The Crisis of Capitalism and the tasks of the Marxists

At this year’s World School of the International Marxist Tendency held at the end of July, Alan Woods delivered a speech on the nature of the present crisis of capitalism, in which he deals with the relationship between the economic cycle and the class struggle, and also looks into what kind of recovery we can expect, considering the enormous contradictions that have accumulated within the system.

El artículo en español.

The economic cycle and the class struggle

The world is experiencing the deepest crisis since the 1930s. Trotsky pointed out that one of the most difficult and complicated tasks that faces Marxist analysis is to answer the question, “Through what phase are we passing?”

There is no such thing as a final crisis of capitalism. The boom slump cycle has been a constant feature of capitalism for almost two hundred years. The capitalist system will always eventually get out of even the deepest economic crisis until the system is overthrown by the working class.

This is evident. But the concrete question is: how do they get out of the crisis and at what cost? And the second question is: what is the relationship between the economic cycle and the consciousness of the working class? Trotsky explained many times that the relationship between the economic cycle and consciousness is not an automatic relationship. It is conditioned by many factors, which must be analysed concretely.

There are two marvellous articles by Trotsky that deal with this question: “Flood-Tide,” which you will find in “The First Five Years of the Communist International”. The other article of fundamental importance was written in 1932, that is to say, during the deep crisis that followed the 1929 crash. It is called “The Third Period of the Comintern's Errors” (January 8, 1930). These two articles deserve to be discussed thoroughly at every level.

It is an elementary proposition of dialectical materialism that human consciousness is innately conservative. Most people don’t like change. They resist new ideas. And they will cling to the existing forms and ideas of society until they are compelled to abandon these ideas on the basis of the massive hammer-blows of events.

The present situation of world capitalism reminds one of what Trotsky said in 1938. “Objectively speaking, the conditions for world Socialist revolution are not only ripe and mature, but they’re rotten ripe!” The situation has revealed its bankruptcy from a historical point of view. That is clear to everybody. And yet we are left with a contradiction, a paradox. If this is true, why is it that the forces of Marxism still remain a tiny minority?

The answer to that question is very simple. Consciousness is lagging far behind the objective situation. The mass organizations of the working class are lagging far behind the real situation. Above all, the leadership of the proletariat is lagging far behind the objective situation.

These factors did not drop from the clouds, but they have been conditioned by decades and generations of capitalist economic upswing, of full employment, relative improvements of living standards. This has been the position, particularly in the advanced capitalist nations, not for a short time, but for a period of over fifty years. That is what conditions the consciousness of the working class in Britain, in France, in Spain, in the USA. Of course the conditions in the so-called “third world” are different.

Consciousness of the working class

It is a very serious mistake for revolutionaries to confuse what we understand with how the masses see things. Most workers, you must understand, the masses, don’t have the same consciousness as the Marxists. The first effect of a deep crisis, a deep slump ‑ and this is a deep crisis ‑ as far as the masses are concerned, is shock. The workers are stunned, traumatized, and they don’t understand what is happening.

Most of them believe that the crisis will be temporary. They draw the conclusion that if they pull in their belts, make sacrifices, put their heads down, eventually things will get better and they will go back to the previous conditions. From the standpoint of most ordinary people, this is a fairly logical assumption. This crisis appears to be something abnormal, something out of the ordinary. And people want to get back to the “good old days”.

The “leaders” of the working class, the trade union leaders, the Social Democratic leaders, the former Communists, the Bolivarian leaders, all encourage the idea that this crisis is something temporary. They imagine it can be solved by making some adjustments to the existing system. And when we talk of the subjective factor, the leadership, we must also understand that for us the leadership of these organizations is not a subjective factor. It is an important part of the objective situation, which for a time can hold the process back.

Of course, this idea of the reformists, that all that is needed is more control and regulation, and that we can return to the previous conditions, is false. This crisis is not a normal crisis, it is not temporary. It marks a fundamental break in the process. That does not mean that there cannot be a recovery of the business cycle. That is inevitable at a certain point.

At this moment in time, the bourgeois economists and politicians, and above all, all the reformists, are desperately seeking some sort of revival to get out of this crisis. They look to the recovery of the business cycle for salvation. They are constantly talking about the “green shoots” of recovery. But so far the “green shoots” are extremely weak and almost invisible.

The measures which have been taken by all the Capitalist governments in the world, from a standpoint of orthodox capitalist economics, are completely irresponsible. The only explanation for these measures is panic. The ruling class is terrified of the social and political repercussions of the economic crisis. That is why they are pumping vast sums of money into the economy and they are creating huge unprecedented levels of debt. As everyone knows, sooner or later debts must be repaid. That in itself is a recipe for a gigantic crisis in the future.

What kind of “recovery”?

It is absolutely clear that some kind of recovery in the business cycle is inevitable at a certain point. But it is equally clear that it will not solve any of the problems facing capitalism. On the contrary, it will prepare a newer and deeper economic crisis, and above all a deep social and political crisis. The bourgeoisie is desperately trying to recover the economic equilibrium, which has been shattered by the collapse of the last year to eighteen months. The problem that they face is that all the measures that they have taken to restore the economic equilibrium will completely destroy the social and political equilibrium.

There is an interesting article by Trotsky, written in 1932 — at the very lowest point of the economic crisis ‑ called “Perspectives for the Upturn”, where he refers to the effects of the economic crisis on the consciousness of the masses. He says the following:

“Discontent, the wish to escape poverty, hate for the exploiters and their system, all these emotions which are now suppressed and driven inward by frightful unemployment and governmental repression, will force their way out with redoubled energy at the first real signs of an industrial revival.”

It is a very concrete question. Workers see the factories are being closed, their jobs are at risk, their families are at risk, the trade union leaders don’t offer any alternative. So temporarily this has a restraining effect on strikes. But when there is even a small upturn, and they see that the bosses are no longer sacking people but taking a few people on and the order books are beginning to fill up, this can act as a powerful stimulus to the economic struggle.

For example, there is world overproduction in steel. There’s “too much steel” (for the limits of the capitalist system, that is). This is related to a sharp fall in the production of cars. There is something like a thirty percent excess capacity in the automobile sector worldwide. And excess capacity is only another way of saying overproduction. The car manufacturers are selling off their surplus stocks, closing factories and sacking workers. But once they finish running down the stocks, there will be a certain small improvement, which will serve to embolden the car workers to take action.

Let us take a historical example. In the United States, from 1929 to 1933, there were no strikes. No movement, except riots of the unemployed. But when there was a slight upturn, in 1933-1934, there was the beginning of a huge wave of strikes and factory occupations, including the Minneapolis strike which was led by the Trotskyists.

That had an immediate effect on the mass organisations in the United States. It led to the creation of the CIO, the Congress of Industrial Organizations, which was a breakaway from the old craft unions, the American Federation of Labor. The CIO was a very radical union that organized previously unorganized sections of the workers. And we will see the same process again.

In the same article Trotsky writes that a revolutionary must be patient. Impatience is the mother of opportunism as well as ultraleftism. He also writes that every Party member must be obliged to join the trade unions. He stresses the need for the revolutionaries to establish closer links to the mass organisations, above all the unions. That is no accident. In a crisis, the workers feel the need for the mass organisations to defend their interests, and these organisations will be affected by the crisis.

Blindness of the bourgeois

Trotsky said in the Transitional Programme that the bourgeoisie is tobogganing to disaster with its eyes closed. These words could have been written yesterday. The bourgeois understands nothing; they don’t know what’s happening. They are in a state of panic. That is why they are taking these irresponsible measures. It is a sign of desperation.

This again is no accident. Lenin pointed out that a man on the edge of a cliff does not reason, he doesn’t think rationally. And the most ignorant and stupid section of the capitalists are the bourgeois economists. For the last twenty years they bragged and boasted that there would be no more boom and slump, that the cycle had been abolished. It is an actual fact, that in the whole of the previous period, for decades, the bourgeois economists never predicted a single boom and never predicated a single slump.

I might add that the same thing is true of Marxist economists. Over the years I have heard many wonderful theories put forth by many clever economists who claim to be able to work out how to predict the cycle. I’ll tell you something: I wish they were right and that they would tell me the formula, in private. We could make a lot of money. But sadly, I have to say that for as long as I can remember, our own guesses at the specific movements of the economic cycle more often than not were wrong.

That is not an accident. Economics is not an exact science. It never has been, and never will be. All you can do is to explain the broad underlying processes and make an educated guess concerning the timing of events. Nevertheless, we are entitled to have a little laugh at the bourgeois economists. They worked out a wonderful new theory called the “efficient market hypothesis.” Actually, it’s a very old theory, there’s nothing new about it. It amounts to the old idea that: “Left to itself the market will solve everything. It will balance itself out. As long as the government doesn’t interfere, doesn’t distort this beautiful market mechanism, sooner or later everything will be ok.” To which, John Maynard Keynes issued the very celebrated reply, “Sooner or later we’re all dead.”

I can’t resist giving two quotes from prominent bourgeois economists, which are a confession of bankruptcy. Barry Eichengreen, a prominent economic historian, now writes: “The crisis has cast into doubt much of what we thought about economics.” And here is Paul Krugman, who was given the Nobel Prize for economics in 2008, only last year: “For the last thirty years macroeconomic theory has been spectacularly useless at best, and positively harmful at worst.” So that’s it: they confess that they haven’t got the faintest idea about economics, or anything else.

The whole system is breaking down. And now they try and comfort themselves with talking about the “green shoots” of recovery. Yet if you look at the figures you see that the US economy is continuing to decline, especially in the industrial sector. Although the fall seems to be less steep than it was.


I have got here the figures of the IMF. They have projected a recovery for 2010. This is a guess, it will probably be wrong, but I will mention these calculations anyway. Here is their wonderful perspective for next year: United States 0.8 percent growth; Japan 1.7 percent (which if you know anything about the history of Japan, is very poor); China (which has pumped huge resources into stimulating demand) 8.5 percent, and the European Union, a continued fall of 0.1 percent.

So what we are facing here in the best case scenario is an extremely feeble recovery, which will be accompanied, not by an improvement in living standards, but by ferocious attacks on living standards, cuts in public spending, and increased taxation which will fall on the working class and the middle class. Is this a scenario for social peace and stability? A recovery with those characteristics will serve to infuriate the working class and that will be accompanied by a wave of strikes and general strikes, you can be sure of it.

Let us deal now with the question of debt. The fact of the matter is that the bourgeoisie, particularly in the United States, is so terrified of the effects of a deep slump that it has been pumping in money and resources in a desperate attempt to avoid the slump getting any bigger. According to the IMF, the gross public debt of the ten richest nations by 2010 will be 106% of the gross domestic product. In 2007 in was 78%. That means an increase of extra debt, in three years, of more than nine trillion dollars. This is an incredible state of affairs. It is without precedent in the whole of history. And it cannot be sustained.

In the 1930s, Hitler resorted to similar policies through a massive programme of arms expenditure. In the USA, Roosevelt resorted to the New Deal, which, by the way, did not solve the crisis in America. What solved the problem of unemployment in America was not the New Deal but the Second World War. And the same is true for Germany. Hitler had to go to war in 1938, because if he hadn’t done so, the German economy would have collapsed. That was the fundamental reason for the Second World War: the imperative necessity of German capitalism to solve its problems at the expense of Europe.

Hitler solved the problem by the simple expedient of invading Europe and seizing all the wealth of France and its other imperialist rivals. However, the perspective of war now is ruled out. Nowadays, the European capitalists are in competition with the United States. Who is going to fight against the United States? The very idea is a joke. There cannot be a world war under these circumstances. Of course, there will be small wars all the time. Iraq was a small war. Afghanistan is a small war. There is a small war in Somalia. But a major war between the major powers is ruled out.

I said that these figures of debt were unprecedented, but what I should have said is unprecedented in peace time. War is a different matter. After the Second World War, the public debt of Britain was 250% of gross domestic product. And America had a debt of over 100% of GDP. That was a result of the Second World War. But they solved these debts by an enormous economic upswing after 1945. I won’t go into the reasons for it because we’ve stated the reasons for this in previous documents (See Ted Grant: Will there be a Slump?).

The post-war upswing lasted for about thirty years (until 1974). But that is no longer on the agenda. No one is suggesting such a perspective. The bourgeois economists are all agreed that it will be a long and painful process to struggle out of the mess which they’re in now. And because they can’t go to war, all of the contradictions must be reflected internally in a ferocious class struggle. That is the real perspective for the next period.

The enormous accumulation of debt means years and decades of deep cuts and a regime of permanent austerity. We can express this as a kind of equation: the ruling class of all countries cannot afford to maintain the concessions that have been given for the last fifty years but the working class cannot afford any further cuts in their living standards. That is a recipe for class conflict everywhere. In the advanced Capitalist countries (including countries like Sweden, Switzerland, Austria) class struggle is on the agenda. This perspective is the best perspective from our point of view.

The present world crisis of capitalism means we have entered a new period in which the workers will face a situation of permanent austerity, with cuts in welfare and attacks on working conditions. This is already having a radicalising affect on millions of workers and youth, particularly in Latin America and other underdeveloped parts of the world and it is spreading to the advanced countries also.

A whole period of austerity

Over a period of fifty years, thanks to the economic upswing, in the advanced capitalist countries (Europe, the United States, Japan, Australia, etc.), the working class and its organizations were able to conquer at least semi-civilized conditions of existence. They considered these conditions to be normal because they have never known anything else. But the last fifty years were not normal at all. This was an historical exception, not the normal state of affairs under capitalism.

Take the question for example of pensions. The first man to introduce pensions was Bismarck. This reactionary Bonapartist kindly introduced pensions for everybody over 70 years of age. At that time in Germany, the average life expectancy was 45. Bismarck was a really smart man! Nowadays workers in many countries consider it a right that when they finish working at 60 or 65 they have the right to some money from the state. They think it is normal, an automatic right. But it is not normal and it’s not an automatic right.

Now the bourgeois are saying this publicly: we can’t afford this. We can’t afford to maintain so many old and unproductive people. The problem is that people are living too long. They should do us a favour and die a bit earlier! Let me quote The Economist editorial of the 27th of June. “Whether we like it or not, we are going back to the pre-Bismarckian world where work had no formal stopping point.” In other words you work until you drop dead.

Pensions will be under attack, beginning in the United States. President Obama represents the smiling mask of capitalism. The man wears a permanent smile that resembles an advertisement for toothpaste. But this nice smiling reasonable mask is going to slip very quickly, and behind the smiling mask the people will see the real brutal, savage, ugly face of capitalism. It’s not a question of stupidity, or because they’re vicious (although they are vicious) it’s a question of absolute necessity. From a capitalist standpoint, they have no choice except to do this.

When they say we can’t afford these reforms, from the standpoint of market economics, they’re telling the truth: they must cut, and cut, and cut again, even when there’s a boom. British Airways recently demanded that workers work for nothing, “we can’t afford to pay your wages,” they say. In January the Teamsters, which is a powerful section of the working class of the USA, accepted a wage cut of ten percent.

What conclusions does one draw from this? Do we say that there’s a low level of consciousness, that the workers are not revolutionary, the usual nonsense we hear from the revisionists and the sects? No! We don’t draw any conclusion like that. Things like this are an inevitable consequence of the present phase through which we’re passing – the transition from one period to another, very different, period.

Ferment in society

What we have described is not a simple or uniform process. There are some quite bitter strikes taking place, even now. There have been factory occupations, not just in South America, but even in Britain there have been some factory occupations. One week ago there was a factory occupation in the Isle of Wight. I don’t know if the comrades have ever heard of the Isle of Wight? It’s a little island on the south coast of England where rich people go to play with their yachts, where people go on holidays, where the Conservative Party always wins by big majorities. For the Venezuelan comrades, it’s a bit like the Isle of Margarita, except that it rains all the time. Otherwise it would be very nice.

There was a factory occupation a week ago on the Isle of Wight. That’s a fact, and quite a significant fact, but we must be careful about this. If I said that was the general picture of workers in Britain that would be false; it’s not the general picture, at this stage. That will come later. But it is not yet the case. However, one cannot draw an automatic parallel between strikes and radicalization, which can express itself in many ways. Marxists would not expect immediately a lot of strike activity in a deep crisis: this would be completely unreal. There’s a very low level of strikes as a matter of fact: in Britain, in Italy, in France, in the USA. But that does not exhaust the question.

There is a tremendous ferment in society, there’s a widespread questioning of the capitalist system which was not there before. This is our terrain; it’s a terrain in which our ideas can make a big impact. This is a change, and it is an important change. It must create favourable conditions for the development of the Marxist tendency. I said in America from 1929 to 1933 there were almost no strikes, but the American Communist Party grew quite rapidly in those days, among the unemployed and blacks in particular.

The “Third World”

What is true for the advanced capitalist countries is ten times truer for the so-called “third world.” I don’t like the expression “third world,” I think it’s an unscientific expression but I can’t think of an alternative. We’re referring to parts of Asia, Latin America, the Middle East and Africa.

When Marx said the choice for humanity was socialism or barbarism, that is literally true. Sub-Saharan Africa was an absolute nightmare situation, even during the boom: a terrible genocide in Rwanda, a horrific civil war in the Congo which no one even talked about, in which at least five or six million people were slaughtered. Now there’s a savage war taking place in Somalia. Recently an American strategist said “you’re all worried about Afghanistan, you should be more worried about Pakistan and Somalia where you can have a similar developments taking place.”

But even in Africa there are key countries where there is a powerful working class: Nigeria, Egypt, where there have been big strikes. But the key country in black Africa is South Africa. The ANC came to power on the basis of a betrayal, a complete sell-out. The mass of black workers got hardly anything out of that deal. All that happened was that there was a black bourgeoisie and a black middle class that fused with the white exploiters and there was a bourgeois section of the ANC led by Thabo Mbeki. He was a Stalinist and then became a complete bourgeois and as a result there was an open split in the ANC.

South Africa is severely affected by the economic crisis, although they had no crisis for 17 years. Now they have a deep recession, the official unemployment rate is 23.5%, the real rate is much higher. Zuma replaced Mbeki and it’s clear that the mass of black workers thought Zuma was going to be on the left, that he was going to defend their interests. But last week there was a massive strike in South Africa. It started with the bus workers, but on Monday and Tuesday of this week there have been big strikes in all the major cities of South Africa, not just the buses but the clinics, the traffic officers, the libraries, the parks, the public sector in general. The municipal workers’ union is demanding a wage increase of 15%. And it looks as if they’re going to get it. But there have been clashes with the police, barricades have been set up and the police are firing rubber bullets against the workers. At least 12 workers were injured in these clashes, and this is continuing. So now the revolutionary movement is spreading to the key country in Africa, which is South Africa.

I won’t say much about Latin America because we have discussed that quite a lot. It remains, of course, an absolutely key sector of the world revolution. In Venezuela the revolution has lasted for over ten years, which is an incredible state of affairs, unknown in history that the situation should last as long as that. But here there is a problem of leadership. Chavez is a very courageous and honest man, but he’s proceeding empirically, improvising, making up a programme as he goes along. He is trying to balance between the working class and the bourgeoisie. And that is impossible. It cannot be maintained.

He was able to do this for quite a long time because of the economic situation. As Lenin said, politics is concentrated economics. The high price of oil saved them. They were able to make concessions, reforms, the missions, and so on, but that’s finished. The price of oil has fallen. It has recovered a little bit but that’s not enough. According to the figures I’ve seen, inflations is at about 30%. Therefore there has been a fall in real wages. Many of the welfare schemes are being cut and unemployment is increasing.

I don’t doubt that the Venezuelan workers still remain loyal to Chavez, but I also have no doubt whatsoever that many workers, even dedicated Chavistas, are saying, and thinking: what sort of a Revolution is this? What sort of Socialism is this? Are we going to solve these problems or not? And that must have a reflection within the Socialist Party, within the PSUV, which is holding its Congress in the autumn.

The Party has been heavily bureaucratized and the leadership is dominated by reformists, but the pressure from below will be there. There is a sharp polarization between the left and the right within Venezuela and this polarization must be reflected within the Bolivarian movement itself. And that should be a very favourable condition for the Marxist tendency.

You can see how correct we were, when we insisted so persistently on the central role of the mass organizations. In South Africa we said the movement would go through the ANC and the South African Communist Party and of course the trade unions COSATU. It was a little bit delayed, and in general the processes have been delayed because of the economic situation. We have to be patient. But in South Africa our perspectives are taking place before our eyes.

And in Venezuela it will be the same, because the comrades have done marvellous work in Venezuela, combining theoretical firmness with the necessary tactical flexibility, always stressing the role of the Bolivarian movement and the PSUV. In the next couple of years I believe the foundation will be laid for a mass left-wing opposition within the PSUV, in which we will participate, of course, fertilizing it with the ideas of Marxism.

In Mexico, again, we see the importance of leadership. In 2006, Lopez Obrador would have only had to lift his little finger and he could have had a successful socialist revolution in Mexico, where millions of people were on the streets. But because Lopez Obrador is who he is, I think he was more terrified of the movement than even Calderon, he tried to put the brakes on the movement. And therefore logically people are disappointed. In the recent elections, the PRD suffered a defeat and the old PRI got big support.

Does that mean to say the Mexican workers are reactionary, or that they have suddenly become conservatives? We must understand the psychology of the Mexican workers. They supported the PRD, they supported Lopez Obrador, but there’s a very serious economic crisis in Mexico. Whole areas of Mexico depend on the immigrants working in the United States (this is even more true of Central America, as you saw in Honduras, or El Salvador). When these immigrant workers are laid off, they can’t send money back to their families. It is a catastrophe. That explains the convulsions in Honduras. There will be similar convulsions in all the countries of Central America.

But workers are very practical people. A Mexican worker looks at the PRD and its leaders, and he says: “these people are hopeless, they’re not doing anything. I need to eat. I need a job. When the PRI were in power, we knew they were corrupt gangsters, but at least they gave me something to eat, I had a job.” So many people voted in the PRI, to see if they would do something for them. They will not, and the PRI will soon discredit itself. The PRD will recover on the basis of a further move to the left.

Threat of Fascism?

In this situation – a transitional situation we will find all kinds of contradictions, not just in South America but in Europe and in general. In the recent European elections, the Social Democrats in particular suffered a heavy defeat and in some countries the ultra-right gained some support. We know that the ultra-left sects have got serious psychological problems. They suffer from a nervous tic, and whenever the ultra-right parties get a little bit of extra votes, they immediately start to sound the tom-toms, and shout: “Fascism, Fascism, Fascism!”

This is crazy nonsense. The correlation of class forces in all countries rules out the possibility of fascism at this stage. Before the war, in countries like Italy, and Germany even, and Spain, the working class was a minority. Even in Germany there was a huge peasantry with could be easily recruited by the demagogic arguments of extreme right-wing and fascist parties. Even in France that was the case, before the war. Now all that has finished. The peasantry has almost disappeared in most European countries and the working class is now a decisive majority in society.

In the 1930s the students in all countries were the sons (there were very few females in the universities then) of the rich. Most were conservative and a large number were fascists and Nazis. In Britain in 1926 the students were strike-breakers. In Germany, Italy and Austria, most of the students were fascists. Is that the position now? You name me any country in the world where the Fascists control the students. On the contrary, in almost all countries the students are left-wing or even revolutionary.

Therefore it’s ridiculous to talk about fascism in the same terms as the 1930s. Insofar as they exist, the fascists are small organizations, in the main. They can be particularly vicious, violent and engage in provocations, but there’s no question of them taking power. In any case, the ruling class would only resort to open reaction after the working class has suffered a series of very heavy defeats. That was the case in Germany, it was the case in Italy also, and Spain also in the period 1919-39. Therefore, long before the question of reaction is posed, the workers of Europe and Latin America will try time and time again to take power. That is the real situation.

In Bolivia you could say there’s a fascist movement. At least there are fascists involved in the right-wing opposition movement. The heroic Bolivian working class in the last few years, on at least two occasions, could have taken power easily. If they did not take power, it was not their fault, but the confusion and the inadequacy of the leadership. The Bolivian workers staged two insurrections. They overthrew two governments. I ask of you, what more can you ask of the Bolivian workers? What more are they expected to do? But they failed because of the leadership who had no perspective of taking power.

Therefore you ended up with the reformist government of Evo Morales. This has opened up a period of sharp class struggle in Bolivia, which is not yet resolved. It depends on the capacity of the Bolivian Marxists to build the leadership and I’m very pleased to announce that the IMT has just approved the affiliation of two very important sections: the Bolivian section and the Moroccan section.

World relations

Comrades the whole world situation is now in uncharted waters. Now the Americans are trying to get out of Iraq. Obama is “a Man of Peace”, so he wants to get his troops out of Iraq and send them to Afghanistan. You know if I was an American soldier in Baghdad, I think I’d prefer to stay where I was! They cannot win the war in Afghanistan and they have destabilized Pakistan.

We had a discussion about Honduras in the IEC and it’s quite clear that the American ruling class is split. It is clear that the CIA and this reactionary mafia were involved in the coup in Honduras. But that didn’t suit Obama. He’s got a different foreign policy, a more “intelligent” foreign policy to that of his predecessor. George Bush was a particularly stupid representative of American capitalism. I don’t think he’s ever read a book, except maybe the Bible, and I don’t think he got further than maybe the first chapter of Genesis. If you could stand next to George Bush and examine his ear, you would be able to see daylight coming through from the other side! He represents the most stupid, the most reactionary section of the American ruling class, the Texan mafia. And they’re still very influential.

Bush wanted to put nuclear missiles in the Czech Republic and in Poland, which the Russian were not very happy about. For some reason they thought that these missiles were directed at them! George Bush said, no, no, no, they are not directed against Russia, don’t worry, they are directed against Iran. So you put missiles in Poland directed at Iran! That’s crazy, and the Russians were not amused. They said, now, that is quite enough. And they made their point very eloquently when they invaded Georgia. They said to the Americans: “so far and no further”.

Obama went to see the Russian president Medvedev and he brought his toothpaste smile with him. Of course, in reality, he was not dealing with Medvedev at all, but with Putin. Medvedev is a puppet of Putin. So he tried his smile and it didn’t have any affect. Putin said, never mind about the smile Mr. President, get those missiles out of Poland. And they’ll have to do that – all that’s finished. This shows the limits of the power of US imperialism.

The Middle East shows the idiocy of Bush’s policy. All they succeeded in doing was destabilizing the whole of the Middle East. All the pro-western regimes there are hanging by a thread. Saudi Arabia is hanging by a thread. Egypt is hanging by a thread. Lebanon is hanging by a thread. So is Jordan, so is Morocco. These ruling elites were terrified by the demonstrations that took place during the Gaza war.

In January I wrote an article about the war in Gaza. That was before Obama was elected. I predicted in this article that Obama would immediately try and reach a deal with Syria and Iran as soon as he was elected in order to get out of Iraq. That is precisely what has occurred. As I explained, part of the reason for the invasion of Gaza, was a warning of the Israelis to Obama saying “don’t forget we’re here. Don’t think you can do a deal behind our backs,” because Iran and Syria would ask for certain things in exchange for collaborating with the USA. “You can’t do anything in the Middle East without our permission”. And that’s a fact.

Obama would like to do a deal with the Palestinians, it would help his friends in the Middle East if he did that, and it would be very useful to him. But the Israeli imperialists have got their own interests and they’re not prepared to reach a deal. Netanyahu says: “yes we accept a deal” but he puts conditions which the Palestinians could never accept. They must be disarmed, in effect, they must accept Israeli control.

What sort of state is that? What sort of independence is that? It reminds me of the famous phrase of Marlon Brando in the film The Godfather: “I made him an offer he couldn’t refuse.” Except that this is the other way around. Netanyahu says: “I made him an offer he couldn’t accept.” They’re Mafiosi, all of them. But that’s what bourgeois diplomacy is like. And I repeat what we have said many times: there can be no solution to the Palestinian problem on the basis of capitalism.


What happened in Iran took most people by surprise. It appeared to fall like a thunderbolt from a clear blue sky. But sudden and sharp changes of this sort are implicit in the situation. As a matter of fact these events were predicted in advance by this International, not now, but ten years ago, at the time of the first movement of the students.

At that time I wrote an article called “The First Shots of the Iranian Revolution.” And now we see the second chapter. Comrades, what a marvellous movement this was! It was an inspiration. After thirty years of the most savage and brutal dictatorship, a monstrous regime, based on a combination of extreme reaction and religious fanaticism, using extreme repression, murder, kidnapping, torture, we saw the explosive entry of the masses on the scene of history.

This is the final answer to all the cowards and sceptics, the cynics, the ex-Marxists, the ex-communists, and all the others who questioned the possibility of revolutionary movements in the present epoch. Despite all the terrible repression there were one million people on the streets of Tehran, maybe two million. It was an astounding revolutionary movement. And yet you have so-called left wingers, so-called Marxists, like James Petras, who have just made a very small error: they’re not capable of seeing the difference between revolution and counterrevolution.

Lenin explained the four conditions for a revolution. We’ve mentioned them before but we’ll mention them again. The first condition is a split at the top, a split in the ruling class: that the ruling class will not be able to rule with the methods they’ve used in the past. For 30 years the people of Iran have languished under this vicious rule, which is oppressive down to the smallest detail of people’s lives. The Mullahs try to control how people think, how people live, what people do, what people wear. Iran is a very young country, and it’s a very big country and 70% of the population are under thirty years of age, they have never known any other regime than this. And after thirty years, the masses are fed up with the Mullahs.

The Ayatollah Khomeini presented the image of Mr. Clean, as against the ghastly corruption of the Shah and his pro-imperialist gang. By the way, what stinking, disgusting, hypocrites the so-called democrats of the West are. In 1953, when there was a bourgeois democratic government, the only time in the history of Iran when there was such a government, led by a liberal called Mosaddeq, these imperialist gangsters wanted to take control of the oil wealth of the country. The British, the Americans, the CIA overthrew Mosaddeq and imposed a brutal dictatorship of the Shah, which was one of the bloodiest dictatorships known in the whole of the 20th century.

The regime of the Shah was disgustingly corrupt. People in this oil rich country were hungry, and the Shah engaged in public spectacles of the most obscene luxury. The Shah had a huge repressive apparatus, one of the biggest armies of the world, the secret police was known as the Savak, which had control over every aspect of life, they were very efficient, like the Gestapo. They had very pleasant little customs like roasting people to death with an electric fire. That was the regime that was put into power by the British and the Americans and supported until the end by the British and the Americans.

That ended in a revolution in 1979, in which the Iranian workers played a key role. They confronted the repressive apparatus in the streets. They armed themselves, because the soldiers deserted en masse, handing their weapons over to the people. It is not generally know that the Iranian workers set up soviets, known as the shoras. Power was within the reach of the working class. Unfortunately the Iranian Communist Party didn’t want to take power. They helped the gangster Khomeini to take power. And Khomeini said, thank you very much and illegalized the Communists and put them in jail.

The price paid by the Iranian people was this monstrous, fundamentalist dictatorship for thirty years. But now this regime is finished. The only thing that maintains it is fear, and as you see the fear is disappearing. Now there’s always a comical side to politics, politics has got an amusing side. And you see this here; it’s quite amusing to see what happened. Khamenei, the Supreme Leader, was so confident that he allowed a relatively free election campaign. He was confident because he was going to rig the elections. The top Mullahs vetted all the candidates, and they eliminated 400 candidates, and since the four candidates who were left were all men of the regime, there was not a problem. Or so it appeared…

But then a strange thing occurred. Hegel said, and Lenin often repeated it, necessity expresses itself through accident. This Mousavi was an accidental figure; he was part of the regime. He was the prime minister during the war with Iraq. But then they had some debates on television and the question of the economy was raised, and this is at the basis of the situation of Iran, as oil prices have fallen. So there was a lot of discontent and a lot of interest in these debates.

By the way, it is true that Ahmadinejad did give some reforms. He could afford it, as he had the money from the oil. He gave subsidies, particularly to the poor peasants in the villages, so he has a certain support among these sections. But that support is increasingly being eroded, the conditions of the masses are getting worse and there has been a wave of strikes in Iran. Therefore, a strange thing happened in this election campaign. In the past people were not interested in the elections, mostly they didn’t bother to vote. But in these elections there were huge rallies in Tehran. This fact already indicated a change in the mood of the masses.

Although Mousavi didn’t represent any real opposition, he was seen by the masses as the opposition candidate and therefore it was seen as an opportunity to give the regime a kick. Most observers were convinced that Mousavi was going to win the election. It is impossible to say what the figures were, we will never know, but here the regime made a mistake. Ahmadinejad immediately came on television and announced he’d won by a huge majority. Even in an advanced capitalist country it takes some time before the final results are announced. Iran is a very big country with quite a primitive infrastructure in the rural areas. So how could he make this announcement immediately?

If he had said, “I won by a small difference” maybe some people would have believed it. But instead, they announced a huge victory, and people didn’t believe it. There was an immediate reaction. People came on the streets: students (it was mainly students in the beginning), also middle class people, and teachers – people who in the past would have supported the regime. The women played a huge role, since the women are some of the main victims of this regime.

Let’s remind ourselves of the conditions Lenin put forth, the four conditions for revolution:

  1. The regime is split; there is a crisis in the regime.

  2. The middle class is wavering between the revolutionary forces and the ruling class.

  3. The working class is ready to fight and make the greatest sacrifices.

  4. The existence of a revolutionary party and leadership.

The regime in Iran is split from top to bottom. This always happens at the beginning of any revolution all throughout history. It happened in France in 1789 and in Russia in February 1917. When a regime enters into an impasse, it is reflected in two factions at the top. One faction says we must reform from the top to prevent a revolution from below. And the other faction says no, if we start reforming from the top there’ll be a revolution from below, keep things as they are. And both of them are right.

As for the second point, the middle class was not wavering, but actually took the side of the revolution. There was some participation of the workers, like the Teheran bus drivers. There was even talk of a general strike, but this failed to materialize, precisely because of the absence of the last factor: a revolutionary party and leadership.

These were the biggest movements of the masses since 1979. They took the regime by surprise. They took Mousavi by surprise. They took the Americans by surprise. The argument that the CIA is responsible for this movement is a monstrous invention. Mousavi did everything in his power to block this movement. Every day he would say: “don’t go on the streets, you’re going to be killed, I want to save your life.” Every day he said this and every day more people came onto the streets. Not just students and middle class people.

The Economist described the people that were on these demonstrations: there was a mixture, students, middle class people, women, a lot of women, but also poor people from the poor districts of Tehran, women dressed in the head covering and poor people, and even mullahs. This was a colossal movement. It’s the kind of movement you’d expect at the beginning of every genuine revolution which stirs up society to the depths. The authorities tried repression; people were beaten up by the Basiji. They were beaten up, imprisoned, and some people were killed. But nothing could stop it. At one point, there were even indications that cracks were opening up within the police.

These demonstrators were extraordinary because nobody organized them. I suppose if ever there was an argument for anarchism, this would be it. It was spontaneous, by word of mouth. The youth used mobile phones and all the other modern technology which is now available.

The regime tried to block the internet and block mobile phone transmission, and still they found ways around it. How do you stop a movement when there’s no leadership, there’s no one to arrest? That’s why they couldn’t stop this movement. The anarchists are doubtless delighted by all this. But we must point out to the anarchists that while the lack of leadership was, in one sense, a strong point, it was also a weak point.

In the end the movement failed in its objectives. We must ask why. There were two fatal weaknesses in this movement. In the first place, it was precisely the weakness of spontaneity. There was no leadership, no plan, and no strategy. It is impossible to keep masses of people on the streets without such a plan. Eventually, the movement will dissipate, just as steam dissipates in the air unless it is concentrated in a piston-box.

Above all there was no participation by the organized workers. That was the second and decisive weakness. This again shows the limitations of the workers’ leaders in Iran. There have been many strikes in Iran in the last period, but in the decisive moment, where was the leadership? Unfortunately, the so-called workers’ vanguard failed to support the movement and did not call on the workers to join it.

I have the impression that these so-called vanguard workers are either ex-Stalinists, or demoralized elements of the older generation who are under the influence of Stalinist ideas. Whatever they are, they behaved very badly. There’s a marvellous article by Trotsky written in 1930, which has got a direct reference to what is happening in Iran. It is called The Spanish Revolution and the Tasks of the Communists. At that time there were big student demonstrations, and Trotsky insisted that the Spanish workers and the Spanish Communists must support these demonstrations and put forth revolutionary democratic demands.

Unfortunately in Iran the workers’ leaders boycotted the election and boycotted this movement, which is a very bad way to behave. An indefinite general strike would have finished this regime, especially if it was accompanied by the setting up of soviets, or shoras, to use the Farsi word. The idea of a general strike was floating in the air, and even Mousavi made some vague references to it. All that was required was to name a day, and that would have been enough. But this demand never came forward.

We pointed out in the articles on the website, that you cannot have a situation where you’re calling people out on the streets saying, demonstrate, demonstrate, demonstrate, without any perspective. People are going out on the streets every day and getting their heads cracked, and there’s no perspective. And therefore what happened was inevitable. I said in my first article: if it carries on like this it will go down. And that is what happened.

On the surface it seems that the regime has regained control but that is not the case. Nothing is solved and the splits in the regime now are wide open. There have been splits on the left (if you can call the reformists the left).and splits on the right also. Particularly interesting is the conduct of Rafsanjani, who is one of the main gangsters in the regime - a very rich gangster, and a very clever gangster. Now he has gone over to the opposition.

Rafsanjani held a Friday prayer meeting about ten days ago, a Friday prayer meeting in one of the main Mosques in Tehran. This is not a new thing; the leaders do this quite often. Ahmadinejad did it quite recently. But at the most in a big rally (for that is what it is), you woud get no more than 50,000 people. How many went to this prayer meeting with Rafsanjani? One million people! Now it may be that one million people suddenly developed a burning interest in praying to Allah. It’s possible, but I don’t think so. This was a mass political demonstration. And this same gangster, this Rafsanjani, gave a very militant speech in the Mosque.

I don’t think he said a lot about Allah, what he did say was to call for democracy, he said that the elections were rigged, he said it was impermissible to use violence against the people of Iran and he called for the release of everyone who had been arrested. This is astonishing. And even more interestingly he was supported by leading clerics from the city of Qom which is the main religious centre in Iran. I think at least four or five Grand Ayatollahs came out in support of Rafsanjani. This means there is an open split and it seems Khamenei is losing control.

Khamenei is the Supreme Leader, not only of the religious questions, he’s the Supreme Leader of the state, he controls the army, the police, the judiciary, and he’s been publicly challenged by Rafsanjani. Even more significant, the night before that meeting, on Thursday night, 24 top army officers were arrested. Two of them were generals. Why were they arrested? They went to this prayer meeting with their uniforms, and this was a serious act of rebellion.

Therefore, all the conditions Lenin put forth for a revolution are present in Iran except one, or to be more accurate, one and a half, because the proletariat, again through the fault of the leadership, has not played the leading role that it should play. Lenin wrote in 1905 that in a situation like that, the proletariat must put itself at the head of the nation. The proletariat and its Party must fight for the most advanced revolutionary democratic demands, which can appeal not just to the workers but to the middle class, the students, the youth, and the women.

These democratic demands must be summed up with one slogan, for a nationwide general strike and soviets (shoras). If they did that, this regime would be finished. Now just think what that means. Just imagine the effect of a revolution in Iran. Imagine the effect it would have on all the countries in that area, regimes like Egypt, Jordan, Saudi Arabia, they would fall, one after the other. Why do you think the imperialists have been so quiet around this business in Iran?

You ask me what form the new government would take. I answer: if there was a Bolshevik Party (even a party of 8000, as the Bolsheviks were in February 1917), you’d be talking about a classical proletarian revolution in Iran. But there is no such party. Therefore it’s almost certain that the Iranian revolution will have to pass through a phase of a bourgeois parliamentary regime of some sort, as happened in Spain after 1931. But under conditions of economic crisis, that will not be a recipe for peace any more than it was in 1931 Spain.

The overthrow of the regime has only been postponed till the next crisis, which may be in six months, twelve months or a couple of years. But it is inevitable. And it will open up a very stormy period in Iran. We can’t be precise about the nature of the regime that will emerge. But I will tell you what it will not be: there cannot be anther fundamentalist Islamic regime in Iran, not after the last 30 years. That’s finished. And therefore the Iranian revolution, for the first time, will cut across all this madness of fundamentalism that exists in the Middle East.

Perspectives and tasks

We are entering into a revolutionary period which will last for some years, with ups and downs, as occurred in Spain from 1930 to 1937, but under those conditions the masses will learn very fast. Our ideas are already getting an important echo inside Iran itself and in the coming period this is bound to grow.

It’s clear that the students are drawing conclusions. They can see the limitations of Mousavi and the reformists. The fact that the Iranian website of the IMT has received hundreds of visits of students asking about Socialism and Marxism is of extreme significance. I believe the International Marxist Tendency acted very quickly in relation to the events in Iran. I can report to you that our articles were immediately translated in Farsi the very same day; they were immediately distributed in Iran and according to our reports, have had an excellent response.

Anyway comrades, I’ve only had time to touch on the most explosive points in world politics and I don’t have time to develop these points any further. In conclusion, I would just like to say this: Lenin once wrote an article with the title “Combustible Material in World Politics.” Comrades there is combustible material now everywhere, and the conditions for revolution are maturing.

Of course, we must not exaggerate: it’s still in the early days. As Trotsky said, we need to be patient. But two things are clear here: we can see at least the beginning of a change of consciousness of the masses. Millions of people are wide open to the ideas of Marxism in a way that was not the case before. I have been almost 50 years in the tendency founded by Ted Grant, and I have seen big movements before. But I have never seen a situation like this and I cannot think of any parallel to what is now developing.

The second and final point is the role of this International. Our forces are still very small, we’re struggling to build the first nucleus of the IMT in many countries, but we are beginning to develop. And we are now not just observers, but we’re an active part of the movement in some very important countries. Therefore, we can be supremely confident of the future, we have the correct ideas, the marvellously profound ideas of Marxism. We have the correct tactics and methods, and above all we are determined to link these ideas to the mass organizations of the working class.

Comrades! We can go forward with absolute confidence in the ideas of Marxism, absolute confidence in the revolutionary role of the working class, absolute confidence in ourselves, and absolute confidence in the victory of the International Marxist Tendency.

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