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.

Wohlforth Embraces Pabloism (1973)

Workers Vanguard No. 22 (8 June 1973)

NYC Workers League Class Series

Wohlforth Embraces Pabloism

This is the second of two WV articles dealing with the issues raised in the recent Workers League public class series in New York City.

The Workers League's pretensions to internationalism and the continuity of the Fourth International are just as phony as the pseudo-dialectics which Wohlforth prates about in order to obscure any consideration of program. Thus the WL systematically betrays the program of the Fl by, among other things, its constant chasing after militant-talking Stalinists (Mao Tse tung or Ho Chi Minh) and leftist nationalists (such as Huey Newton), its "critical" support for aspiring labor fakers (Morrissey in the NMU), its adaptation to even the most reactionary elements of the labor bureaucracy (Meany and Abel) and its refusal to fight in the unions for solidarity with the Vietnamese revolution. Now it abandons the Transitional Program explicitly with the line that wage demands are inherently revolutionary, and transitional demands therefore unnecessary and sectarian.

IC Fiction

But even organizationally, the “internationalism" of the WL is a fiction. Wohlforth equates internationalism with abject subservience to the Socialist Labour League of Gerry Healy, in much the same manner as Earl Browder's Communist Party slavishly capitulated before every twist and turn ordered by Stalin. The Healyite "International Committee" has always been an empty form without content - a rotten bloc between the British SLL and the French Organisation Communiste Internationaliste in which each pursued its own policies (often sharply at variance with one another) and divided up the rest of the world as spheres of influence (Healy getting the English-speaking countries, while the OCI received the rest of Europe and South America).

A carefully preserved secret until 1966 was the fact that there was no discipline in the International Committee, the only basis for decision-making being unanimity. Thus the repeated demands by Healy from 1962 to 1966 that the Spartacist tendency subordinate itself to "international discipline" (which in every case we stated we would do, while refusing to sign, as was the fashion of the Stalintern, documents which amounted to a repudiation of our positions or else simply apolitical demonstrations of servility) were nothing but the capricious whim of a would-be petty dictator. In the fifth class Wohlforth explained this fraud by saying, well, nobody's perfect. But to speak of a federated international bloc as the "International" is no less absurd than to profess that a federated national grouping which does not "yet" have democratic centralism can be a vanguard party. At the class on Spartacist Wohlforth denounced SL National Chairman James Robertson for alleged "anti-internationalism" because at the 1966 IC Conference Robertson had unwittingly violated an unannounced conference "rule" by missing a session. Wohlforth's demagoguery only revealed the WL's boundless hypocrisy, for the SL had just distributed to the class participants material showing that Wohlforth himself – in direct violation of a categorical instruction from Healy – did not bother to attend the conference at all.

Behind the question of organizational structure (itself a crucial programmatic aspect of Leninism) stands the question of the very nature of the IC as an unprincipled political bloc. For years the SLL and OCI held sharply counterposed positions on central questions – even on the very nature of the party. Thus the OCI has maintained that the basis of the party is program, while to the SLL, the basis of the party is "Marxist philosophy." Similarly, the OCI held the view that the Fourth International had been destroyed by revisionism and needed to be reconstructed, while the SLL proclaimed that the IC is the Fourth International. Nor was there agreement on issues such as the 1967 Arab-Israeli war (over which the OCI took a revolutionary defeatist position for both sides while the SLL supported the "Arab Revolution"), or the united front (which the SLL sees as a tactic while the OCI supports a "strategic united front").

In his presentation at the seventh class (on the split with the OCI) Wohlforth presented an elaborate fairy-tale history of the IC, explaining that there were, of course, differences, but they had to be discussed instead of precipitously splitting. As revealed by documents published by the SLL and OCI after the split, the actual "discussion" in the IC had the character of two ships passing in the night.

A perfect example was the true story of the “split in the IC at the Essen youth conference." According to the WL/SLL the prime sin of the OCI, its failure to recognize the absolute centrality of the struggle for dialectics, was revealed by the OCI's document for the June 1970 London pre-conference of the IC. However, that document was published in late 1969, yet nine months later the SLL had no alternative to offer to the meeting; it also refused to vote on the document. Another twelve months pass and the SLL delegation arrives at the Essen youth conference to be faced with an OCI-written document which had the same line as the previous one; in the meantime, of course, Healy and Co. sill had not produced an answer. But this was apparently too much, so in typical Healyite fashion the English delegation offered an amendment-ultimatum on "dialectics" which was voted down by the French-dominated delegates assembly. The SLL now maintains that this is when the IC really split. However, at the time the SLL delegation not only did not take their amendment onto the floor of the conference to fight it out, but they then went on to give the conference enthusiastic coverage in their press; the "already split" IC continued to appear in the pages of the Bulletin as the continuity of the Fl.

OCI Centrists and SLL Political Bandits

The formal split came when the OCI handed Healy a nice factional club by supporting the centrist policies of the Partido Obrero Revolucionario, which in the 1971 Bolivian events took a line similar to that of the POUM during the Spanish civil war. To avoid being tarred with the same brush Wohlforth claimed that Lora [head of the POR] had never been in the International Committee and he never would have been admitted to it without a full discussion on his political history. But, as an SL spokesman pointed out at the class, the Healyites themselves had been very happy to take credit for the influential POR as recently as one month before the military coup (see the uncritical article which hailed the POR as "the Bolivian section of the International Committee" in the Bulletin of 19 July 1971)!

At the time of the split, Healy was able to capitalize on the OCI's centrist positions of support for the POR and a "strategic united front" in order to pose as the principled left wing of the IC. But the history of the SLL and WL reveals that they have wallowed in every opportunist deviation for which they now denounce the OCI. Thus, while the OCI accommodated to the French Stalinists by calling for votes to the CP in the recent elections (in spite of the fact that the CP was part of a popular front),the Workers League flatly supported the pop front: "The illusions of the workers can only be exposed by first electing the Left Union in the second round... " (Bulletin, 12 March 1973).

The SLL/WL's 'left" criticisms of the OCI are fraudulent. But no less fraudulent are the Healyites' pretensions to anti-revisionism. The SLL/WL posture toward the Pabloists has always been that of an estranged spouse alternating vituperation with reconciliation. Thus the 20 July 1970 Bulletin reported Healy's overtures to the United Secretariat with a proposal for political discussions and common work, hopefully to result in a "joint international conference" between the IC and the Pabloists. An internal WL directive dated 15 March 1970 earnestly explained the need to tone down criticisms of the SWP/YSA because:

"The perspectives document agreed to in England proposed that the road to the American working class is through the YSA and it meant just that."

The whole thrust of the Healyite overture was to legitimatize the Pabloist cabal of Mandel, Frank, Hansen and Co. at precisely the moment that the USec was becoming markedly unstable and left currents were beginning to develop in several sections. The symbiosis between the USec Pabloists and the IC "inverted Pabloists" was clearly revealed here again, and the USec leadership was enabled to adopt a "principled" facade by turning the Healyites down.

When the OCI and SLL came to a parting of ways in 1971, this finally stripped naked the facade of internationalism of the "International Committee." A true International is composed of tendencies which are defined by program, not geography. (Even in the badly degenerated Socialist Workers Party, whose international ties to the IC had long been merely formal, the motion toward reunification with the Pabloists caused enough concern among some elements to precipitate the formation of an anti-Pabloist faction.) But the 1971 IC split had no ramifications in either of the leading national organizations: Apparently the entire SLL was in agreement with the "British line" and the entire OCI with the "French line."

Cuba and Inverted Pabloism

The WL class series was an instructive lesson in the methodology of Pabloism. The class on Cuba demonstrated Wohlforth's total confusion about the process of the Cuban revolution which, under petty-bourgeois nationalist leadership, uprooted capitalist property relations and established a deformed workers state. Duplicating in its essentials the Chinese revolution, Cuba illuminated the problem which had faced orthodox Trotskyists following World War II: how could capitalism have been overturned in Eastern Europe, and then China, without proletarian revolutions under Trotskyist leadership? Did this mean our evaluation of Stalinism was wrong? Unable to creatively extend orthodoxy to explain these transformations, the postwar Trotskyist movement's inability to solve this problem opened the road to a revisionist answer: Pablo's 1951 theory that under the pressure of a new objective reality Stalinism could become revolutionary, and thus the Trotskyists had no further function except as a pressure group to aid this. "blunted instrument" to realize its new-found revolutionary potential.

The orthodox Trotskyists could only reply by pointing in horror at the necessary consequence: if Pablo's theory were , correct, the very founding of the Fourth International was a mistake. Seeking to resist Pablo's liquidationist conclusions, they sought to deny reality until it overwhelmed them (the SWP did not officially characterize China as a deformed workers state until 1955). The response of the Healy tendency to the Cuban revolution was the same: according to the WL/SLL, Cuba is still a capitalist state.

Spartacist spokesmen at the class pointed out that this response accepts the method of Pabloism while seeking to reject its conclusions. At the heart of both is the acceptance of the deformed workers states as being only quantitatively different from healthy workers states. Thus the SWP justified its uncritical accommodation to Castro, saying Lenin's Russia was a very good workers state; Stalin's Russia was a very bad workers state; Castro's Cuba is a pretty good workers state (getting better all the time), and after all, so long as it's a workers state, that's good enough. Healy argues that if a petty-bourgeois leadership could establish a deformed workers state (which, for him, is just another workers state) then the Transitional Program is wrong in claiming that a Trotskyist working class leadership is necessary for successful proletarian revolution: therefore, Cuba is not a workers state.

Confronted with this analysis, Wohlforth vehemently insisted that indeed there "is no qualitative difference" between a healthy and deformed workers state. In this one statement, Wohlforth reveals his fundamental kinship with the Pabloists and sweeps aside the achievement of Trotsky in recognizing in 1933 that a qualitative change had taken place as a result of the Stalinist degeneration of the Soviet Union and the Third International. The consolidation of power in the hands of a petty-bourgeois stratum (the bureaucracy) made necessary a new international party to struggle for political revolution in the Soviet Union as well as for social revolution against capitalism.

As one could expect by now from the fabled Healyite "dialectics,” the SL's position (that Cuba is a deformed workers state) was termed by Wohlforth (who considers Cuba to be capitalist) as "Shachtmanism"! Anyone with the slightest familiarity with the positions of Shachtman (who split from Trotskyism in denying that Russia was a degenerated workers state) can easily understand the absurdity of such an accusation.

Vietnam: Pabloism and Social Patriotism

Healy/Wohlforth's contortions over Cuba are nothing, however, in comparison with the blatant and disgusting Pabloism of the WL on the question of Vietnam. In a positively obscene laudatory obituary (Bulletin, 22 September 1969) for Ho Chi Minh, the murderer of the Indochinese Trotskyists, the WL refers to him as an "instinctive" fighter against imperialism (akin to Hansen's description of Castro as a "natural" Marxist). Some of the articles of the Healy/ Wohlforth tendency on Vietnam could be set side by side with those of the arch-Pabloist Ligue Communiste and even a careful reader would have trouble figuring out which was which(for example, the reference to the "transcendental power" of "peoples war" in the February 1968 Fourth International).

Wohlforth's class presentation on Vietnam was a textbook example of Pabloist method. To begin with, the Vietnam struggle of the 1960's was essentially a "movement of the colonial peoples under Stalinist leadership." It was under Stalinist leadership, but "for 20 years Stalinism could not compromise the movement as it wished to"! And, of course, there are different wings of the Stalinists and "the North Vietnamese have time and time again come into conflict with the Soviets; the latest time was last December." To top it all off was a little bit of spicy orthodoxy, claiming that "our position is for victory of the NLF against the U.S. imperialists."

Wohlforth pointed out the fundamental unity of the WL position on Vietnam and its support for the "Arab revolution" and for the bourgeois Indian army in the 1971 war with Pakistan over Bangla Desh. (At the time, the Bulletin, 20 December 1971, gave "critical" support to Indira Gandhi. In the class Wohlforth revealed what "critical" support means to the WL, saying "we were 1,000 percent for the victory of the Indian army.") He also emphasized several times that "the colonial revolution is not simply a workers revolution."

To begin with, the term "colonial revolution" has been given circulation in the "Trotskyist" movement by the Pabloists who, with their theory of "epicenters" and "blunted instruments," wish to deny the world-wide unity of the permanent revolution. Trotskyists do not call for a "colonial" revolution,” Brother Wohlforth, but for a proletarian (yes, workers!) revolution in the backward countries (such as Russia), leaning on the peasantry, to successfully carry through even the democratic tasks of national liberation and agrarian revolution. Like the Pabloists of the United Secretariat the WL used the label "colonial" revolution to justify political support to various left-talking nationalists.

The "method" of the Healyite Workers League is thus ultimately that of Pabloism. No longer believing in the possibility of proletarian revolution under Trotskyist leadership, the Pabloists seek to construct a rationale for tailing non-proletarian strata (e.g., petty-bourgeois nationalist movements, "left" Stalinists, out-bureaucrats in the unions), on the grounds that the "objective situation" compels even a "blunted instrument" (e.g., the Stalinist NLF in Vietnam) to make the revolution. In contrast to those "purists" or "sectarians" who insist that only the proletariat, under Trotskyist leadership, can create a healthy workers state and open the road to socialism, the WL in truly Pabloist fashion embraces the most “left" of what is, instead of undertaking the arduous task of building the Trotskyist party, the embodiment of the Transitional Program of the Fourth International.

To Wohlforth's apology for the Vietnamese Stalinists, SL supporters at the fifth class counterposed the Trotskyist position of unconditional defense of the deformed workers states against imperialism and political revolution against the bureaucratic misleadership which sabotages that defense and the further progress of the socialist revolution. To this Lucy St. John, editor of the Bulletin, counting on the ignorance or cynicism of WL members, made the fantastic charge that "Spartacist refuses to call for military defense of the Vietnamese workers." On the basis of this flat lie, WL supporters proceeded to accuse the SL of "Shachtmanism" on Vietnam. In the fashion of all Stalinist apologists, the WL seeks to link authentic Trotskyism with those, like Shachtman, whose anti-Stalinism proceeds from their motion toward reconciliation with the bourgeoisie.

Anyone remotely familiar with the history of the Spartacist League knows that the SL has consistently fought for military defense of the Vietnamese revolution, for the exclusion of the bourgeoisie from the antiwar movement and for working-class strike action against the war. The SL is the only tendency which has consistently raised the Vietnam war in its trade-union work, calling for immediate withdrawal of U.S. forces and solidarity with the Vietnamese revolution. In contrast, the WL has time after time capitulated on the defense of the Vietnamese revolution in order to pursue its opportunist appetites.

SL speakers at the class on Vietnam cited as examples the 1971 program of the WL youth group (Young Socialists) which did not mention this demand; the refusal of the WL's short-lived "Trade Unionists for a Labor Party" front group to include any mention of the war or racial oppression in its program (Bulletin, 18 December 1967); the WL's support for U.S. Senator Vance Hartke and the SWP in the brutal physical expulsion of SL and Progressive Labor supporters who were demanding the ousting of the bourgeoisie from the July 1971 NPAC conference.

At the fourth class the SL distributed to those attending copies of a 1965 leaflet signed by Tim Wohlforth (along with all the pacifist social-patriots, Stalinists, SWP, PL, etc.) which demanded simply "Stop the War in Vietnam Now!" and continued:

…The war in Vietnam is not necessary for national security. The United States is the richest, most powerful, most heavily armed nation in the world. A continuation of the conflict cannot enhance the honor of the American people...." [emphasis in original]

Meany as "Blunted Instrument"

It is in its policies toward the union movement that the Workers League has demonstrated in the grossest fashion its fundamentally Pabloist method. The WL has always conceived of its role as that of a left pressure on the existing Meanyite bureaucracy, which the WL claimed would be forced to build a labor party by the mounting unrest in the union ranks. Wohlforth has heralded every cynical and empty "labor party" threat by the bureaucrats, deliberately masking the fact that these statements were designed as back-handed support to Nixon by a labor bureaucracy so reactionary that it could not swallow the 'radical' McGovern.

For example, the 17 July 1972 Bulletin front-page banner headline proclaimed, 'AFL-CIO Tops Threaten Labor Party at Miami.' The 25 September 1972 Bulletin front page crowed "Steel Convention Lambasts Democrats" and triumphantly hailed Meany's overture to Nixon as if it were a step toward a break with bourgeois politics in favor of a workers party:

"Meany made it even more clear than before that the fundamental question was not just McGovern but was indeed the support of labor for the Democrats which has gone on for some 36 years and today is at the breaking point."

One issue of the Bulletin featured a cartoon showing a locomotive (the working class) driven by an uneasy Meany rolling over the capitalists. The implication is clear: Meany is, the 'blunted instrument" who can be pushed, unwillingly to be sure, into leading the workers against the class enemy. This cartoon is the epitome of Pabloism. Reflecting the objectivism which lies at the heart of the Healyite method, this cartoon denies Trotsky's statement that the crisis of humanity is reduced to the crisis of revolutionary leadership, instead investing the present leaders of the class with the power to fight for the workers' interests. The crisis of leadership becomes irrelevant.

In order to climb in bed with the labor bureaucrats the WL has always pursued the most shameless economist policies in its relatively sparse trade-union work. Hence the constant calls for a labor party formed by the bureaucrats (and based on the bureaucrats ' anti-communist program); hence the deliberate omission of the war and race, questions from the 1967 TULP program; hence the "critical support" to out-bureaucrats like Hill of the SSEU and Morrissey of the NMU.

A highlight of the class series was the intervention by members of the Militant-Solidarity Caucus of the NMU who pointed out that the WL's real appetites were revealed by the Bulletin's support to Morrissey, whose entire program consists of vague promises of democracy and a policy of suing the union in the capitalist courts (which the WL claims to oppose). In contrast to Morrissey, the M-SC is based on a full program which includes the demand for a labor party to fight for a workers government and international class solidarity with the Vietnamese revolution. Also unlike Morrissey, the M-SC has waged a determined fight against the discriminatory job-trusting "group system," called for building an international union instead of protectionist legislation and campaigned for the release of WL supporter Juan Farinas (who was jailed after a frame-up conviction for "draft evasion"). In a classic statement of the totally reactionary implications of WL policies in the unions, Wohlforth remarked at the fifth class:

“Our policy in the NMU, in the Mine-workers, in the SSEU, is to support left bureaucratic layers in the elections, and then criticize them. We support Morrissey 100 percent in the elections and criticize him down the line.... The Militant-Solidarity Caucus is just a showpiece and goes against the movement of the working class.... Morrissey is just a bastard:-but he's an out-bastard: We will support the out-bastards against the in-bastards every time, just as long as we get a little room to breathe in the unions."

So, according to Wohlforth, the demand for a labor party, the struggle against the special oppression of youth through the “group system, even defense of the WL cause celebre Farinas – all this "goes against the movement of the working class." To grasp the incredible cynicism of the WL, one need only recall that Wohlforth referred to the 1971 NYC police strike as an. expression of the movement of the working class. That is the result of WL Pabloism: support for cops and bureaucrats and opposition to real class-struggle politics:

The "Final" Crisis

Behind Wohlforth's rejection of Trotskyist trade-union work as an “empty showpiece" lies his unsated appetite for a 'left" section of the trade-union bureaucracy to tail-end. (Similarly Healy, who claims to have broken with Pabloism in 1953, has never repudiated his policies of the 1940's and I950's, when he was deeply submerged in the "Labour left' in a classic example of Pabloist "entrism sui generis" which lasted more than a decade.) In order to fulfill this appetite Wohlforth must, however, have something to bargain with, and this means building a movement with at least some pretense to revolutionary aspirations. Such a movement will inevitably be composed of human beings, and Wohlforth must therefore reckon with the possibility that at least occasionally some of his followers will feel the need to explain to themselves the bizarre flip-flops in WL policies. To handle this "unfortunate" eventuality one needs a "theory" which explains why selling out the rank and file to the bureaucrats is really an "expression of the movement of the working class." This is the purpose of the crisis-mongering of the Workers League.

The essence of the Healyite "economic analysis" is the contention that the “post-war boom" has been brought to an end by the international financial crisis: Since gold reserves can only cover at best around 10 percent of the value of world trade, the capitalist system must inevitably collapse. In other words, we have here the keystone to all objectivist theories -- the final crisis. Exaggerated? Let the SLL/WL speak for themselves:

"Ever since 1914 the capitalist system has been gripped by contradictions that could only be solved by slump or war. Now its corpse – bloated by the postwar inflation-has burst. And the system is turning to dust.... "
-- "Capitalism Hits the Dust as Nixon Puts the Boot In," Workers Press, 15 February 1973

"The latest moves by the Nixon administration in devaluing the dollar mark a rapid acceleration of the capitalist system towards a breakdown and crisis deeper than at any time in its history." [emphasis in original] "Development of the Post-War Economic Crisis -- Draft Resolution of the Socialist Labour League." Workers Press, 24 February 1973

"The most frantic gold rush in modern history... is a warning to the working class that the latest dollar devaluation is a direct prelude to the complete collapse of the world economic system." [emphasis in original] "Gold Price Soars to New Heights," Bulletin, 5 March 1973

If such a crisis is so severe that it can destroy the economic base of capitalism, the bourgeoisie will be inexorably driven to fascism while the labor bureaucrats (in the WL's cloud-cuckoo-land of economic determinism) must therefore fight for the interests of the working class.

"The next Nixon government will not compromise with the working class as past administrations – including his own – have. Rather, he plans to run the equivalent of a war-time government that will confront the working class head-on, seek to smash its unions and living conditions, and establish a naked dictatorship that will whip American workers into submission.

"These remarks by Nixon must be seen in the light of the deepening economic crisis which has destroyed the basis for compromise. There is no way that a decisive collision between the government and the working class can be avoided.”
-Bulletin, 4 December 1972

Thus, you see, it is all right to call on the arch-reactionaries Meany, Abel or Van Arsdale to form a labor party, since the terminal crisis makes a decisive collision "unavoidable." And, of course, what need is there for the Transitional Program, since even "simple trade union demands are today so profoundly revolutionary" (Bulletin, 16 April 1973)?

In contrast with the SL, which sees recurring cycles of booms and crises in a world capitalist system that has been decaying at least since 1914, Wohlforth proudly proclaims that his tendency has recognized the imminence of The Crisis "since 1962." The absurdity of this stance is obvious: even if the world capitalist economy were to collapse tomorrow into the worst depression of all time, to take credit for prescience on the grounds that one has spent the last eleven years predicting its imminent arrival is akin to crying all week that Monday is coming and then patting oneself on the back when it finally arrives. Periodic crises are inevitable for the bourgeois order, and at some point the WL's crisis-mongering will undoubtedly intersect reality.

However, so far Wohlforth shows a remarkably poor sense of timing: The post-war boom is supposed to have lasted until 1961, ending around the time of the Belgian general strike. But even Mandel, author of the Pabloist theory of "neo-capitalism," recognizes recessions in 1948-49, 1953-54, 1957-58 and 1960-61. And in the U.S. 1962 marked the beginning of a massive capital investment boom (investment increased an average of 11 percent per year during 1962-66)! Currently the WL claims we are in the midst of the worst crisis ever, which has driven the profit rate to 'below the level of zero percent" (Bulletin, 12 February 1973), when in fact we are in the middle-to-late stages of a boom which sent profits up more than 25 percent during the first quarter of 1973.

Healy's Cross of Gold

One of the more peculiar aspects of the Healyite economic theories is the explanation of "The Crisis" as being caused by the insufficient supply of gold, thereby placing the SLL/WL in a long line of monetary quacks, beginning with Proudhon and running through William Jennings Bryan, de Gaulle and Lyn Marcus. According to the SLL:

"While prices, stimulated by government inflationary policies, have risen five or six times on their pre-war level, gold, was held down in price for 37 years.

"It is in this crisis that gold is enacting its revenge for all these years in which the Keynesians tried to tamper with the law of value....

"Without gold, products cannot enter circulation and become commodities. The rush into gold and the flight from all forms of paper-the feature which now overshadows everything In the crisis-means a collapse of commodity production for the world market.... "
-"The Dollar Crisis" (Bulletin pamphlet, 1973), p. 23

This approach is totally counterposed to Marxist economic science. As an SL supporter pointed out in the sixth class, Marx insisted that the basis of economic crises was in capitalist production, not circulation. The root cause of all crises is that capital expands faster than the surplus value that it generates (i.e., the rate of profit falls). Marx dismissed credit theories of crisis out of hand:

"In investigating why the general possibility of crisis turns into a real crisis... it is therefore quite superfluous to concern oneself with the forms of crisis which arise out of the development of money as means of payment.” [emphasis in original]
- Theories of Surplus Value, Ch. 17

Perhaps the most striking departure from Marxism by Healyite economic theory is the argument that inflation has (only temporarily, of course) suspended the law of value. According to the SLL's monetary "expert" Peter Jeffries, "The operation of the law of value has... been 'suspended' or 'avoided' throughout much of the boom period" (Newsletter, 30 March 1968). In the first place, there was no such "post-war boom" in the sense of a qualitatively different period (if the law of value was "denied" for "27 years," as the 28 May Bulletin alleges, that certainly would be a qualitative change). Following World War II we have experienced a period of succeeding booms and recessions, with overall growth rates for the major capitalist nations which were well within (and sometimes below) historical norms.

Equally important, the idea of a post-war boom period is the cornerstone of the Mandelian theory of "neo-capitalism." Like Mandel, the SLL/WL links this "boom" to inflation caused by government deficit spending, i.e., Keynesianism; and like Mandel, Healy/Wohlforth believe that this is/was a period in which the bourgeoisie is successfully able to grant reforms substantially benefitting the working class. Trotsky insisted this was impossible during the epoch of decaying capitalism, and concluded that reform demands were inadequate and had to be replaced with transitional demands which point to the only real solution for the working class, socialist revolution. For Mandel and Healy/Wohlforth it was not only the law of value which was suspended in the neo-reformist period of the "boom" – it was also the Transitional Program. (And now, with the 'final crisis' at band, transitional demands are likewise unnecessary, since wage demands are revolutionary according to the WL.)

The Crisis of Leadership

The post-war stabilization of capitalism was not, as the WL claims, the result of the Bretton Woods monetary agreement of 1944, but rather the product of the tremendous destruction of capital accomplished by World War II and the defeat, due to the absence of revolutionary leadership, of the general strikes and revolutionary upheavals which swept the European working class after the war. These upheavals could have meant the end, not only of a period of stabilization, but of capitalism itself. They were defeated because of the betrayals of the Stalinists (and the Pabloists). Thus the question of economic stability in the imperialist epoch is fundamentally a political question, or as Trotsky put it, the fundamental crisis in this epoch. lt is the crisis of proletarian leadership.

In Trotsky's "Report on the World Economic Crisis and the New Tasks of the Communist International" to the Third Congress of the CI, he began not with the expansion of credit (which accompanies every boom), but with the defeats of the European revolution which laid the basis for a temporary period of capitalist recovery. As for the myth of the "final crisis," in the same Speech Trotsky comments:

"So long as capitalism is not overthrown by the proletarian revolution, it will continue to live in cycles, swinging up and down. Crises and booms were inherent in capitalism at its very birth; they will accompany it to its grave....
"It might be asked whether the great struggles over wages... will automatically lead to the world revolution, to the final civil war and the conquest of political power.... We have no automatic guarantees of development."

After the Congress, Trotsky wrote concerning the controversy with the proponents of the "theory of the offensive":

"There was a rather indefinite grouping whose contention it was that the commercial and industrial crisis – and it was extremely acute – …constituted the final crisis of capitalist society, and that this final crisis of capitalists society would inexorably worsen right up to the establishment of the dictatorship of the proletariat. This conception of the revolution is completely non-Marxist, non-scientific, mechanistic."
-The First Five Years of the Communist International, Vol. II, p. 60

In contrast to the monetary crank theories of the SLL/WL, and in answer to Wohlforth's absurd charge that the SL does not recognize any changes since 1914, at the sixth class Spartacist League National Chairman James Robertson read the opening paragraph of the current SL perspectives document as an example of a Marxist evaluation of the current period:

"1. The tasks facing the Spartacist League and the capacity of the SL as a revolutionary Marxist organization have both been qualitatively transformed through an interacting process. The crisis and breakdown of the post-World War II configuration of the world capitalist system, dominated by American imperialism, has been marked by the catastrophic consequences of the American involvement in Vietnam, the French general strike of 1968 and the definitive collapse of the 'American century' with Nixon's new fiscal and economic policies, which mark the forced abdication by the U.S. of the role of world policeman and the reversion of American imperialism to merely the strongest of several competing units. These developments have of course also been conditioned and paralleled by the political decomposition of the deformed workers state bloc, above all the Russia/China split."
– "Memorandum to the CC on the Transformation of the SL," Marxist Bulletin No. 9, Part III

Philosophical Objectivism and Political Opportunism

The most striking characteristic of the Workers League since its very inception as a tendency has been its constant shifting of positions. When talk is cheap the WL affects a principled Trotskyist stand, but when it smells a chance for an opportunist link-up then principles are thrown out the window (or, more accurately, shelved to be used again next month) as they rush to support the existing more powerful forces – Healy, SWP majority, black nationalism, the labor bureaucracy, French popular front, etc. It is the constant gyrating that we refer to in calling them "political bandits."

Yet beneath the grotesque zig-zags, an underlying method can be discerned. It was the exposition of this method that highlighted the recent NYC class series. After hours of obfuscating verbiage about an abstract "fight for dialectics" (the purpose of which is to avoid any consideration of program), Wohlforth felt constrained to demonstrate the consistency of supporting Mao Tse tung, Ho Chi Minh, Mujibur Hallman, Huey Newton, Stanley Hill and James Morrissey and `ignoring the Transitional Program in the trade unions. In doing so he revealed the heart of Healyite "theory" as philosophical objectivism, the belief that the overwhelming economic crisis eliminates the crisis of leadership: wages are a revolutionary issue and Meany/Abel are an adequate leadership.

It is this objectivism that permits Wohlforth to give political support to, for instance, the Vietnamese Stalinists with the justification that "objective conditions" have "forced [them] into a fight with imperialism under conditions where there can be no compromise"[emphasis in original] (Bulletin, 14 May 1973).

As Pablo in the early 1950's launched his campaign to liquidate the Trotskyist movement into the Stalinist parties; he made clear the role of philosophical objectivism as the fundamental justification for the abandonment of the principles and program of the Fourth International. The "Theses on International Perspectives" of the "Third Congress of the FI" (1951) states:

"The objective conditions determine in the long run the character and dynamic of the mass movement which, taken to a certain level, can overcome all the subjective obstacles in the path of the revolution. This conception continues to be the base of our revolutionary optimism and clarifies our attitude towards the Communist parties."
- Quatrieme International, August-September 1951

It is this theory which is characteristic of Pabloism in all its variants. But Pabloism itself is only a "theoretical" justification for something far more fundamental: the abject fear of the petty bourgeois faced with the task of leading the proletariat in struggle for socialist revolution, and the resulting overpowering desire to find shelter in the warm embrace of the traditional leaders of the working class, the agents of the bourgeoisie and the most direct expression of what is, as opposed to what will be.

NPAC: Fake Trotskyists Aid SWP in Betrayal (1971)

Workers Action No. 10 (September 1971)

NPAC: Fake Trotskyists Aid SWP in Pop Front Betrayal

The Workers League has rendered all forms anti-Trotskyism an invaluable service by its conduct at the NPAC Conference. Many would-be revolutionary youth honestly believe that Trotskyism equals class-collaboration. That they believe this is only partly due to decades of Stalinist slander. In recent years the prime responsibility rests squarely on the Socialist Workers Party (SWP), particularly its conduct in the anti-war movement. It no longer requires any Moscow TriaIs-style slander to convince radicals of what now is the truth: that today the leading self-proclaimed "Trotskyist" organization is class-collaborationist to the core, and has behaved so the anti-war movement since 1965. The Workers League's contribution to this has been to enhance the credibility of the SWP leadership as "Trotskyist," calling for unity discussions, joint commemoration of the anniversary of Trotsky's death, etc. They have pursued these overtures for the past year. But at the NPAC conference, they moved a step further: they assisted the SWP marshals in the beating and political exclusion of Progressive Labor, SDS, and the Spartacist League for their shouting down of Senator Vance Hartke and Victor Reuther! Wohlforth further commended the marshals for their behavior, promising the physical support of the WL again whenever necessary. This in the name of Trotskyism! What is an anti-war militant to think when he is beaten by not one but two "Trotskyist" organizations (one claiming to be in the forefront of anti-revisionist struggle) for his shouting down a leading capitalist politician and a red-baiting labor bureaucrat? And thus anti-Trotskyism appears logical to militants who have been beaten, in the name of "Trotskyism, " for disrupting bourgeois speakers.

SWP Degeneration

The Workers League's present bloc is sealed in blood at a time of a qualitative degeneration of the SWP. For years, the SWP, despite its deep revisionism, has clung to non-violence within the movement. Its role in the anti-war movement was one of deception and manipulation aimed to prevent any turn toward the working class which would upset its bourgeois allies. Yet the NPAC Conference was the first time it attempted to silence left opposition with brute force. Until NPAC SWP, even in extreme political degeneration remembered – if only by reflex – some of the lessons from years in which it was built as a revolutionary party, defending itself against continual Stalinist hooligan attacks. Now the SWP has finally capitulated fully to the non-proletarian organizational methods which appropriate to its non-proletarian politics: gangsterism against left criticism. The Workers League must have found its role alongside the SWP marshals congenial, since the WL and its mentor, Gerry Healy's SLL in Britain, practiced and publicly defended violence against their opponents for years (See WA #9, Government Goons, and 'Left-Wing' Hypocrisy").

PL: Proletarian impulse

Stalinism, like all varieties of revisionism, is at bottom class-collaboration. Despite the Trotskyist label, the SWP today stands much further from the class program of Leninism than ex-Stalinist Progressive Labor. This should not be so difficuIt for the Workers League to understand; in the 1930's, sections of social-democratic parties were far to the left of the degenerated "Communist” parties, and Trotskyists responded to them accordingly.

Progressive Labor is not a Trotskyist organization – in either origins or program. While proceeding from revolutionary proletarian impulse (unlike the SWP), impressionistic confusion and sectarianism abound in PL's analysis and methods. PL equates Victor Reuther and his ilk with Senator Hartke and the capitalist class to a "boss" is a "boss." We disagree. We maintain that Victor Reuther is not a part of the capitalist class, but rather an arch-enemy within the working-class movement. To PL, our position may seem to be a semantic quibble, but it flows from important political differences – for example, the recognition that a labor union is not simply a bosses' organization like for example the Democratic Party, We did believe that Reuther had a right to speak at the conference – and also the "right" to be denounced and heckled. But he had no more right than any other worker or anti-war activist to a privileged presentation of his views as an "official" spokesman for "his" class.

The marshals had PL-SDS beaten and excluded not for a gangster attack on the conference, but because they successfully embarrassed the SWP's prize "anti-war" Senator and heckled its prize labor bureaucrat. Under these circumstances, it was an elementary duty to defend PL-SDS against expulsion. To have aided the marshals, as the WL did, or have remained "neutral" (the course of the IS and Labor Committee) would have enabled the SL as a body to attend the next day's plenary session, but any points we could have made after such a betrayal would have been meaningless. Spartacist was indeed denied entrance as a body on the next day. The SL joined PL-SDS in picketing the meeting in protest against the exclusions. We did not support or participate in the adventurist attempt later on Saturday to force entrance into the meeting – during which a number of PL-SDS supporters were severely injured by the large contingent of police called by NPAC.

Workers League Lies

The account of the Conference printed in the July 12 Bulletin is shot through with contradictions and plain lies as the WL attempts to demonstrate some principled basis for its pact of blood with the class-collaborationist SWP.

The Bulletin begins its obfuscation of the events of the Conference with its account of one of the first incidents:

"The SDS speaker said speakers like Hartke and union bureaucrats 'will sell us out' and 'what we need is a student-workers alliance. They've got the money and we don't need them.' Their alternative was to build student struggles around ROTC and strike support for workers. 'The Spartacist League which is working in SDS presented almost an identical motion."

Now, what the Spartacist League proposed – by reading a motion from the floor, which was never recognized by the chair or voted – was that ruling class politicians like Hartke be summarily excluded from the Conference, and that the Conference dispense with the "keynote speeches" and immediately begin floor discussion. Nothing about ROTC. Nothing about a student-worker alliance, a PL strategy for narrow campus struggles which Spartacist has criticized since it was first propounded. The WL, of course, presented no motion at all, remaining perfectly quiet and proper throughout Hartke's speech.

Regarding the Saturday discussion of the marshals' actions in beating and excluding the protesters, the Bulletin reads:

"Wohlforth reaffirmed the Workers League position to defend the SWP any where at any time against Stalinist hooligan attacks."

Well and good. Now Wohlforth merely has to show where the "Stalinist hooligan attacks" occurred at the Friday night meeting at which the expulsions took place. This is done nowhere in the two articles devoted to the Conference. This is because the only Stalinist violence which took place that night was the attack by the marshals, led by SWPer Fred Halstead, on the tendencies which were militantly demonstrating their opposition to the Pop Front!

Workers league Evades

The Bulletin continues:

"...a hysterical Carol LaRouche (Labor Committee) demanded that the convention go on record to repudiate a statement by Hartke at a news conference that 'PL is just as responsible for the war as Nixon.' This motion was not a principled one but was a maneuver to force the SWP to vote with them and PL/SDS. Coming at the time it did it was aimed at diverting the discussion from Stalinism and giving a cover to PL... Harry Ring, seeking to get around this situation, actually ended up putting forward a motion in the anti-war movement which took a clear class stand on the war. He stated: 'If Hartke said this I want to disassociate myself from it. But this would tend to destroy the coalition.' He proposed the following motion: 'To repudiate any declarations that PL is responsible for the war. It is Nixon and the class that he represents who are responsible for the war.' A few minutes later he attempted to change the motion to eliminate the phrase 'and his class' ... "

The fate of these motions is important, and it indicates that the Bulletin glosses over what actually took place. A vote was taken on the Labor Committee motion, more or less ignoring Ring's motion, and it failed, with the WL abstaining. This left the SWP in a terrible position. The SWP-NPAC voting cattle, following out the "line" of Hooray for Hartke, Down With PL, had committed the organization to a position that was not only blatantly anti-communist, but so idiotic that it would be a laughing stock among even pro-imperialist liberals. Wohlforth, glorying in the role of SWP left cover, rushed to the microphone to bail the SWP out, by reintroducing the Ring motion which was intended (although the SWP floor leaders were too slow to pick it up) to separate the SWP from Hartke's ridiculous statement without mentioning Hartke, which would have threatened the Pop Front which the SWP had at all costs to preserve. The Ring motion was then, of course, passed, with nobody much 'knowing or caring whether the phrase "Nixon and his class" was in or out. Because, whatever the Bulletin would like to pretend, it mattered very little; what difference does it make if "Nixon and his class" are criticized once it has been made clear by deeds that any attempt to break the anti-war movement from the living embodiments of that class will be beaten back by any means necessary, including violence.

Wohlforth Discovers a Principle

By Sunday the WL had swallowed Harry Ring, the SWP goons, Senator Hartke, Victor Reuther, and a host of lesser liberal lights and labor fakers. What they could not stomach - the only thing in the entire brutal liberal-dominated Conference - was the refusal of the chair on Sunday afternoon to let the WL motion stand for a vote. Then, and only then, Wohlforth discovered "principles," pulled up his political pants, and walked out!

One of the Bulletin NPAC articles concludes regarding breaking with Stalinist class-collaboration:

"The SWP can make such a break if its leadership chooses to do so. The Workers League will of course give it every assistance despite continuing differences on many fundamental positions if it will even begin to take such a course."

Since the WL did, in fact, give the SWP "every assistance" until it rejected the WL's own motion for consideration, we must assume the SWP's behavior up to that point is Wohlforth's idea of beginning of a working-class turn – Hartke, goons, CIA-trained labor traitors and all.

On the face of it, the WL's grovelling pledge is absurd. "The SWP can make such a break" – how? – "if its leadership chooses to do so." The statement applies, with equal profundity to any organization. Why is a reformist organization reformist? Because its leadership chooses to be so. When will it move to revolutionary proletarian politics? When its leadership chooses to do so. The SWP leaders must consider Wohlforth's appeal hilarious, if not very alluring.

Unmentioned by the Bulletin, of course, is the WL line on the April 24th march in Washington. There the WL denounced "anyone who brings one body in front of the platform" as a class-collaborator. The difference between April 24 and the NPAC conference? At April 24th the WL held a separate rally. At the NPAC conference they sat in the meeting and supported its leaders. That's the difference.

The CIA's Man Arrives: "A Very Positive Development"

Consistent with the WL's, chosen role as at. torneys for the SWP, the Bulletin tries to provide a political jusication, in pseudo-class terms, for the SWP. The core of the position is this:

"Clearly the position of the disrupters was that Reuther and Meany were the same and that Reuther as well had no business at the conference. But Reuther is a leader of one of the largest working class organizations, trade unions, in the United State. He not only has the right to be at such a peace conference; his presence at such a conference is a very positive development.

"It is true that Victor Reuther is a labor bureaucrat and as such is aligned with the bourgeoisie politically and in other ways... . But he is at the same time part of the leadership of a trade union. His presence at the conference is a reflection of the movement of the working class against the war....

"The action of PL-SDS-Spartacist represents a petty-bourgeois revolutionism which is completely hysterical in character and totally hostile to the working class...."

There are so many things wrong with these few sentences that it is difficult to know where to start; they add up to the most powerful example of why we consider the WL, in fundamentals, to be similar to the condition known as gonorrhea.

To begin with, the anti-collaborators were not disrupters according to the criteria established by workers' democratic standards, and it is significant that of all the groups at the Conference, only the WL and SWP held that they were.

As explained earlier, Spartacist never held that Reuther and Hartke were "the same," and the WL well knows it. Reuther is "only," in DeLeon's excellent phrase, the "labor lieutenant of capital" within the labor movement, while Hartke is a direct representative of capitalism. PL sees no difference at all, and put out a leaflet attacking us for this conception (it is instructive that PL seems to be capable of understanding our position, but not so the WL!). The Spartacist leaflet produced Friday night and distributed heavily for the next two days carried a long paragraph explaining this. From the WL vantage point of sucking up to labor bureaucrats, however, it is no wonder they chose to obfuscate our position; they hope no one will think to ask them: admitting the legitimate class distinction between Reuther and Hartke, then, why didn't the WL boo Hartke?

Actually, Reuther has been quite slow getting onto the "peace" bandwagon; the CP, through its various connections, fronts, etc. has been holding conferences of "progressive," "anti-war" labor bureaucrats for years. Far from being something new, such maneuvers are hoary with old age. Sellout bureaucrats like Reuther or DC37's Victor Gotbaum go to those jamborees as a cheap way of expunging a little tarnish from the necessary "progressive" image, then use this outside constituency to consolidate and strengthen their roles inside the union structure to further isolate and smash militant oppositionists in their own unions!

The Bulletin writes:

"It is easy to shout Reuther down; it is another thing to replace him and Woodcock and the rest of them as a leadership of the UAW. That task requires a long struggle during which the Reuthers and Woodcocks are exposed time and time again in the course of actions,"

Fine. But what was Spartacist doing at NPAC, but making an effort to expose Reuther by shouting "Labor Strikes Against the War" – the one tactic in which labor can act independently of capitalist politics and bring its real strength to bear against the war. This demand is the one thing that Reuther and his ilk will not call for, for it would show that labor has had it in its power for years to bring Yankee imperialism to its knees, and has not done it precisely because of the ties of the Reuthers, Gotbaums, etc. to their capitalist masters. And what was the WL doing at NPAC? Their silence as Spartacist chanted its slogan was deafening; the WL main motion to the Conference, despite its call for a labor party, was notable by its lack of mention of the struggle within the working-class movement against the labor bureaucrats who keep labor impotent in anti-War struggles and tied to the capitalist political parties.

There is more. The Bulletin's description of Reuther is so carefully abstract that it could fit almost any labor bureaucrat over the past twenty-five years. Is Reuther then just any run-of-the-mill faker with an ossified heart of gold? An SDS leaflet handed out at the Conference gives a more accurate description of the man: a chief witch-hunter of all "reds" and militants in the unions in the late 1940's; a chief prop of the CIA-funded American Institute for Free Labor Development, which worked to set up anti-communist union leaders in Latin America; for 11 years a collaborator with Jay Lovestone, the CIA's man in the AFL-CIO International Union Department! It is the presence of this man which the Bulletin hails as "a very positive development;" presumably justifying its front-page headline, "Working Class Breaks Through at NPAC Conference."

the WL's attempt to present the "disruption" by Spartacist and PL-SDS as a frenzied attack by the hysterical petty-bourgeoisie on the labor movement (in other words, as the petty-bourgeois radicalism which can become a basis for fascism) is a miserable failure, revealing only the utter shamelessness of the WL in its ever-recurring attempts to suck up to the treacherous misleaderships of the anti-war and labor movements.