The following is the third part of a draft document which will be discussed at the World Congress of the International Marxist Tendency this summer. The main aim of this document is to define the main economic, social, and political trends in the world today and to develop a perspective for the class struggle in the next period. The document was originally drafted in October 2015.

Part One | Part Two | Part Four

World relations

putin and obamaFrom the standpoint of international relations, the period through which we are passing is without historical precedent. In the past there were always at least three or four Great Powers vying for superiority on a European or world scale. Thus, for long periods international relations tended towards some kind of equilibrium that was periodically punctuated by wars.

The economic instability is also expressed in increasing political instability. Not since the Second World War have international relations been so fraught with tensions. The aggressive expansionist tendencies of US imperialism since the fall of the USSR has created a chaotic situation everywhere: in the Balkans, in the Middle East, in Central Asia, North Africa, Pakistan, and lately also in Africa.

Before the Second World War Leon Trotsky had already predicted that the USA would emerge as the dominant world power, but he added that the USA would have dynamite built into its foundations. That prediction was dramatically confirmed with the destruction of the Twin Towers on 9/11.

The United States established itself as the dominant world power in 1945. The rise of American power was accompanied by the collapse of the power of the European imperialist states. World War II had shattered both Japan and Western Europe. The United States dominated economically, militarily, and politically, although it was confronted by the power of the Soviet Union.

An uneasy equilibrium was established that lasted almost half a century. Power was not in London, Paris, or Warsaw. It was in Moscow and Washington. There was no question at that time of the USA interfering in countries like Iraq, Syria, or Yugoslavia, which were in the Soviet sphere of influence. Much less could Washington contemplate meddling in the Ukraine or Georgia, which were still part of the Soviet Union.

All that changed with the collapse of the USSR just over two decades ago. Dragged down by internal crisis, and under the pressure of a massive protest movement, Moscow was compelled to withdraw from Eastern Europe. The Soviet-led Warsaw Pact was wound up. However, NATO continued to exist as a potential threat to Russia.

In the 1980s American President Ronald Reagan made a verbal promise to Soviet leader Mikhail Gorbachev that the West had no intention of expanding NATO eastwards into the sphere of influence of the Soviet Union. That was a lie. In the past two decades the USA has been systematically expanding NATO to the east, incorporating several countries that were previously within the sphere of influence of the USSR.

German and US imperialism were behind the breakup of Yugoslavia—an entirely reactionary development for the peoples of Yugoslavia and a complete humiliation for Russia. Although Russia had troops stationed there, the West was allowed to take over while the Russian army was relegated to the role of an impotent bystander.

In the past, the contradictions we see on a global scale would have led to world war. But this is no longer a possible outlet. The correlation of forces on a world scale does not allow it. That, however, does not signify an epoch of peace. On the contrary, the contradictions will find an expression in a never-ending series of small wars, leading to terrible bloodshed and chaos.

Although the United States remains enormously powerful, it is far from being omnipotent. The wars in Afghanistan and Iraq exposed the limits of the power of US imperialism. Even the most powerful imperialist state cannot afford to be directly involved in large numbers of conflicts all around the world. It would soon find itself exhausted economically and politically as public opinion swung sharply against foreign interventions. This lesson was lost on the shortsighted ruling clique under George W. Bush. It had to be learned painfully by his successor.

Russia and America

Urged on by US imperialism, NATO advanced right up to the frontiers of Russia. First the Balkan states were incorporated into NATO, and then Poland joined. But when the Americans attempted to draw Georgia into NATO, it was one step too far. The Russian army was sent and Georgia was swiftly crushed. Now it was the Americans’ turn to be humiliated, as the Russians seized large quantities of arms and equipment provided to the Georgian ruling clique by Washington—even the toilet seats.

That was a clear warning to the Americans. The Kremlin was saying, “Thus far and no further!” But the US ruling circles are blind, deaf, and dumb. When the Germans were ready to pull back from the conflict in Ukraine in late 2013, John McCain and his Republican allies stepped in, forcing Obama’s hand in the matter. They were looking to deal Russia a blow in revenge for Georgia and draw it closer to the EU and NATO. The idea that Putin would quietly accept the loss of Ukraine was foolish in the extreme. It was even more foolish to expect him to accept the loss of the Crimea, where the Russian navy has a big base at Sebastopol.

obama-putin-ukraineThe right-wing coup in Kiev, backed by extreme nationalist and fascist forces, succeeded in toppling the government of Yanukovych, but by so doing they have plunged Ukraine into an abyss of economic collapse and civil war. The West, predictably, has not delivered any of its promises to the Ukrainian people. Nor have they done anything to stand up to Russia, despite all their fist-shaking and threats.

The imposition of sanctions on Russia have not weakened the regime but strengthened it. Before the Ukrainian crisis and US sanctions, Putin was not in a very strong position. But the measures taken by the USA to “punish Russia” had the opposite result to that intended. Putin was able to ride on a wave of patriotism, and at some point enjoyed an approval rating of nearly 90%.

On the surface it may seem paradoxical that Putin has emerged strengthened from the crises in Ukraine and Syria. The efforts of the West to isolate him have been a miserable failure. In Syria he is the man who now calls the shots. And even if the US persists in maintaining sanctions over Crimea and Ukraine, we can confidently predict that its European allies will quietly drop theirs. The crisis-ridden European economy needs the Russian market and Russian gas just as much as the European bourgeois need Russian help to clear up the mess in Syria and halt the unending flow of refugees.

But if we look deeper into the situation, it will become evident that it is not as stable as it looks. The Russian economy continues to fall, hit by the falling price of oil and Western sanctions. Real wages are falling. The middle class can no longer spend pleasant weekends in London and Paris. It grumbles, but does nothing. The Russian workers were influenced by the official propaganda on Ukraine. They were scandalized by the activities of the Ukrainian fascists and ultra-nationalists and Putin was able to take advantage of their natural sympathy with their brothers and sisters in Eastern Ukraine. On this basis his poll ratings soared.

Putin may be able to maintain his grip on power for some time, but everything has its limits, and in the end history always presents its bill. The economic crisis has led to a sharp fall in living standards of many workers, especially outside Petersburg and Moscow. The masses are patient, but their patience has definite limits. We saw evidence of this at the end of 2015 when long-distance truckers went on strike. A small symptom perhaps, but a symptom nevertheless that sooner or later the discontent of the Russian workers will find its expression in serious protests and strikes.

Putin felt confident enough to launch a military offensive in Syria, which caught the West off guard. As a result, the man who was supposed to be an international pariah is now, in effect, the arbiter of Syria’s fate.

Not long ago Obama and Kerry were breathing fire and brimstone against the man in the Kremlin. Then suddenly Putin turns up at the United Nations and becomes the center of attention. He even appears in public together with the US President, and there is a well-publicized handshake—though not a very warm one, to be sure.

For Putin, the main aim in Syria was to keep Assad in power as a reliable Russian ally, and to halt the advance of the Islamist rebels who were getting ever closer to the main areas of Assad’s support in the West—and Russia’s bases there. At least one can say that Putin’s intentions were clear and unambiguous. That gave him an appearance of strength.

Obama, on the contrary, is a man with a sharply divided Congress and a rabid Republican opposition. He is acutely aware of the danger of getting involved in a war on the ground in Iraq. The American people are weary of foreign adventures. That, and not any pacifist or humanitarian considerations, is why he is at pains to avoid committing US forces on the ground in Syria.

The reason for the contradictions in US policy in Syria is not hard to see. The only serious military actions against the jihadis in Syria have been the ones carried out by the Russians in collaboration with the Syrian army of Bashar al-Assad. And the only serious military actions against ISIS in Iraq (apart from the Kurds, who will only fight in their own areas) are carried out, not by the so-called Iraqi army and its US backers, but by the Iranian-backed Shia militia and elements of the Iranian military.

In practice, the Americans have been forced to recognize this and accept the demands of Russia and Iran that Bashar al-Assad must remain in power for the foreseeable future. That is why Obama had to arrive at a deal with Iran over nuclear arms that is hated by Saudi Arabia and Israel, and also by their Republican friends in Congress. In short, he has to face all ways at once. That gives him the appearance of weakness. The Russian leader returned to Moscow convinced that with regard to Syria, the Americans would do exactly the same as with regard to Ukraine—that is, nothing of any consequence—and he was not wrong.

The Russians redoubled their arms shipments to Damascus, pouring in weapons and equipment. They have launched a series of bombing raids against ISIS and other targets. The Russian raids effectively changed the balance of forces on the battlefield. This forced the US and its Western allies to step up their bombing campaign, which until then had been halfhearted and aimed at containing ISIS rather than defeating it. Thus, at every step the Russians have run rings around American diplomacy. In Syria, Washington has had to swallow its pride and accept Moscow’s terms. This has fundamentally altered the correlation of forces, not just in Syria but in the Middle East as a whole.

The Middle East

C’est pire qu’un crime, c’est une faute” (“It’s worse than a crime, it’s a mistake”). The celebrated words attributed to Louis-Antoine-Henri de Bourbon-Condé, duc d’Enghien, might serve as a fitting epitaph for the foreign policies of US imperialism in recent decades.

syria-the-good-old-cold-war-gameThe flames that engulf the entire Middle East are the direct consequence of the criminal invasion of Iraq and the continuing interference of US imperialism in that unhappy region. Having destabilized Iraq and reduced it to a smoking, war-torn ruin, the Americans and their allies have aided and abetted reactionary forces in Syria which now pose a serious threat to their interests. But the so-called war against terror that has allegedly been waged for nearly fifteen years in Iraq has achieved precisely nothing.

The politicians in Washington understood nothing and foresaw nothing. Ironically, by destroying the old state machine of Saddam Hussein and the Iraqi army, they upset the balance of power in the region and created a vacuum, into which stepped their old enemy Iran. When the US army stormed into Iraq there was no al-Qaeda present in that country. Now the whole region is in the grip of the jihadi madness. This is the direct result of the meddling of US imperialism.

Belatedly, the Americans have woken up to the disastrous state of affairs they themselves have created and which now threatens them. Now the US is faced with the growing threat of jihadi violence that is spreading like an uncontrollable epidemic through the Middle East and North Africa, crossing the Sahara Desert to burst through in Nigeria, dragging in the neighboring countries of Niger, Chad, and Cameroon.

How is the world’s greatest military power to respond to this threat? It was forced to limit itself to bombing from a great height. But it is an open secret that bombing alone does not win wars, and least of all wars like the one in Iraq and Syria. America and its allies have bombed ISIS positions for over a year. But the effect on ISIS seems to have been minimal.

It is true that the self-styled Islamic state, with its cruel and inhuman punishments, its crucifixions, beheadings, and stoning to death, its oppression of women and attacks on culture and education, represents a reactionary aberration—a throwback to a dark and primitive past. But all this is merely the mirror image of the crimes of imperialism, the indiscriminate bombings, the torture and abuse of prisoners in Abu Ghraib and Guantanamo Bay. The interventions of imperialism in the Middle East since 2001 have cost between 1.3 and 2 million lives and led to the displacement of many millions more who now live in barbaric conditions. This comes under the heading of “collateral damage.”

The imperialists need an excuse for their criminal aggression in the Middle East, and this is conveniently provided by the murderous actions of the jihadis. The imperialist propaganda machine has assiduously built up the impression of an all-powerful ISIS. But events will show that ISIS is not as all-powerful as it seemed. Since the intervention of the Russians, ISIS and the other jihadi groups have quickly been forced onto the defensive.

The Russian intervention has changed everything. It has forced the Americans to intensify their activity. But in order to defeat ISIS, they need boots on the ground. Only the boots in question must not be American ones. A small number of American Special Forces have been involved on the ground, though to what extent is not clear.

Unfortunately for Obama, in order to defeat ISIS it would require not very small forces, but rather substantial ones. How is this problem to be resolved? Some incurable optimists placed their hopes on the Iraqi army. But this was the vainest of all vain illusions. When they destroyed the Iraqi army in 2003, the Americans removed the only military force in the region capable of acting as a counterbalance to the power of Iran. Now the pathetic remains of that shattered force is demoralized and not fit to fight ISIS or anybody else. Its total lack of fighting ability was shown last summer when the Iraqi army ran away like frightened rabbits, leaving Mosul to the tender mercies of the ISIS jihadi hordes.

At the same time, the “moderate opposition” inside Syria has proven to be a complete fiction. With minor exceptions, almost all the groups fighting Assad are Islamist fanatics of one kind or another. They are more interested in fighting the Assad government than fighting ISIS. The main role of these “moderates” is to act as a bridgehead to channel the arms sent by the Americans to jihadi groups. The Americans announced that they were going to form a fighting force of 5,000 “moderates,” but now admit that there are only a handful left in the field (where they are and what they are doing remains a complete mystery). Others have been killed by al-Qaeda groups—who received intelligence about their whereabouts from the US ally, Turkey—or have gone over to al-Qaeda, handing over their weapons.

In the end, the US has been forced to give up all its plans in Syria. The support for the “moderate” rebels has been significantly scaled down. Meanwhile, it has been forced to throw its weight behind the Kurdish forces of the YPG. Around the YPG, they have set up the Syrian Democratic Forces (SDF) and the Democratic Syrian Congress.

The YPG has proven extremely efficient in Syria, mainly because it is a popular militia based on a democratic and non-sectarian program. With 50–70,000 troops, it is only surpassed by the Assad army, which is inferior to it in training, morale, and motivation. With the setting up of the Democratic Syrian Congress, it has de facto become a Kurdish statelet.

The YPG is undoubtedly the most progressive movement in the Middle East at the present time. However, it is being used by the US for wholly reactionary reasons. US imperialism aims to breakup Syria into small statelets run by different militias and warlords, which they can play off against each other to maintain its control. For the imperialists, the slogan of self-determination for small nations is always a reactionary deception and a trap. For the present, they are obliged to make use of the Kurds to fight ISIS on their behalf. However, at a certain stage the imperialists will inevitably attempt to use this divide-and-rule tactic against the Kurds themselves. While supporting the progressive aspects of the Kurdish movement and defending the right of the Kurdish people to self-determination, Marxists must warn against mixing up the Kurdish cause with the intrigues of US imperialism, and criticize the inconsistencies and shortcomings of the Kurdish leadership.

The shift in US policy towards the Kurds has deepened the divisions between Washington and its Turkish ally, whose al-Qaeda–linked proxies stand to lose direct and indirect US support. Turkey views the YPG and its sister organization, the PKK, as a threat, and has been alienated by the new US line. This has led to the ironic situation of a low-intensity war, brewing between the US-supported SDF and Saudi- and Turkish-supported Islamist proxies. This could explode into a full scale war at any point.

Besides support for the Kurds, the US has realized that it needs Iranian-backed forces, as well as the Assad regime, to stabilize Syria and prevent it from being overrun by Islamic fundamentalist groups. Everybody knows that the brunt of the fighting in Iraq, apart from the Kurds, who are mainly interested in fighting for their own areas, has been borne by the Iranian-sponsored Shia militias and Revolutionary Guard, and that the Iraqi army is being trained and commanded by Iranian officers. The attempt to build up a fighting force based on “moderate Islamists” is likewise doomed to failure. The different factions are more intent on fighting the Assad government and each other than fighting ISIS. Clashes between al-Qaeda groups and groups belonging to the newly formed Syrian Democratic Forces (a US-backed group consisting of the Kurdish YPG and dubious, yet non-jihadist remnants of the FSA) have increased.

Therefore, all insistence on regime change in Syria has been conveniently forgotten, and the Americans have been forced to drop their earlier belligerent attitude to Tehran and reach a shaky compromise with Iran over its nuclear program, with the promise of reducing sanctions. This was undoubtedly a humiliating climb down for Washington and a major diplomatic triumph for Tehran. Iran now has effective control of Southern, Eastern, and Central Iraq (ISIS and the Kurds control the West and the North) and a major influence in Syria, as well as most of Lebanon, the base of the powerful pro-Iranian Hezbollah.

Gritting its teeth, Washington has been compelled to turn to the only viable option: a deal with Iran—and Russia. But is this not that same Iran that, not so long ago, was demonized in the American press as part of the “Axis of Evil.” Not long ago, John Kerry was breathing fire and brimstone in his bellicose denunciations of Tehran. Now suddenly all is sweetness and light in Washington’s dealings with Tehran. Mr. Kerry delivers conciliatory speeches, beaming with a smile from ear to ear as he sings hymns of praise to the leaders of Iran for their great wisdom and moderation.

The same is true of America’s dealings with Russia—only more so. Not so long ago, Vladimir Putin was considered to be outside the pale of civilization, a man to be shunned and boycotted. Now, suddenly, he is the hero of the hour in Syria. These developments are raising serious concern in Ankara and Riyadh. The American imperialists are trying to face two ways at once, and in the process they are finding themselves in new and insoluble contradictions. These diplomatic contortions are a further indication of the mess that the Americans have landed themselves in the Middle East. The government in Baghdad is heavily dependent on Iran. The fear in Saudi Arabia and other countries in the region is that Iraq is being turned into nothing more than an Iranian satrapy. This result is not at all what Washington desires, but it is the logical consequence of all America’s actions.

Their attitude towards Syria is even more contradictory. Publicly they continue to denounce Assad and complain about the Russian “interference” in Syria, while in reality there is a de facto detente. The Americas complain that the Russians do not give them enough information about their targets in Syria, that it is impossible for them to coordinate the bombing raids, that there is a risk of accidents, etc., etc. They complain loudly that the Russians are bombing not only ISIS targets, but also the “moderate opposition” forces backed by the West that are attacking the Syrian army in the West. But the Russians pay no attention, and continue blasting their targets remorselessly.

Saudi Arabia and Yemen

It is an old maxim of diplomacy that nations have no friends, only interests. In the Middle East the United States is trying to balance between the four major regional powers—Iran, Saudi Arabia, Israel, and Turkey—leaning now towards one, then towards another in a perpetual balancing act. In Iraq, US fighters carried out air strikes in parallel with Iranian ground forces, while in Yemen, the United States supports Saudi air strikes against the Houthis, who are backed by Iran. The United States says it is expediting deliveries of weapons to Saudi Arabia, yet at the same time the Obama administration is desperately signalling to Tehran that it does not wish to clash with Iran over Yemen.

The Saudi ruling clique is at the center of counterrevolution in the entire region. For decades, Western leaders have constantly backed the reactionary Saudi monarchy, slavishly swallowing all its vicious actions and licking the backside of the disgusting creatures that rule the roost in Riyadh, as we saw at the funeral of the late, unlamented King Abdullah.

These devout Muslims, the “protectors of the Holy Places” and hitherto one of America’s most loyal allies, beheaded more than 50 people in one year alone, apart from other pleasant little practices like floggings and crucifixions. But the rotten Saudi regime is resting on very shaky foundations. There is a growing ferment among the oppressed Shia population of Saudi Arabia as well as a significant part of the youth. This could lead to an uprising at a certain stage. But there is also a growing impatience among the Wahabi reactionary zealots, who are more sympathetic to ISIS and al-Qaeda than the royal family, whom they see as illegitimate. This contradiction is undermining the regime, which is desperately trying to cling on to power.

These were major factors that determined the Saudi reaction to events in Yemen. The volte-face of American foreign policy in relation to Iran led to further complications for Washington. It enraged the Saudis and Israelis, who see Iran as the main enemy. Iran has good relations with the Houthi-Shia militias that swept through Yemen on a populist program and took control of Aden, driving out the Saudi puppet. In response to this, Saudi Arabia ordered its air force to bomb the rebels.

The Saudis hastily put together a coalition of ten states which aims to drown the Yemeni insurrection in blood. Reluctantly the US and Britain joined the coalition, although they have avoided direct participation in the bombing. The coalition forces have brutally bombed the country, pulverizing its infrastructure, destroying schools and hospitals, and killing a large number of civilians. Twenty million people are in acute need of aid. Despite the murderous bombings, the Houthis have not been destroyed, and there is a general hatred towards the Saudis and their allies among the mass of the population. The fact that the Pakistan army refused the request by the Saudis to participate in their military campaign against the Houthi rebels is sufficient proof that a ground offensive in Yemen would end in disaster.

The present ruling clique is playing with fire. The old King Abdullah was a very cautious man who tended to avoid direct involvement in risky foreign adventures that could upset the stability of his regime. But his successors are degenerate upstarts, ignorant, stupid, and overconfident. Blinded by their sense of invulnerability, they have launched an unwinnable war. By intervening militarily in Yemen, Saudi Arabia risks destabilizing its own regime or even provoking an uprising.

Saudi Arabia is deliberately stirring up religious sectarianism against the Houthis. This has led to the strengthening of al-Qaeda in large parts of the country. The execution of Nimr-al-Nimr was a judicial murder ordered by the Saudi royal clique. It was a deliberate provocation intended to stir up sectarian strife between Shias and Sunnis and push the government of Tehran into taking military action against Saudi Arabia, which would then call on the Americans for aid.

This immediately led to the storming of the Saudi embassy in Tehran and the breaking off of diplomatic relations by Saudi Arabia. All this was carefully premeditated. Events proceeded step by step, like the steps of a ballet dancer. But this ballet is the dance of death. This was a desperate act by a regime that finds itself in deep trouble and faces the prospect of overthrow.

The Saudi gangsters miscalculated in Yemen. They have stirred up the anger of the Shias, who constitute at least 20% of the Saudi population and are among the poorest and most oppressed layers. Mass demonstrations broke out in Saudi cities with slogans like “Death to the House of Saud!” By overreaching themselves the Saudi ruling clique has sown the winds and will reap a whirlwind.

Turkey

turkey-bomb-pkkTogether with Saudi Arabia and Israel, Turkey represents the main counterrevolutionary force in the region. Although formally part of NATO, under the reactionary regime of Erdogan, Turkey in practice has been backing ISIS and other Islamist forces in Syria.

Erdogan’s regional ambitions are well known. He wishes to reestablish something resembling the old Ottoman Empire, bringing large parts of Central Asia and the Middle East under Turkish control. In order to further this ambition he attempts to use the Turkic-speaking peoples like the Turkmens for his own cynical purposes, just as Russian tsarism used the South Slavs in the past as the pawns of an expansionist foreign policy.

It is also an open secret that Erdogan has been supporting ISIS and other Islamist gangs in an attempt to overthrow President Assad and grab slices of Syrian territory. That is why he has allowed a large number of Islamist fighters to cross the Turkish border into Syria, while blocking the supply of arms and volunteers to the anti-ISIS forces in Syria and brutally crushing the Kurds who are fighting ISIS.

The shooting down of a Russian warplane by the Turks was a provocation intended to create a conflict between America and Russia. Turkey is a member of NATO and has appealed to its allies for help. But while publicly expressing support for Turkey’s “right to defend its national sovereignty,” NATO did nothing, while Putin used the incident as an excuse to move a Russian S-400 missile defense system to Syria, thereby taking control of Syrian airspace.

Erdogan’s provocation achieved nothing. It did not stop President Hollande from visiting Moscow or calling for a wider international coalition against ISIS. In reality, the Erdogan regime is not stable. The mass uprising that spread throughout Turkey in 2013 was a warning of what awaits Turkey in the future.

Israel

The Palestinian question remains unresolved and continues to poison the political life of the Middle East. The attempts of Abbas and the Palestinian Authority to isolate Israel diplomatically in the UN and other international forums are exercises in futility.

Relations between the administration of President Obama and the government of Israel have become openly hostile since Netanyahu accepted an invitation from the Republicans to address the US Congress last year.

When Netanyahu was elected, the White House refrained from customary congratulations. There was no phone call from Obama. Instead, the prime minister got a brief call from the Secretary of State, John Kerry. This little incident, of small significance in itself, indicates the growing contradictions between the USA and Israel.

In an attempt to put pressure on Washington, Netanyahu resorted to the crudest blackmail. Israeli intelligence obtained secret details about the nuclear talks between Iran and the United States from “confidential” briefings from US officials as well as from informants, diplomatic contacts in Europe, and eavesdropping. They handed this sensitive information over to members of Congress.

By such underhanded means, Netanyahu was attempting to sabotage the deal with Iran. The Wall Street Journal quoted a senior US official as saying that it is “one thing for the US and Israel to spy on each other. It is another thing for Israel to steal US secrets and play them back to US legislators to undermine US diplomacy.”

The chill deepened when Netanyahu explicitly ruled out the so-called two-state solution—the cornerstone of Washington’s peace efforts. The White House warned that the Obama administration could be making “recalculations” in its dealings with Netanyahu.

Israel has maintained its iron grip over the West Bank. Gaza is being slowly strangled, and Jewish settlements in the occupied territories are being remorselessly expanded. The leadership of the Palestinians is totally impotent, leading to desperate actions on the part of the youth, actions which will play right into the hands of Netanyahu. This is yet another blow to Obama and US imperialism, which has failed in its attempts to find a compromise solution.

The rise of China

china-debt-crisisIn the East, the USA faces another challenge in the rise of China. After the crisis of 2008, China saved the world economy by absorbing a large amount of surplus capital (that is, overproduction). But now China’s role in the world has changed into its opposite. As a rising economic power, hungry for raw materials to feed its industries, China penetrated Africa and South America, where it mainly extracted raw materials. But now it is faced with a crisis of overproduction.

Like Germany before 1914, the productive forces amassed in China cannot be contained within its borders. This is leading to conflicts with surrounding states as well as the big imperialist powers. The huge programs of economic stimulus packages have had no lasting effect. China finds itself compelled to resort to dumping in order to unload vast quantities of cheap goods on the world market. Thus, China’s role in the world economy has turned into its opposite.

Also like Germany in the past, China is striving to gain power and influence in world affairs that reflect its economic power. It is seeking a redistribution of spheres of influence. To the existing powers, especially Japan and the United States, China’s thrusting ambitions are increasingly perceived as a threat. Publicly, America says it welcomes China’s ascent to great power status, so long as the Chinese respect international norms and play a proper part in the “multilateral system.” But in practice, whenever China does anything on the world stage, the USA tries to hem it in.

America has systematically blocked China from increasing its say in international financial bodies like the IMF. Even a modest proposal to increase the resources of the IMF (giving slightly more votes to China) has been stymied for years in Congress. America has also frustrated efforts to boost China’s weight in the World Bank. To counter China’s growing weight in the region, the USA is also intriguing with eleven other Pacific Rim countries to set up the Trans-Pacific Partnership, which excludes China, despite its being the most important economy in the West Pacific. But China continues to expand its influence in the region, to America’s chagrin.

We saw this in the case of the Asian Infrastructure Investment Bank (AIIB). As usual, America has adopted a policy of containment. But this has failed in practice. China now holds in its hands the world’s largest foreign exchange reserves, with which it plans to launch a new bank to help build bridges, roads, and other necessities of development in Asia.

The Chinese ruling elite wants to ensure that its military might and political influence are brought into line with its economic strength. Its expansionist tendencies are bringing it into conflict with US imperialism in the Pacific, which is destined to become the decisive area in world history. Fearing (correctly) that the new bank will be a vehicle for Chinese influence in an area vital to its own interests, America is attempting to sabotage the plan. Behind the scenes, the Americans have put pressure on its allies not to join it.

When Britain became the first country outside Asia to apply for membership, an American official complained about the UK’s trend towards “constant accommodation” of China. But that did not stop Cameron from inviting China’s President Xi Jinping to London for a state visit, with red carpet treatment and dinner with the Queen in Buckingham Palace. The European powers are falling over themselves to court favors in Beijing. Following Britain’s lead, Germany, France, and Italy announced that they, too wanted to be founding members of the Bank.

A high-speed rail line from Shanghai to Kunming will be completed in 2016, promoting China’s expansion into Southeast Asia. And the Asian Infrastructure Investment Bank, the first China-led multilateral financial institution, set up in 2015, gives China the chance to use its huge reserves to boost its political ambitions.

Over the past two years China has been engaged in a massive campaign of building artificial islands in the South China Sea. In response, the Americans sent a naval destroyer on what they called a “freedom of navigation operation” near one of the artificial islands. The head of China’s navy was probably not alone in seeing all this as a “veiled threat.” Except that it was not really veiled.

Admiral Wu Shengli said his forces had shown “enormous restraint” in response to “provocative actions” by America in the South China Sea. In the past these tensions would have led to war. But the correlation of forces has changed dramatically. No longer is China a poor, downtrodden semicolonial nation that could be invaded by Japan, Britain, or the United States. The Americans are not even able to take military action against North Korea, which is constantly provoking them. Still less will they dare to challenge the military might of modern China. Although the US can call most countries in the region its “allies” against China, such as Vietnam, China’s rise will test this balance of forces more and more. Each time the US fails to intervene, as it did in Ukraine and Syria, it is registered not just in Beijing, but in Hanoi, Taipei, and Seoul. China is the biggest trading partner for all of these countries, and its share of their trade will only grow. These contradictions will in the future cause political instability in the countries of the Western Pacific as the US and China vie for influence.

The new $1 trillion Silk Road strategy, involving in particular Pakistan, Afghanistan, and Central Asia, is motivated partly by strategic considerations (avoiding the Strait of Malacca), but also by the need to export overproduction. 70% of loans to countries in the new Silk Road strategy are made on condition that Chinese companies must be involved. But this is also provoking conflict with and within these countries.

The China-Pakistan Economic Corridor, a huge project that aims to connect Gwadar Port in Southwest Pakistan to China’s autonomous region of Xinjiang, is an extension of China’s proposed 21st century Silk Road initiative. It is supposed to provide benefits to Pakistan in transport, infrastructure, telecommunications, and energy. In reality, it is a plan to turn Pakistan into a Chinese satellite.

China will benefit most by opening trade routes for Western China and providing China direct access to the resource-rich Middle East region via the Arabian Sea, bypassing longer logistical routes currently through the Strait of Malacca. It will include the construction of highways, railways, and natural gas and oil pipelines connecting China to the Middle East. China’s stake in Gwadar will also allow it to expand its influence in the Indian Ocean, a vital route for oil transportation between the Atlantic and the Pacific.

The Chinese state intends this to serve the geopolitical and strategic interests of the Chinese elite. This project is opposed by US imperialism and also by an important section of the Baloch nationalists. It brings no benefit to the inhabitants of Gwadar, who live and work in desperate conditions. On the contrary, they are being deprived of their rights in the area. There is also resentment among Sindhis and other nationalities through which this “corridor” has not been routed. Thus, China’s expansionist policy serves to aggravate the contradictions in Pakistan and the entire region.

Pakistan, Afghanistan, and India

More than one-fifth of the human race lives in the South Asian subcontinent, which has natural resources abundantly sufficient to create a paradise on earth. Yet after nearly seven decades of formal independence, this ancient land is a sea of misery, poverty, illiteracy, and oppression. It has been plagued by wars and terrible ethnic and communal violence. The bourgeois of India and Pakistan have proven completely incapable of solving any of the basic tasks of the bourgeois-democratic revolution. They are more dependent on imperialism than they were prior to independence. Pakistan has not succeeded in completely eradicating feudalism, while India has not even succeeded in abolishing the cruel and reactionary caste system.

In Pakistan the situation of the masses is not any better than in India. In both countries the exploitation of the masses is made far worse by the cancer of corruption and the pillaging of the state by venal politicians, businessmen, and army generals. In both countries vast sums are wasted on military expenditure at the expense of health and education.

The counterrevolutionary strategy of the ruling clique in Pakistan has produced a nightmare situation in both Afghanistan and Pakistan itself. The ruling class and the army are heavily involved in massive drug smuggling rackets and other criminal activities.

This is the real basis on which the Taliban and other fundamentalist monsters thrive. The feuds between rival fundamentalist cliques and the state are at bottom a fight for the huge swathes of black money generated by the drug trade. This was originally created and encouraged by the Pakistani Intelligence Service (the ISI), with the full knowledge and support of US imperialism, to fund the counterrevolution in Afghanistan. The result has been an absolute catastrophe.

The rabid bigots of the Taliban and other Islamic fundamentalist groupings are now out of control. This was shown in a most brutal way by the bloody attack on an Army Public School in Peshawar in December 2014, in which the Pakistani Taliban killed at least 132 children and nine staff. These were all children of Pakistan army officers. As a result the army was compelled to step up its attacks on the Taliban who were previously their stooges and puppets.

The imperialists and their regional stooges are responsible for the destruction of what was one of the richest cultures in Asia. They have created Frankenstein’s monsters: rabid dogs that do not hesitate to bite the hand of their master. In Afghanistan, after fifteen years of imperialist occupation, nothing has improved for the ordinary people. The oppression of women continues unabated. And the human rights record, so loudly trumpeted by Western commentators, has only worsened.

The government of Kabul is hopelessly split and in crisis. Its impotence has been revealed by a series of bloody attacks staged by the Taliban in what were supposed to be safe areas. As a result, the imperialists are forced to maintain a military presence that they intended to terminate. The Kabul government is sitting on American bayonets. Without them it would be overthrown immediately.

Until recently, there appeared to be one bright spot amidst all the darkness of the subcontinent. The Indian bourgeois boasted about the growth of the economy. They talked about the “Asian tiger.” But that was in a period when the world economy was expanding. And in any case the benefits of that growth went mainly to a privileged minority. Conditions for the overwhelming majority did not improve. Now the Indian economy is feeling the cold winds of a worldwide crisis. The rupee has fallen sharply. India has tied its fate to that of the capitalist world market. It cannot escape the effects of the global crisis of capitalism.

Despite all his triumphalist demagogy, Narendra Modi’s government is in deep trouble. His Bharatiya Janata Party (BJP) lost a key state election in Bihar. Voters complained, most of all, of food inflation. Thanks to falling oil prices, overall inflation has been under control since Modi became prime minister. But rising prices of certain food products have pushed the retail inflation higher in the last few months. In the middle of the campaign, the prices of arhar dal—split red lentils which are an essential part of the people’s diet—soared, becoming a central campaign issue.

The real situation was shown by the general strike called by the ten largest central trade unions in September 2015, paralyzing India. The trade union and communist leaders had anticipated a maximum of 100 million workers participating in the strike. That figure itself reveals the colossal potential power of the Indian proletariat. But in fact more than 150 million workers came out on a total one-day general strike that day, the biggest general strike in history.

Only the proletariat and its natural ally, the poor peasantry, can show a way out of the nightmare into which capitalism and imperialism have plunged this ancient and potentially prosperous land.

South Africa

South Africa is the key to the African continent. It has by far the largest economy and working class, and it is a nation with a very proud revolutionary tradition. It was the revolutionary masses, and not the negotiating skills of the ANC leaders, which led to the overthrow of the apartheid regime in 1992. Nevertheless, after twenty-four years of formal bourgeois democracy under the rule of the ANC, the situation has not changed much for most of the people of the second-biggest mineral producer of the world.

This has laid the basis for an increasingly radicalized mood, especially amongst the young generation, which has no illusions in the old leaders of the liberation movement, many of whom have joined the ranks of the bourgeois. The Marikana massacre, when black workers were shot down in cold blood by the forces of the ANC government in defense of the (black and white) owners of the mining industry, had a profound effect on the attitude of many towards the ruling party. The ANC today is seen by many as a hotbed of corruption, thieving, and stealing.

The radical metalworkers union, NUMSA—with almost 400,000 members—has split away from the Tripartite Alliance. The NUMSA leaders talk about setting up a new party which, if it were to happen, would represent a serious challenge to the ANC. But the NUMSA leaders are dragging their feet on this question, instead dedicating themselves to futile bureaucratic struggles and court cases with the ANC right wing.

Into this vacuum stepped Julius Malema, the former ANC Youth League leader, and his Economic Freedom Fighters. Their radical rhetoric has made them very popular, in particular among the youth. All this reflects the enormous revolutionary potential which is developing in South African society.

Revolution is also affecting the rest of sub-Saharan Africa, with the events last year in Togo, Burundi, and most importantly, Burkina Faso. Revolutionary movements have broken out in these countries, and in Burkina Faso we have witnessed yet again a mass movement overturning an attempted military coup. This underlines the enormously favorable conditions for revolution, even in what are relatively underdeveloped countries.

Venezuela and the limits of Reformism

The situation in Latin America has been transformed. Ten years of relative stability guaranteed by economic growth has come to an end. This is having the most profound social and political implications.

Maduro Victory-Joka MadrugaThe situation in Brazil has dramatically changed, with the economy entering into serious decline, with a fall in GDP last year of 4.5%. This, together with a series of unpopular anti–working class measures introduced by the government, has brought more sharply into focus the fact that the PT has been defending the interests of capitalism, not the workers. This has enormously weakened the PT. Gone are the days when the party commanded huge loyalty from the masses. In its place we have a radicalization, especially among the youth, expressed in a series of strikes and protests.

The victory of Mauricio Macri in the Argentinean presidential election spells the end of twelve years of Kirchnerist populism that ended with an economy in crisis; dwindling foreign-exchange reserves; inflation of around 25%; and a budget deficit of more than 6% of GDP. This created the basis for the victory of the right. But even if the Kirchnerist Daniel Scioli had won, he would have had to carry out similar policies. The crisis of capitalism would have left him with little choice.

This exposes the limitations of so-called populism, which attempts to solve the contradictions of capitalism without carrying through the expropriation of the bourgeoisie and imperialism. That is to say, it attempts to square the circle. Shorn of its radical and “revolutionary” terminology, populism stands exposed as being little more than a variant of left-reformism, adapted to the traditions and psychology of Latin America. In the last analysis, all that populism means, even in a strictly etymological sense, is demagogy.

Chavez in Venezuela came closer than anyone to embracing the socialist revolution. But he never carried it out to the end. Following his death, all the contradictions have come to the fore with disastrous consequences.

Nicolas Maduro possesses neither the charisma nor the boldness of vision of his illustrious predecessor. He reminds one of Robespierre, who could call the masses out again and again to save the revolution—until one day they failed to respond. When Robespierre moved to the right, he acted like a man sawing the branch of a tree upon which he is sitting. By disappointing and demoralizing their mass base, the Bolivarian leadership has prepared the grounds for their own destruction.

The election defeat in Venezuela on December 6, 2015 was the direct result of the refusal to carry out the revolution to its conclusion by expropriating the ruling class and destroying the capitalist state. The attempt to regulate capitalism through price and foreign exchange controls instead led to massive economic distortions. The Bolivarian leadership had used the oil revenues to fund social programs and a massive program of public works. The collapse in the price of oil in the world market deprived them of any room for maneuver.

The distortions created by the attempt to manage capitalism led inevitably to a chaotic situation: a vicious circle of hyperinflation, smuggling, black market, corruption, and crime. The Maduro government, remaining firmly within the limits of capitalism, has been incapable of addressing these problems. An important section of the masses lost confidence in the government, and this led directly to the election defeat. Between the 2013 presidential election and the 2015 parliamentary election the PSUV and allied forces went from 7,587,532 votes to 5,599,025. In other words, the Bolivarians lost nearly two million votes. The counterrevolutionary opposition, on the other hand, went from 7,363,264 votes to 7,707,422 votes, gaining a mere 344,000.

What failed was not socialism or the revolution but, on the contrary, reformism, half-measures, corruption, and bureaucracy. The counterrevolutionary opposition, having a two-thirds majority in the national assembly, will launch an offensive to reverse the most progressive laws of the revolution; to regain control over key levers of the state apparatus; to privatize nationalized companies and land; to remove regulations on prices and foreign exchange; and to trigger a presidential recall referendum.

These events have exposed the hollowness of the illusion of “oil socialism,” just as the capitulation of Tsipras in Greece has exposed the limitations and contradictions of left-reformism. In practice, they amount to the same thing: a utopian attempt to carry out socialist policies without a radical break with capitalism. Such policies, in the end, always serve to demoralize the masses, destroy their faith in socialism, and prepare the way for the victory of reaction in one form or another.

Marx explained that counterrevolution can act as a whip to drive the revolution forward. After a period of inevitable disorientation, the revolutionary masses will attempt to resist the attacks of the counterrevolution through mobilization and direct action. The election defeat will also serve to accelerate the process of inner differentiation within the Bolivarian camp. Within the leadership there will be a strong pressure to compromise with the opposition. The most corrupt and degenerate elements will jump ship to join the ranks of the right wing. But the rank-and-file revolutionary activists will draw more advanced conclusions and will be open to Marxist ideas. This will create new and favorable conditions for the strengthening of the Marxist tendency in the Bolivarian movement.