Contribution to the International Communist Seminar
"The world socialist revolution in the conditions of imperialist globalisation"
Brussels, 2-4 May 2001

The currently much talked-about "globalization" is nothing but the intensification and expansion of the contradictions of imperialism almost around the world, facilitated by the revolution in new technologies.

In the aftermath of the collapse of socialism in Eastern Europe, the bourgeoisie has glorified its capitalism as the only "civilized," "humane," "viable" and "efficient" system. The peoples of the world have to accept it lest they perish.

Global capitalism has demonstrated in the past decade that it only causes crises, extreme misery and ever more devastating wars. The people of the former socialist countries and the whole world are finding this out at their expense.

Present-day "globalized" imperialism is the most criminal and barbaric system the world has ever known. It goes far beyond the pre-war horrors of the German Nazis against the Soviet Union.

The same conditions that caused the First and Second World War are still around. Indeed they are even more intense and extensive now especially without the counterbalance provided by the Soviet Union between 1929 and 1940.

The factors that will bring the world to the threshold of a new crisis of global dimension are accumulating. Even if capitalism intervenes to try and prevent a repeat of 1929, these "solutions" would only shift the burden of the crisis to different sections of the world’s population. These "solutions" would therefore only exacerbate the ills they pretend to treat.

More than ever, the workers and the peoples of the world need a Communist Party and revolution. Only socialism can save this world.

Capitalism and imperialism are characterized by different crises. Developed capitalism has its crisis of overproduction which it averts on the Third World. As a result, the greater part of humanity which is in the Third World is suffering from a terrible crisis of underproduction.

1. 1 Never before has so much wealth been created. At the same time, never before has there been so much poverty.
World output has grown tenfold in the last fifty years, from 3,000 to 30,000 billion dollars. The potential exists today to solve the major problems of underdevelopment and to satisfy the basic needs of all people. Yet an ever decreasing minority corners an ever increasing part of total wealth, plunging growing numbers of people in extreme and unbearable poverty. "Globalized" imperialism makes life increasingly impossible for billions of workers and peasants all over the world.

In 1960, the richest 20% of the world’s population already cornered 30 times the income of the poorest 20%; in 1997, this worsened to 74 times.

The situation is tragic for all the masses of the Third World.

In sub-Saharan Africa and the other least developed countries, income per capita has dropped compared to 1970. This is also the case in many countries of Latin America, the Middle East and Central and South Asia.

The share of the developing countries in global private capital flows has diminished from 14.4% in 1997 to 7.6% in 2000. During the same period, their share in foreign direct investment fell from 36.5% to about 16.0%. Considering the massive wave of privatization, mergers and acquisitions of the national industries of the Third World countries during the 90s, this slump demonstrates how the investments in some countries (the "tigers") represent an even bigger plunder of the Third World, leading to the destruction of employment, industry and agriculture.

The destruction of the productive forces of the Third World by the multinationals has resulted in the expansion of the informal sector. People in the informal sector live off the crumbs left by the capitalists. The growth of the informal economy – which provided more than 80% of new employment in Latin America and 93% in Africa during the 90s – has also increased the proportion of workers without any protection. In many countries of the Third World like Colombia, Cameroon, or Pakistan, employment in the informal sector exceeds 50% of total employment. Poverty in these countries is much higher than 50%.

The living conditions of the masses are deplorable even in the countries of the Third World that have seen rapid industrialization during the past years, like in East Asia. And the situation has even worsened in Asia following the 1997 crisis. The United Nations Development Program (UNDP) even found that: "In Indonesia, the poorest country hit by the crisis, the additional number of people thrown into poverty by the crisis is estimated at 40 million or 20% of the nation’s population."

According to the UNDP, chronic poverty has become the key problem in the former socialist countries of Europe and Asia.

At the start of the year 2001, one third of the 3 billion people who make up the world’s active population were unemployed or underemployed. The majority of them live in the Third World.

We are witness to the decline of real wages. The 1998-99 report of the International Labor Organization (ILO) affirms that "the share of salaries in world output went down almost everywhere in the world." In the United States, the income of the poorest 40% has been dropping since 1977. The income of the poorest 20% decreased with 10% while the richest 20% have seen their income grow with almost 40% from 1977 to 1999. Newly created jobs were at lower wages, however, forcing the even the employed to hold several jobs to be able to live a decent life.

During the ‘80s, the number of families living below the poverty threshold increased 60% in the United Kingdom and 40% in the Netherlands. These two countries served as models for all European countries for completely destroying social benefits achieved after the Second World War.

1. 2 More than a century ago Marx explained: "The ultimate cause of any real crisis is poverty and the limited consumption of the masses, against the tendency of capitalist production to develop the productive forces as if these had no other limitation but the absolute consumption capacity of society."

Present-day imperialist globalization only sharpens this contradiction.

The anarchy characteristic of capitalism becomes more and more devastating up to the point that a small number of powerful monopolies wage bloody battles to expand their market share.

[1] The overproduction for the capitalist market goes hand in hand with underproduction in the greater part of the world. Except for the industrialized countries and some ten countries of the Third World, imperialism prevents capitalism from establishing itself and developing anywhere.

In the car industry, manufacturers are able to produce some 75 million vehicles per year. But sales only reached less than 56 million in 1999. Hence there is overcapacity of about 20 million vehicles per year.

Let’s take Brazil, the biggest market in Latin American, as an example. Car manufacturers have invested (or plan to invest) between 12 and 17 billion dollars to reach a total production capacity of 3 million annually. But in 1997, before the economic crisis, production didn’t even reach 2 million cars. In 1998, the number of cars that rolled out of the factories was less than 1,586,000. The situation is even worse in other countries of Latin America: the production branches of manufacturers are closed because they prefer Brazil and, to a lesser extent, Argentina.

There have been similar developments in the steel sector.

It is in a state of constant "overproduction" even as most peasants in the Third World still do not have tractors at the beginning of the 21st century.

[2] The capitalists resort to huge mergers to expand their market share, to finance their investments and, in this way, to pursue their accumulation. As all of them pursue the same objectives with the same means (they don’t have any alternative), overproduction and overcapacity only increases further.

The giant mergers and rationalizations make the biggest multinationals grow in terms of capital and production units but they also bring about mass layoffs. In spite of the mergers and the 230% growth in the volume of business in the last 15 years, employment in the 200 biggest multinationals has known a nominal stagnation and has in fact declined. The big multinationals of the car industry have shed 250,000 jobs during the last 20 years while those of the oil industry shed 570,000 jobs. Therefore, the displacement of part of production through subcontracting has caused job losses and worsening in working conditions. Thirdly, delocalization of certain production units to the Third World (in sectors like electronics and textile) causes the destruction of the less competitive local industries. The jobs "created" by the multinationals are never enough to compensate for the losses. Finally, the activities of agricultural and food companies displaces farmers from their land and forces them to join the ranks of the semi-proletariat in the informal sector.

1. 3 Capitalist exploitation of the working class becomes more inhumane and unbearable by the day.

[1] Capital demands ever higher profits and for this the capitalists have to intensify the exploitation of workers for their surplus value. To increase the creation of surplus value, capitalists can only resort to their old arsenal of measures. But these are made more oppressive by the intense competition: increasing productivity, intensification of labor, growing flexibility, lower wages, use of cheaper labor power, etc.

In the past 15 years, the 200 biggest multinationals’ average profit per job has increased threefold and now stands at more than 15,000 dollars (650,000 Belgian franks or 16,500 Euro). Even with inflation (and a curbed index), there are no workers who have seen their wages multiply by 3.3 in the past 15 years.

[2] The competition between the centers of imperialism has resulted in an unprecedented and spiraling intensification of labor. The European governments and employers have to catch up with the American model where unemployment is at its lowest. Why? Because, according to the International Labor Organization (ILO), "the American worker actually realizes more working hours than his colleagues in other industrialized countries and he is also more productive. In 1996 the United States outstripped Japan with almost 10,000 dollars with regard to the added value per employee and almost 9 dollars per hour with regard to the added value per person per working hour but the Japanese workers have been catching up fast in the past few years. The productivity race is like an endless marathon in which the American worker is still ahead but, nonetheless, competitors from several other countries are on his heels, especially Japan, the Korean Republic and the major European countries."

It is Europe’s and Japan’s ambition to catch up with the United States in an endless marathon, meaning up to the total exhaustion of the workers! And the European employers are realizing it: the ILO report demonstrates that, on the average, productivity has increased faster in Western Europe than in the United States (+22 points). The supremacy of the United States with regard to productivity is threatened not only by the Asian economies but also by Europe. Among the European countries, productivity has significantly increased in Sweden (39 points), Spain (38 points), Denmark (34 points) and Belgium and the United Kingdom (both 33 points). In the same period, labor productivity grew about 30 points in France and 31 points in Germany.

One study (including Germany, the United States, Finland, Poland and the United Kingdom) shows that one worker out of ten suffers from depression, anxiety, stress or nervous exhaustion and risks hospitalization or unemployment because of this.

The causes of illness and death of the workers are enormous sources of wealth for the capitalists. While the former are falling prey to depression and suicide, the part of capital in the added value of companies and the rate of profit are increasing.

1. 4 "Globalization," that are seven big roads that lead straight to an organized genocide in the Third World.

[1] Debt:

Total debt has grown from 61 billion in 1970 to 2,554 billion in 1999. It has increased 79% in the last ten years. It has more than doubled compared to 1982 when the debt crisis broke out in Mexico.

The poorest countries, that are indebted to international institutions and the imperialist states, are held at gun-point. They are already incapable to reimburse their debt. The Third World countries that underwent a certain industrialization and are liable to international banks and financial corporations have generally incurred very high debts. It will be difficult to increase it even more. Problems are already arising whenever the economy slows down because the income from exports has to ensure the servicing of external debts.

With their burden of debt, the countries of the Third World are feeding the centers of imperialism. The IMF and the World Bank, far from alleviating this burden, are applying even stricter conditions to their loans. The countries that apply for loans have to submit themselves to their dictates in advance. That way, they demand that these countries invest more in infrastructure, a condition to receive investments from the multinationals.

These policies inevitably meet resistance, like from Malaysia that rejected any aid from the IMF during the 1997 crisis in order to preserve its independence.

[2] The sell out of raw materials:

Only one recent example: During the years 1998-99 there was an unprecedented fall of the prices of raw materials exported by the Third World. The composite price index of raw materials, except oil, fell more than 30%

[3] Protectionism:

Imperialism concocts new protectionist measures against products from Asia and Latin America in order to force the entry of its products in the Third World. A recent study of the WTO and the UNCTAD proves that reality is quite different. Behind a general decline of tariffs, imperialist countries impose restrictions of 350 to 900% on certain particular products, especially those exported by the Third World like food, shoes and textile. Although world trade has grown spectacularly, it has stagnated in these sectors that are relatively favorable for the Third World.

Protectionism aims to delay the social catastrophe in the West by worsening the catastrophe that has made the lives of 4 million people already unbearable.

[4] Exploitation of labor:

From its inception, imperialism exploited the Third World, first as a source of cheap raw materials and later as a market to dump its products, especially its surplus or obsolete and expired products.

Today, the rate of surplus value in the imperialist metropolises is not sufficient to satisfy the capitalists. Imperialist "globalization" has awakened the interest of the multinationals in the few islands in the human ocean of the Third World. They transfer the production that is relatively labor-intensive to some twelve countries. These investments are made where good infrastructure is available, skilled labor is cheap and readily available and police control is efficient. Since the 80s the multinationals invest a few tens of billion dollars yearly, essentially in countries such as South Korea, Taiwan, Brazil and Mexico. Given that the wages are only 5 to 10% from those in the imperialist countries, the multinationals are exploiting the labor force to the limits without creating many jobs.

[5] Privatization :

Genuine and balanced economic development of the Third World is impossible without comprehensive national planning. Dismantling the nationalized sectors of the economy, the multinationals lay hold of the best pieces and sow destruction in the other sectors.

Privatizations from 1990 to 1999 are estimated at 850 billion dollars worldwide. In 1999 alone, privatizations reached 145 billion dollars! That is 10% of the output of the European Union. That is the equivalent of 2/3 of the output of the African continent. The multinationals plan the extreme exploitation of workers in their tens of millions in their international empires while plunging whole countries into anarchy. Privatization is the fifth road to destruction and genocide.

[6] Import liberalization:

The Uruguay Round of GATT, followed by the creation of the WTO, was a bloody battle between Japan, the European Union and the United States. The countries of the Third World were only invited to the negotiating table when the superpowers had already reached decisions. The technological development allows to feed the world’s population but the multinationals want to wipe out the local peasantry to maximize their own sales and profits. The mechanized and exceedingly subsidized agriculture of the West intensifies its offensive to sell its products at dumping prices.

The developing countries are arguing that they are incurring yearly export losses amounting to 700 billion dollars because of the North’s protectionism. In 1995 agricultural subsidies of the imperialist countries amounted to 46 billion dollars (compare to their total "development aid" of 58 billion dollars). The industrialized countries spent 353 billion dollars in 1998 to protect their agricultural production, or 7 times more than their official development aid. The current trade liberalization is a real assault on hundreds of millions of people in the Third World.

[7] Technological monopoly:

Through the WTO, imperialism hinders the access to advanced science and technology and takes the lead in privatizing and patenting plants, and "improved" animals, and even some human genes! Billions of people in the Third World need better nutrition and medicines for their survival but the multinationals impose expensive patents on their pharmaceutical products and food crops in order to extort the wretched of the earth to their last penny.

The most notorious among these companies is Monsanto (and also Novartis, that develops the same policies at the European level). This company sends its trade representatives to all Third World countries to sell its sterile seeds, forcing the farmers to buy new seeds again from the same company. Thanks to its patents, Monsanto can influence the prices of its products at will. To cap it all, this company also provides kits of pesticides, herbicides and fertilizer the farmers need to improve their harvests. These products are not only very expensive but also very harmful for the people and the environment.

Imperialism’s tyrannical overexploitation of the Third World cannot serve eternally as an emergency exit from its crises. This "solution" also has limitations and will transform itself in its opposite: the anti-imperialist, national and democratic revolution. As imperialism becomes more aggressive, the anti-imperialist aspect is gaining importance. It is up to the communists, the only consistent anti-imperialists, to take this aspect seriously into account when defining their strategy and tactics.

Armed revolutions make progress in Nepal, the Philippines, Colombia, Ecuador and elsewhere and communists the world over have to support them wholeheartedly.

1. 5 "Imperialist globalization" has ravaged the former socialist countries of Eastern Europe, transforming them from highly industrialized and developed countries in Third World countries, creating misery, unemployment, war and millions of deaths.

Since the transition of these moribund socialist societies to so-called "welfare capitalism" in 1989-1990, they are engulfed in dismal capitalism.

The countries of the East have experienced an average annual negative growth of 4% since 1990. In terms of GDP, Russia’s production is at a level of 57% compared to 1990, the Ukraine’s at 39% and Georgia’s at 30%.

The former USSR, which was the second world power in 1989, has now reached the level of a Third World country. Its GDP equals the volume of business of two big car giants, GM and Ford! Male life expectancy is only 61 years, the level of an average developing country like India.

The 2000 report of the ILO has to admit that in the countries of the East, "unemployment was almost non-existent before 1989." "But rapidly, the rise in unemployment has started to exert pressure on these welfare systems in Bulgaria, Hungary, Poland and Slovakia and it has deteriorated the conditions of benefits and reduced their level and duration." In the whole region, less than half of the unemployed are receiving any unemployment benefit or social help.

The peoples of the former socialist countries, who were carried away for a moment by the myth of "liberating" capitalism, will bring back socialism because they have experienced that it is superior to barbaric capitalism.

Because countries that have maintained a socialist orientation have known an opposite development, their prestige and position in the world was reinforced.

China has reduced the number of the poor from 360 million to 210 million in 1998 (or a 150 million reduction). In the period 1987-1998, the number of the poor in capitalist Third World countries increased with 340 million while in China and Vietnam it went down with 163 million. If India would be able to provide the same health services as China, it would save 1.4 million children from death.

1. 6 Imperialist "globalization" stresses the extremely parasitic and speculative character of finance capital – making the whole system ripe for a more dramatic repeat of the 1929 crash.

Stock market capitalization has grown insanely during the past decade. It almost quadrupled in nine years, while world output only grew 34%.

From 1990 to 1999 the value of shares in the hands of private individuals has grown 13% per year. It went up from 9,000 billion in 19990 to 26,000 billion in 1999. The wealthiest families have used this money for their consumption and this consumption was the motor for American growth during the 90s. This wealth is based on the companies’ expected profits. A slump, or a fall, in the stock market would have the opposite effect: it would drag along the economy in a profound recession like in 1929.

1. 7 Also indebtedness reaches untenable proportions.

In several instances, indebtedness has allowed the capitalist system to escape the capitalist crisis, albeit temporarily.

American debt (household, corporate and public) has reached its highest level ever. It increased from 140% of GNP in 1981 to 189% in 1991, which is still the current level.

In order to curb the public debt, Clinton has reduced some public expenses, which has brought about other problems.

The debt of American corporations and households is at the highest level since the Second World War. In case of a recession, such indebtedness has to lead to bankruptcies that are detrimental to the workers and the attachment of property to recover the debts.

Europe has known a different situation. Because of the adherence to the Euro, the European Commission has imposed such a reduction of public debt and budget deficits (including reduction of government employees, of social expenses and increase of indirect taxes) that it will be difficult to chose a policy of public indebtedness. It is already experiencing difficulties to finance retirement benefits and health care. It considers reducing the taxes for the rich and corporations even more. Initially, the European Union wouldn’t see its public debt grow. On the contrary, it is pushing households into speculation and debts: by investing on the stock exchange , by taking private insurances,…

The Japanese example cannot reassure them. In 1991, public debt was at 68.2% of GNP. But since that time the Japanese economy is in crisis. The succeeding governments have injected more than 1,000 billion dollars in several "rescue" plans for the financial system or to finance infrastructure to allow the enterprises to deliver their goods to the state. Today, Japan is among the most indebted countries in the world with a public debt of about 130% of GNP. And still the economy does not take off. The central bank cannot bring it down anymore. There is no way out.

1. 8 Conclusion: Eventually, a crisis like in 1929 is inevitable as the bombs are exploding one after the other and the escape routes are dwindling.

In several aspects, the situation is worse than during the years leading to 1929. Speculation is in full swing. The gap between the wealth in the financial markets and the real production is wider than ever. Overproduction, symbolized by overcapacity, is at its height. The income of the workers is, at best, stagnant. The situation of the masses in the Third World has never been so disastrous. And indebtedness reaches an unprecedented level.

Since the transition of the USSR and the countries of Eastern Europe in 1989-1990 to "welfare capitalism," the years of recession are more numerous than those of growth. East Asia was the symbol of capitalist development of the Third World, supposedly allowing it to escape misery. But in 1997, one by one, the economies of these countries collapsed. The world’s most "dynamic" region goes into severe crisis, making the United States and Europe tremble. New technology, symbol of American renewal and allegedly driving world economy, would be able to bring an age of extraordinary development. Yet today most of the information technology companies are almost bankrupt. Only the biggest of them are trying to take advantage of the situation by acquiring the most interesting parcels, although they are laying off scores of workers themselves. The NASDAQ has lost 60% of its value in one year’s time, erasing 4,000 billion dollars with one stroke of the pen.

A new crisis similar to that of 1929 will provoke a deluge of tremendous protectionist measures, intense trade wars and massive unemployment. It will push imperialism to war and the oppressed masses to revolution.