How David North Embraces Karl Kautsky 2 (1999)

From Spartacist Pamphlet: Imperialism, the “Global Economy” and Labor Reformism (September 1999)

How David North Embraces Karl Kautsky

The “Global Economy” and Labor Reformism
(Part 2)

Economic “Globalization”: Myths and Realities

An article in the recent special issue of the Nation (15 July 1996) devoted to the question of “globalization” begins with the portentous statement “Economic globalization involves arguably the most fundamental redesign and centralization of the planet's political and economic arrangements since the Industrial Revolution.” Similarly, Australian Northite leader Nick Beams asserts that “globalization refers to the internationalization of the circuit of productive capital” and that this constitutes a “qualitative transformation” of the world capitalist system (International Workers Bulletin, 15 July 1996).

In fact, the history of industrial capitalism was marked by a previous shift, far more profound than the present one, in the geographical distribution of production. The Industrial Revolution began in England and Scotland in the early 19th century and then spread by mid-century to France and the Low Countries (Belgium and Holland). In the late 19th century, the “New Industrializing Countries” of the day were Germany, the United States and Japan.

Writing in the 1890s, Friedrich Engels noted that Germany, which at the time of the 1848 Revolution was economically dominated by peasant agriculture and small-scale artisan manufacturing, had become “an industrial country of the first rank.” During the same period the United States, too, became an industrial country of the first rank. American industrial development was heavily dependent on investment by British capital, especially in the key sector of railway construction. Following the overthrow of the feudal order with the Meiji Restoration of the 1860s, Japan deliberately emulated the advanced capitalist countries of the West, beginning by exporting light manufactures produced by cheap unskilled labor. Tsarist Russia also experienced rapid industrial growth between the 1890s and World War I, largely financed by West European, especially French, capital.

By the beginning of the 20th century, however, the existing advanced capitalist (i.e., imperialist) countries had achieved such dominance over more backward regions that they were able to arrest the development of new rival industrial powers. Hence the present global division between the so-called First World and the Third World.

Since the Northite International Committee maintains that world capitalism has recently undergone a “qualitative transformation,” one would expect this ostensibly Marxist organization to substantiate their analysis with a comprehensive study of the relevant economic data. For example, Lenin’s 1916 work, Imperialism, the Highest Stage of Capitalism, contains pages of statistical tables illuminating and substantiating its analysis on all aspects. By contrast, the writings and speeches on “globalization” by North and his henchmen are devoid of even cursory data on trends in global production, investment and trade. Their 1993 pamphlet, The Globalization of Capitalist Production & the International Tasks of the Working Class, contains not a single statistical table or graph.

A few basic and easily accessible statistics debunk the notion of a qualitative transformation of world capitalism. Western/Japanese investment in the so-called Newly Industrializing Countries totaled some $100 billion in 1993, a peak year. Yet this record amount was only 3 percent of total capital investment in North America, West Europe and Japan. In other words, the imperialist bourgeoisies still invest more that 30 times as much in their own “First World” as in the Third World. American capitalists invest 9 cents in Canada and West Europe and just 5 cents in the entire rest of the world for every dollar they expend on productive assets in the United States.

Why, then, all the hullabaloo about economic “globalization”? For the past few decades, and especially since the destruction of the Soviet Union, the world capitalist economy has in certain respects been returning to the norms of the pre1914 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 it had attained in 1914, on the eve of the first imperialist world war. Yet the current theoreticians of “globalization” rarely if ever mention Lenin’s seminal study of the rise of the imperialist system, to which they add little or nothing, save confusion. As we noted in an earlier article (“David North ‘Abolishes’ the Right to Self-Determination,” Part One, WV No. 626, 28 July 1995):

“The idea of an ‘era of global economic integration’ which North presents as if it were yet another of his unique ‘theoretical breakthroughs’ has been known to the Marxist movement for over a century now. It’s otherwise known as imperialism!”

The term “globalization” refers to certain significant quantitative changes in the contemporary structure of world production and trade. In 1970, 85 percent of all exports (in value terms) from Africa, Latin America and Asian countries other than Japan consisted of agricultural produce, oil, mineral ores and other primary products. Since then exports of manufactured goods from Third World countries have increased by an average rate of 15 percent a year in real terms and now make up well over half the value of their total exports. Much of this industrial , output is financed and organized by Western/Japanese corporations either directly or through local subcontractors, licensees, etc. However, the growth of internationally competitive manufactures in East Asia and Latin America is reversible and cannot continue at anything close to the rate of increase of the past few decades. That is a political, economic and, indeed, mathematical certainty.

There’s a saying in American business circles: there are liars, damn liars and statisticians. One can always select and present statistics to be deliberately misleading. One of the most common ways of doing this is to show dramatic percentage increases from a low initial base and then to project similar percentage increases into the future. For example, a worker making $5 an hour who gets a dollar raise has received a 20 percent increase while a worker making $13 an hour who gets a dollar raise has received an 8 percent increase. But the second worker is still vastly better off than the first. And the low-wage worker well knows he is not going to keep getting a 20 percent raise every year for the next ten years.

However, much writing and discussion on the world economy – by both bourgeois ideologues and leftist intellectuals – is based on this kind of fallacious methodology. For example, between 1950 and the mid-1970s Japan’s national output grew at an average annual rate two to three times greater than that of the U.S. In the 1970s, big-name American intellectuals wrote well-publicized books – e.g., Herman Kahn’s The Emerging Japanese Superstate, Ezra Vogel’s Japan as Number One – predicting that Japan would overtake the United States as the world’s leading capitalist economic power by the end of the century. Not long after these books. came out, the Japanese growth rate sharply decelerated and during the past decade Japan’s economy has been stagnant. Today, Japan’s national output is still less than half that of the U.S.

The current apocalyptic vision of economic “globalization” is based on the same faulty premises as the “Japan will be number one” literature of the 1970s. For example, between 1985 and 1994 China’s share of world exports of footwear went from 1.5 percent to 15.5 percent, an increase of 1,000 percent. If one projects the same increase for the next ten years, China will account for 150 percent of world trade in footwear, a mathematical impossibility. In another example, investment in plant and equipment by Western/Japanese corporations in backward countries, now including East Europe and the ex-USSR, increased last year by 13 percent. But it is wrong to assume this trend will continue indefinitely into the future.

The Development of Modern Imperialism

To understand the actual significance and limits of the recent changes in the world economy, it is necessary to view these changes In a broad historical perspective. In his 1916 pamphlet, Imperialism, the Highest Stage of Capitalism, Lenin described modern imperialism as that epoch of capitalism marked by the export of capital and the division of the world into “spheres of influence” by a few major advanced capitalist states. The two key institutions of the pre-1914 imperialist order were colonialism and the gold standard.

Particularly Britain and France, but also other West European countries, the United States and Japan exercised direct state power over hundreds of millions of toilers throughout the world. British plantation owners in India did not have to worry that the Indian government would impose high taxes on their property or enact laws favorable to labor since the government in India was their government. Compared to British India, foreign investment in China in the pre-1914 era was relatively slight, because the country was beset by political disorder and was an arena of conflict among a number of rival imperialist powers.

At the same time, the gold standard assured a degree of financial integration among the advanced capitalist countries which has never been matched since. Exchange rates between currencies were fixed, there were few or no restrictions on the international movement of capital, and real interest rates were stable and closely linked in the major financial capitals –London, Paris, New York. British holders of American railway bonds did not have to worry, that their assets would be devalued by hyperinflation or by the depreciation of the dollar against the pound.

Under these conditions the globalization of capital flourished as never before or since, as can be shown with the following few statistics for Britain and France (taken from Herbert Feis, Europe – The World’s Banker 1870-1914 [1964]). The income derived by British capitalists from their foreign assets increased from 4 percent of total British national income in the 1880s to 7 percent by 1903 to almost 10 percent on the eve of World War I in 1914. Foreign investments were concentrated in Britain’s own colonies (especially India, South Africa, Canada and Australia) as well as in the United States and, to a lesser extent; Argentina. By 1914, total productive assets held by British capitalists outside Britain amounted to well over one quarter of the capital stock within Britain itself!

While the globalization of pre-1914 British capitalism was historically unique, the role of foreign investment for French capitalism in this period likewise greatly exceeded that of any present-day imperialist country. Between 1909 and 1913, almost 5 percent of French national income was derived from French investments abroad (mainly in Russia, Turkey; the Balkans and France’s own African and Asian colonies). By 1914, the total value of French long-term foreign investment (45 billion francs) amounted to 15 percent of the productive wealth within France (295 billion francs).

Now let us look at comparable figures for the United States at present. In 1994, total income derived from the foreign assets of American capitalists, both direct investment and stock and bond holdings, was $167 billion. That amounted to slightly less than 2percent of the U.S. gross domestic product of $6.7 trillion. The current total value of American direct foreign investment is about one trillion dollars, slightly less than 10 percent of the $10.5 trillion in privately owned industrial assets (plant and equipment) within the United States. In the case of Japan, the relative weight of foreign investment is even less than it is in the U.S., and in the case of Germany it is substantially less.

World War I and the Russian Revolution

As the above figures indicate, World War I and the 1917 Bolshevik Revolution in Russia brought about a profound and long-lasting disruption of the world capitalist economy. To begin with, the war killed off the gold standard. All combatants financed their huge, unprecedented military expenditures by printing money while imposing tight controls over all international transactions. When the war ended in 1918, price levels in the major capitalist countries bore no relation whatsoever to either prewar foreign-exchange parities or real purchasing power.

An attempt to resurrect the gold standard in the mid-1920s was buried under the wreckage of the Great Depression of the 1930s. That decade saw the collapse of world trade, the rise of “beggar thy neighbor” trade protectionism, the widespread use of foreign-exchange controls (especially in Nazi Germany) and the establishment of regional economic blocs dominated by a single imperialist power (e.g., Japan’s “Greater East Asian Co-Prosperity Sphere”).

Added to the effects of the Great Depression and intensifying interimperialist conflict were the consequences of the Russian Revolution. Not only had a major country been ripped out of the sphere of capitalist exploitation, but the imperialist bourgeoisies were now imbued with a fear of “red revolution” elsewhere; especially in backward countries where social and political conditions were manifestly unstable. The huge losses suffered by French financiers and other holders of Russian tsarist bonds cast a long shadow over world capital markets in the 1920s and ‘30s. Lending to semicolonial countries like China and Mexico was inhibited by the perceived danger of revolutionary turmoil and left-wing governments which would repudiate the country’s foreign debt. The only significant foreign investment in China during the interwar period was undertaken by the Japanese in Manchuria – after they had conquered and occupied this region in 1931.

From World War II to the Cold War

The struggle of the major capitalist powers to redivide markets and spheres of exploitation led in 1939-41, as it had in 1914, to an interimperialist world war, though this time one in which a chief combatant was a (degenerated) workers state, the Soviet Union. (Thus, while taking a defeatist position toward all the imperialist powers in World War II, as in the previous world war, revolutionary Marxists called for unconditional military defense of the USSR.) The outcome of the Second World War perpetuated and deepened the disruption and segmentation of the world economy. By defeating its main imperialist rivals, Germany and Japan, the United States became the hegemonic capitalist power. But the global hegemony of American imperialism was blocked by the Soviet Union, which had emerged from the war as the second-strongest state in the world: From East Asia to West Europe to South America, the course of economic developments between 1945 and 1991 was integrally connected with the Cold War.

In West Europe and also Japan, the devastation of the war combined with the leftward radicalization of the working class militated against a return to the “free trade” and “free market” policies of the pre-1914 era. Except for the U.S., all major advanced capitalist countries engaged in a high degree of state intervention in economic activity during the first phase of the postwar period. Almost all foreign-exchange transactions in West Europe were subject to strict government regulation and bureaucratic approval The pound, franc and deutschmark did not become “freely” convertible until the late 1950s.

Currency convertibility is a basic economic precondition for large-scale foreign investment in manufacturing and services, since the revenue generated from these activities is usually denominated in the currency of the country in which the investments take place. The oil extracted by Exxon in Saudi Arabia is sold on the world market for dollars. But the automobiles produced by General Motors in Germany are sold to Germans for deutschmarks. Thus, it was only in the 1960s – after the introduction of convertibility gave them the option of repatriating their profits – that American corporations bought out or built industrial plants in West Europe on a significant scale. The total value of U.S. direct investment in manufacturing in West Europe went from $3.8 billion in 1960 to $12.3 billion (discounting for inflation) by the end of the decade.

It was, however, in the economically backward regions of the world that the postwar period saw the most radical political changes affecting the international movement of capital. In the course of defeating the Nazi Wehrmacht, the Soviet Red Army occupied East Europe. Over the next few years, under the hostile pressure of American imperialism, these countries were transformed, bureaucratically from above, into “people’s democracies” – i.e., deformed workers states structurally similar to the Stalinized Soviet Union, based on planned, collectivized economies, the state monopoly of foreign trade, etc.

Bureaucratically deformed workers states also emerged in China, North Korea and Vietnam, as a result of indigenous, peasant-based social revolutions led by Stalinists. It was above all fear of war with the Soviet Union which prevented Washington from using its nuclear weapons against Mao’s China during the Korean War in the early 1950s and a few years later against the Viet Minh forces which were defeating the French colonial army in Indochina. A large part of the world was thus removed from the sphere of capitalist exploitation, although still subject to the powerful political, economic and military pressures of imperialism.

At the same time, radical political changes also took place in those economically backward countries which remained within the sphere of capitalist exploitation. The weakening of the West European imperialist, states caused by World War II combined with the radicalization of the colonial masses led to the “decolonization” of much of Asia, the Near East and Africa. State power in these regions now passed into the hands of indigenous bourgeoisies, who sought to pursue their own national interests within a global context dominated by international finance capital.

Despite some CIA-organized coups (e.g., against Mossadeq in Iran in 1953), the ability of U.S. imperialism to control the governments of the former colonial and semicolonial countries was. limited by the countervailing power of the. Soviet Union. Moscow’s backing allowed bourgeois-nationalist regimes like Nasser's Egypt, Nehru and Indira Gandhi’s India and Saddam Hussein's Iraq to exercise a degree of political and economic independence of the imperialist powers which they could not have attained on the basis of their own national economic. resources.

During the 1960s, Soviet funds and engineers helped build the Aswan High Dam – one of the largest in the world – in Nasser’s Egypt. By the early ‘70s, the USSR had become the largest market for India's exports, while Moscow provided the New Delhi regime with over 60 percent of its imports of military hardware. At the same time, Western and Japanese corporations were discouraged from investing in countries like Egypt and India for fear of punitive taxation, restrictions on the repatriation of profits and the possibility of nationalization without adequate compensation. The 1960s and ‘70s thus marked the heyday of economic nationalism and statified capitalism in what was then called the “Afro-Asian bloc.” But with the collapse of the Soviet Union, there was no longer even a partial counterweight to Western/Japanese imperialist domination in the Third World. The 1991 Gulf War signaled that, without the protection of the USSR, those bourgeois-nationalist regimes which flouted the dictates of Washington would be subjected to the devastating power of the Pentagon war machine.

However, even with the relatively greater room for maneuver they had when the Soviet Union still existed, the bourgeois-nationalist regimes in the Third World did not and could not chart a course truly independent of imperialism, nor could they bring about the economic and social modernization of their countries. Despite their “non-aligned” posture and even “socialist” rhetoric, the semicolonial bourgeoisies remained tied to the imperialist bourgeoisies by a thousand strings, subordinated and subservient to the power of the imperialist world market. Thus, India’s exports remained concentrated, as in the colonial era, in light manufactures produced by unskilled labor. Egypt remained economically dependent on the export of cotton (as well as tolls from the Suez Canal), Ba'athist Iraq and Qaddafi’s Libya on the vicissitudes of the world oil market controlled by the “Seven Sisters” monopolies. And Algeria under the radical-nationalist FLN regime relied heavily on money sent back by Algerians working in France. Only through the revolutionary overthrow of the local bourgeoisies, as part of a perspective of world socialist revolution reaching into the imperialist centers, can these countries achieve true independence from imperialism.

The End of the “American Century”

What is now termed economic “globalization” was rooted in the recovery of Germany and Japanese capitalism from their devastation and defeat in World War II. By the 1960s, German and Japanese manufactured goods were making huge inroads into world markets, including the American market. The competitive position of U.S. imperialism was further weakened in this period by the inflationary pressures generated by its long, losing colonial war in Vietnam. America's large, permanent balance-of-trade deficits, especially with Japan, fatally undermined the use of the dollar as the global medium of exchange and store of value – the international monetary system, originally set up at the 1944 conference in Bretton Woods, New Hampshire. Nixon's August 1971 devaluation of the dollar in terms of gold, and the subsequent recourse to fluctuating exchange rates, signaled the end of the short-lived “American Century” of U.S. imperialist hegemony in the capitalist world.

The weakened competitive position of U.S. capitalism was further exposed by the large losses experienced by corporate. America during the 1974-75 world economic downturn. The American bourgeoisie responded with a concerted drive to increase the rate of exploitation. An anti-labor offensive was marked by “giveback” contracts, two-tier wage systems for younger workers and outright, union-busting. Unionized plants in the Midwest and North, which paid relatively high wages, were shut down as production was shifted to the “open shop” South and Southwest.

At the same time, American industrial capital undertook a major expansion in East Asia and Latin America. Between 1977 and 1994, there was a five-fold increase in manufacturing plant and equipment owned directly by U.S. corporations in Third World countries, from $11 billion to $52 billion (in real terms, discounted for inflation). Japanese industrialists soon followed their American competitors in going offshore. By the mid-1980s, Matsushita was producing many of its TV sets and air conditioners in Malaysia, Yamaha its sporting goods in Taiwan, Minebea its miniature ball bearings in Singapore and Thailand, TDK its magnetic tapes in Taiwan and South Korea, etc.

Nonetheless, investment by Western and Japanese corporations in neocolonial countries was still inhibited by the uncertainties of the Cold War. A popular uprising or even an election or military coup could suddenly bring about a left nationalist regime backed by Moscow. For example, in 1979 a revolution in Nicaragua toppled Washington's puppet dictator Somoza and brought to power the radical petty-bourgeois nationalist Sandinistas. At the same time, a major leftist insurgency was raging in neighboring El Salvador. Thus, even Yankee imperialism's own “backyard” was not secure for Wall Street banks and the Fortune 500 corporations.

Economic “Globalization” and Capitalist Counterrevolution

A fundamental political condition for the present triumph of capitalist “globalization” was the retreat of Soviet global power under Gorbachev, the disintegration of the Moscow Stalinist bureaucracy and the counterrevolutionary destruction of the Soviet Union in 1991-92. It was no accident that the electoral overthrow of the Sandinista regime in 1990, capping a contra war armed and organized by Washington, coincided with the beginning of a massive investment boom by U.S. banks and corporations in Mexico. At the same time, capitalist counterrevolution in the former Soviet sphere has opened up a new, huge sphere for exploitation, especially for German imperialism. A few' years ago, a spokesman for German industry exulted: “Right on our own doorstep in Eastern Europe, we have for the first time a vast pool of cheap and highly trained labor.”

During Cold War II in the 1980s North’s IC joined in the imperialist anti-Soviet chorus along with other pseudo-Trotskyists like the United Secretariat of the late Ernest Mandel, as well as mainstream social democrats and Eurocommunists. Having done all within their means to promote counterrevolution in the Soviet Union and East Europe, the Northites now proclaim that the restoration of capitalism there – a historic defeat for the international proletariat – was objectively determined. Their 1993 pamphlet, The Globalization of Capitalist Production & the International Tasks of the Working Class, informs us: “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.”

By their own terms, for the Northites the Soviet working class simply did not exist as even a potential factor in deciding the fate of the Soviet Union. The IC has effectively repudiated the Trotskyist program of proletarian political revolution against the Stalinist bureaucracy as even a historical possibility in this supposedly new era of “globalized” capitalism. The 1938 Transitional Program, written when the Soviet Union was relatively far more economically backward and geographically, isolated than in the 1980s, stated, “either the bureaucracy, becoming ever more the organ of the world bourgeoisie in the workers' state, will overthrow the new form of property and plunge the country back into capitalism; or the working class will crush the bureaucracy and open the way to socialism.”

What did Trotsky mean here about opening “the way to socialism”? Wouldn't a Russian-centered Soviet workers state, even if administered on the basis of proletarian democracy and governed by a genuinely communist vanguard party, still be surrounded by hostile and economically more advanced capitalist states? Yes, of course. However, the overthrow of the Stalinist bureaucracy by the Soviet working class, under the banner of proletarian internationalism, would have reawakened and inspired revolutionary fervor among the workers, rural toilers and oppressed peoples throughout the capitalist world. And a communist government of the USSR would have provided invaluable political, economic and, if necessary, military support for proletarian revolutions in capitalist states, including the imperialist powers.

For Proletarian Political Revolution In China!

As against all the various pretenders to Trotskyism, not least North’s IC, 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. The International Communist League mobilized all the limited resources at our command during the political turmoil in the East German (DDR) deformed workers state in 1989-90, fighting for proletarian political revolution to oust the Stalinist bureaucracy which, in league with West German imperialism and its Social Democratic lackeys, pushed for a capitalist reunification of Germany. Uniquely, the ICL opposed capitalist Anschluss (annexation) down the line, calling instead for a “Red Germany of Workers Councils” as part of a Socialist United States of Europe.

And during the terminal crisis of Stalinist rule in the USSR, our tendency actively intervened in the Soviet Union with the program and perspective of proletarian political revolution to “open the way to socialism.” The counterrevolutionary destruction of the Soviet Union was no more objectively inevitable in 1991-92 than in 1941, when the USSR was invaded by Nazi Germany. The direction taken by Russia, the Ukraine and other Soviet republics when the Kremlin bureaucracy disintegrated under Gorbachev, while conditioned by the pressures of the world capitalist market, was determined by the struggle of living social and political forces. A decisive factor in the outcome was a retrogression in the political consciousness of the Soviet working class brought about by three generations of Stalinism in power. 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 non-Russian republics.

In the case of the USSR, the Northites maintain that the capitalist counterrevolution which actually did take place was inevitable. In the case of China, they maintain that a capitalist counterrevolution has already taken place when it has not yet occurred. A major article in their Fourth International (Winter-Spring 1994), titled "The Political Background of the Restoration of Capitalism in China," asserts:

“The state which issued from the Chinese Revolution no longer defends or maintains the limited gains won by the workers and peasants in 1949....
“The Chinese state is not, even in the most distorted sense, an instrument for the defense of the working class.... The state defends the interests of the bureaucracy as a privileged social layer: increasingly linked to the rising capitalist class and, through them, the interests of imperialism itself.”

Despite the significant inroads made by capital, both domestic and foreign, over the past several years, the People's Republic of China remains a bureaucratically deformed workers state. The author of the article quoted above, one Martin McLaughlin, is here plagiarizing without attribution the Maoist doctrine of “capitalist roadism" and applying it to Mao's one-time chief rival within the Beijing Stalinist regime, Deng Xiaoping. Significantly but predictably, not once is the Trotskyist program of proletarian political revolution mentioned in this lengthy article, which purports to cover the entire history of China in the 20th century.

In contrast, a “Perspectives and Tasks Memorandum” adopted by our international tendency in January 1996 states:

“The next period is likely to see the breakdown and terminal crisis of Stalinist rule in China as powerful elements in the bureaucracy, directly tied to offshore Chinese capital and actively supported by Western and Japanese imperialism, continue to drive toward capitalist restoration. The Chinese working class, although heretofore limited by police repression to actions at individual workplaces, has in recent years exhibited massive discontent with the social degradation, insecurities and blatant inequalities generated by Deng’s ‘market socialist’ program. The rural economy has experienced the rise of a class of relatively wealthy peasant smallholders while an estimated 100 million landless peasants have flooded into the cities. We can thus foresee monumental class battles leading either to proletarian political revolution or capitalist counterrevolution in the most populous nation on earth.”

“Transnational” Corporations and Imperialist States: Antagonists or Partners?

A central element in the theory of a new “globalized” capitalist economy is that transnational corporations have supplanted nation-states as the dominant institutions in world power politics. In his latest book, Global Dreams: Imperial Corporations and the New World Order (1994), leading American left-liberal intellectual Richard J. Barnet maintains:

“The architects and managers of these space-age business enterprises understand that the balance of power in world politics has shifted in recent years from territorially bound governments to companies that can roam the world. As the hopes and pretensions of government shrink almost everywhere, these imperial corporations are occupying public space and exerting a more profound influence over the lives of ever larger numbers of people.”

A more extreme version of the same thesis is presented by another American rad-lib intellectual, David Korten, in his 1995 book, When Corporations Rule the World. The current view of the International Committee is essentially similar, as North stated in a 1992 speech:

“Under the aegis of imperialism, the globalization of production collides against the nation-state form within which capitalist rule is rooted.... “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 the same process is the growing antagonism among nation-states and the eruption of various forms of national and communal conflict.”
– Capital, Labor and the Nation-State (1992)

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. In particular, North’s view of the capitalists as an international class flies in the face of the Marxist understanding that the bourgeoisie cannot transcend national interests (for further discussion, see “On Bourgeois Class Consciousness,” Spartacist No. 24, Autumn 1977).

In the Barnet/Korten/North view, 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 or weaken the American; German and Japanese bourgeois states. This view expresses a liberal idealist outlook since it implicitly assumes that capitalists do not need state power – i.e., armed bodies of men – to protect their property against challenges from both the exploited classes and rival capitalists. in other countries. Wall Street bankers and the CEOs of the Fortune 500 corporations understand (as Richard Barnet and David North apparently do not) that Mexican and South Korean workers are not devout believers in the sanctity of private property. Replying to similar arguments at the time, notably by German Social Democrat Karl Kautsky, Lenin in his 1916 study of imperialism quoted the German economist Schulze-Gaevemitz:

“Great Britain grants loans to Egypt, Japan, China and South America. Her navy plays here the part of bailiff in case of necessity. Great Britain’s political power protects her from the indignation of her debtors.”

The same applies to the U.S., Germany and Japan, whose armed forces are prepared to act as “bailiff in case of necessity.” Whether undertaken by corporations, banks or other financial institutions, foreign investment depends on the political, economic and military power of the states controlled by the owners of these capitalist enterprises.

North & Co. have not yet revised or repudiated the position that the Republican and Democratic parties represent the interests of the American bourgeoisie. Why then do the political leaders of these parties continue to expend hundreds of billions of dollars a year on the U.S. armed forces? Even an old-fashioned liberal like Russell Baker has observed: “The era of big government is over except for the Pentagon” (New York Times, 24 September 1996). That’s because the Pentagon provides and organizes the security guards, so to speak, to protect the property of American capitalists in other countries. Citibank and Exxon are no more independent of, much less antagonistic to, the American imperialist state than Barings Bank and Royal Dutch Shell were independent of the British imperialist state in the pre-1914 era.

Indeed, if the recent merger announcement by Boeing and McDonnell Douglas demonstrates anything, it is that “multinational” corporations – especially so in strategic industries like electronics and aerospace – are very much rooted in their own nation-states. This monopolistic merger is aimed not only at reinforcing the U.S. aerospace and weapons industry but at increasing its competitive edge against rivals like the West European Airbus conglomerate.

"Socialist" Apologist for Scabbing (1996)

Workers Vanguard No. 637, 19 January 1996

David North, “Socialist” Apoologist for Scabbing

Four years ago, the organization known as the Workers League, led by one David North, decided to write off the trade unions, saying “to define the AFL-CIO as a working class organization is to blind the working class” (Bulletin, 10 January 1992; see “Workers League vs. the Unions,” WV No. 580, 16 July 1993). Now, in the context of the defeated 17-month-long Caterpillar strike and the four-month battle by Liverpool dockers against union-busting, North & Co. have taken this formulation out of the realm of theory and shown it for what it really is: an open prescription for strikebreaking.

Early last month, as dock workers unions from North America to Australia announced their refusal to handle ships loaded in Liverpool by scabs, North’s followers in the British International Communist Party (ICP) wrote a scurrilous article, “Dockers Must Reject Fake Internationalism” (International Worker, 2 December 1995), calling this basic declaration of solidarity a “fraud.” Yet some two weeks later, American trade unionists of the International Longshoremen’s Association (ILA) turned back a scab Atlantic Container Lines ship from three U.S. ports by honoring picket lines put up by dock workers who had flown in from Liverpool, giving a huge boost to their strike.

_______________________________
North’s Workers League spent decades crudely fawning after the anticommunist labor tops, calling on the likes of George Meany to form a “labor party.” Now, when the world’s capitalist rulers are escalating their war against the unions, the poor and immigrants following the destruction of the Soviet Union, North’s followers tell workers that any struggle by the trade unions against these attacks is useless.
_______________________________

As a cover for their anti-internationalist, anti-working-class line, the Northites point to the ILA’s “history of working with the U.S. State Department and CIA backed operations abroad.” This is pretty cheeky coming from these political bandits, who took up the cause of every imperialist-backed anti-Soviet movement from the Lithuanian nationalists to the bloodthirsty Afghan mujahedin reactionaries. North’s Workers League spent decades crudely fawning after the anticommunist labor tops, calling on the likes of George Meany to form a “labor party.” Now, when the world’s capitalist rulers are escalating their war against the unions, the poor and immigrants following the destruction of the Soviet Union, North’s followers tell workers that any struggle by the trade unions against these attacks is useless.

The link between the Northites’ current anti-labor line and their historic anti-Sovietism was captured in a recent appeal by ICP National Secretary David Hyland to the deeply reformist Militant Labour group for a “mass socialist party,” Openly calling to “destroy the influence and control of the old unions,” Hyland offers as proof that any “trade union perspective” is bankrupt… “the example of Solidarność in Poland” (IWE, 11 September 1995). Solidarność, in fact, was a counterrevolutionary political movement masquerading as a “union” on behalf of its CIA and Vatican bankrollers, which was cheered by the Northites as it organized Polish workers behind a program of capitalist restoration.

Never ones to differentiate the trade unions from the pro-capitalist bureaucracy that keeps them chained to the exploiters and their state, North & Co. have now become lawyers for scabbing. Reporting on the Caterpillar UAW strike, which was betrayed outright by the UAW bureaucracy, their American newspaper writes, “UAW officials have attempted to absolve themselves of blame for whar has happened by diverting the anger of strikers towards the ‘scabs,’ i.e., those union members who decided to cross picket lines” (International Workers Bulletin, 18 December 1995). Putting quotation marks around “scab” is no slip. In fact, the article justifies scabbing, claiming that “the large majority of the 4,000 union members who returned to work were not right-wing or anti-union. Most simply recognized the futility of the policies being pursued by the UAW, which had, after all, abandoned the previous strike.” Now that corporations are shelling out billions every year to hire union-busting law firms and private police, are the Northites offering themselves as PR agents for the growing army of strikebreakers?

The “hot-cargoing” of scab shipping by dockers internationally is an example of the kind of genuine solidarity in action which can fortify the unions against the worldwide capitalist offensive. Our perspective is the forging of a new, class-struggle leadership in the labor movement as part of the fight to build a revolutionary workers party. This requires a hard political struggle to drive out the sellout bureaucracy — the “labor lieutenants” of the bosses — that is undermining and destroying the unions. That fight must also be waged against scab “socialists” like the Northites, who spit on the best traditions of working-class struggle as they stand on the side of the capitalist union-busters.

Northite Fool's Gold (1991)

Workers Vanguard No. 533 (22 November 1991)

Northite Fool’s Gold

This article was written for Spartakist No. 91, published by our comrades of the Spartakist Workers Party of Germany

For close to two decades David North’s Workers League and his cohorts in the “International Committee of the Fourth International” have been foam-flecked cheerleaders for virtually every imperialist-backed anti-Soviet force in the world. But these days the WL is talking a lot out of the other side of its mouth. Now we read in the “ICFI” statement on “The Lessons of the August Putsch and the Tasks Before the Soviet Working Class” (Bulletin, 6 September) that only their organization “defends the historic conquests of the Soviet proletariat and upholds its great socialist traditions”! Our advice to anyone who falls for this one is, as the Romans said, caveat emptor - hold on to your wallet.

More than 20 years ago we recalled Lenin’s term “political bandits” to describe the Workers League and its “International,” then headed by IC “founder-leader” Gerry Healy. Over the years, the Healyites’ “political” banditry was eclipsed by their degeneration into outright gangsters-for-hire. In 1979, after years of pimping for Libya’s Qaddafi, Healy & Co. heralded Iraqi Ba’athist dictator Saddam Hussein as a leader of the struggle against “counterrevolutionary Stalinism” and hailed his execution of 21 members of the Iraqi Communist Party. At the same time they photographed anti-Saddam protesters in London and handed the photos over to the Iraqi embassy, fingering demonstrators for arrest, torture and possibly death. Meanwhile the Healyites were receiving tens of thousands of dollars from the Ba’athist regime.

Although the most heinous, this was only one of many crimes committed by the Healy/Northites, for which they were put on the payroll of virtually every Arab sheik and dictator in the Near East (see “Healyites Got Blood Money,” WV No. 517, 4 January, and “Northite Blood Money,” WV No. 523, 29 March).

In 1985 when this dirty source of revenue dried up, Healy’s organization fell apart and Workers League leader David North declared himself the heir to his former master’s seat at the head of the shattered remnants of the International Committee. Now that it seems like nobody’s paying them for what they say and write, the Northites have reverted to an earlier scam: selling themselves as supposed orthodox Trotskyists in the abstract, while still tailing after anti-Soviet counterrevolutionaries in the concrete. But this latest con game blew apart with the August showdown in Moscow, as Yeltsin’s countercoup brought to power the capitalist-restorationist forces that the Bulletin has been covering for.

The Northites’ current posture as the defenders of the gains of the October Revolution is so manifestly fraudulent that they can’t get it straight themselves.

Healyite Schizophrenia

The “ICFI” statement on tie coup and Yeltsin’s countercoup reads like it was written by a schizophrenic. First we have the declaration that “The International Committee of the Fourth International welcomes the humiliating collapse of the August 19 Stalinist putsch in Moscow.” Yet the very next paragraph states, “But the justified satisfaction felt by workers both in the Soviet Union and internationally at the failure of the putschists must not blind them to the fact that those now assuming center stage in Moscow are bitter antisocialists and ruthless exponents of capitalist restoration.” Again later it declares, “The collapse of the August 19 coup is a large. nail in the coffin of the Stalinist bureaucracy.” Yet this is followed by:

“But any premature jubilation on the part of the working class would be totally unjustified.
“Those forces now in the forefront are the most ruthless and frothing enemies of the working class. Their aim is nothing less than selling off all the assets of the Soviet Union and its reduction to a semi-colonial status.”
– Bulletin, 6 September

It’s those telltale “buts” that give the game away. For the collapse of the coup, which North & Co. “welcome,” is not divorced from, but identical with the victory of “those forces now in the forefront” who they admit are “frothing enemies of the working class.” What’s to welcome? This is not “dialectics,” which Healy and North have done so much to discredit, but the squirmings of opportunists hoist on their own petard. They want to be with the Yeltsinite “masses” on the barricades while warning against Yeltsin the harbinger of capitalism. The dilemma, which many Stalinophobic pseudo-Trotskyists resolve by prettifying the “democrat” Yeltsin, North deals with by talking out of both sides of his mouth.

The anti-Stalinist David North evidently agrees with Joseph Stalin on one thing: “Paper will put up with anything that is written on it.”

Even at the level of description, the “two-line” statement exposes itself. It heralds “the implacable opposition of the socialist working class to the military-KGB coup.” Yet a few paragraphs later it notes Yeltsin’s “appeal for a general strike went largely unanswered, even in Moscow. The working class identified with neither faction.” The Northites warn that “without the independent mobilization of the working class on the basis of a socialist program, the collapse of Stalinism will lead to even more brutal forms of repression and social devastation” and “the terror of capitalism.” Yet for years these Stalinophobes have denounced the Kremlin bureaucracy as the sole moving force for capitalist counterrevolution in the USSR.

Thus in one of his interminable speeches, spread over six pages of the same 6 September issue of the Bulletin, David North refers to Gorbachev as “leader of the restorationist faction of the official Communist Party apparatus” while Yeltsin is called “a representative of the emerging Soviet bourgeoisie” and of “bourgeois comprador elements,” dating this as far back as 1987. But as recently as the 21 June Bulletin, an article titled “Behind the Election of Boris Yeltsin” writes of “the drive to capitalist restoration in the Soviet Union, whether it is led by Mikhail Gorbachev, Boris Yeltsin or some other counterrevolutionary representative of the bureaucracy.”

And referring to Yeltsin the bureaucrat rather than Yeltsin the bourgeois is no mere slip of the pen, for in the Northite zodiac the Soviet bureaucracy is nothing but a “counterrevolutionary” agency working hand in hand with imperialism. Thus in his 1989 tract on Perestroika Versus Socialism, North declares that “the political and economic goals of the bureaucracy in its relations with world imperialism” are “the destruction of the planned economy and the social conquests of the October Revolution” and the restoration of capitalism. And, more generally, in his 1988 tome The Heritage We Defend, he declares that “Trotsky had branded the Stalinist bureaucracy as ‘counterrevolutionary through and through’.” This stupidly one-sided formulation is the banner of every anti-Soviet fake-Trotskyist. And it is a lie.

Leon Trotsky never said any such thing. Rather, he wrote in “The Class Nature of the Soviet State” (October 1933) that “Whoever fails to understand this dual role of Stalinism in the USSR has understood nothing.” He is referring here to the position. of the bureaucracy, which rests upon the collectivized property forms inherited from the October Revolution, at the same time as it seeks to balance between the bourgeoisie and the proletariat, transmitting the pressures of imperialism but also, on occasion, constrained to defend in its bureaucratic fashion the workers state in order to protect its privileges. Trotsky repeatedly insisted on this fundamental point, as in The Revolution Betrayed, which has a section on “The Dual Character of the Workers State” And in a 1937 article against the future renegade Burnham, Trotsky noted:

“The function of Stalin, like the function of Green [then head of the American trade-union federation, AFL], has a dual character. Stalin serves the bureaucracy and thus the world bourgeoisie; but he cannot serve the bureaucracy without defending that social foundation which the bureaucracy exploits in its own interests. To that extent does Stalin defend nationalized property from imperialist attacks and from the too impatient and avaricious layers of the bureaucracy itself. However, he carries through this defense with methods that prepare the general destruction of Soviet society. It is exactly because of This that the Stalinist clique must be overthrown. But it is the revolutionary proletariat who must overthrow it. The proletariat cannot subcontract this work to the imperialists. In spite of Stalin, the proletariat defends the USSR from imperialist attacks.”
– ”Not a Workers’ and Not a Bourgeois State?” (November 1937)

We discussed the genealogy of the anti-Trotskyist formula that Stalinist is “counterrevolutionary through and through” in our article “David North: Joseph Hansen’s Natural Son” (WV No. 456, I July 1988). It is important to underline it here once again, for behind North’s analytical deceit lies a fundamental assault on the Trotskyist program of unconditional defense of the Soviet Union against counterrevolution. And indeed, at the decisive moment in the face of a direct counterrevolutionary assault by forces which North himself acknowledges to be a “comprador bourgeoisie,” North’s bottom line was “we were for the defeat of this coup” – which was also Yeltsin’s bottom line.

From Walesa to Yeltsin: Crush the Counterrevolution!

In an article titled “Middle Class Radicals and the Soviet Coup” (Bulletin, 13 September), the Northites assume a posture of denouncing the cabal of fake-Trotskyists who cheered Yeltsin’s countercoup. At the same time they rant that the Spartacist League “criticized the coup plotters only for ‘ineptitude’ and ‘stupidities,’ because they did not arrest Yeltsin or even cut off his phones, and did not mount a ‘serious assault’ on the Russian parliament building. In other words, this politically-diseased organization was hoping against hope for an old-fashioned Stalinist bloodbath.” North’s German followers of the BSA (Bund Sozialistischer Arbeiter) continue in the same vein, saying the Spartacists only criticize the coup plotters “because they didn’t carry out a bloodbath in front of the White House in Moscow like the Chinese Stalinists did two years earlier in Tiananmen Square in Peking” (Neue Arbeiterpresse, 4 October).

To compare the couple of thousand scruffy yuppies, speculators and Russian nationalists, including fascists and priests, who were the pathetic advance guard of Yeltsinite counterrevolution, with the hundreds of thousands of workers and students, many of them explicitly pro-socialist, who rallied day after day in Tiananmen Square, is obscene. Like the less duplicitous cheerleaders for Yeltsin, the Northites can’t stand our statement that “a call on Moscow workers to clean out this counterrevolutionary rabble was in order.” And to North & Co., the crime of crimes would be a military bloc with a section of the bureaucracy seeking to fight the outright capitalist restorationists. And as we wrote in our polemic “Traitors, Not Trotskyists – Cheerleaders for Yeltsin’s Counterrevolution” (WV No. 535, 27 September):

“The ‘gang of eight’ was incapable of sweeping away Yeltsin in its pathetic excuse for a putsch because, as we wrote, it was a ‘perestroika coup.’ But both imperialism and the forces of internal counterrevolution were aligned on Yeltsin’s side. The coup plotters were not only irresolute but didn’t want to unleash the forces that could have defeated the more extreme counterrevolutionaries, for that could have led to a civil war if the Yeltsinites really fought back. And in an armed struggle pitting outright restorationists against recalcitrant elements of the bureaucracy, defense of the collectivized economy would have been placed on the agenda whatever the Stalinists’ intentions. Trotskyism would have entered a military bloc with ‘the Thermidorian section of the bureaucracy against open attack by capitalist counterrevolution,’ as Trotsky postulated in the 1938 Transitional Program. This was precisely our policy toward Jaruzelski in 1981.”

And indeed, it is precisely the example of Poland which lies behind the Northites’ policy in the Moscow coup. At that time, when the entire left was proclaiming “Solidarity with Solidarity,” the international Spartacist tendency sought to expose before the world’s working class that Lech Walesa & Co. were an agency for the CIA and Western bankers, Ronald Reagan, the Pope and clerical nationalists. They quoted as if it were an outrage our forthright statement: “If the Kremlin Stalinists, in their necessarily brutal, stupid way, intervene militarily …we will support this. And we take responsibility in advance for this; whatever the idiocies and atrocities they will commit, we do not flinch from defending the crushing of Solidarity’s counterrevolution” (WV No. 289, 25 September 1981). Healy, North et al. lined up with the counterrevolutionary cabal.

Now that Solidarność leader Walesa is presiding over the capitalist immiseration of Poland, all the fake-lefts are jumping ship, including North. Thus in its statement on the August coup, the Bulletin denounces Walesa for running a “pro-imperialist regime” which uses police and troops to smash workers strikes. But ten years ago, the Northites joined with anti-Communist Polish emigres and AFL-CIO bureaucrats at a pro-Solidarność rally in Chicago which was addressed by the Reaganite governor of Illinois. “Mass Support for Solidarity,” ran the front-page headline of the Bulletin (18 December 1981) describing this anti-Soviet political orgy.

Anti-Soviet Nationalists and Anti-Union Witchhunts

With openly. capitalist-restorationist forces on the ascendancy in Russia and other republics, the Northites offer themselves as the leadership for the struggle of the Soviet working class to “stop the degradation of the Soviet Union into a Balkanized semicolony of imperialism.” What gall! The Workers League has been the most fervent defender of every force in the USSR that was fighting for just such an outcome.

Last year they championed the cause of the right-wing nationalist Sajudis government in Lithuania. Echoing the most right-wing, anti-Communist elements of the American ruling class, the Workers League even denounced Bush for not imposing imperialist sanctions against the Soviet workers state on behalf of Lithuanian independence:

“The April 24 announcement by the White House that it is taking no retaliatory actions against Moscow for its blockade of Lithuania underscores the unprecedented level of collaboration between imperialism and Stalinism against the international working class.”
– Bulletin, 27 April 1990

Here the militantly counterrevolutionary Lithuanian Sajudis regime – whose first act when granted independence by the Yeltsin-Gorbachev regime was to grant a blanket amnesty to the native fascist collaborators of Hitler’s Germany – Is identified with the international working class!

Today the Northites declare that the Soviet working class “must retain its complete independence from the political aims of the imperialists and their political and economic agents in the Soviet Union.” Yet last spring the Bulletin uncritically enthused over the Soviet coal miners strike, which was organized and manipulated by the pro-Yeltsin leaders of the newly formed Independent Union of Miners to demand that control over the mines and other industrial enterprises be transferred from the central Soviet government to the Yeltsin regime of the Russian Republic.

Although the strike reflected the desperate economic conditions facing the miners and their growing hatred for the Gorbachev regime, we warned of the hardline Yeltsinites at the head of the miners union:

“These people are bitter enemies of the Soviet working class. They seek to turn the powerful Soviet miners into a battering ram for openly pro-capitalist forces whose victory would mean the destruction of every remaining social gain - the right to work, cheap housing and low food prices, free medical care-which the Soviet workers have as a result of the collectivized economy.”
– ”Soviet Miners Strike Amid Perestroika Turmoil,” WV No. 522, 15 March

We pointed out how many of the leaders of the new union were “well known to the AFL-CIO,” according to the American union federation’s newspaper, and indeed they had been toured through the U.S., paid for by the Bush government. And we noted how the AFL-CIO is notorious as an agency for CIA intervention into the labor movement internationally. Not a peep on any of this from the Northites.

Among the cabal of CIA types present at the founding congress of the Russian miners union in October 1990 was a delegation from the scab “Union of Democratic Miners” in Britain. A creature of the Thatcher government and the British mine bosses set up to destroy the real miners union during the 1984-85 coal strike, the UDM was there to purvey the imperialist-orchestrated Big Lie campaign that miners union leader Arthur Scargill “mishandled” funds that were donated by Soviet miners during the strike. The bourgeoisie was enraged at this internationalist solidarity from Soviet workers, who dug deep in their pockets to aid this bitter class battle. After years of persecuting the union, and even stealing union funds from the banks, the British state finally had to drop court charges against Scargill.

Spartacists who were present at the Soviet miners congress exposed this anti-union vendetta. Now the Northites say nothing about the whole affair. Small wonder. In 1983 it was their own international leaders, in Gerry Healy’s Workers Revolutionary Party, who instigated the initial anti-Communist witchhunt against Scargill. On the eve of the coal strike, Healy’s press lambasted the miners union leader for accurately calling Solidarność an “anti-socialist” organization. This was a completely calculated “bombshell” by the Healyites and one which was played for all it was worth by Thatcher, her Fleet Street media and the anti-Communist labor bureaucrats in Britain in their campaign to cut off any solidarity with the miners. The Healyites were so proud of themselves that they published an entire pamphlet about it.

David North and the “AFL-CIA”

Here we had the intersection of the two political hallmarks of Healyism – vicious anti-Sovietism and belly-crawling before the Cold War trade-union tops. At the height of the Vietnam War, the Workers League put out a program for a labor party that didn’t mention either the war or the fight for black liberation in the U.S. And in the December 1990 German Bundestag elections, the Northite BSA ran on a program that did not even mention immigrant workers, racist/fascist attacks or women’s rights. And while they included ritual criticisms of the Social Democrats (SPD), the Northites called for votes to the SPD witchhunters, who served as the advance guard of capitalist reunification in a Fourth Reich of German imperialism.

Today, as part of its “orthodox” con game, the Northite “ICFI” is making critical noises about the pro-imperialist labor bureaucracy. North cynically proclaims: “We do not make a fetish of the so-called mass organizations, with their paper membership and their overstaffed and overpaid bureaucracies…. The AFL-CIO, like all the other bureaucracies which exist in this world, is an instrument of imperialism which exists to control and discipline the working class” (Bulletin, 6 September). He calls for a “Fight for a Labor Party Based on a Socialist Program,” and even declares at such a party need not be “some sort social democratic party under the aegis of the AFL-CIO.” Quite a mouthful coming from the same Workers League which for years routinely called on the same sellout AFL-CIO bureaucrats lead everything including general strikes.

In fact, during the Iran-Contragate scandal, the Northites demanded that he AFL-CIO conduct[s] its own independent inquiry into the, illegal White House activities and the direct dangers they pose to the working class” (Labor Must Act on Iran-Contra Crisis, January 1987). This is tantamount to calling on e CIA to investigate itself! The AFL-CIO tops were no less involved in the U.S. war crimes in Central America than the crew in the White House basement. Lane Kirkland was a member of the Rockefeller Commission, which carried out a whitewash of CIA assassination activities for the Ford administration in 1975. Kirkland was a member of the Kissinger Commission, which rubber-stamped Reagan’s support to the contra terrorists in Nicaragua. He is a member of the National Endowment for Democracy, set up to give a veneer of legitimacy to CIA-funded subversion. And the AFL-CIO has for years provided cover for CIA “labor” activities through the “American Institute for Free Labor Development” in Latin America and similar outfits elsewhere.

“Democratic” Cover for Imperialist War

The hypocrisy is mind-boggling, but hardly new for the sinister David North, who was one of the prime authors of the Healyite cop-baiting smear job against the American reformist Socialist Workers Party, “Security and the Fourth International,” and who more recently appealed to the capitalist state to jail SWP member Mark Curtis, while lining up AFL-CIO bureaucrats to back this vicious frame-up. As part of his current pseudo-orthodoxy jag, North is putting his membership’s heads through yet another Healyite wringer as they build for a “Berlin Conference Against Colonialism and War” this month.

This is quite a name for a conference held by this crew. When the U.S. imperialists’ mad bombers were laying waste to Iraq, the central demand of the Northites was for a “national referendum on the gulf war in which all workers and youth of voting age would be able to take part” (Bulletin, 30 November 1990). We pointed out (and perhaps members of North’s Workers League could figure out for themselves) how this amounted to “democratic” support for the imperialist war:

“At the red-white-and-blue ‘antiwar’ demonstration in Washington, D.C. on January 26, the Northites marched under a banner reading: ‘Stop War Against Iraq – Let the People Vote on War.’ This is worse than the most abject social-pacifism, appealing to the imperialist butchers to give a more ‘democratic’ cover to their genocidal war against the Iraqi people. At the time, the American ‘people,’ in their overwhelming majority, supported Bush’s war!”
- WV No. 523, 29 March

North’s attempt to invoke Trotsky in defending this social-patriotic ploy is a slander against the Bolshevik leader, who consistently fought for class struggle against imperialist war. While the “ICFI” was peddling this line, the Spartacist League marched under the banner “Defeat U.S. Imperialism! Defend Iraq!” and the sections of the International Communist League (Fourth Internationalist) fought for labor political strikes against the war.

So our advice to anyone who might be taken in by North’s latest shell game is to look carefully at the record of this dubious tendency which took well over £1 million from Arab bourgeois regimes; which set up the leader of the British miners union for persecution by the class enemy; which has systematically used the capitalist cops and courts against its opponents on the left; which extolled the execution of Iraqi Communist workers, and fingered opponents of the Ba’athist regime for bloody repression; which hailed feudalist Ayatollah Khomeini and Walesa’s Solidarność, the only union Ronald Reagan ever loved; which has supported fascistic Lithuanian nationalists and Yeltsinite “union” misleaders bought by the “AFL-CIA”; which has catered to the AFL-CIO bureaucracy in America and the Fourth Reich Social Democrats in Germany …look carefully at all this and understand that the slimy reality of the Northites is not just what you read on paper. These people are capable of saying and doing anything.

David North: Joseph Hansen's Natural Son (1988)

Workers Vanguard No. 456 (1 July 1988)

Anatomy of a Healyite Russia-Hater

David North: Joseph Hansen’s Natural Son

Workers League leader David North has made no small effort to ensconce himself as the undisputed “leader” of the shattered remnants of Gerry Healy’s corrupt International Committee (IC). To do so of course requires that North declare all of the other former leading lights of Healyism (including the “founder-leader” himself) to be hopeless “renegades.” Never mind that North was trained, tutored and installed as a leader by the same crew he now denounces in order to proclaim himself to be the sole surviving repository of Healyite “orthodoxy.”

One of the most recent installments of this cynical charade is North’s book The Heritage We Defend. Ever so modestly described as “A Contribution to the History of the Fourth International,” in reality it is a 500-page treatise against Healy’s longtime hatchet man Michael Banda. Against Banda’s ignorant, anti-Trotskyist “Twenty-Seven Reasons Why the IC Should Be Buried Forthwith and the Fourth International Built” – a way station on Banda’s road to becoming a Stalinist PR man – North attempts to claim as his own the revolutionary heritage of James P. Cannon’s Socialist Workers Party. This is really egregious considering that the Workers League published hundreds of pages written by their former leader Tim Wohlforth, sneering that Cannon was a barely Marxist, vulgar “window smasher.” This was Wohlforth’s way of making himself out to be, in effect, the first real American Marxist.

As for North, he was specially chosen by Healy to be the WL “leader” as a reward for his eager services as mouthpiece for Healy’s obscene “Security and the Fourth International” campaign – a psychotic smear job impugning the integrity of the old, revolutionary SWP and Trotsky himself. Slandering the SWP’s Joseph Hansen as a conscious agent of the FBI and the Russian secret police, and an accomplice in the murder of Trotsky, the Northites have for over a decade echoed the Stalinist lie that Trotsky was killed by one of his own.

“Security and the Fourth International” grew straight out of Gerry Healy’s own particular combination of years of political banditry and paranoid megalomania. It was Healy’s way of “explaining” his International Committee’s failure to definitively expose and defeat Pabloism, the revisionist current originated by Michel Pablo which in the early I950s abandoned Trotskyism with the perspective of liquidation into the mass Stalinist and social-democratic parties. In the 1960s Joseph Hansen became the main spokesman of the Pabloite degeneration of the SWP as it abandoned the struggle for an independent proletarian vanguard. But instead of political struggle the Healyites concocted their devil theory that Hansen had been hired by the U.S. government and the Kremlin Stalinists to destroy the SWP.

Declaring themselves to be the Fourth International, Healy’s IC kept up a vicious vendetta against the long-since reformist SWP, including the use of the capitalist courts. This is not the only time they crossed the class line. A secret report (which surfaced as part of the fallout from the Healyites’ spectacular implosion) by an IC Commission to investigate “the corruption of G. Healy” details payoffs that were received for services rendered to a variety of oil-rich Arab despots. This included supplying photographs to the Iraqi embassy of a demonstration of opponents of Saddam Hussein’s Ba’athist regime in Iraq. The report of the IC investigation says that while the “Commission has not vet been able to establish all the facts... a receipt for £1,600 for 16 minutes of documentary footage of a demonstration is in the possession of the Commission.” An indisputable and monstrous fact is that the Healyites hailed the execution of 21 Iraqi Communists by Ba’ath rulers in 1979. Healy’s payoff was blood money!

As the Spring 1988 issue of Solidarity, a British journal of “libertarian socialism” which leaked the secret IC report, notes: “It is certain that the anti-Healy camp know far more about the dirtier aspects of the WRP’s past than they have so far publicly admitted.... These include North, who has resolutely chosen not to make public even the skeletal information we publish....” Of course he hasn’t. Of all Healy’s former lieutenants, North is uniquely the one who clings to the real “heritage” of Healyism – in particular the scandalous “Security and the Fourth International” campaign.

“Counterrevolutionary Through and Through”

But North could well be hoist on his own petard. In The Heritage We Defend he writes that “Trotsky had branded the Stalinist bureaucracy as ‘counterrevolutionary through and through’....” One can look through everything Trotsky ever wrote and never find this falsely and stupidly one-sided formulation. On the contrary, as he said in “The Class Nature of the Soviet State” (October 1933): “Whoever fails to understand th[e] dual role of Stalinism in the USSR has understood nothing.” The formulation “counterrevolutionary through and through” which North embraces was the work of... none other than the devil incarnate of Healyism, the arch-agent himself – Joseph Hansen.

It first issued from the big and unwise mouth of Dave Weiss (D. Stevens) during the 1952-53 fight against the pro-Stalinist liquidators in the Cochran-Clarke faction in the SWP. And it was Hansen who landed the assignment of defending Weiss’ statement. This Hansen did with his usual quite capable vigor, including the amplification that the Kremlin Stalinists were not only “counterrevolutionary through and through” but “to the core” (“What the New York Discussion Has Revealed,” Joseph Hansen, SWP Internal Bulletin, Vol. 15, No. 4, February 1953). Indeed Hansen was the biggest exponent, if the number of pages count, of the view North falsely ascribes to Trotsky. Yet who in the Soviet Union could be characterized as “counterrevolutionary through and through”? Only an out-and-out Great Russian fascist, something out of the present-day Pamyat or perhaps a CIA mole in the KGB could fit this bill. But this certainly doesn’t describe the Stalinist bureaucracy. A conservative nationalist caste resting on the proletarian property forms established by the Russian Revolution, the Kremlin bureaucracy is the product of and reflects the contradictions of a bonapartist regime issuing from the degeneration of a workers revolution in a backward country surrounded by imperialism.

In “Not a Workers’ and Not a Bourgeois State?” (November 1937), Trotsky explained:

“The proletariat of the USSR is the ruling class in a backward country where there is still a lack of the most vital necessities of life. The proletariat of the USSR rules in a land consisting of only one-twelfth part of humanity; imperialism rules over the remaining eleven-twelfths. The rule of the proletariat, already maimed by the backwardness and poverty of the country, is doubly and triply deformed under the pressure of world imperialism....

“In its capacity of a transmitting mechanism in this struggle, the bureaucracy leans now on the proletariat against imperialism, now on imperialism against the proletariat, in order to increase its own power. At the same time it mercilessly exploits its role as distributor of the meager necessities of life in order to safeguard its own wellbeing and power. By this token the rule of the proletariat assumes an abridged, curbed, distorted character. One can with full justification say that the proletariat, ruling in one backward and isolated country, still remains an oppressed class. The source of oppression is world imperialism; the mechanism of transmission of the oppression – the bureaucracy.

“If in the words ‘a ruling and at the same time an oppressed class’ there is a contradiction, then it flows not from the mistakes of thought but from the contradiction in the very situation of the USSR. It is precisely because of this that we reject the theory of socialism in one country.”

Far from characterizing the bureaucracy as “counterrevolutionary through and through,” in the Transitional Program, the founding document of the Fourth International, Trotsky wrote that “all shades of political thought are to be found among the bureaucracy: from genuine Bolshevism (Ignace Reiss) to complete fascism (F. Butenko)” The dual nature of the Kremlin oligarchy is fundamental to the Trotskyist position of unconditional military defense of the Soviet Union combined with the call for political revolution to oust the bureaucracy.

Trotsky presented his fullest analysis of the contradictory nature of the Stalinist bureaucracy in the last political battle of his life, against the repudiation of Soviet defensism by the petty-bourgeois Shachtman/Burnham opposition in the SWP in 1939-40. Even in the context of some of the most heinous counterrevolutionary crimes of the Soviet government – the destruction of the Bolshevik Party, the strangulation of proletarian revolution in Spain by the Kremlin bureaucrats, the beheading of the Red Army – Trotsky never characterized the bureaucracy as “counterrevolutionary through and through.” But Shachtman certainly did.

Defending Baron von Mannerheim’s Finland against Soviet intervention, Shachtman argued that in Poland the Red Army had acted only as a “counterrevolutionary force.” Trotsky, who saw the possibility for a social transformation in Finland coming with the Red Army intervention, pointed to the expropriation of the capitalists and large landowners in Eastern Poland which took place despite the Stalinist degeneration of the Soviet workers state. Against Shachtman he argued:

“the Kremlin with its bureaucratic methods gave an impulse to the socialist revolution in Poland.... This impulse in the direction of socialist revolution was possible only because the bureaucracy of the USSR straddles and has its roots in the economy of a workers state.”

As Trotsky noted, the seizure of Eastern Poland was both “a pledge of the alliance with Hitler” and “a guarantee against Hitler” through the nationalization of semi-feudal and capitalist property. To understand this means understanding real dialectical materialism as opposed to the cynical shell game of “dialectics” employed by the Healyites. For years they were distinguished by obfuscating, idealist lectures on the ever-mystical “dialectic” which nobody could understand – except Healy. Only the self-declared “founder-leader” was meant to understand, just as only he could determine “security” clearances. “Dialectics” and the “Security” slanders were the underpinnings of the Healy cult, designed to keep the membership completely confused and above all intimidated by their omnipotent leaders.

David North: A Joseph Hansen of the Second Mobilization

But just how is it that David North has come to embrace the politics of Joseph Hansen – a man he has reviled as the sinister arch-nemesis of Trotskyism and slandered as the number one agent responsible for the supposed infiltration and takeover of the SWP by the U.S. government? Applying the demonology of Healyism to North himself one can only ask: can he be far behind? Not subscribing to the paranoid conspiracy theories that are the stock-in-trade of Healyism against their opponents, we can trace the political genealogy of Hansen/North’s shared anti-Soviet revisionism back to the source. In his 1953 document “What the New York Discussion Has Revealed,” Hansen proclaims,

“I trace the current differences back to the discussion on Eastern Europe....
First of all, in taking the position that Stalinism had brought about an overturn in property forms in these countries, I raised the question myself as to how this affected our estimate of the political character of Stalinism. My answer was that the power to make such changes did not require us to revise the concept of Stalinism developed by Trotsky. Stalinism still remained counterrevolutionary to the core.”

Leaving aside Hansen’s wrongful attribution to Trotsky the view that the Kremlin bureaucracy was “counterrevolutionary to the core,” his analysis of the differences that developed within the SWP and the Fourth International are quite to the point. The SWP had a very hard time for a couple of years explaining how deformed workers states were created in Eastern Europe. So did the leadership that emerged at the head of the Fourth International in Europe where the most promising cadres had been killed by war and by fascist and Stalinist repression. As we noted in “Genesis of Pabloism” (Spartacist No. 21, Fall 1972), they were confronted with the question:

“...is the Trotskyist understanding of Stalinism correct if Stalinism shows itself willing in some cases to accomplish any sort of anti-capitalist social transformation? Clinging to orthodoxy, the Trotskyists had lost a real grasp of theory and suppressed part of Trotsky’s dialectical understanding of Stalinism as a parasitic and counterrevolutionary caste sitting atop the gains of the October Revolution, a kind of treacherous middle-man poised between the
victorious Russian proletariat and world imperialism.”

Empirical evidence tore a gaping hole through the Trotskyists’ post-WW II attempt at wooden orthodoxy. The impressionistic Pablo simply threw overboard “the old Trotskyism” and declared that the Stalinists could play an “objectively revolutionary” role; his conclusion was deep entrism into the Stalinist and mass reformist parties in Europe. During 1951-53, Pablo’s liquidationism led to the destruction of the Fourth International. The SWP (with Healy in tow) waged a belated and partial fight against Pabloism, splitting out the anti-liquidationist International Committee. But a few years later over the Cuban Revolution the SWP followed suit and Joseph Hansen was the main theoretical apologist. The need for a Trotskyist party was dropped as Castro’s petty-bourgeois guerrillas were embraced as the modern-day equivalent of Lenin and Trotsky’s Bolsheviks.

In the name of combatting Pabloite revisionism the Healyites reacted by simply putting a minus where the SWP put a plus. Making a caricature of the sterile, formal “orthodoxy” that had characterized the post-World War II SWP, the Healyites argued that since there was no Trotskyist party in Cuba no social transformation had taken place – in short they stood Pabloism on its head. In contrast the Spartacist delegation to the 1966 conference of Healy’s international Committee argued:

“...the petty-bourgeois peasantry under the most favorable historic circumstances conceivable could achieve no third road, neither capitalist, nor working class. Instead all that has come out of China and Cuba was a state of the same order as that issuing out of the political counter-revolution of Stalin in the Soviet Union, the degeneration of the October. That is why we are led to define states such as these as deformed workers states. And the experience since the Second World War, properly understood, offers not a basis for revisionist turning away from the perspective and necessity of revolutionary working-class power, but rather it is a great vindication of Marxian theory and conclusions under new and not previously expected circumstances.”
– ”Spartacist Statement to International Conference,” Spartacist No. 6, June-July 1966

The Healyites’ opposition to the SWP over the Cuban Revolution had little to do with fighting the Pabloist liquidation of Trotskyism. In fact Healy’s line was that the Fourth International had been rebuilt, the International Committee was it, and Pabloism was simply proto-Stalinism. In contrast the Spartacist delegation to Healy’s 1966 IC conference argued that the actual reconstruction of the Fourth International could only he achieved through completely rooting out this revisionism: “Up to now, we have not done very well, in our opinion, in smashing the Pabloites: the impact of events alone, no matter how favorable objectively or devastating to revisionist doctrines, will not do the job.” As we pointed out: “The ‘orthodox’ movement has still to 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.” This was borne out in the Healyites’ embrace of various “Third World” Stalinists like Ho Chi Minh and Mao’s “Cultural Revolution.”

For daring to raise our political differences openly in 1966, we were denounced by Healy as petty-bourgeois American chauvinists, and expelled for refusing to confess to the charge. False confessions were a matter of “discipline” in the political cult of the megalomaniac Gerry Healy, the man whose shoes David North is desperate to fill. Almost two decades later Healy himself was ousted amidst lurid charges of moral turpitude leveled by his former lieutenants. In an interview “On the 1966 Split” in Spartacist (No. 36-37, Winter 1985-86) covering the subsequent rather spectacular implosion of Healy’s British Workers Revolutionary Party, comrade James Robertson commented:

“...we have some stuff to say now, because we were the principled people the whole way. And I would suggest that the main reason is not some morality associated with Americans versus English persons, but that over a long period of time, through many fights, through one tendency after another, we stood concretely for the defense of the Soviet Union, against imperialism, and against the damn Russian bureaucracy. That has in fact been our political compass, and it also generates a certain cultural superstructure and a certain morality.”

The “Principles” of Political Bandits

The Healyites had no such compass. Despite their inverted Pabloism over Cuba, denying that a social revolution ever took place, Healy’s International Committee had a perfectly Pabloite tailist line toward the Vietnamese Stalinists and went on to herald Mao’s “Cultural Revolution.” It was their support to the mythical “Arab Revolution” in 1967 that provided the theoretical preparation for their various forays across the class line, some of which have come home to haunt them. And it was under the cover of “anti-Stalinism” that the Healyites hailed the murder of 21 Iraqi Communists by the Ba’athist regime.

While they lined their pockets with Arab gold and availed themselves of the forces of the bourgeois state against leftist political opponents, the Healyites would still invoke Leninist “orthodoxy” when it suited their purposes. Last year saw North screaming foul at the SWP for using the capitalist courts against the workers movement, to wit wing the Workers League for costs in North’s years-long court suit against the SWP (see “David North and the Law,” WV No. 430, 12 June 1987). More recently, witness the 1988 “Election Manifesto” of the Workers League’s candidates for president and vice president. The call to “establish the political independence of the American working class from the capitalist class” is rather remarkable from an organization which continues to drag leftists through the bosses’ courts.

The WL’s election manifesto also demands that “The working class must defend the Soviet Union.” But repeatedly over the past two decades North’s Workers League has taken the side of virulently anti-Soviet forces – with Khomeini’s mullahs in Iran, with the CIA’s company union Solidarność in Poland, with U.S. imperialism’s Islamic cutthroats in Afghanistan. To cover for their anti-Sovietism the WL has invented a global conspiracy between Washington and Moscow. Or rather they borrowed it from Pierre Lambert Healy’s one-time bloc partner, who regularly vituperates against a “counterrevolutionary Holy Alliance, sealed a Yalta,” supposedly uniting the White House and the Kremlin. They just leave out the Cold War, and for a reason.

“Down with Imperialism and Stalinism! Unite Soviet and American Workers” was the front-page headline of “Workers League Political Committee Statement” in the 27 May Bulletin. This slogan, equating the bureaucratic misleaders of the degenerated/deformed workers states with the capitalist class enemy, comes straight out of Lambert’s Organisation Communiste Internationaliste. “Long live the struggle of the youth against the Stalinist bureaucracy and imperialism!” was the clarion call for the Lambertistes’ 1971 Essen Conference. The OCI’s Stalinophobia led straight into the camp of the most right wing Cold War social democrats. For example, several dozen of the OCI members, including Lambert himself served as paid functionaries of the French social-democratic union Force Ouvrière, which has been linked to the notorious CIA operative Irving Brown going back to 1947.

Applied to the U.S. the Northites’ resurrection of this slogan leads straight to the State Department “socialism” of Norman Thomas and Max Shachtman in his later years. The Bulletin writes that “Gorbachev’s policies of perestroika (restructuring) and glasnost (openness) are the road to the restoration of capitalism in the USSR and the transformation of Stalinist bureaucrats into capitalists.” Evidently, for the Northites, no counterrevolution to overthrow the remaining gains of the October Revolution would be required, just a cold transformation of the Soviet degenerated workers state into a capitalist state imposed from the top. As Trotsky argued, this is to run the film of reformism in reverse, positing a peaceful transition from a workers state to capitalism.

The Northites’ “analysis” of where Gorbachev’s Russia is going is unmitigated Third Campism, which parenthetically is a quintessential expression of petty-bourgeois American chauvinism – the charge which Healy came up with and North continues to trumpet against the Spartacist League. North’s view is reality seen through the prism and under the pressure of U.S. imperialism. As Trotsky argued against Shachtman and Burnham in “A Petty-Bourgeois Opposition in the Socialist Workers Party”:

“A vulgar petty-bourgeois radical is similar to a liberal ‘progressive’ in that he takes the USSR as a whole, failing to understand its internal contradictions and dynamics. When Stalin concluded an alliance with Hitler, invaded Poland, and now Finland, the vulgar radicals triumphed; the identity of the methods of Stalinism and fascism was proved! They found themselves in difficulties however when the new authorities invited the population to expropriate the landowners and capitalists - they had not foreseen this possibility at all!”
– L. D. Trotsky, In Defense of Marxism

Healy and North also charged the Spartacist League with ‘being “agents” of Joseph Hansen because we were among the first to protest Healy’s despicable “Security and the Fourth International” slanders. In protest demonstrations outside Workers League meetings we defended Hansen as “an honest revisionist.” That’s more than we can say for North and his gang who have grievously crossed the class line so many times that who, what or where they are is forever a subject for debate.

We waged a relentless political struggle against Hansen’s anti-Trotskyist revisionism. Healy could never have done so because it would mean confronting his own politics. So he “explained” the SWP’s degeneration by slandering Hansen as a government agent who was hired to infiltrate and destroy the SWP. Yet here is North peddling Hansen’s “counterrevolutionary through and through” line. Any of the WL leader’s acolytes who accept the demented logic of his “Security” scam ought to be asking some nervous questions. How did it happen? Did Hansen secretly recruit North? And who will the next “great leader” be?

Consider the fate of North’s former lideres máximos. Yesterday’s self-declared “founder-leader” Gerry Healy is today’s KGB agent, according to the Bulletin. In North’s eyes, every one of Healy’s lieutenants (except North him self, of course) has become a demoralized renegade - from Banda to Cliff Slaughter, the longtime “theoretical” mouthpiece for Healyite crimes, who now admits that the “Security” slanders were a fraud. And let’s not forget Tim Wohlforth, Healy’s former hapless American toady, who warmed the seat North now occupies at the head of the Workers League. Wohlforth was axed amidst allegations of CIA connections through the family of his girlfriend Nancy Fields. Actually, to say he was axed is unfair to the real character of Wohlforth-he even voted for his own expulsion. Truly the son of “the god that failed,” in 1981 Wohlforth resurfaced in the pages of New Left Review in the role of saved-again social democrat denouncing Soviet totalitarianism.

Stalin never claimed that all the Bolshevik Central Committee at the time of the October Revolution were counterrevolutionary spies and traitors. Exempted were Lenin, a few who died early and a couple who lucked out and died a natural death at old age. David North, the new boy of the IC leadership, declares that every well-known leader of the British Healyites (SLL/WRP), and not least the leading American satellite, Wohlforth, are degenerate if not deeply flawed or downright wrong from the beginning. Thus North claims that he is the legitimate heir to what? At least Stalin, by hiding Lenin’s break with him, could claim the great Lenin. Moreover, Stalin could cite himself as an “Old Bolshevik.” But North, until the final implosion of the WRP, was a self-confessed toady to the “great” Gerry Healy and the heir to Tim Wolhforth.

Only someone who wanted to be “the leader,” no matter of what, would be so desperate to claim the heritage of authentic Healyism. To any rational elements in North’s WL and IC we can only say: Your organization is rotten through and through and to the core! North is attempting to secure his position at the head of an organization with a heritage of corrupt links with various murderous Arab colonels and sheiks. That this is not a suitable vehicle for the socialist liberation of mankind is a vast understatement.