Why study history?

CAPITALISM THE system we live under today, is unequal and undemocratic. This is because capitalism is a class society, based on the exploitation of the working-class (the majority of the population) by the capitalist class (a small minority of the population) who own and control industry and financial institutions, and dominate governments and the political establishment.

We are told that capitalism is the best way of organising society; that socialism is impossible. We are told that history is made by famous individuals like kings, queens and politicians, and that working-class people have no power to change society.

We are even told by some people that there is no way of understanding how society develops: followers of post-modernism, a theory which gained popularity in the 1990s, believe that there are no general laws that govern the development of society.

None of these things are true. The theory of historical materialism, developed by Marx and Engels, provides a framework for analysing human society and the laws of its development. It explains that class societies have not always existed; that in fact the earliest human societies were classless ones based on co-operation not exploitation.

This pamphlet shows how the ruling class today tries to fool people into accepting that there is no alternative to capitalism, but also how the reality of life forces people to search for an alternative and explains the battle of ideas that this creates.

Most importantly, it discusses why the working-class have the power to overthrow the capitalist system and create a society that abolishes class exploitation altogether; a society that combines the democracy, equality and freedom seen in early societies with the advantages of modern economic, scientific and technological developments: a socialist society.

1. Human society is based on material forces
Materialism vs idealism
MARX AND Engels worked out their theory of how human society develops in a struggle against ‘idealist’ philosophers.

Many people think of socialism as being ‘idealist’ – that is that it is a nice idea, but unrealistic (what Marx and Engels called ‘utopianism’). On the contrary, the ideas of socialism and Marxism are very practical and realistic because they are based on analysing the real world and how it works

Unlike the way most people understand the word today, ‘idealism’ originally meant a trend within philosophy. The idealists believed that ideas come first, and that material reality comes into being as a result of these ideas. An idealist (in philosophy) would say that changes in material reality are caused by ideas, not by material forces; that ideas have an existence that is independent of and unrelated to material reality.

While we recognise that ideas play an important part in social change, Marxists are materialists (again, in the philosophical sense). To a materialist, human society and history is shaped by material social and economic forces – real things and processes – and ideas are the reflection of this material reality in human consciousness.

Marxists believe that human society is based on material forces. In other words, in order for any human society to exist, humans must produce the necessities of life which enable us to survive: food, shelter, water, etc. These are material things without which we would die out. But the way we interact to produce these necessities, who controls the products of our labour and how they use them, determines the type of society we live in.

At the beginning: evolution
WITHOUT CERTAIN physical factors, human society as we know it could not have developed: the large human brain, the voice box and the opposable thumb. The development and growth of the brain and the voice box happened because of the way early humans evolved in interaction with their environment. They were less well adapted to their environment than many species and compensated for this by working together in large groups and developing tools.

The growth of the physical size of the human brain, which is much larger than any other animals’ when compared to our body weight, was both a result of the growth of human intelligence (driven by the need to co-operate and make tools) and a cause of its further growth. With a larger amount of brain available for use, early humans had more potential to develop their intelligence further.

The opposable thumb allows us to hold, make and use tools. Without the fine handling skills it made possible, early humans wouldn’t have been able to develop and use the sophisticated tools that allowed them to survive and prosper in a changing environment.

Without the range of sounds the human voicebox allows us to make, early societies could never have developed the complex languages that made them able to communicate ideas and co-operate on a large scale.

To summarise: the development of new skills to cope with the struggle for survival caused physical changes. In turn these physical changes opened up new possibilities for language, tool-making and mental abilities (such as abstract thought), developing human intelligence further. Both of these processes continued to develop each other.

Hunter-gatherer society/Primitive Communism
WE ARE taught to think that class society has always existed – that class exploitation is a natural and unavoidable part of human society. But this is not true. The earliest human societies were classless societies based on co-operation and consensus, without the systematic exploitation or oppression of any one group by another.

This type of society, which is usually called hunter-gatherer society, was not a brief change from the ‘normal’ exploitation and oppression we see in class society. It was the only way human society was organised for over 100,000 years, until class society began developing around 10,000 years ago. Even today there are a few areas around the world where hunter-gatherer societies still exist, though this may not be the case for much longer (all of them are under pressure to become absorbed into the capitalist world economy).

Why were hunter-gatherer societies run so differently to society today? The answer lies in the way in which the production of the necessities of life were organised.

They depended on finding enough food to survive through a combination of hunting and scavenging wild animals and gathering wild plants. They were at the mercy of their environment and had no way of storing more than small amounts of food long-term, particularly as they usually had to travel long distances to find food.

Everyone was involved in producing the necessities of life (food, shelter etc) because otherwise the group would starve. There was no room for an elite to develop who could exploit the labour of others.

There were often differences in the work people did. For example in many hunter-gatherer societies women appear to have done more childcare while men tended to do more hunting, although this basic division of labour was very flexible and did not exist everywhere.

However, where they did happen these differences were due to practical reasons and not given value-judgments about the status of particular types of work, or the people doing them (as they are today). It was only when class society arose that childcare and other work more associated with women became devalued and the systematic oppression of women began.

Hunter-gatherer societies tended to operate in small groups (the size of groups depended on the availability of resources) which were linked to a number of other small groups in the same area. Studies of hunter-gatherer societies carried out in the last century show that in many cases they had developed a complex system of sharing resources within and between the groups as a kind of insurance against famine or conflict.

In hunter-gatherer society, if one group does well it is in their own long-term interests to share the fruits of their success with other groups. If they have a surplus of food they cannot eat or store they give some to other groups, understanding that if another group is successful the original group will be able to share their surplus. This not only helps the groups through the times when food is scarce, it also reduces conflict between them. When everyone is dependent on each other, it is in everyone’s interests to avoid conflict.

Marx and Engels described hunter-gatherer society as ‘primitive communism’, because the way in which the necessities of life are produced and distributed in hunter-gatherer society – its ‘mode of production’ – in turn produces a democratic and co-operative method of decision-making. The quote below describes how this worked among G/wi-speaking bushmen in the central Kalahari reserve of Botswana in the late 1950s and early 1960s.

‘Consensus is reached by a process of examination of the various proffered courses of action and rejection of all but one of them. It is a process of attrition of alternatives other than the one to which there remains no significant opposition. That one, then, is the one which is adopted. The fact that it is the band [group] as a whole which decides . . . is both necessary and sufficient to legitimise what is decided and to make the decision binding on all who are concerned with, and affected by, it.’

Political process in G/wi bands by George Silberbauer
(from Politics and history in band societies, edited by Eleanor Leacock and Richard Lee, published by Cambridge University Press, 1982).

We are often told that the selfishness, brutality and war we see in the world today are part of human nature; that humans are not designed to co-operate and live as equals. But the existence of ‘primitive communist’ societies all over the world for such a long period of time proves that this is not the case.

Human nature has almost endless possibilities. Life under hunter-gatherer society was certainly not perfect: there was bound to be hardship and disagreements between individuals. But the way society was organised under hunter-gatherer society helped to bring out the most positive and co-operative aspects of human nature. At the same time, more negative things such as greed and selfishness were pushed into the background. A socialist society, like hunter-gatherer society, would be able to bring out the best in human nature.

The Neolithic revolution . . .
AROUND 10,000 years ago two discoveries began to revolutionise the way human society was organised: the cultivation of plants (agriculture) and the domestication of animals.

These two achievements, known as the Neolithic revolution, enabled humans to gain a degree of control over their environment for the first time ever. The productivity of labour increased enormously: instead of travelling to where they could find adequate food at different times of the year, humans could grow or keep their own supplies of food and were no longer completely dependent on natural conditions.

This led to the establishment of more permanent settlements, where reserves of food could be stored and where crops and animals could be cared for and protected against raids. The amount of food available increased dramatically, while there was also a rapid growth in the size of the population in Neolithic society.

For the first time ever, human society was able to produce a permanent surplus (the amount of food and goods produced over and above what they needed to survive). This allowed a section of society to be released from the day-to-day work of producing the necessities of life without endangering the survival of the group.

This meant that a section of society were able to concentrate much more on specific specialist tasks, which ranged from conducting rituals believed to help bring food and fortune to the group to tool-making and the development of new techniques such as the smelting of metal and firing of pottery. This led to new and more productive ways of using human labour, for example by the use of metal tools in agriculture.

As the productivity of labour increased and some societies became more complex, a layer of administrators also emerged. For example the first known writing system in the world was developed by the Sumerians in the years leading up to 3,000 BC.

The development of Sumerian society, which arose between the Tigris and Euphrates rivers not far from modern-day Baghdad, was based on irrigation: human-made systems of channels to take rainwater and river water to fields of crops. This massively increased the yield of crops. But to organise the work of digging irrigation channels to support a large and growing population, and also to make sure that the water was distributed efficiently, Sumerian society needed administrators.

Early Sumerian writing took the form of symbols, scratched into clay tablets to record simple transactions (e.g. so many sheep, or so much grain). But over several hundred years, as the tasks of the administrators grew and became more complex, these early symbols were developed into a real system of writing agreed and understood by all Sumerian administrators (the ability to write and read was a closely-guarded privilege). . & the rise of class society

THE ‘SPECIALISTS’ and administrators who were freed from the work of producing the necessities of life played an enormously progressive role in helping develop the productive forces. However, over a long period of time many of these ‘specialists’ and their descendants became entrenched in their positions through the accumulation of wealth, status and tradition.

In many areas they began to become a ruling elite, a new class with different interests to others in society. They attempted to make rules in order to protect their privileged position. The most successful of these new elites established special bodies of servants/warriors that they paid to enforce their rules within the group, as well as protecting the group from attacks from outside.

This did not happen without resistance. In some groups it appears that an emerging ruling class was blocked from consolidating their grip on power and collective organisation was re-established. However, such groups tended to be weaker than those with a ruling class, where the productive forces had been developed further. Therefore unless they were geographically isolated from other more developed societies, the collectively-run hunter-gatherer groups generally became absorbed into them anyway, often by defeat in war and enslavement.

The development of human society is based on the development of the productive forces.

THE DEVELOPMENT of tools/machinery or techniques that increase the productivity of human labour, such as the horse-drawn plough, irrigation or the invention of factory production, increases the size of the population a society can support; the specialisation or division of labour that is possible within society.

The type of society we live in is based on the way production is organised.

THERE HAVE been many different ways in which production is organised in human society, leading to many different kinds of class society. Below are examples of three of the most well-known types of class society – slavery, feudalism and capitalism – which explain how the way in which production was organised helped to shape each society.

Slavery: The ancient slave societies, for example Ancient Egypt, Greece and Rome, were based on the exploitation of slave labour on a massive scale. Large cities where wealthy landowners lived were supported by huge numbers of slaves (mostly captured in war) who worked the land and made most of the goods such as oil, wine, pottery and jewellery that made the slave societies so rich.

Feudalism: is a peasant-based economy where the peasants control what they produce on their ‘own’ plot of land but are forced to give a portion of the fruits of their labour to the feudal lord who owns or controls the land where they live. This surplus taken by the lord can take many forms, for instance: the peasant doing a certain number of days labour on the lord’s land; giving a certain proportion of the year’s produce; or paying money rent.

The landowning aristocracy are the ruling class under feudalism. Although the state usually centres round the monarchy, the royal family is generally drawn from the landowning aristocracy and follows their interests.

Capitalism: the economic system which dominates the world today, is based on private ownership of the means of production (manufacturing industry, the raw materials and resources needed for industry and, today, even the seeds necessary for food production) and exploitation of the labour of the working-class.

The working-class, with no land or substantial inherited wealth, have no means of supporting themselves and are forced to sell their labour to survive. Capitalists buy this labour power, then get their money back and make profits by selling necessities and other products to the working-class and other classes in society.

The struggle of ideas in society reflects the struggle of class forces

IDEAS ARE not neutral or ‘above’ society in any way. In class society the ideas of the ruling class dominate because of the ruling class’s economic, political and legal dominance (the amount of money/power/force at their command).

The ideology (system of ideas) of any ruling class reflects their material interests. For example feudal monarchies in many countries around the world defended their privileges and power by appealing to religious ideas and institutions. In England the church supported the feudal monarchy’s ‘divine right’ to rule, saying that ordinary men and women had no right to question a monarch who had been chosen by God.

Ideas that are considered ‘common sense’ are often actually the product of a particular type of class society. The philosopher Plato argued in the 4th century BC that what happened in nature was determined by ideas instead of material forces. He believed that therefore you didn’t need to do practical experiments to develop an understanding of how natural processes work: it could all be worked out by thought

His outlook was formed by the type of society he lived in, Ancient Greece, which was a slave society where physical work was considered demeaning and unnecessary for the elite. It took well over a thousand years for Plato’s wrong idea to be overturned and for the importance of scientific methods of measurement and experimentation to be recognised.

Although the ideas of the ruling class are dominant, they are constantly being challenged by other ideas. This struggle of ideas reflects the struggle of class forces in society. Opposition to the dominant ruling class ideology is a reflection of the material interests of other classes.
Government, legal system and ideology

THE GOVERNMENT, legal system and ideology of any society are called the ‘superstructure’ that grows out of the economic base of society. The form that the superstructure of any society takes is determined first of all by the economic relations that that society is based on. However, this does not mean that the economic system determines everything in a society. Local traditions and the particular way a society has developed also influence the political and legal system. For example, many capitalist societies still have a monarchy, which is really a feudal/pre-capitalist institution. Republics and monarchies, parliamentary ‘democracies’, fascist and military dictatorships are all systems of government utilised by the capitalist class.

In Britain today the laws are made and implemented mainly by representatives of the ruling capitalist class. Other classes, such as the working-class and middle-class, also make their voices heard, but the way that the legal system is set up protects the interests of the ruling class. For example, in British law many offences against private property (such as theft, criminal damage etc) are considered more serious than offences against a person (assault, GBH, even murder in some cases).

This leads to a bizarre situation where the majority of women in jail in Britain are there for crimes of poverty such as stealing food or failing to pay fines, while the private companies that run the railways are allowed to get away with killing people in train crashes caused by their pursuit of profit before safety. In the global monopolised world we live in today it is legal for a multinational company to patent existing plants, such as species of rice that have been grown for hundreds of years, and to charge farmers anywhere in the world for the ‘right’ to grow them.

Ideology changes as material conditions change

THE FOLLOWING statements express ideas that are widely accepted today in Britain. Compare them with the examples of ideas that were widely accepted in Britain at the end of the 19th century:

‘Men are stronger than women’ ‘greed is part of human nature: you can’t have an equal society’, ‘racism will always exist’

19th Century:
‘Men are physically and mentally superior to women’, ‘white people are superior to Black people’, ‘Britain is helping its colonies by bringing civilisation to them’

Both sets of statements reflect the ruling class ideology that says division and greed are natural and necessary. But changes in the material conditions of British capitalism during the last 100 or so years has forced capitalist commentators to change the way that they express their ideology.

At the end of the 19th century in Britain, women were legally considered to be the property of their husbands or fathers and had no right to inherit property, vote or go to university.
In 1884-5 European powers met at a conference in Berlin to divide Africa between them. At the end of the 19th century, because of her economic and naval strength, Britain ruled an empire that covered one-third of the world’s land-surface. The British Empire provided raw materials and mineral wealth for British industry, and a huge market for manufactured goods from Britain. The British ruling class tried to justify their colonialism (which in most of Britain’s colonies amounted to military occupation) with openly racist ideas.

During the 20th century mass movements for independence finally broke up the British Empire and Britain was overtaken by the USA as the dominant world economic power. Struggles for women’s rights, combined with the increasing demand for women workers in industry and the confidence and economic muscle their new position in the workforce gave them, have won women many rights that did not exist in the 19th century. These material changes are what has forced capitalist commentators in Britain to adapt the way they present their ideology.

The power of ideas comes from the material forces they represent

MARX AND Engels did not ‘invent’ the idea of socialism: it had existed for a long time. Movements such as the Diggers, who fought for an end to private ownership of land during the English Civil War, had put forward basic socialist ideas much earlier. However, early socialist movements were overwhelmingly utopian, putting forward the idea of a better society but without a real understanding of how it could be achieved.

Marx’ and Engels’ contribution was to show that socialist ideas had a scientific and objective foundation and to put it in context by explaining how human society had developed. They were able to develop a worked-out ideology for socialism:


The strength of socialist and Marxist ideas comes from the fact that they accurately reflect and explain the material conditions that the working-class experience under capitalism:

The alienation, exploitation and oppression of the working-class

The collective nature of the labour of the working-class
the contradiction between the enormous productive power of capitalism and its inability to develop the productive forces for the benefit of all or provide enough of the necessities of life for everyone (seen today in the biggest gap between rich and poor since records began).

While these material conditions exist, working-class people will be forced to search for a socialist alternative. However the popularity of socialism will not be enough to remove capitalism and replace it with a socialist form of society.

2. Changing the course of history

“THE MOST indubitable feature of a revolution is the direct interference of the masses in historic events. In ordinary times the state, be it monarchical or democratic, elevates itself above the nation, and history is made by specialists in that line of business – kings, ministers, bureaucrats, parliamentarians, journalists. But at those crucial moments when the old order becomes no longer endurable to the masses, they break over the barriers excluding them from the political arena, sweep aside their traditional representatives, and create by their own interference the initial groundwork for a new regime . . .”

Preface, The History of the Russian revolution, Trotsky.

Revolutionary change – how society develops

OVER TIME the contradictions built into the economic, political and legal structures of each class society grow. Eventually they become a block on the productive forces (the productivity of human labour), holding back their development. The old ruling class try desperately to block change in order to cling on to their privileges and power.
In this situation the only way that society can move forward is for the old ruling class to be removed from power and a new way of organising society to be put in its place. This means a revolution.

The English Civil War

IN ENGLAND the capitalist class won political power in a revolution, though they don’t talk about it much today. The English Civil War in the mid-17th century, where parliamentarians confronted monarchists on the battlefield, was a war between two opposing classes and their supporters: the feudal aristocracy and the monarchy, against the rising capitalist class.

The feudal system in England had begun to reach the limits of its development over 200 years before. Improvements in agricultural methods and the clearing of forests and other areas to provide more land for cultivation had enormously increased agricultural productivity, but could go little further under the feudal system of small peasant plots.

A slump in grain prices combined with big increases in the price of luxury items put pressure on the lifestyle of the feudal aristocracy. They in turn tried to squeeze more out of the peasantry, demanding rent in money rather than grain or labour.

In the mid-14th century the Black Death epidemic struck, which eventually killed up to 40% of the population. The shortage of labour this caused in the countryside gave the peasantry more power in their ongoing struggle with the feudal lords, who were forced to allow better conditions and lower rents. The landless poor, who were forced to work for others in order to survive, were able to demand better wages – both in the country and in the towns.

As the feudal ruling class sank into decline, the embryo of a new society was beginning to form in the towns and cities. Encouraged by a growth in long-distance trade, artisans and merchants gathered at town markets to sell their goods. Artisans also found buyers for their goods locally, particularly among the feudal lords and the richer peasants.

The towns in England (and most of Western Europe) had relative freedom from direct control by the feudal lords and soon the artisans and rich merchants were forming guild organisations and corporations to protect their interests.

These processes – of growth in the production of goods to sell at market and the increasing crisis in feudal power in the countryside – both reinforced each other. Town guilds and corporations were beginning to introduce capitalist relations, employing a growing army of wage-labourers. But however much the economic power of this embryonic capitalist class grew, the government and legal system of England were still based on the interests of the feudal aristocracy.

Eventually the struggle for political power between the feudal aristocracy and the rising capitalist class was decided by a Civil War. The capitalists drew the most oppressed sections of the population behind them in their struggle. They overthrew the monarchy (it was later restored), established parliament (which was dominated at that time by representatives of the capitalists) as the supreme political authority and established a legal system that supported the interests of the capitalist class.

However, human society doesn’t develop in a straight line, stepping from one type of society to the next and constantly developing. Society can also go backwards.

What happens when revolutions fail?

UNFORTUNATELY, REVOLUTIONS against the existing order are not always successful. If revolutions against an outdated mode of production and its ruling class fail again and again then the decaying system will sink further into decline. The development of society can be thrown backwards for hundreds of years.

The ancient slave societies of Egypt, Greece and Rome developed science, technology and literature enormously. This flowering of culture was made possible because these societies rested on the exploitation of huge armies of slave labour. But in time these powerful empires began to come up against the limits of slavery (and in the case of the Roman Empire, the limits of constant expansion).

One example of how the limits of slavery held society back is the way that scientific advances and inventions that slavery produced were not always put to use in order to increase the efficiency of human labour. For example the Ancient Egyptians understood all the principles necessary to build the steam engine, and the waterwheel was invented in Roman times.

However, neither of these inventions were put to use systematically or generally; instead, they were used to make toys to amuse the rich and powerful. This was because the economic system of slavery, where slave labour was so cheap and easily available, did not encourage the spread of this new technology that could have developed the productivity of human labour immensely and taken society forward.

Instead of being overthrown and replaced by a more progressive form of society, the ancient slave economies began to fall apart internally until, divided and weak, they were conquered by foreign invaders. The collapse of the Roman Empire threw society in most of Western Europe back for centuries before it began to develop once more.


THE ACHIEVEMENTS of capitalism, in developing the productive forces, are immense. The mechanisation of the production process, electrification, the development of railways, an extensive road network and motorised vehicles, the invention of computers and the development of virtually instantaneous communication around the world, have transformed trade and produced goods and wealth in previously unimaginable quantities.

But these advances have come at a price. The rise of wage labour and the ‘free market’ enabled even more intensive exploitation of the working-class. The capitalists own and control the tools, factories and raw materials (the means of production). Because they have no land or independent source of wealth, workers are forced to sell their labour to the capitalists in order to survive.

Capitalists, in competition with each other, attempt to force down the wages of their workforce in order to increase their profits. The threat of unemployment, and of unemployed workers who would work for less, is used as a stick to beat their workers with to make them accept worse wages and conditions.

Under early capitalism (eg, at the beginning of the Industrial Revolution in Britain), the living and working conditions of the masses were worse than they had been for the majority under feudalism. It was only with the development of working-class struggle, including the setting up of the trade unions, that workers and the unemployed began to improve their situation.

The enormous wealth and the power it made possible were monopolised by the capitalist class and used to make yet more money by exploiting the labour of the working-class. The first capitalist countries (like Britain) used their economic and military might to establish empires by seizing control of territories abroad, where the natural resources and the labour of the local population were callously exploited to maximise the wealth, power and prestige of the imperial ruling class.

The working-class – ‘gravediggers’ of capitalism

MARX AND Engels showed that capitalism was only the most recent form of exploitative class society. They also explained that as capitalism developed it was also creating the seeds of its own destruction. The central role that the growing working class played in the production process produced a class that could not only challenge the rule of the capitalists but was also capable of building a new and more progressive society.

From a historical viewpoint, capitalism’s most important achievement was to develop the productive forces to a level where a socialist society is possible. Without the material basis for abolishing hunger, poverty and illiteracy worldwide, a socialist society is impossible.

Capitalism has achieved this material basis. According to the United Nations: “It is estimated that the additional cost of achieving and maintaining universal access to basic education for all, basic health care for all, reproductive health care for all women, adequate food for all and safe water and sanitation for all is roughly US $40 billion a year . . . This is less than 4% of the combined wealth of the 225 richest people.” (UN Human Development Report, 1997.)

Yet under capitalism even this relatively minor redistribution of wealth will never happen. The private ownership of industry, transport and communications is holding the productive forces back. The modern globalised world economy is continually trying to overcome the limits of capitalism, for instance: national boundaries and the inability of workers to buy back the goods that they produce because they are not paid the full value of their labour. But time after time these limits plunge the system into crisis.

The parasitic nature of modern capitalism is shown by the massive growth in financial speculation as opposed to investment in real industry. The incredible communications systems that have been developed could allow a socialist society to democratically plan a modern economy in detail to meet people’s needs. But under capitalism they are monopolised by the biggest multinationals to ensure they squeeze every extra drop of profit out of both their workers and the buying public.

A socialist society could end the wastage of resources on weapons of mass destruction, huge military machines, the duplication and distortion of scientific research, the wastage of food to keep world prices high etc. But in order to achieve this the private ownership of the major industries and financial institutions must be removed and replaced by common ownership and workers’ democracy.

The role of individuals in history

A REVOLUTION is not something that can be conjured up by any individual or organisation. It is a process that occurs when the contradictions within any class society have reached crisis point: when the masses, feeling that they can no longer put up with their oppression, rise up to challenge the rule of the current ruling class. (To find out more about what happens in a revolution, see the pamphlet on Changing the World – the role of a revolutionary party in this series.)

Marxists reject the idea, put forward by some mainstream historians, that strong individuals are responsible for making history by themselves. Putting major historical events down to one individual’s ambition or strong personal beliefs helps to mystify history, not to explain it.

While Marxists believe that revolutions are made by the masses, we also understand that in a mass movement or a revolution – particularly at certain critical stages – the intervention of the right individuals can make the difference between the success or failure of the movement.

However, this does not mean that individuals can replace mass movements or mass involvement in a revolution in any way.

People who can help channel mass movements in the right direction do not fall ready-made from the sky. They are shaped and prepared by the economic and political period that they have lived through, and particularly the class struggles and mass movements they have participated in. In this way, the experience and lessons of past movements are absorbed by these individuals, which they then bring back to the movement to help ensure its success.

The difference between a socialist revolution and all previous ones

A SOCIALIST revolution has to be led by the working-class. Revolutions against previous forms of class society, were led by a minority class who exploited the anger of the masses in their struggle to gain political power for themselves (eg, the capitalist revolutions against the feudal ruling class)

However, today the working-class are the majority of the population in many countries. In order to free itself from oppression and exploitation, the working-class has to abolish class society altogether. The socialist revolution is the first revolution in human history that has the power to put an end to class exploitation. It is also the first revolution to be carried out by a class that has become fully conscious of the historical task it faces.

This consciousness does not exist yet. People’s experience of capitalism pushes them towards socialist conclusions in different ways and at different times. Encouraging the development of class consciousness and socialist ideas is one of the tasks of a revolutionary party, which can draw different sections of the working-class and radical middle class together, uniting them in a common fight. (For more information, see the pamphlet on the role of a revolutionary party.)

The end of class society

A SOCIALIST society would abolish classes, allowing the collective and truly democratic running of society to reappear for the first time since hunter-gatherer society. But this would be on an entirely higher material basis: instead of living at subsistence level completely dependent on the local environment, society would be based on productive forces that are capable of providing more than enough for every person’s needs.

In the transition from capitalism to socialism, after a successful socialist revolution, the state would be run by the working class (and also the poor peasantry and landless masses in the many countries where they exist). But even this, though it would be a state based on workers’ democracy rather than class exploitation, would eventually wither away as socialism and then a genuine communist society was built.

The material basis for the state is the suppression of one class (in this case the capitalists) by another (in this case the working-class, supported by other oppressed classes like the peasantry and landless poor).

As a classless society develops, the material basis for any state organisation that stands above the population disappears. The necessary tasks that the state performs in class society – planning, administration, etc – would be organised and carried out by the population as a whole according to their own democratic decisions.

‘Socialism or barbarism’

IF ONE revolution is unsuccessful in overthrowing capitalism, the consequences can be severe. Fascism and dictatorship are ‘solutions’ that the capitalist class often resort to ‘maintain order’ after a failed revolution. But if in the long-term no revolution succeeds in establishing a socialist society, even these horrific prospects would pale into insignificance next to the disintegration of capitalism worldwide.

Throughout human history as the productive forces have developed, so has the destructive potential of human society. As each new form of class society arises the exploitation of the oppressed classes within it seems to become more and more total. Increased productivity and technology enable more and more complete control and exploitation of the masses, as well as more and more powerful and horrific weapons to destroy human life.

The nuclear weapons held by governments around the world could destroy the planet many times over. The environmental destruction of capitalist industry goes hand in hand with private ownership and profiteering. As the capitalist system lurches from crisis to crisis, the growing instability it creates increases the number of wars and conflicts and uses up the natural resources of the world with less and less thought for the future

Unless a series of socialist revolutions around the world succeed in abolishing capitalism, the disintegration of a society with such awesome destructive power could be a disaster unparalleled in human history.

A socialist society would not only free the productive forces from the limits of capitalism and free humans from wage slavery and the alienation from labour that capitalism produces; it would also ensure that production and technology were used for constructive not destructive purposes.

Quick definitions

material reality – things and processes in the real world that can be touched or measured
mode of production – the way in which the production of necessities of life and other goods is organised
productive forces – the productivity of human labour (the amount of goods produced by a fixed amount of human labour), which is developed and increased with the help of technology, scientific knowledge and more efficient ways of organising labour power
ideology – system of ideas
progressive – something that helps take society forward by helping develop the productive forces


Marx and Engels classified the first types of class society as ‘barbarism’ and the rise of the ancient slave empires of Egypt, Rome and Greece as ‘civilisation’. Today these terms seem out-dated and tainted by association with the ideology of imperialism.

Therefore in this pamphlet I have used more specific terms that have arisen from research carried out since Marx and Engels were writing – such as Neolithic society, slave societies, etc – to describe each type of society.

Further reading:
The German Ideology (part 1) – Marx and Engels
The Communist Manifesto – Marx and Engels
What Happened in History? – Gordon Childe
Man Makes Himself – Gordon Childe
Origin of the Family, Private Property and the State – Engels

Internationalism and the struggle for socialism

By Nick Beams

20 May 2009

The following is the text of a report given by Nick Beams, national secretary of the Socialist Equality Party (Australia), to the WSWS/SEP/ISSE regional conferences, “The world economic crisis, the failure of capitalism, and the case for socialism.” The report is available for download in PDF.

On behalf of the International Committee of the Fourth International and all the members of the Socialist Equality Party in Australia, I would like to bring the warmest revolutionary greetings to this conference.

It is of great importance for the working class and oppressed masses all over the world that, at the very centre of world capitalism, in the belly of the beast, so to speak, the SEP has convened conferences in three cities across the United States to get to grips with this historic crisis of world capitalism, and to advance a socialist perspective for the working class.

Let me begin by emphasising the significance of the fact that we work as members of a world party. The ICFI is the only party that functions on a daily basis, in all aspects of its work, as an international tendency. It is the only party which, to use a phrase of Trotsky’s, seeks to draw together workers of all countries into “a single international proletarian organisation of revolutionary action having one world centre and one world political orientation.”

And precisely because of this, the ICFI is the only party now striving to advance a socialist perspective to meet the breakdown of world capitalism, based on the development of the class struggle.

This serves to underscore the historical significance of the struggle waged by Trotsky for the program of socialist internationalism, and the struggle conducted by the ICFI, for nearly six decades, for an internationalist perspective as the only viable basis for the struggles of the working class in every country.

What has happened to all the vast national-based bureaucratic organisations—parties and trade unions—that have dominated the workers’ movement in the major capitalist countries? Not only do they have no policies or program to meet this crisis, they work hand-in-glove with the ruling elites and governments in every country to impose it onto the back of the working class.

The evolution of the United Auto Workers (UAW), which has now become integrated into the ownership structure of General Motors and Chrysler, is only the most glaring expression of what is a universal process. The national-based unions and labour organisations function as the policemen of capital. They have separated themselves from any connection with the interests of the working class.

The emphasis our movement places on the necessity for internationalism does not arise from subjective considerations. Rather, it is a reflection of the most profound objective tendencies in the world capitalist economy itself. Any scientific examination of this crisis—this capitalist breakdown—establishes that there is no national solution to the myriad problems now confronting the working class and the masses as a whole—whether in the US, Australia, Britain, or in China, India and elsewhere.

Such a solution is ruled out by the totally integrated character of the world economy—a characteristic that has been highlighted by the very manner in which the crisis itself has unfolded.

In 2007 the learned, and not-so-learned, bourgeois economists and media pundits in the US maintained that the so-called sub-prime crisis was a limited financial disturbance that would soon pass. Their equally short-sighted counterparts internationally held that it was simply a US problem, which would not impact on their own much better-regulated financial systems. Whatever problems the American economy encountered, the rest of the world would not be too adversely affected, because it would be able to “decouple” from the US.

Those illusions have been well and truly shattered. Recently the well-known economists Barry Eichengreen and Kevin O’Rourke published some very revealing graphs on the extent of the global slump. They show that the decline in industrial production, world trade and stock market values is proceeding at a faster rate on a global scale than in the period following the Great Crash of 1929.

What explanation, then, of this crisis is offered by the bourgeois economists and commentators? Let us take one of the more perceptive representatives of this group, Martin Wolf, the economics commentator of the Financial Times. He points to the collapse of the entire framework of the “free market” neo-liberal ideology that accompanied the coming to power of Reagan and Thatcher.

In a column published on March 9 entitled “Seeds of its own destruction” he begins as follows: “Another ideological god has failed. The assumptions that ruled policy over three decades suddenly look as outdated as revolutionary socialism.”

In other words, the crisis is the result of a failed ideology, not the result of the working out of objective contradictions lodged within the capitalist system itself. Consequently, if the correct policies are now introduced and the mistakes of the past overcome, then capitalism can resume its advance.

But Wolf has the sense that he is on shaky ground, and so feels it necessary to throw in the remark about revolutionary socialism. This is truly whistling past the graveyard, because revolutionary socialism has never looked so applicable.

Like all defenders of capitalism, Wolf bases his comment on an identification of revolutionary socialism with the Stalinist regimes of the Soviet Union and Eastern Europe that collapsed in the period 1989-91. Here it is instructive to recall what the revolutionary socialists said at the time. I will make only one of many possible citations.

The perspectives resolution of the Workers League (forerunner of the US SEP), adopted in February 1990, barely three months after the collapse of the Berlin Wall, stated: “The disintegration of the Eastern European regimes cannot be explained apart from the development of the world economy as a whole. The social upheavals in Eastern Europe reveal not only the crisis of Stalinism; they are the most advanced political expression of the general crisis of world imperialism.”

The Workers League developed this analysis, which has been totally vindicated, in direct opposition to the outpourings of the bourgeois academics and commentators at the time about the “end of history” and the final triumph of the free market and capitalism. Now these spokesmen of capital have been forced to change tack somewhat and, like Wolf, speak of the failure of free market ideology. But they are no closer to providing an analysis of this crisis, than they were to understanding the real significance of the demise of the Stalinist regimes twenty years ago.

While they can produce useful facts, figures and statistics, and even point to important processes, none of the bourgeois economists and commentators is able to provide a scientific explanation of the crisis.

This is because their ideological outlook, and their class position, is grounded on the permanence of the capitalist system. Hence, according to them, the source of the crisis is not to be found in the fundamental laws and contradictions of the capitalist economy, but is to be located externally. What is underway is not a breakdown of the capitalist mode of production itself, but the failure of a certain “model” of capitalism, the collapse of an ideological framework, an oversight and failure of those who should have been regulating the economy.

An editorial in the Financial Times of March 10 entitled “The consequence of bad economics” puts it down to the intellectual failures of political leaders and regulators.

“Those who sound the death knell of market capitalism,” the editorial concludes, “are therefore mistaken. This was not a failure of markets; it was a failure to create proper markets. What is to blame is a certain mindset, embodied not least by Mr Greenspan. It ignored a capitalist economy’s inherent instabilities—and therefore relieved policymakers who could manage those instabilities of their responsibility to do so. This is not the bankruptcy of a social system, but the intellectual and moral failure of those who were in charge of it: a failure for which there is no excuse.”

The FT adopts the tone of the stern English schoolmaster, giving his pupils a rap over the knuckles, in order to block any attempt to probe deeper, to discover the underlying causes of the crisis, offering the assurance that order can be restored once a new “mindset” is adopted.

In a comment published on April 8, in the wake of the G20 meeting, Martin Wolf, perhaps sensing that “failed ideology” was not an adequate explanation, pointed to the massive imbalances in the world economy—principally the US balance of payments deficit and the Chinese trade surplus with the US—as a cause of the crisis.

“It is easier for most to believe that the explanation for the crisis is solely the deregulation and misregulation of the financial systems of the US, UK and a few other countries. Yet, given the scale of the world’s macroeconomic imbalances, it is far from obvious that higher regulatory standards alone would have saved the world.”

But this only pushes the problem one step further back, because the question immediately arises: what was the cause of these imbalances in the first place? Out of what processes did they arise? And why have they had such a destructive impact on the US and world financial system?

Many commentators argue that a cause of the crisis is the growth of debt to truly gargantuan proportions. But here again the question arises: why did this occur?

Others hope that the crisis will take the form of a recession, a very severe one, but a recession nonetheless. That illusion is dispelled, however, as soon as one considers some basic issues. The capitalist economy emerges from a normal recession as it entered into it, except that the less profitable sectors have now been eliminated. But the outcome of this crisis cannot be a return to what existed before. The whole regime of profit accumulation, based on complicated financial manipulations, has collapsed. This is not simply a recession, but a breakdown.

A characteristic feature of all the attempted explanations of the bourgeoisie and their representatives is their ahistorical character. They make no attempt to place the present developments within the context of the historical evolution of capitalism. And for good reason, because once this is done, it becomes clear that the breakdown arises not from external factors, but from the innermost workings of the capitalist economy.

Thus, to understand the present situation, we must analyse the historical development of the contradictions of the capitalist mode of production that have given rise to it. These contradictions assume two basic forms. Firstly, between the development of the world economy, now manifested in the globalisation of production and the international integration of economic activity on an unprecedented scale, and the division of the world into rival and conflicting nation-states. Secondly, between the development of the productivity of labour, made possible by enormous advances in science and technology, and the system of private ownership of the means of production—a contradiction that manifests in the tendency of the rate of profit to fall.

In discussions on the present crisis you will find frequent references to, and comparisons with, the Great Depression. It is necessary, however, to go further back. The Great Depression was itself a product of the first breakdown in the capitalist mode of production, which took place in 1914 with the eruption of World War I.

Like the present collapse, the first was preceded by a period of bourgeois optimism. At the beginning of the twentieth century it seemed, at least to those who chose not to probe too deeply, that the problems that had accompanied capitalism in its birth and early development had been overcome, and, under the aegis of the bourgeoisie, a new era in the advance of humanity had opened up. The ideological pressures generated by this process found their reflection in the socialist movement. Within the German social democratic party, Bernstein claimed that Marx’s breakdown theory had been refuted; that revolution was not viable or even necessary because socialism could be achieved through the continuous reform of capitalism.

In 1914 the breakdown of capitalism announced itself in the form of war—a war of hitherto unprecedented savagery and destruction, truly a descent into barbarism. World War I established that world socialism was not simply a more advantageous form of economic and social development, but an historic necessity. In the Russian Revolution of 1917, the working class took the first step in the struggle to realise this objective. But the revolution remained isolated, due to the betrayals of the social democratic leadership of the working class. This isolation created the conditions for the emergence of a nationalist bureaucratic regime, headed by Stalin, which became a chief prop for the world capitalist order, carrying out the physical destruction of the Marxist culture on which the revolution had been based.

Eventually, after two world wars, mass unemployment, the horrors of fascism, and the destruction of tens of millions of lives, US capitalism was able, with the assistance of the social democratic and Stalinist parties, to restabilise world capitalism. Through the new monetary system set up at the Bretton Woods conference of 1944 and the Marshall Plan of 1947, a new period of economic expansion developed after the late 1940s.

But the economic expansion of the post-war boom did not overcome the basic contradictions of the capitalist economy. On the contrary, the economic boom led to their re-emergence at a higher level.

The growth of international trade in the 1950s and 1960s began to undermine the viability of the Bretton Woods monetary system. Under the system, the major world currencies exchanged in fixed relationships to each other and to the US dollar, which was backed, in turn, by gold, at the rate of $35 per ounce. As trade, investment and military spending expanded, however, the mass of dollars circulating outside the US, which provided the necessary liquidity for the international economy, began to vastly outweigh the gold held in the US that backed them.

For the Bretton Woods agreement to be maintained meant an exodus of gold from the US that could only have been prevented through the imposition of deflationary policies and a virtual permanent recession. That was not possible, given the upsurge of the American working class at that time. Nor was the US willing to cut back on the outflow of investment capital and military spending. Nixon cut the Gordian knot on August 15, 1971, when he appeared on television to announce that henceforth, US dollars would no longer be redeemable for gold—an event that Chinese financial authorities today no doubt have in their minds, as they ponder the security of their vast financial investments in the US. Will another US president appear on television one evening and tell them that they cannot withdraw these assets?

The collapse of the Bretton Woods system of fixed currency relationships had far-reaching consequences. Under conditions where every national economy was increasingly dependent on the world economy, in a complex network of relationships, it meant that new financial mechanisms had to be developed that would provide a measure of stability to international transactions.

Financial derivatives were one of those mechanisms. They were initially developed to provide insurance against fluctuations in currency markets, which could significantly impact on the profitability of import and export contracts. Contracts to buy and sell currencies were made. But these contracts could themselves be traded—leading to the creation of new financial markets. Furthermore, with the erosion of national currency and capital regulations, money could be borrowed in one market to be used in another. This gave rise to the need for derivative contracts, which took account not only of currency movements, but movements in interest rates. And such contracts could also be bought and sold, leading to a further expansion of financial markets.

In addition to the demise of Bretton Woods, another change in the world economy was to have no less far-reaching consequences—a fall in the rate of profit across all the major capitalist economies from around the mid-1960s. This fall set off an intense struggle for markets that led to fundamental changes in the very structure of the world capitalist economy.

Developments in the class struggle were also to have a decisive impact. The period from 1968, starting with the May-June events in France and ending with the political restabilisation in Portugal, saw an upsurge by the working class and potentially revolutionary situations. The bourgeoisie only remained in the saddle because of the betrayals of the trade union bureaucracies and the Stalinist and social democratic parties. However, the underlying economic problems remained and deepened. These were compounded by the existence of large concentrations of industrial workers, which had developed during the post-war boom.

At the end of the 1970s, the bourgeoisie began an offensive against the working class. It was marked politically by the coming to power of the Reagan and Thatcher governments and was waged under the banner of the “free market”. It involved the destruction of vast areas of industry in many of the advanced capitalist countries, principally the US and Britain. The same process was initiated in Australia from 1983 onwards, under the Hawke Labor government.

The destruction of whole sections of industry was accompanied by a turn to financialisation as a means of profit and capital accumulation. Financialisation involved a process in which profits were accumulated, not through the development of industry and the employment of workers in the creation of new value, but in the development of financial means for appropriating profits that were produced elsewhere.

Throughout the 1980s, however, this new mode of capital accumulation was still only just beginning. It was to surge ahead in leaps and bounds after the Tiananmen Square massacre in China in June 1989, followed by the Chinese Stalinist leadership’s decision in 1992, immediately following the liquidation of the USSR, to open the door to foreign investment and clear the way for the integration of the multi-millioned Chinese working class into the global circuits of capital. The massacre was a message to the ruling classes of America and the other major capitalist countries: your capital will be safe here, protected by the Chinese police state. The message was received and understood. The international bourgeoisie’s response was typified by Australian Prime Minister Bob Hawke. Shedding tears on television over the bloody repression of the students, he went on, after his retirement, to make tens of millions in his capacity as the head of a company advising on, and arranging, investment deals in China.

The turn to China and other low-cost countries had two interconnected motivations. It boosted profits and it could be used as a continuous pressure on the working class in the advanced capitalist countries.

It is not possible to obtain a completely accurate picture of the boost to surplus value provided by the transfer of manufacturing to low-cost countries. But with estimates that the initial impact of so-called off-shoring amounts to a 40 percent reduction in costs, it is hundreds of billions of dollars every year. Even more significant than these savings are the changes that have resulted in the very mode of capital accumulation.

Consider the example of the iPod. It is estimated that an iPod selling for, say, $200, costs just $4 to manufacture in China. The manufacturing firm, however, receives only a very small portion of the surplus value that is extracted from the workers in the production process. Part of the difference between the manufacturing cost and the sales price is accounted for by the outlay on computer programmers and others, whose labour has gone into the iPod’s manufacture. But in terms of the cost of each individual appliance, this is a very small amount. While the outlay on programmers etc., may be a very large amount, it is spread across an enormous number of units. And once a program is written, it can be copied endlessly at no additional cost. Let us say the programming cost per iPod is $6. This still leaves $190. This is distributed among different property owners, in the form of rent to the owner of the mall where the iPod is sold, interest to the bank which has provided finance, payments to the advertising company, payment to the legal firm that has fought the law suits over copyright, and so on.

What is involved here is a qualitative change. No longer do we have the direct extraction of surplus value, but the appropriation of surplus value, produced elsewhere, by financial and other means. We have a quantitative measure of how important this process has become in the functioning of the US, and, therefore, of the world economy. In 1980 financial profits were around 6 percent of all corporate profits. They had risen to more than 40 percent by 2006.

One of the main factors fuelling this process has been the provision of cheap credit. Credit has been cheap because Chinese financial authorities, along with their counterparts in Japan and other so-called surplus countries, have recycled their dollar holdings back into the US financial system. This, in turn, created the conditions for an expansion of debt in the US, which itself ensured the growth of the US market, providing the outlet for goods manufactured in China and other low-cost countries.

The profits appropriated by finance capital are, in the final analysis, dependent on the surplus value extracted from the international working class. But the processes of financialisation develop a life of their own. As long as cheap credit keeps flowing in, and asset values keep on rising as a result, it seems that the wildest dreams of capital can be fulfilled: money can be turned into more money without any reference to the processes of production. Money begets more money, simply as a result of its inherent nature.

This process has now brought about a situation where the claims of financial assets, both to current and future income, vastly outweigh the actual mass of income—derived from the surplus value extracted from the working class—on which they actually rest. Again, it is not possible to provide a single statistic that measures this over-accumulation of financial assets. But we can get an idea of its dimensions from the fact that in 1980 financial assets were roughly equal in size to world GDP. Some 25 years later they were 300 to 400 percent of world GDP.

Of course, it is possible for financial assets to rise faster than GDP without there being an over-accumulation, provided that the share of profits in GDP also increases. And this has been the case on a global scale since the beginning of the 1980s, as the labour share of GDP has been pushed down. The real wages of American workers during this period have not increased. In other words, all of the expansion in wealth, due to productivity increases over the past quarter century, has become available for appropriation by capital. Not even this, however, can account for the three- to four-fold increase in the ratio of financial assets to GDP.

Here we come to the historical significance of the breakdown now underway. The over-accumulation of capital in relation to real wealth, built up over the past three decades, means that vast sections of capital must now be destroyed. The previous structure of capital accumulation has collapsed and a new structure is being established.

Explaining the logic of this process, Marx noted that capital as a whole will suffer a loss. But that is by no means the end of the matter. How much “each individual member has to bear, the extent to which he has to participate in it, now becomes a question of strength and cunning” in which each section of capital seeks to restrict its share of the loss and pass it on to someone else.

Marx witnessed only the beginning of this process. Finance capital has now grown to gigantic proportions. It dominates the government, the press, public opinion and has rewritten the statute book to do away with restrictions on its activities. It now controls the levers of political power and uses those levers to plunder the wealth of society as a whole, so that it can be sustained. Thus Lehman Brothers goes under, whereas AIG receives hundreds of billions of dollars in government money. What is the difference? AIG has close financial connections to Goldman Sachs, which, in turn, has the closest connections to the US Treasury.

In the last weeks, we have seen another example of the control exercised by the banking and financial elites. A report in the Wall Street Journal of May 9 makes clear that the outcome of the so-called “stress tests” conducted by the US Treasury and the Federal Reserve to determine the position of the major banks was influenced by the banks themselves.

The article began: “The Federal Reserve significantly scaled back the capital hole facing some of the nation’s biggest banks shortly before concluding its stress tests, following two weeks of intense bargaining.”

Bank of America and Wells Fargo were said to be “furious” when shown the preliminary results, and demanded a revision. This was not some academic dispute —billions of dollars were involved, affecting the profitability of the banks and, not unimportantly, the bonuses and remuneration of their executives.

One of the biggest downward revisions was for Citigroup. According to theWSJ : “Citigroup’s capital shortfall was initially pegged at roughly $35 billion … The ultimate number was $5.5 billion. Executives persuaded the Fed to include the future capital-boosting impact of pending transactions.”

Note carefully the last sentence. It signifies that we are back in the world of Enron accounting, where financial accounts do not reflect the actual situation, but entirely fictitious outcomes devised by executives. In this case, “creative accounting” is not being applied to one company, but across the banking and financial system.

In the latest issue of the Atlantic Monthly, the former chief economist of the IMF, Simon Johnson, in an article entitled “The Quiet Coup” points out that political power has effectively been captured by financial interests. This prompted the FT columnist Martin Wolf to pose the question: Is America the new Russia, where the political system is dominated by a semi-criminal oligarchy of the extremely wealthy? Wolf replied in the negative, but his answer pointed to the fact that the situation in the US is, in fact, worse.

“In many emerging economies corruption is egregious and overt. In the US, influence comes as much from a system of beliefs as from lobbying (although the latter was not absent). What was good for Wall Street was deemed good for the world. The result was a bipartisan program of ill-designed regulation for the US and, given its influence, the world.”

In other words, while the domination of the wealthy and criminal elements is overt in Russia, in America it is built into the very structure of the political system.

But how did this occur? The rise and rise of finance capital, the growth of parasitism on a gigantic scale, was not simply the “bad” side of an otherwise healthy system. It was the outcome of the very processes by which capital resolved the economic and political problems that arose in the late 1960s and early 1970s. It did not develop in some way external to the expansion of the world economy over the past two decades, but was central to it.

Now these economic processes have led to the breakdown of world capitalism, posing the task of reconstructing society from top to bottom. As we have emphasised, this can take place in only one of two ways: either through a program implemented by the bourgeoisie or one initiated by the working class.

The capitalist program of restructuring involves nothing less than the devastation of the social position of the working class, the destruction of vast sections of the productive forces, an ever-intensifying global struggle for markets, profits, and resources and, arising from this, increasing global conflict and the danger of war.

How must the working class approach this period? First of all, by examining its own historical experiences, in particular, during the past four decades.

An immense international upsurge of the working class developed in the period 1968-75, which had revolutionary potential. But the problem was, it remained there … at potential. The movement did not result in the actual taking of political power. Due to the betrayals of the leaderships of the working class, the bourgeoisie remained in the saddle and, when the political situation had been restabilised, carried out a massive re-organisation of economic and class relations, to defend its interests.

The working class resisted this program in a series of struggles throughout the 1980s. But the processes of economic globalisation meant that the perspective of national reforms, to which the working class remained tied, had lost any viability. In the final analysis, that was the reason these struggles were defeated. Furthermore, the national-based trade unions and social democratic and labour parties, through which the working class had sought to advance its interests, now became the chief enforcers of the bourgeoisie’s program.

Faced with the complete integration of its old organisations into the very structure of capitalist rule, and the collapse of the old program of national reformism, large sections of the working class sought to defend their social and economic interests by means of individual initiatives, or by what have been called “coping” mechanisms—working more overtime and longer hours, holding down more than one job, increasing the number of family members in the workforce and, above all, taking on more debt. For other sections, however, not even these methods were available. They were plunged into a downward spiral of impoverishment, now extending over two generations.

The breakdown of the capitalist economy means that all the “coping” mechanisms of the past two decades have disintegrated. The bourgeoisie intends to return workers and their families to the type of poverty already being experienced by many. The working class must re-enter the social and political struggle. And it must do so armed with a new political perspective, based on an understanding of the tasks posed by the breakdown of the capitalist system. That is, it must advance its own independent initiative for the reconstruction of the world social and economic order. Nothing less will do.

This is the meaning of the capitalist breakdown. It signifies that the productive forces of mankind can no longer grow and develop within the old set of social relations based on private profit and the nation-state system. Society faces a disaster if social and economic relations continue to be subordinated to the blind laws of capitalist accumulation. The profit system and the criminal subjugation of the wealth of society to the interests of a tiny minority must be overturned so that social relations can be reorganised on the basis of reason. In short, the socialist transformation of society has become an historic necessary if mankind is to go forward.

However, we are informed by Ms Barbara Ehrenreich writing in the Nation on March 4, that the vast changes wrought by finance capital make socialism impossible: “It was … supposed to be a simple matter for the masses to take over or ‘seize’ the physical infrastructure of industrial capitalism—the ‘means of production’—and start putting it to work for the common good. But much of the means of production has fled overseas—to China, for example, that bastion of authoritarian capitalism. When we look around at our increasingly shuttered landscape and survey the ruins of finance capitalism, we see bank upon bank, realty and mortgage companies, title companies, insurance companies, credit-rating agencies and call centers, but not enough enterprises making anything we could actually use, like food or pharmaceuticals.”

In another country the political equivalents of Ms Ehrenreich, disillusioned radicals and ex-radicals, will add their own variations to this tune, in accordance with their particular national situation. Socialism is not possible here, they will declare, because while we have manufacturing industry, we do not have the whole of the value chain—only part of it. Its origins lie outside the country and its end is elsewhere. So it is not possible to establish socialism here either.

What does all this add up to? Not that socialism is impossible, but that a socialist society cannot be constructed on a national basis. But that is precisely the issue on which genuine socialism has always been differentiated from various forms of national reformism. This issue was at the very centre of the struggle between Trotsky and the Left Opposition, and the rising Stalinist bureaucracy in the Soviet Union. The conflict took place over socialism in one country versus the necessity for world socialist revolution.

Ehrenreich maintains that socialism is impossible because of the international division of labour brought about by capitalism. The exact opposite is the case. It is precisely the international division of labour, and the consequent integration of the labour of the working class from all over the world, that renders the national-state system created by capitalism an obstacle to the further development of mankind and poses the historic necessity for socialism.

Of course, the seizure of political power by the international working class will not occur as a single, simultaneous act. Developments in the political superstructure, of which the socialist revolution is one of the most profound, have their own laws. But they are determined, in the final analysis, by changes in the economic base of society. The global integration of production and the domination of the international working class by global finance capital mean that the political struggles of the working class will increasingly develop on an international scale. And this requires the building of a world party.

We can be sure that once the socialist revolution begins, it will rapidly spread. And a decisive role will be played by the American working class.

The American journalist and revolutionary John Reed titled his account of the Russian Revolution Ten Days that Shook the World. The emergence of a socialist movement of the working class in the United States—a movement that clearly defines its tasks and objectives as the conquest of political power as part of the struggle for world socialism—will have a truly electrifying effect. It will not only shake the world, but fundamentally transform it.

world socialist website http://www.wsws.org