Australian Communist Journal of the Communist Party of Australia (Marxist - Leninist)

October – December 2010

Contents

Introduction page 3 1. Challenging The Ideology Of Social Democracy page 5 2. State Of Global And Australian Economies page 15 3. Finance Capital And The Australian Economy page 27 4. Climate Change And Sustainable Development page 35 5. – Some Questions The Role Of Class Analysis In Australia’s Revolution page 39 6. The State Of Small Business In 2009 page 49 7. The Signifi cance Of Revisionism page 53 8.

1 2 put an end to the exploitative, repressive and outmoded system of capitalism and Introduction imperialism. It is the most resolute, disciplined and decisive class, and when informed by the science of Marxism, is capable of changing the entire society towards socialism, and ultimately the classless society of communism.

The bourgeois ruling class possesses The world today is in economic, powerful means to enforce and spreads political, environmental and social its own capitalist class ideology upheaval. Capitalism and imperialism of the supremacy and permanency stagger from one economic crisis to of capitalism with its archaic and another, created by their own internal and exploitative relations of production, inherently irreconcilable contradictions. where surplus value and profi ts are Nonetheless, the system of capitalism socially created by the labour power of and imperialism will not collapse on exploited workers, but privately owned its own, but needs politically class by a tiny minority. conscious determination and organised mass struggle by the working class and Marxism-Leninism fi rst and foremost its allies. is a science fi rmly based in the material conditions of society and class struggle. Economic crisis and the intensifi ed Marxism-Leninism uses the scientifi c exploitation of people and the method of dialectical materialism to environment has sharpened and comprehend the objective world and broadened the confl ict between advance the struggle for the betterment monopoly capitalism and the growing of humanity and the environment. It is progressive movements of the people. not a lifeless dogma or a rigid blueprint, In these conditions, the revolutionary but quite the opposite. It embodies the theory of the working class is an dynamic, and many sided, universal indispensable guide for the protracted principles and truths crystallised and and complex struggle for fundamental synthesised collectively by Marx, change. Engels, Lenin, Stalin and Mao Zedong, (and in Australia Ted Hill, the founding Revolutionary theory empowers the Chairman of the CPA (M-L)), through working class with the consciousness their own meticulous investigations and of its own tremendous destiny and detailed analyses of material conditions, the direction of struggle against including intense participation in the imperialism and monopoly capital. class struggles of their times. Marxism-Leninism is the revolutionary theory and practice of the working class, The source of Marxist-Leninist the only class that has the capacity for revolutionary theory is found in the revolutionary vision and leadership to rich and long tradition and practice

3 of class struggle. Its universal and investigate the vibrant characteristics general truths, drawn from accumulated and particularities of the Australian practice, in turn guide and develop the people’s struggles and the economic, struggle of the working class further. environmental and social conditions in Marxist-Leninist revolutionary theory this country. is unfaltering and uncompromising in its dedication and service to the working It is hoped that our comrades, friends class and the oppressed. and supporters will respond to the ideas expressed and make their own The method of dialectical materialism positive suggestions and contributions in analysing and changing the world to advance the theoretical level and compels an all sided objective practice of the Australian revolutionary examination of the material world and movement. all its interrelated aspects. It reveals that all matter is made up of many “We are Marxists, and Marxism teaches contradictory aspects and sides (unity that in our approach to a problem we of opposites), and that everything is should start from objective facts, not in constant motion and realignment, from abstract defi nitions, and that we within itself and with external matter, should derive our guiding principles, and change comes through the resolution policies and measures from an analysis of these contradictions in the course of of these facts.” - Mao Zedong never ending struggle.

This issue of Australian Communist examines some of the present conditions in Australia, and its relation to the world. This is mainly a collective effort put together by comrades striving to examine some of the key issues for the Australian working class and people from a Marxist-Leninist perspective. They refl ect the collective contribution, discussion and consultation in the period since the 12th Congress in 2009.

All of the topics in this issue require continued investigation and analysis, especially those dealing with the Australian economy and the class structure of Australian society. The articles are not the fi nal say on these matters, but only a start to what we hope will inspire comrades and friends to study Marxism, participate in and

4 by dictators indistinguishable from Hitler; communism represses individual Challenging The freedom; and communists rule through Ideology Of Social fear and the imprisonment or execution of opponents. Democracy Requires As powerful as this discrediting is, it Engagement With is only an external factor in shaping the consciousness of our class. The The People truth is that material conditions in today’s Australia foster illusions of “democracy” in working peoples’ minds and provide fertile ground for the impact of ruling class propaganda, by clinging to a faith in parliament, by the sincere belief that the Labor Party is better for them than the Liberals, and I by sticking with a belief in the rule of The persistence of social democratic (bourgeois) law. In periods of capitalist illusions within the working class is economic booms, and the unmet one of the biggest obstacles to a wider demand for labour, the ruling class has embrace of the revolutionary politics of greater capacity to rule by deception, the Communist Party and its ideology of make a few concessions to the working Marxism-Leninism. class and the people, reinforcing ideas of social democracy, the permanency of Often individual communists are capitalism and its ability to satisfy the respected for their work within their needs of the majority. workplaces or mass organisations yet the concept of anything resembling This faith and these beliefs, even in socialism and communism as an answer the absence of any mud that the ruling to social problems is either dismissed class might throw at communism, are as misguided idealism or treated with suffi cient, for so long as they persist, scepticism. to act as a formidable obstacle to the conscious embrace of Marxist-Leninist The ruling class continually wages politics by workers. ideological attacks against communism and is very largely successful in We label such faith and such beliefs discrediting, through falsifi cation and “social democracy”. Challenging social misrepresentation, the history and democracy requires active engagement practice of Marxist-Leninist ideas by the Party and its members with other in the 20th century. It has framed working people. discussion of communism around a set of simplistic and fabricated (History of Social Democracy, see “facts”: communist “regimes” are led Appendix 1.).

5 they are squeaking out, and appealing II to the only god they have been taught The Australian Labor Party is a social to trust in – the Parliamentary Labour democratic party of a newer type. It was Party.” not formed as a Marxist party nor even as a socialist party. It was formed so that She then further described this Labor trade unions, ultimately defeated in the Party “god” as “the Trinity-in-Unity of Great Strikes of the 1890s, could secure Craft Union Leaders, small capitalists representation in the parliaments of the and lawyers on-the-make”. colonies (and in the Commonwealth of Australia Parliament after Federation Lenin may have drawn on this very in 1901) and obtain by legislation article – he refers to “an English improvements in the conditions of the correspondent of the German labour working class. press” – to write about Australia in Pravda of June 13, 1913. He observed Although the Labor Party was formed that “The Australian Labour Party does by trade unions, it was open to not even call itself a socialist party. membership by all sections of society. Actually it is a liberal-bourgeois party, As the conservative side of colonial while the so-called Liberals in Australia politics was dominated by Anglophile are really Conservatives.” pastoralists and business people closely tied to and dependent on British capital He went on to explain that although and markets, smaller capitalists and “the leaders of the Australian Labour the more nationalist and republican- Party are trade union offi cials (they minded sections of intermediate classes are) everywhere the most moderate and also pushed their interests through the ‘capital serving’ element”. evolving machinery of the Labor Party. Their service to capitalism lay in In 1912, Dora B. Montefi ore, an establishing the infrastructure for the English-born socialist who had lived for transition from a series of individual a time in Australia, wrote for the British capitalist economies located in Daily Herald an article titled How separate colonies to that required for “Labour” Bluffs the People. Montefi ore the development of a modern national said of the “so-called Labour Party in capitalist economy. Australia” that it was “only one of the capitalist parties which has bluffed the “Capitalism in Australia is still quite people that it stands for their interests”. youthful,” he wrote. “The country is She described the “small capitalists (as) only just taking shape as an independent the mainstay of the Labour Party”: state….

“These small capitalists are in Australia “The ties binding the separate states into being forced downwards by the power of a united Australia are still very weak. trustifi ed capital into the ranks of wage- The Labour Party has had to concern slavery; and under the forcing process itself with strengthening and developing

6 these ties, and with establishing central containing workers’ struggles, in part government. through its ties and infl uence over the ACTU and some other trade unions. “In Australia the Labour Party has done what in other countries would be done The current period is a good example by the Liberals, namely, introduced a of this where dominant US imperialist uniform tariff for the whole country, a interests are comfortable with the job uniform educational law, a uniform land Labor is doing for them on the economic tax and uniform factory legislation.” and military fronts, and in reining in the working class. The two great expressions Thus, a party created by trade unions of the latter are the controlling function to seek to better the conditions of over the whole working class of workers through legislation enacted by subordinating the Your Rights at Work parliament was simultaneously a party Campaign to ALP electoral strategy, and to which a section of the capitalist class the attempted taming of the spearhead, and its allies in the professions turned the construction workers, through for the modernisation and advancement the retained powers of the Australian of capitalism in Australia. There was no Building and Construction Commission. irreconcilable contradiction in this. In The Rudd Labor government’s service order to outmanoeuvre the strongest, to US imperialism in its two and a half wealthiest and best organised sections years of offi ce was rewarded by Rupert of the capitalist class - tied through Murdoch’s The Australian nominating kinship, culture and capital to British Rudd for the 2010 Australian of the imperialism – the nascent, weaker and Year award. (Hawke and Keating more marginalised groups of capitalists were similarly nominated by the The had no alternative but to accept the Australian for the Australian of the Year necessity of buying the electoral awards for their services to imperialism support of the working class by offering during their terms in offi ce). concessions and reforms through the platform of the ALP. The character of the ALP was always that of a capitalist party with its origins As the loyalty of the ALP to capitalism in trade unions, organisations that had was proven time after time, so even the been brutalised by the ruling class in the dominant imperialist sections of the 1890s, but which lacked the vision and ruling class have seen the usefulness the capacity to risk the far greater clash of using social democracy. The required to achieve socialism. newspaper magnate Rupert Murdoch has been central to this process, having successfully cultivated and promoted a III generation of ALP leaders. At times, the Although the Labor Party membership ALP is seen by the dominant, pro-US was overwhelmingly working class and imperialist sections of the ruling class as trade unions enjoyed affi liated status a “better horse to back” than the Liberals within it, the irreconcilability of the because it has a better track record of objective needs and interests of the two

7 great classes, capitalist and proletarian, through parliament, and thus, through resulted in its members and supporters the Labor Party. feeling betrayed time and again. Objectively, there was no betrayal, for There are two reasons for this. Firstly, the ALP as a party of capitalism was the CPA was not formed out of an merely managing capitalism in the experienced mass movement in interests of capitalism. Australia. In its lack of experience it veered quickly between “left” and Warning those in Britain who pinned “right” errors, particularly in relation to their hopes on “a Labour Party in the ALP which it sought, not long after Power”, Dora B. Montefi ore wrote in the CPA had formed, to enter. Thus, The Call of October 2, 1919 that “there the resolute Montefi ore, in addressing existed about ten years ago a similar sort the Comintern in Moscow on 25 June, of Labour Party in Australia which came 1924, made the mistake of depicting into power pledged to break down land the “right wing” of the ALP, rather than monopoly and stand at every point for the party as an institution, as being of the interests of the workers. They will “no serious danger to capitalism” and have noticed that once in power, whether reported that “the CP is on the point in Federal or State Governments, these of penetrating the Labour Party and ‘Labour’ Governments declared with will soon fully belong to it and form sublime insolence that they existed to a resolute element in it.” Those of us represent all classes, and started off who work in trade unions know that we to prove they meant what they said still have many Montefi ore’s who try to by systematically strike-breaking at channel progressive elements into the Lithgow and elsewhere.” ALP to “neutralise its right wing” and set a “progressive” agenda for a party of Inspired by the Russian Revolution capitalism. of 1917, and rejecting the service to capitalism of the ALP, the most Secondly, the Australian working class, politically conscious elements amongst despite its great struggles from Eureka the working class formed the Communist to the 1890s, and despite the reality Party of Australia in 1920. of harsh conditions for many at the workplace, was still infected with a way This represented the desire and of thinking that saw itself as a class as the intention to break politically, better off than the working classes of the ideologically and organisationally from “old” world. The absence of a residual the acceptance of capitalism embedded landed aristocracy and its attendant in social democracy and its Australian class snobbery had seemingly made the representative institution, the ALP. Australian bourgeoisie invisible, and allowed the growth of that particularly However, it did not yet speak directly Australian myth that “Jack is as good to the broad ranks of the working class as his master”. In this illusion, social who retained their social democratic democracy found the internal basis for preference for working peacefully its long grip on the workers.

8 Under the infl uence of the popularity and an enduring belief in parliament of the Soviet experience, the Labor and Labor as their party. Even when Party was compelled at last to adopt Labor is rejected, it is usually for an a policy of aiming for “socialism” independent candidate or one or other in 1921. However, between that of the remaining parliamentary parties date and the subsequent dropping of (Democrats, Greens, Family First) the “socialisation plank” in 1975, a rather than for a path that seeks to go procession of state and federal ALP beyond the confi nes of the bourgeois Governments came and went without democratic institutions. ever once deviating from their essential task of developing a more effi cient and Kevin Rudd’s articulation of a social- somewhat more “acceptable” – to its democratic response to the current working class followers – system of economic crisis sought to convince capitalism. ALP supporters that parliament and the Labor Party are capable of fi nding Actually, social democracy has a double- a way out of the great fi nancial sided function in making capitalism meltdown and the underlying downturn acceptable to the working class and, as caused by the over-production of noted in the previous section, making the commodities. He was quick to label working class acceptable to capitalism. the crisis an international problem of “extreme capitalism” brought on by “regulatory failure” and to declare that IV “the international challenge for social If history alone was suffi cient to dispel democrats is to save capitalism from the social democratic illusions of the itself”. The remedy for the ills brought majority of workers, then a century of on by “free market fundamentalism… Labor in and out of offi ce in Australia and excessive greed” is “a system of would have done the job. open markets, unambiguously regulated by an activist state…” However, the illusion that parliament belongs to the people and that Labor Thus, he offered the working class an governments are better for the workers assurance that social democracy, despite than Liberal governments has been the experience of a century of practice passed on from generation to generation to the contrary, will bring capitalism of working class families. A signifi cant under control, and do it as an act of minority of advanced, clearly class parliamentary legitimacy. conscious workers strive for an anti- imperialist national independence Yet even before his fi rst term of offi ce and a socialist economic and political ended, Rudd proved to the working class transformation. For the majority of that they are correct to maintain their workers, there is a combination of cynicism. Some of the more noxious a widespread and healthy cynicism features of Howard’s WorkChoices were regarding those who are elected to watered down, and combat troops have parliament in the name of Labor, been withdrawn from one theatre of the

9 imperialist “war by terrorism”, but in agreement is a non union agreement, every other respect the 2007 election of meaning specifi cally, the only legal the social democrat Rudd government parties and signatories to a collective had merely ensured a fi fth term of offi ce agreement are the employer and the for the neo-liberal Howard government employees, effectively cutting the policies. unions out of the agreement…

Thus we have the continuation of the Of course, unions can be the construction industry’s war on its own nominated bargaining agent of the workforce by the reconstitution of the employees, providing each and ABCC within the Fair Work Act. You every employee appoints them in can dig a stinging nettle up from the writing and gives a copy to their front garden and replant it out the back, boss. In fact, anyone can be the but it’s still a stinging nettle. bargaining agent…

And look how former Australian This will undoubtedly lead to an Services Union organiser, former erosion of the unions’ command…. Commonwealth Public Sector Union organiser, former National Union of Smart, well-organised employers Workers organiser and former ALP should do very well under the new member Grace Collier – now head of system. her own industrial relations consultancy fi rm – positively gloats over this little As the saying goes, “With friends like gem that has been put into the Gillard these….!” Fair Work Bill. It is worth quoting a few paragraphs from her piece in The Hawke and Keating, who both became Australian of July 20, 2009: Labor Prime Ministers in the era after the shattering sacking of Whitlam in a Part 2-4, Division 2, of the Fair US-inspired constitutional coup, became Work Bill only allows collective ardent champions of the US-Australia agreements to be made between “alliance”. Keating, in particular, set employers and employees. For the course for sailing with the wind of the fi rst time in our history, a monetarist neo-liberalism with the irony union offi cial’s legal power to sign that a Prime Minister of a party formerly collective workplace agreements on committed to “socialising” became the behalf of workers has been removed. chief exponent of a massive agenda for privatising. Breathtaking in its signifi cance, this is something John Howard failed to From its inception in the early 1890s, achieve. Used properly, this could the ALP occasionally championed prove to be the most signifi cant the interests of the local national workplace reform in years. bourgeoisie against the dominance of foreign economic and political interests …since July 1, the only type of in Australia, fi rst British colonialism

10 and later, after WW2, US imperialism. in Australia) and works for that class unreservedly. At different times it also articulated, though timidly, the Australian people’s Under Rudd and now Gillard, the ALP desire for national sovereignty, embraces US imperialism and is acting including control of national resources in concert with Obama to re-assert the and industries, and promoted the US economic dominance that defi nes development of Australian culture. the conditions for the existence of The Labor Party’s strongest support the Australian ruling class. Treasurer for economic, political and cultural Wayne Swan was one of the fi rst in independence - limited to within the new Rudd government to whistle capitalism - was mainly before and Yankee Doodle Dandy when he declared during the Whitlam government’s era in war on Chinese sovereign wealth funds, offi ce. It refl ected the spreading public bringing in new foreign investment sentiment for greater independence guidelines early in 2008 to “ensure that from Britain and the US, amongst wide such investment is consistent with the cross sections of the people, including national interest”. the local patriotic national bourgeoisie at that time. This had its positive In his two and a half years as PM, aspects in assisting the anti-imperialist Rudd and former federal secretary of independence struggle as part of the the Storemen and Packers Union and struggle for socialism in Australia. President of the ACTU Simon Crean, who held the position of Minister However, from the mid 1980s the for Trade in Rudd’s government, Hawke and Keating Labor governments vehemently opposed the “buy Australia” fully embraced the US imperialist push taken by unions to the ALP’s July global economic expansion (imperialist 2009 National Conference. Both were globalisation) and removed the few motivated by loyalty to US interests remaining obstacles standing in the as typifi ed by the Australia-US Free way of deeper penetration of Australia Trade Agreement. Even Gillard’s by foreign capital. This has virtually announcements on “fair principles” on wiped out the few remaining elements government procurement sits nicely of the patriotic national bourgeoisie and with the privatisation of services, which locally owned manufacturing industries, suits large multinationals who can use and entrenched the Labor Party’s the tighter procurement standards to complete allegiance to imperialism, in help eliminate “bottom feeder” local particular US imperialism. Imperialism capitalists or government contractors sustains capitalism in Australia, so that only the big players win the narrowing Australia’s ruling class contracts. Thus social-democracy to mainly international capital and promotes a concentration of capital multinational corporations with a within a procurement process that occurs shrinking local monopoly tied to foreign on a national and an international scale, capital. The Labor Party is a party of the with foreign capital in the lead position. capitalist class (mainly US imperialism By such means is “extreme capitalism”

11 defeated and “normal” capitalism, Advanced workers must by all means which of course would never run to become involved in the discussion of extremes (!) with or without regulation, the historical experiences of communist strengthened for its next onslaught on parties and of the various proletarian the working class. dictatorships of the 20th century. Advanced workers can and will reject the way the ruling class defi nes the V historical experience of communism. Marxist-Leninists must engage with the vast majority of the workers who are But our immediate task is to win under social democratic infl uence in the struggle for anti-imperialist order to challenge assumptions about independence and for its consolidation the permanence and desirability of under working class leadership. capitalism. This means not getting sucked into “left The nature of the Marxist-Leninist Party bloc” lifestyles, into patterns of social as a vanguard resides in its ability to behaviour characterised by mixing express the aspirations of the advanced mainly or solely with people of a similar elements of the working class, but “left” outlook, people with whom it its role as a vanguard resides in its is easy to start a discussion around responsibility for taking the ideas and advanced ideas, with people who won’t analysis of Marxism precisely to those knock back the “correct” understandings among the broader ranks of the workers that can be put forward. who currently reject those ideas and that analysis. Lenin advised the British Communists to “go into the most common taverns, The presentation to workers of penetrate into the unions, societies and the Party’s immediate demands or casual meetings where the common minimum program is critical. Demands people gather, and talk to the people… that are realistic and achievable in the strive to rouse the minds of the masses historical short term can connect the and draw them into the struggle…” Party to workers who are not yet ready (“Left-Wing” Communism, An Infantile to accept the maximum or communist Disorder). That is, they had to actually program. This is the way to deal seek out the company of workers still with the ideological dictatorship of infl uenced by “opportunism” (the term the bourgeoisie and its control of the to which social democracy would later framing of the question of communism. apply) and seek them out on their own To simply prattle on about our maximum terms and in their own territory. goals is to throw pebbles at the mountain and is, in any case, inconsistent with In our conditions, Marxist-Leninists our understanding of the theory of must not isolate themselves because revolution by stages. of their politics, but must seek out frequent and regular contact with non- communists for the sake of those politics.

12 For the sake of winning even backward bourgeois or capitalist democracy and workers to our minimum program, let proletarian or socialist democracy. alone gaining amongst progressive and Essentially, capitalist democracy gave advanced workers a wider acceptance of the people the right every three or so the validity of Marxism-Leninism, we years to select, by voting, which section must be amongst people who are often of the ruling class would rule over them. diffi cult to get into a discussion about Such “political” democracy was thus the things that matter most to us, with seen as very narrow and very limited. people who are not immediately blinded It did not extend to other areas of social by the sun shining out of our ideological life. By contrast, proletarian democracy backsides, with people who will put up would embrace all social forms – all sorts of resistance to what we have politics, the economy, culture, military to say. And there is no better time to be and diplomatic activity and so on – and doing this than now, when an economic thereby constitute a social democracy. crisis is making some of those people a little more receptive to talk about The various revolutionary socialist the state of play in their workplaces, parties that arose in conscious their communities, their nation, their commitment to Marxism throughout world. But we have to be there for the Europe in the late 1800s were therefore long haul, and accept the law of uneven taken to be social democratic parties. development which creates high points The fi rst of these to seize power for and low points in the spontaneous the working class we now know as the struggles of the people. Communist Party of the Soviet Union, but it was the Russian Social Democratic Labour Party before, and for some time after, the seizure of power.

Appendix 1. At the Second Congress of the RSDLP in 1903, a split occurred between History of Social Democraccy the followers of Lenin and those of Martov. Lenin argued for a vanguard In the late 1800s the terms “Marxism” party of workers with advanced and “social democracy” meant pretty consciousness, for a form of party much the same thing. This can be a bit organisation that favoured centralism confusing to people wanting to know of powers in its leaders on the basis more about Marxism-Leninism because of democratic membership rights, and there are many writings of Marx, Engels for the overthrow of capitalism and its and Lenin in which the authors describe replacement by a state that would be a themselves as social democrats and talk dictatorship exercised by the workers about how to advance the goals of social over the previous rulers of society. democracy. Martov argued for a “softer” position: for a party that anyone with half an The term arose as revolutionary socialists interest in the movement could join, drew a line of distinction between with a leadership structure that created

13 obstacles to decisive action, and for abandonment of the path of revolution in reforming and improving capitalism peaceful times, completed their betrayal through peaceful parliamentary means of the workers in the environment of without any requirement for proletarian inter-imperialist warfare. dictatorship. Representing a minority trend within This simplifi es their differences the world social democratic movement, somewhat but it provides a template for Lenin and the Bolsheviks successfully similar differences emerging throughout applied their theories to Russian the social democratic (at that time the conditions, overthrew the Tsarist system revolutionary and socialist) movement that represented Russian feudal and in Europe. capitalist forces, withdrew the new State from the imperialist war, and set The emergence of the split between about establishing a socialist system Lenin’s Bolsheviks and Martov’s through proletarian dictatorship over the Mensheviks within the RSDLP led to the overthrown classes. The working class formation of the RSDLP (Bolshevik) as became the ruling class and exercised a separate party after 1912. Two years that rule through elected Soviets later the First World War between the (councils) led by the Bolshevik Party. imperialist powers broke out. Genuine Marxists such as Lenin depicted the war The majority of social democratic parties as one for the re-division of the world renounced Bolshevism/Leninism but between competing ruling classes. The retained the name of social democracy. workers, said Lenin, should unite against The Bolsheviks no longer referred to exploitation and oppression and not give themselves as social democrats. their support to their own respective rulers. They should turn the war waged Those former Marxist parties that had by the bourgeoisie, with the workers once believed in socialism achieved as cannon fodder, into revolutions for by revolution and maintained through working class emancipation in their own proletarian dictatorship now embraced countries. reformism and parliamentarism. That is, they accepted methods and institutions Sham Marxists, however, rallied to the developed by and inseparable from patriotism and “national” interests of capitalism to pursue a vague and poorly their respective bourgeoisies. They defi ned “socialism”. They sought to depicted the workers of “enemy” nations win concessions for the workers from as uncultured beasts engaging in the their own bourgeoisie but would send most depraved and unnatural cruelties, the workers to die in imperialist wars to and argued that social progress was protect that bourgeoisie from its rivals. now a battle for the triumph of “their” civilisation over the barbarism of others.

These sham parties of the socialist movement, having argued for the

14 pressure to narrow their budget defi cits at a time when the economic recovery State Of The Global is weak. And Australian In Australia, the situation is not as Economies dire as in the developing world or in those parts of Europe (Greece, Spain, Portugal, Latvia, Italy, Iceland) that have seen or are facing signifi cant collapses. However, there is still the beginning of a signifi cant decline in the position of most working people. This could easily become even more serious. The problems affecting the global Exactly how far the fall will go is economy show the reality of the capitalist uncertain at this time. At worst, millions system in relief. The majority of will be thrown into serious poverty. At humanity has long suffered unremitting best, the standard of living will continue poverty and exploitation. Initial success to decline for most people. in building socialism in various countries aside, it has never been any different. The present descent into greater socio- The present capitalist economic crisis is economic turmoil underscores the deepening this poverty and exploitation inevitability of eventual crisis under to an extent that has not been seen since capitalism. It also exposes the dogged the Great Depression of the 1930s. and vicious efforts to secure profi ts at all costs. The nature of the capitalist Pronouncements from the mouthpieces economy, including the actions of those of capitalism that the situation is turning who own and control it, is precisely around are an almost daily event. It is what has created the conditions for premature and does not accord with greater instability and eventual crisis. the facts. Indeed Billionaire investor George Soros said on June 10 2010 There has been a general slowdown in that “we have just entered Act II” of the the global capitalist system since the crisis as Europe’s fi scal woes worsen early 1970’s, notwithstanding some and governments are pressured to curb temporary short-term fl uctuations. The budget defi cits that may push the global relatively high fi nance and speculation economy back into recession. driven growth in the later part of this period has not been able to reverse this “The collapse of the fi nancial system trend. In fact, it is part of the problem as we know it is real, and the crisis is and over emphasis on it has served to far from over,” said Soros. “Indeed, we largely cover up what is really going on. have just entered Act II of the drama.” Ordinary people are further and further Soros, 79, said the current situation in the away from the false promises of world economy is “eerily” reminiscent governments, about the prosperity that of the 1930s with governments under

15 deregulation, privatisation, tightening the existing market through the transfer the belt and the open door for the of national income towards the dominant biggest corporations’ policies was going monopolies. to bring about. Because of the rising proportion of Globally, the number of those living capital relative to labour devoted to on a conservative $2 a day has doubled production, the value created per dollar over the last three decades and stands of capital invested declines and there at 2.8 billion, or nearly half the world’s is a tendency to resolve this with ever population. A billion people go hungry more monopoly (concentration and every day and 2 billion do not even have centralisation of capital), and increasing clean water. the quantity of output through intensifi cation of the exploitation of While the spark that has set the present labour. The result has been a long crisis alight was fi nancial excess in term crisis of over-production. The the United States, and the Sub-Prime “globalisation” offensive of monopoly collapse the immediate trigger, the crisis capital has been about swallowing rivals occurred because of the underlying and capturing new markets, as a means operations of the capitalist economy, for the biggest capitalist powers and made worse by the extent of reliance corporations to extricate themselves on paper profi ts and digitally conjured from their diffi culties. virtual capital. Profi t has been less and less generated by the creation of new The fi nancial crisis is a consequence, value, and more and more through the fi rst of all, of an underlying crisis in process of commodifying fi ctitious the production of commodities, tied capital through fi nancial speculation. up to a declining rate of profi t. Marx The Bank of International Settlements explained in Volume 3 of Capital that calculated in 2009 that derivatives had the tendency for the rate of profi t to been created to the value of $US1.14 fall in conventional industries created quadrillion. That is a bubble 18 times the an attraction for the owners of fi nance value of the total world Gross Domestic capital to speculate in fi nancial markets. Product prior to the 2008 crisis. Capital that would otherwise have been invested in the manufacture of The global and national economies are commodities has fl ooded the world dominated by capitalist monopolies of fi nance to largely be used for other that have sought to maintain their purposes. Massive expansion of credit profi ts by forcing greater trade and and virtual capital, looking for a quick investment liberalisation, in a context profi t, has expanded this reserve of where smaller rivals cannot compete. capital further. Speculative bubble has Monopoly extends as the big fi sh followed speculative bubble. The oil swallow the small fi sh. Growing and cash crops are the latest and there is monopolisation of the economy both evidence of speculation in mineral prices. deepens the contradictions existing in Derivatives are not based on increasing production and exchange, and curtails the quantity of output, but gambling

16 on price. In this game, the richest infrastructure. Then devoting an excess corporations and individuals carve out amount over what is required does not of the total value society produces the make sense. Excess investment funds largest slice for themselves, and they do will be drawn away as Marx said, for so at the expense of everyone else. speculative purposes. This is exactly what has been going on in the global In the global context, the greatest share economy. It has made the world of of world’s income is in the hands of 16 fi nance extremely fl uid and distorted the percent of the population. The world’s global and national economies. There 500 richest individuals had a net worth is an oversupply of capital in relation of $US2.6 trillion in 2005, which is to the existing level of production. The equivalent to the national income of illusory and fi ctional nature of the value the poorest 48 countries, or 416 million contained in speculative fi nance capital people. is what economists refer to as “bubbles” and what the rest of us experience as “oh Forty six of the world’s biggest shit!” when the burst occurs. multinationals are from the US, European Union and Japan. Nine-tenths Overstating the value of fi nance of global direct foreign investment within real economic growth actually outfl ows totalling $US2.6 trillion exaggerated that growth and for a long in 2006 were from these centres of time hid the instability that lies below imperialism. the surface appearance. The global economy has proved to be much more Global fi nancial assets, including volatile than many believed. equities, private and government debt, securities and bank deposits bloated sixteen-fold since 1980, from $US12 Financial Crisis of Capitalism - trillion, to an estimated $US190 trillion US Crisis comes home in 2007. In 2006, the value of global The situation of the US economy is fi nancial assets was 350 percent of illustrative and shows the problems Global Domestic Product (GDP). of the capitalist system in sharp relief. While it is true that there must be a The trends that have affl icted the world certain surplus of capital to ensure originate from and are also clearly seen the conditions for future production in the United States. and at an expanded rate (expanded reproduction), the fi gures seen here are Since the 1970s the share of wages in obviously a great deal in excess of what US national income began to decline. has been required. By the late 1990s, the share of corporate profi ts had increased from less than 20 For instance, say a 10 percent growth percent to over 40 percent of national in production requires a corresponding income. In 1980 fi nancial assets were 10 percent growth in investment on at just under 4 times GDP and by 2007 this production, plus a certain sum for rose to over 9 times. This is startling. the provision of associated services and Whichever way you look at it, there

17 has been both a large scale transfer of power for more than half a century. The national income and an explosion in the very processes that have been hastened quantity of fi nancial assets. through competition, the crisis of a falling rate of profi t and overproduction, Combined American household, and extending monopoly have been corporate and public debt rose to an quickly carried across the planet. The unprecedented and clearly unsustainable US economy and the rest of the global $US51.1 trillion in 2007, which by capitalist economy share the same fate. itself is nearly 4 times the US GDP of $US13.8 trillion. This provides further evidence of the existence of a massive Monopoly capital’s increased excess of capital. aggression A by-product of the current situation Public debt breaks down into federal is increasing aggression by monopoly ($US15.8 trillion) and State ($US12.2 capital in seeking to relieve the crisis trillion), while private debt breaks down and maintain monopoly profi ts. into business ($US10.1 trillion) and household ($US13.1 trillion). The emergence of the forces leading to crisis in the 1970’s drove the most The artifi cial extension of the developed capitalist powers to seek domestic market, without creating a greater inroads into the markets of corresponding increase in the quantity poorer countries, intensifying what is of value produced in the economy, often called neo-colonialism. There has could not continue without eventually also been increased contention between producing a credit crisis. these powers. It has led to what was later termed globalisation, a more thorough The resurgence of military production domination of the global economy by has been notable. Feeding this is more the biggest corporations, mainly of the intense global competition and the US, Europe and Japan. increasing turn of US imperialism towards reliance on force, rather than too Growing global competition has much reliance on political and economic been accompanied by a more open pressure and diplomacy. However, the interventionism by governments of these level of military production is not and centres of imperialism, imposing greater cannot be suffi cient to restore the health trade and investment liberalisation of the US economy. Only by way of (deregulation), exploitation of a confl agration on the scale of World labour and plunder of raw materials War Two may it be possible to use war and markets. Less capital intensive and military production as a possible agricultural systems in developing solution. countries have been overrun and vast numbers thrown into hardship. The current global crisis emerged in the US and spread out because the US has Usurious debt burdens have been used been the dominant predatory economic directly to rob capital from poorer and

18 dependent countries. In industrialised accentuates the glut of capital and all countries, in particular, debt has been a that goes along with it. means to artifi cially create new markets by mortgaging the future of individuals, By the 1990’s the major capitalist families and the economy as a whole. (imperialist) economies became increasingly reliant on gaining profi ts Even more vicious attacks have been from purely fi nancial schemes, robbing directed against workers, including each other, disconnected from the those in industrialised countries. Real economy of production. Parasitism, that wages have been pressed down, working part of the economy that feeds on the conditions lost. Workers’ organisation value already created and survives only and democratic rights in general have by taking from others, grew. Parasitism been curtailed. was greatly enabled by advances in information and communications Since the 1990’s, the world has technology. witnessed an expansion of the reserve army of labour through the greater use A most negative aspect has been the use of migrant workers and a more fl exible of this technology to fashion complex labour market in general. The result fi nancial instruments for transferring is that a substantial proportion of the capital from one hand to another and working class works under inferior to hide it from prying eyes. This gave conditions, with less pay and ongoing an exaggerated illusion of prosperity insecurity of employment. Public and growth in industrialised countries. utilities and even social services have That illusion is now beginning to be been privatised as new sources of profi t. shattered. Unfortunately, this will bring hardship and suffering to those who are All of these measures have been made to foot the bill. imposed to keep up the profi ts of the private monopolies. Smaller capitalists By 2000, the crisis was coming to have shouldered a part of the burden. a head. The initial response was a But workers, peasants and other sections massive expansion of the liberalisation of the global population have suffered of domestic economies and credit, and much more. This has been replicated in the imposition of an unequal free trade individual nations. regime and further expansion of credit in the global economy by imperialism. But increasing the wealth of a few and The crisis has deepened. The house of deepening and spreading the misery cards is now beginning to wobble and of the majority has only intensifi ed parts topple. the underlying contradictions of capitalism and the developing crisis. Capitalism is limited in how it deals The dispossession of large swathes with the crisis, because it is rooted in of humanity constricts the market the system’s fundamental contradiction and opportunities for profi ting from between private ownership of the investment, which in turn, further means of production and the social

19 nature of production. This is at once the unabated. foundation of the crisis and the brake on its resolution. Government bailouts of big banks and corporations simply fund a continuation The new Keynesianism now being of the problem and expand government promoted and based on greater debt, shifting private capital’s debt, government intervention to provide and this in turn adds to the pressure stimulus packages, corporate lifelines to extort more from the people in the and bailouts will not be suffi cient in way of taxes and fees, or to attack their itself. It pretends that the problem is living standards through cutbacks to merely about fi nancial excesses of government programs and services. If individuals. all else fails, governments turn to the printing presses and create additional The US working class was paper money, thus fuelling infl ation. particularly quick to reject the Obama administration’s bailout of some of the In Australia, stimulus spending world’s biggest banks and corporations. transformed corporate losses into Quite correctly they demanded that expanded government debt which government fi nancial support be directed should be paid for by the rich through at the poor, not the super-rich. They also corporate taxes, enforced restraints saw that unlike their own treatment on bankers and corporate pirates, and when assistance has to be sought, nationalisation. that there were very few conditions placed on the big monopolies being bailed out by Obama. Fundamentally, Continuing challenges to their speculative proclivities remain Imperialism unchanged. Wolfgang Munchau Ordinary people face great challenges writing in the Financial Times in in the struggle against oppression and early March 2010 said: “I cannot exploitation and to overcome the present understand why we are still allowing crisis. The international mechanisms of the trade in credit default swaps world trade, investment and economic without ownership of the underlying life, dominated by the United States, securities… A naked CDS purchase are restructuring national economies to means that you take out insurance on favour imperialism even more and away bonds without actually owning them. from the interests of the peoples living It is a purely speculative gamble. There in these economies. This domination is not one social or economic benefi t. crafts domestic economic and political Even hardened speculators agree on regimes in a manner most favourable this point. Especially because naked to the multinational monopolies of the CDSs constitute a large part of all CDS imperialist powers. State force is used transactions, the case for banning them to implement the desired measures and is about as a strong as that for banning suppress those who resist. bank robberies.” Many other similar forms of speculative activity continue

20 For most of the world’s population control over the economy in the hands the options are narrowing down. The of the majority, there can be no genuine working class, farmers, indigenous political democracy. Increasing numbers populations and others are facing the are seeing the need to bring this about. necessity to resist in order to avoid utter destitution. In this they are confronted Neo-colonial and other dependent by a common enemy. Peoples around economies strive to break from the the world are increasingly compelled imperialist hold, so that their economies to unite against US imperialism in can be re-established and drastically particular. It is the main characteristic of transformed to serve the needs of global politics today. the great majority. There is also a growing call for genuine national industrialisation and for the provision of The people’s struggle basic and vital needs for housing, food Millions are rising to meet the challenge security, health care, education, and a of fi ghting against economic, political decent income for all, in a manner that and military aggression. Armed struggle is humane, just, does not exploit others against imperialism and local monopoly and is ecologically sound. bourgeois and landlord forces has intensifi ed in some countries. Broader The peoples of the world want to be in forces are being united and mobilised control of their lives, as well as being at and aim at national liberation, genuine the centre of building just and peaceful democracy and a new system that is for societies. To these ends, they contribute the majority and not the minority. their efforts to building and strengthening democratic mass movements. These Unequal trade and investment efforts point towards the reality of an arrangements are being rejected. More upsurge in democratic and revolutionary and more countries outside the major movements worldwide. imperialist centres are demanding that the current global economic regime be Australia’s position replaced with a new fair trading and investment system that treats all nations The state of the US economy and and peoples as equals. People want the global situation affect Australia international relations of cooperation directly and decisively. Australia is a and solidarity between peoples. dependency primarily of the US, and engages with the global economy. These There is a growing demand for factors have a critical bearing on what more progressive, sustainable and happens in Australia. democratic economies in the global and local contexts. Canadian workers, So do domestic factors. Trends observed for example, at the mercy of their in the US and global economies are also imperialist neighbour, are responding experienced in this country. to demands of “Manufacturing ‘Yes!’, Nation Wrecking ‘No!’” Without

21 More than 2000 companies, with a interests. These funds have largely been total market capitalisation of $A1.6 used to secure a source of profi ts from trillion, were listed in the Australian speculative activities. They have not Stock exchange in 2007. Portfolio been used meaningfully to strengthen investment made up about 63 percent of Australia’s manufacturing base and total foreign investment. In dollar terms the economy in general. Now that the this is $31 billion. In the 1980’s it was situation has gone pear shaped, workers around 4 percent of GDP. By 1992 it had and retirees fi nd that they have lost a grown to 10 percent and in 2007 reached substantial portion of the value of their 19.5 percent. superannuation contributions.

Over recent decades, trends in direct By adding the amount of superannuation foreign investment correspond to the funds under the control of overseas worldwide expansion in the fl ow of corporations to the amount of foreign capital out of manufacturing in the direct investment, we get $A761 billion. developed capitalist economies, to Then add to this domestic capital of take advantage of weaker competitors about $A1.42 trillion and we get $2.18 in other parts of the world. There has trillion. This is substantially in excess of been a shift away from manufacturing GDP, which was valued at $A1.3 trillion to the services sector, coinciding with a in 2007. period of fi nancial liberalisation, which in Australia occurred under the Hawke Debt levels in Australia are also very and Keating governments. high. Between June 2003 and March 2008, Australia’s foreign debt expanded One of the effects of this shift was that it from $A582.7 billion to $A1.42 trillion. began to fuel the speculative bubbles of Foreign liabilities expanded from the dot.com world, stock market and real $A945.7 billion to $A1.65 trillion over estate. Even more serious was its effect the same period. The amount of capital in distorting the Australian economy, linked to the global economy and directly away from its production base. tied up with foreign corporations stands at $A2.4 trillion. This is almost twice Australia has the biggest superannuation Australia’s GDP. fund pool in the Asia Pacifi c region and the fourth largest in the world. Add the quantity of capital that is tied It sits at around $A864 billion and is up with subsidiaries and other company a prized jewel. The pool’s size and structures that on paper show Australian rapid growth has offered substantial ownership, but in reality hides foreign profi t opportunities for international control, if not ownership, and the fi gure fi nancial groups. They have taken is even higher. advantage of this. Overseas corporations manage around half of Australia’s Australia’s public debt is relatively low superannuation investment funds. That when compared to other industrialised is, control of around $A430 billion is countries. The reason is that for over two in the hands of American and European decades, governments have transferred

22 public debt over to private debt. Rather overproduction. Manufacturing is in than disposing of the problem, its rapid decline. The last three decades form has been changed. The key to the have led to the growth of a top heavy Australian debt problem is private debt. fi nancial sector, burdened with capital leaving production and added to by Since 1984, the ratio of Australia’s credit and virtual capital. This has been private debt to GDP has grown by an channelled into speculative bubbles. average of 4.2 percent every year and by Huge investments in Australia’s natural 2007 stood at 156 percent. There has resources are rewarding multinational been a rise in Australia’s domestic debt mining corporations and the massive from $A136 billion in 1988 to $A952 fi nancial institutions associated with billion in 2007, a sevenfold increase. them, with massive profi ts. Decline in Private business debt has consistently manufacturing and uncontrolled mining been just under half of household debt. of natural resources is re-shaping Australia into a quarry with no value The Australian economy has increasingly added industries. This will result in the relied on borrowing rather than on country’s even heavier dependency and income to keep on functioning. The vulnerability to imperialism. following rough fi gure can be deduced from the above data. Australia’s private Australia is faced with serious long- debt stands at around $A1.4 trillion. term external and internal debt and the threat of growing unemployment, After interest payments, households are underemployment, casualisation and job poorer now than they were in 2002. A insecurity, as workplaces wind back and growing proportion of the investment shut down. At the start of 2009, there was in housing (now over 30 percent) was general public agreement by a range of turned over, not to providing new forecasting institutions and economists housing stock, but towards speculating that up to 250,000 jobs could go in the on the price of existing housing by short term. This is a big number in terms investors, often taking advantage of the of the size of Australia’s population of generous negative gearing opportunities 23 million. provided under legislation. Mortgage repayments and rents began to blow It all threatens to snowball into a out and after 1990 at a rate that was much deeper crisis or at least into a 450 percent of the rise of income. continuation of the cycles of crises Personal debt followed later on a very which bedevil capitalist economies. similar trajectory. Aggregate household debt payments, other than mortgages, Over the past 30 years, national income now absorb 15 percent of household has been redistributed towards corporate disposable income, compared with 8 profi ts and the richest individuals, from percent in 1990. around 17.5 percent in 1980, to around 30 percent now. There is an extension of monopoly and a crisis of a falling rate of profi t and

23 The burden of the crisis is being put used as a means to impose a regime that on the backs of Australia’s working will favour the monopolies even more people and smaller businesses. Public thoroughly. An Australian Labor Party sector cut-backs are likely to continue, government will not change this. Ample despite a few short-term and inadequate evidence is provided by the accelerating increases. Billions of dollars in corporate rate of back-fl ips on previously made handouts have already been delivered. promises. This has come out of government funds and will leave less for other needs. In Australia has been partially protected other words, Australia’s working people by the mineral resources boom, mainly and smaller business owners will be the result of demand from China. It made to foot the bill for the handouts has been a major source of expansion through increased taxes. of production in the minerals sector. That is the positive side, at least in Monopoly corporations, particularly respect of employment opportunities. the expanding mining sector, demand The negative is that an over-reliance on bigger investments of public funds into mining, in the absence of value-adding infrastructure needs for big business. before export, serves to further depress Public funds are redirected away from the manufacturing base and distort the needs of the people in public health, overall economy. education and public transport and handed out to the multinational motor Australia’s mining resources industry vehicle industry, whilst there’s little should be developed in a planned way government investment in developing to build a self-reliant and balanced renewable energy industries. national economy and protect the natural environment. In the short term, Furthermore, these handouts are given profi ts and taxes from mining should be with no strings attached. There is ploughed into developing a viable and some evidence that it has already been sustainable local manufacturing industry misused to pay overseas owners (eg with an emphasis on value-adding car industry) and speculation in real prior to export in the case of minerals, estate and other places. At the very least and with ecologically sustainable and there should have been some conditions energy renewing industries as a priority. imposed, such as, compulsory support The realisation of these tasks raises the of manufacturing, support for smaller need for an anti-imperialist state power businesses and to raise the disposable led by the working class and its allies. income for day to day necessities of consumers. Challenges for Australians Attacks on workers’ union organisation There is absolutely no doubt that an and other forms of organisation of the even more serious recession in Australia working class and other Australians is a real possibility. It demands urgent that pose a challenge to the existing action. This means a clear turn towards order will continue. The state will be an alternative economic direction.

24 This alternative direction must be and of gathering around itself allies for one that does not put the wellbeing of the task of building a new society. The big business above everything else. It working class must take the lead within must put the wellbeing of the people the ranks of those classes and social and the natural environment in the fi rst strata rejecting capitalism and fi ghting place and be able to mobilise resources Australia’s subordination to the interests and the people of Australia to create a of imperialism. The independent new economy. Under working class Australia that emerges from the present leadership and with careful planning and era of imperialist control will only goal setting, balance can be introduced survive and develop to the extent that to the various sectors of the new the working class wins the struggle for economy for the purpose of securing a a socialist direction in the new economy. prosperous, just and sustainable future. Achieving this requires a conscious Australians too, are compelled by effort from those who can already see circumstances to fi ght against the the big picture. This means to double attempt to impose the burden of the our efforts to build a broad political front crisis on their backs. As the crisis bites that brings together all possible allies, deeper, Australians will be compelled to who despite differences of opinion, lift the scale and scope of this fi ght. In agree on the need for a progressive doing so, a road out of the present mess and democratic direction, who wish to will be charted. By necessity, this must see the economy and political system point in the direction of putting an end guaranteeing the vital needs of all, and to the present domination of imperialist who internationally, seek to establish fi nance capital. The working class alone proper and equal relations with all is capable of carrying this to fruition nations and peoples.

25 26 However, there were no such restrictions on non-ADI fi nancial institutions, at Finance Capital least until the 1970’s. And it is through And The Australian the merchant banks that most corporate funding and fi nancial corporate lending Economy occurs.

One reason for the existing level of protection for the existing banks was the need for the government to use them as instruments of monetary policy, through which control was kept over the amount in circulation, its availability and its cost (through interest rates). In other words, The Reserve Bank of Australia they were institutions whose regulations recognises three types of institutions of served the needs of the capitalist system fi nance capital in Australia. and they could be used to ease or tighten the fi nancial pressures on the mass of 1. Authorised Deposit Taking the Australian people, as required by the Institutions (ADI), such as banks capitalist economy. building societies and credit unions. This had occurred since the British 2. Non-ADI fi nancial institutions, colonial invasion of Australia but such as merchant banks, fi nance became more pronounced in the period companies and companies issuing during and after the 1850’s Gold Rush, securities. and continued until 1945. During the same period there had also emerged a 3. Insurers and fund managers, measure of local Australian capitalism. such as life insurance companies, Although fairly small by comparison, general insurance companies, the Australian capitalist class was able superannuation and approved to rise suffi ciently to make its presence deposit funds, public unit trusts, cash felt. In this respect, there was also a management trusts, common funds degree of protection of these interests. of trustee companies and friendly

societies. In 1979, the Fraser government established the Campbell Committee Between 1945 and the early 1980’s to enquire into the fi nancial system. legislation provided some protection The committee recommended opening for the banking institutions operating in the fi nancial sector to greater foreign Australia, but having close ties to British investment. This coincided with the capital. Despite their reliance on British period where the Australian economy imperialist fi nance through deposits and society had become securely and overseas borrowings, new foreign locked into the US sphere of orbit. It banks on Australian soil or takeovers was only two years since the infamous of existing banks were not permitted.

27 US linked coup against the Whitlam and NAB), which remained central government. The shift towards to the implementation of government loosening foreign investment controls policy. in the fi nancial industry was in part a means to consolidate the position of The impact of fi nancial sector US imperialism in Australia against deregulation throughout the Fraser- the interests of British imperialism. Hawke –Keating years is seen in the It was also in part to weaken following table. Note that the table Australian national capitalism. Fraser’s underestimates the degree of foreign deregulation was a great service to US investment, because it does not consider imperialism and those sections of the foreign ownership by less direct means. Australian bourgeoisie most closely Despite this weakness, it is still quite linked to imperialism, as it facilitated clear. the deeper integration of imperialist and local capital markets. Nevertheless, Foreign ownership doubled in the neither Campbell nor the Hawke banking sector, but remained relatively Government’s Martin Committee of low (at least in an open sense), given 1984 could escape the fact that the the dominant position of the Big Four Australian people are strongly opposed banks, and increased dramatically in to foreign ownership and control; hence the merchant banking and securities some regulation remained to prevent a (authorised dealers) sectors, where most “socially unacceptable loss of resident corporate fi nancing and speculative ownership and control.” Subsequently, investment occurs. In the banking under Hawke – a great servant of US sector, only two foreign banks operated imperialism – fi fteen foreign banks in 1983, when the Hawke era began (a commenced operation in 1985. New Zealand bank and a French bank that had opened branches here before In 1986, again under Hawke, the 1945 and were subsequently allowed to government announced that all controls stay). However, by the end of the Hawke over foreign investment in non-ADI’s era there were eighteen foreign banks except for rare instances where “national or foreign bank subsidiaries. Between interest” as defi ned by pro-imperialist 1991 and 1996, the Keating years, that politicians applied, would be removed. number grew to thirty.

Keating - that great Labor embracer of The newly elected Howard government imperialist globalisation – encouraged announced in 1997 that the blanket the establishment of further foreign prohibition on foreign takeover of the banking institutions in 1992, by four big banks would be removed and removing the limit on the number of that any proposal would be judged on its new banks that could be established merits. Note that historically a measure here. He also gave the go ahead for of foreign ownership of these banks was foreign banks to take over smaller possible through the use of non-ADI Australian banks, excluding the Big institutions, insurers and fund managers, Four (Commonwealth, Westpac, ANZ and nominee companies that provided

28 Table 1: Level of Foreign Investment in the Financial Sector (end-June 1978 and end-June 1996)

Category of Institution Total sector Assets controlled Share of assets assets by foreign owned controlled by institutions foreign owned institutions

$ billion $ billion per cent 1978 1996 1978 1996 1978 1996 Banks 44 483 3 70 7 15 Building Societies and Credit 10 28 0 0 0 0 Unions Merchant Banks 4 59 2 56 62 94 Authorised Dealers 2 4 0 4 22 100 Finance Companies 17 49 6 18 34 37 Other NBFIs 2 20 0 3 0 16 Life Companies 12 127 2 45 13 36 Non-Life Superannuation 9 154 0 42 0 27 Managers for Public Unit Trusts - 55 - 23 - 42 General Insurance 6 58 2 18 33 31 Friendly Societies and Common -13-0 - 0 Funds Total Financial Sector Assets controlled by Foreign Institutions (per 14 27 cent) - data not available. Sources: Financial System Inquiry Final Report (1997); Australian Financial System Inquiry Interim Report (1980) and Reserve Bank of Australia. an appearance of nominal Australian Acquisitions and Takeovers Act (1975), ownership, hiding the true extent of thus further facilitating the entry of US foreign ownership. British imperialism capital into the Australia fi nance sector. had benefi ted the most from this. US imperialism was also benefi ting, but Mark Vaille, Howard’s Minister for sought to have the restrictions on it lifted Trade reported slavishly to the US Trade to create new space in relation to its rival Representative Robert B Zoelick on the and impose its stamp of dominance. day that the AUFTA was signed, that Deregulation facilitated this. the Australian Government “recognises that foreign ownership of fi nancial Following the signing of the Australia sector companies can result in a range US Free Trade Agreement (AUFTA) of benefi ts, such as injections of capital, in 2004, acquisitions of interests in the access to new skills and technologies, Australian fi nancial sector companies and enhanced competitive pressure on were exempted from the foreign the domestic market.” We will comment

29 on some of these a little later. dominance in the fi nance industry. It maintains considerable strength. But a Vaille also obsequiously reported feature in recent times is that US capital to the US overlords that since the has been closing the gap. US capital announcement of the 1997 policy now leads in non-ADIs and funds change, “there have been over 250 managers, and challenges its British foreign investment proposals in the counterpart in insurance. US capital fi nancial sector decided with no has made large incursions into the four rejections. Of these, 14 proposals were banks, particularly the Commonwealth, valued between $500 million and $2 Westpac and the NAB1. A large part of billion, and over half of the 14 involved this has been through non ADIs, funds acquisitions by major US companies. In managers, insurance companies and total, over the three years from 2000-01 nominee companies, rather than through to 2002-03, almost $35 billion worth direct ownership of shares. Because of foreign investment proposals in the these other institutions are often fi nancial sector…were approved. Over a registered in Australia, their ownership quarter of the total equity in Australia’s is not recorded as foreign ownership in banking and general insurance sectors offi cial statistics. There has also been a is now owned by non-residents. The considerable rise in direct US foreign Government of Australia allows investment, especially at the hands 100 percent ownership of fi nancial of Citibank and the Chase Manhattan institutions, with some 40 foreign- Bank. Japanese capital has hardly any owned banks…” presence in the Australian fi nancial sector. Collectively, the European Union Privatisation initiatives in the fi nancial is relatively strong. sector also served imperialism well. For example, the Australian Government established the Housing Loans Insurance Corporation in 1965 to provide government protection ______for lending institutions against the 1 Even within banking circles there is growing possibility of home mortgage defaults. unease that the profi t motivations of the lending In 1997, Howard sold this off to the US sector are at odds with the needs of the productive sectors of the economy, and of small and medium- General Electric Mortgage Company sized businesses in particular. Joseph Healy, head which in turn sold it to the newly- of NAB’s business banking division was quoted listed US insurer Genworth. Together in the Weekend Financial Review (March 13-14 with QBE, Genworth dominates the 2010) as saying that the banking sector would rather lend money for buying houses than for lenders’ mortgage insurance industry growing small business. “A banking system that in Australia, an industry which even in likes funding mortgages instead of funding small recent times has been reporting solid business is potentially creating problems for the profi ts. future in our productive capacity as an economy”. Naturally Healy refrained from suggesting a state- owned and operated banking system required to Generally speaking, British fi nance make investments that served the interests of the capital has had a long history of people!

30 Table 2. Ownership of equity in Australian Enterprise Groups(a), by Non-residents

30 June 2005 30 June 2006 30 June 2007 Geographical location of immediate investor by $b (%) $b (%) $b (%) Sector/Country/Country groups All sectors 425 100 507 100 634 100 United Kingdom 117 28 146 29 183 29 United States of America 136 32 167 33 212 33 Japan 21 5 24 5 27 4 Other countries(b) 150 35 170 34 213 34 OECD 351 83 421 83 52483 APEC 195 46 232 46 290 46 EU 162 38 196 39 242 38 ASEAN 11 3 13 3 16 3 Sectoral components(c) Non-financial corporations(d) 306 100 369 100 459 100 United Kingdom 83 27 106 29 131 29 United States of America 94 31 116 31 146 32 Japan 18 6 21 6 24 5 Other countries(b) 111 36 127 34 158 34 Banks 55 100 62 100 76 100 United Kingdom 26 47 30 47 36 48 United States of America 17 32 19 31 22 29 Japan 1 1 1 1 1 1 Other countries(b) 11 20 13 21 16 21 Non-bank deposit taking institutions 14 100 14 100 16 100 United Kingdom - 2 - 3 1 8 United States of America 9 68 10 71 10 66 Japan 1 7 1 6 1 6 Other countries(b) 3 23 3 20 3 20 Other financial sub-sectors(e) 50 100 61 100 83 100 United Kingdom 9 17 11 17 14 17 United States of America 16 32 22 36 33 40 Japan 1 2 1 1 3 3 Other countries(b) 25 49 28 46 34 41

______- nil or rounded to zero (including null cells) (a) Total equity held by non-residents, includes direct and portfolio equity investment. (b) Includes unspecified and all other countries. (c) Data for Reserve Bank are not shown, as there is no foreign ownership in this sub-sector. (d) Includes private non-financial corporations; and national, state and local public non-financial corporations. (e) Includes life and other insurance corporations; central borrowing authorities; and other financial institutions.

31 Imperialist fi nance capital has impacted deal for customers, the tendency towards on the fi nancial sector workforce by concentration and monopolisation has requiring “increased effi ciencies” proceeded apace. A recent study by the as companies try to undercut each Australia Institute found that: other in an increasingly competitive environment. Although assets under • Currently the underlying profi ts of control of this sector have steadily the Big Four equate to almost 3% of increased, the number of employees GDP, up from less than 1% in 1986. has fallen, transferring a greater Of every $100 spent in any form workload and greater work intensity in Australia, nearly $3 ends up as into a shrinking workforce. As the underlying profi t for the banks. Financial Sector Union notes too, bank employees’ wages have been held back, • The Big Four banks now control forcing workers into a reliance on more than 75% of all bank assets commissions on ever-increasing sales and banks account for over 90% of targets designed to persuade customers all lending by fi nancial institutions into taking on more debt than they need, in Australia. or using fi nancial products that are not in their interests. The FCU call to • This has distorted competition, ban sales targets and commissions for allowing them to become extremely bank workers, and to provide instead profi table with underlying profi ts a realistic wage, is one that is in the of around $35 billion, some $20 interests of all Australians. billion of which are a result of their monopoly position. It naturally follows that bank customers have suffered with the greater penetration The following table2 shows the of imperialist fi nance capital as retail explosion of pre-tax profi ts (with bad banks impose huge fees for service and debt provisions deducted) recorded by charges for bank products, both to meet the Big Four since 1986. capital raising requirements needed to compete against each other and in the ever-present drive to secure maximum profi t. Foreign banks have also led the innovations for extending consumer credit and offering on-line banking through home computers, trapping many households in vicious cycles of personal debt.

Despite the greater access of imperialist capital to Australian fi nancial markets, ______sold as a promise to Australian bank 2 Tables 3, 4 and 5 taken from “Money and power: customers that more competition would The case for better regulation in banking”, The open up the market and deliver a better Australian Institute Paper No. 4, August 2010

32 Table 3. Historical performance – profit before tax ($m and % GDP)

1986 1989 1999 2006 2009 ANZ 357 773 2162 5214 4380 Commonwealth 396 813 2498 5704 5975 National 484 1110 4141 7275 6962 Westpac 540 926 2026 4547 6096 Total 1777 3622 10827 22740 23413 Percent GDP 0.7 1.0 1.8 2.3 1.9

The unmistakeable trend is for greater is partly explained by the much larger and greater growth of profi ts in the provision made for bad debt by the banking sector. Although the world banks in the year to September 2009, as economic crisis is recorded here as shown in the following table, as well as resulting in a lowering of bank profi ts much greater activity in the resources as a percentage of GDP in 2009, this sector.

Table 4. Profits in recent years – Big Four banks ($m and % GDP)

Year to Sep-06 Year to Sep-07 Year to Sep-08 Year to Sep-09 Pre-tax profit 23043 25398 18856 22096 Bad and doubtful debt 1801 2278 6675 12993 provisions Underlying profit 24844 27676 25531 35089 % GDP Pre-tax profit 2.38 2.43 1.67 1.84 Bad and doubtful debts 0.19 0.22 0.59 1.08 Underlying profit 2.57 2.65 2.26 2.91

The Big Four banks clearly have not tax for the year ended 30 June 2010 suffered during the world economic was $5,664 million, which represents crisis. The common bourgeois a 20 percent increase on the prior year. explanation is that they are relatively Cash net profi t after tax for the year highly capitalised and have been able was $6,101 million, an increase of 42 to withstand the pressures that saw percent.” internationally many banks close or remain open through tax-payer bailouts. Smaller banks, those outside the Big The August 12, 2010 announcement of Four monopoly, were not in the same record profi ts by the Commonwealth position of being able to claw back is typical of how they have fared: “The profi ts from fees, charges or interest Commonwealth Bank of Australia’s increases. (The Group’s) statutory net profi t after

33 Table 5 Performance data of the smaller banks ($m)

Year ended June-08 Year ended June-09 Charge for bad or doubtful debts 449 1808 Profit before tax 4589 1846 Total underlying profit before tax and 5038 3654 losses Performance indicators as % of GDP Year ended June-08 Year ended June-09 Charge for bad or doubtful debts 0.04 0.14 Profit before tax 0.37 0.15 Total underlying profit before tax and 0.40 0.29 losses

Table 5 shows that in the wake of the governments of both Liberal and Labor global fi nancial crisis, their relative persuasions. position has declined with profi t before tax almost halving. The contrast In summary, the Australian fi nancial between the Big Four and the also rans sector is characterised by the dominant is quite clear. position of big monopolies with their concentrations of power and capital, by a The spectacular growth of imperialist tendency towards further concentration fi nance capital in the merchant banking in the wake of deregulation to meet the system referred to earlier has been needs of the globalisation agenda, and accompanied by the steady worsening by the growth of imperialist penetration of Australian capitalism’s foreign debt of Australian fi nancial markets. position. The ratio of net foreign equity Financial services workers and the to net foreign debt was 1:4 in 1992-93; general public are being squeezed in the it has deteriorated steadily since and inexorable drive for maximum profi ts stood at 1:11.15 in March 2009. What by these big monopolies. The answer is this means is that capital fl ows between state ownership of banking and fi nancial Australia and the rest of the world have institutions in an independent Australian been much more about syphoning capital republic under the leadership of the out of the country by foreign owners and working class. creditors, and much less about Australia acquiring overseas assets.

Thus Australian capitalism has an increasingly weakened position in respect to imperialism precisely at the same time as imperialist fi nance capital has had the door to Australian capital markets opened by subservient

34 will maintain people’s jobs to avoid a Climate Change voter backlash. And Sustainable Meanwhile in the scientifi c community, the real debate has shifted from a debate Development – between ‘climate skeptics’ and those scientists who say that human economic Some Questions activity does have an impact on global warming to a debate about what needs to be done that is within human control There is a growing awareness by to make future human life on this planet millions of people across the globe that sustainable. This is refl ected within the the way economies develop impacts many community and environmental on the environment. Sustainable groups and even within governments. development is an urgent matter. If Reputable scientists who for example societies continue on the model of support an end to a ‘fossil fuel’ development of capitalism where profi t economy may differ on what energy maximisation and growth for more sources should be used for future profi t predominate, the planet and its sustainable development. The clearest atmosphere will struggle to sustain example of divergence of views within human life. Global warming, pollution the environmental movement is on the of river systems, destruction of forests question of nuclear power. Is it ‘green are just three examples of capitalism’s power’ or is it as dangerous to the future destructive global footprint. of humanity as continued reliance on fossil fuels? Even if nuclear power is As a result of this growing awareness, ‘green’, what about the uranium mining there is an intense struggle of ideas on needed to create nuclear power? If what courses of action to take. nuclear is ‘green’, should the rights of Indigenous peoples be subordinated Within Australian parliamentary circles, to the need to mine more and more the main political parties make claims uranium? If nuclear power is ‘green’, and to having ‘the balance right’ regarding reducing greenhouse gases is primary, their policies on climate change and does it matter if uranium mining pollutes other environmental issues. Their main underground water systems and whether problem is that they know that the kind radioactive carcinogenic particles and of action that needs to be taken urgently gases escape into the atmosphere during could lose them the next election. the mining process, as claimed by Decisive government action on climate some environmentalists such as Helen change will receive a big backlash Caldicott and David Bradbury? Does from those sections of big business that continued mining of uranium increase control the economy. So at the very best, the likelihood of nuclear weapons being their policies support gradual change used as the contradictions between which minimizes the impact on big imperialist powers and/or imperialism business’s profi ts and which they hope and oppressed nations intensify?

35 START WITH THE SCIENCE Does Brook’s favourable comment about Rio Tinto moving in to profi t from As Engels did in Dialectics Of Nature, nuclear power plants in Australia make one has to start with the science to come one suspicious or cautious? What is Rio up with answers. To the lay person, Tinto’s record like regarding care for nuclear energy as an option to fossil the environment? Can a multinational fuels is being promoted in the daily like Rio Tinto be trusted to build safe press as a sensible, safe option. France pollution free nuclear power plants in has 80% of energy supplied from Australia? nuclear power plants. There has been no major disaster there as yet. Some well Other well respected scientists within the respected scientists who are passionate environmental movement argue that the about the need to take drastic action to risks are too high with nuclear power and reverse global warming are pro-nuclear. that like coal and natural gas, uranium For example, Barry Brook, Professor is a fi nite resource. Furthermore, there of Climate Change at the University are other forms of energy that do not of Adelaide and a biologist, argued in rely on extracting minerals or gas from an article in The Advertiser on 4/8/09 the ground as an energy source. These that Australia’s natural gas supplies are energy forms are solar and wind power. limited, produce vast amounts of CO2, A Victorian based group Beyond Zero while coal is “twice as bad” as natural Emissions argues that a rapid transition gas in terms of carbon emissions and from fossil fuel dependency is possible dumps heavy metals, soot and chemicals with wind power and solar thermal causing acid rain. “Clearly we must power and storage. Solar thermal power hitch ourselves off the fossil fuel energy and storage means heat generated by the bandwagon, quickly”. He then argues sun is stored in tanks so that it can be that Australia is “endowed with far used to produce power 24 hours a day, more energy than all the oil and gas in not just daylight hours. This technology the Middle East” in the form of uranium is well advanced according to Matthew and that Australia should therefore ‘go Wright from Beyond Zero Emissions. nuclear’. He adds that “nuclear power At a “100% Renewable by 2020 Forum” station companies are now focusing on in Adelaide in July this year, Wright designing smaller-sized reactors that are said that Australia only needed 120,000 built to a standardized, ultra safe design, hectares of land for solar thermal in a factory, and then shipped to site… power and storage to power the whole The age of huge plants, which can be of Australia. Transmission of power diffi cult to fi nance and take many years through high voltage DC cables is now to build may soon be history”. He then possible. Wind turbines to produce ends the article by saying, “It’s time for electricity would be used as a back Australia to embrace nuclear power as a up to solar power in the Beyond Zero major enabler of a low-carbon economy. Emissions plan to move Australia from Companies like Rio Tinto recognize this “riding the coal dredger”. Spain and need. We all should”. parts of the USA are the leaders in this

36 form of ‘green power’ with solar power planning by a federal government is in the USA now generating more power essential. than the total power currently used in the whole of NSW. Wright claimed that Given that Australia’s impact on the China has halved the cost of producing a global scale is small from a population wind turbine in the space of one year and perspective, there will be many other increased production of them tenfold. issues arising from a warming planet and predicted rising oil prices in the near What do the scientists backing solar and future. Who will pay for the increased wind power say about nuclear power as cost of living that will occur? The a ‘green’ alternative? Wright said that Brotherhood of St Laurence reports that solar and wind power production involve low income families typically produce mining of lime and clay for cement, iron 22 tons of carbon annually, less than half ore for steel and sand for glass. None of of the 57 tons produced by high income this mining has the degree of damage families. Who is more vulnerable to the environment that is currently to heatwaves, fl oods, bush fi res and associated with uranium mining. extreme weather? Who can afford Secondly there is no direct link between increased transport and energy costs? mining these substances and nuclear The federal government has a $2.15 bombs. He also claimed that very few billion Climate Change Action Fund insurance companies will underwrite over 5 years to provide assistance to nuclear power plants and that nuclear business, community and workers in the power plants are high maintenance and transition to a less polluting economy. high cost. Is this enough when the government’s lasped CPRS scheme would give the big POLITICAL WILL polluters $16.4 billion according to the Australian Conservation Foundation? Australia has the opportunity to develop either nuclear power or the solar/wind What therefore are the demands of the option or both. There are other options people in relation to who pays for the to throw in the mix such as ‘hot rocks’ transition to a sustainable economy? thermal energy and power generated by What will the people’s response be to the wave energy from the sea. Wright from predictable racism that will be promoted Beyond Zero Emissions claimed that by sections of the corporate sector in it is possible for Australia to achieve relation to the growing phenomena of 100% renewable (excludes the nuclear “climate refugees”? option) by 2020. He is certain it is scientifi cally possible. He said that the There are interesting times ahead. mass movement rapidly developing People will be coming up with answers in Australia regarding climate change and looking for leadership which needs to push governments to make it protects their living standards but which happen. He was also asked if he thought also nurtures the planet and its thin the 2020 goal was possible if left to atmosphere. ‘market forces’. He replied that central

37 38 in the ownership of production, and in the production processes of the The Role Of economy. From a rudimentary analysis Class Analysis In so far, we can categorise several main classes in Australian society according Australia’s Revolution to their relationship to the production process.

1. The Ruling Class The ruling class in Australia is the class that owns and controls the main and most decisive means of production (mines, factories, large agribusinesses, The following is a brief Marxist large building and construction works, examination of classes and class etc), and by extension, the means relations in today’s Australia. Scientifi c of circulation (banks and fi nancial investigation of different classes and institutions) and most of the wealth class relations in Australia is essential of the country. This class is a tiny in the charting of struggle for socialism. handful of the biggest corporations This sketch is only a fi rst step in what and individuals but who control the we hope will become an ongoing and life lines of the country’s economy, the a deeper social investigation of classes political institutions and instruments of and the dialectics of class relations in the state (public service, army, police, Australia. legal institutions, including the courts, etc.), and imposes the dominant class Key questions to be considered are: ideology.

Which class dominates? This ruling class is not a homogenous Which class is the main force of political monolith. It is fractured with competing struggle? interests and rivalries between the Which class can lead the struggle for different sections of monopoly capital, revolutionary change? including fi nance and industrial capital. Which classes can be won over or The current global economic crisis has neutralised in the course of struggle? intensifi ed the competition between different sections of the ruling class Regardless of income, upbringing for depleted state funds, resources and or a person’s subjective opinion of markets. Presently, the mining, natural their class position, Marxism defi nes resources and fi nance sectors of the classes in terms of their relationship to ruling class exercise immense power and production. Generally, people’s thinking infl uence over the country’s economic and view of the world is shaped by their policies that favour its interests. class position in the social relations of production. That means their relations

39 In Australia, the ruling class comprises of these local monopoly capitalists also the imperialist bourgeoisie and local act as proxies and agents of imperialism monopoly capitalists. in the exploitation of the people and resources of underdeveloped countries in South East Asia, the Pacifi c region, Imperialist bourgeoisie East Timor, New Guinea, Philippines, This is a tiny minority and the most Africa and South America. Some even powerful and decisive sector of the take on features of imperialists within ruling class. It consists of foreign the advanced capitalist economies (eg. corporate monopolies with direct New Zealand). However, both types of investment or ownership in key imperialist behaviour by local Australian industries and resources (including monopoly capitalists are subject to the corporate agribusiness), or with majority limitations set by the bigger imperialist shareholdings or controlling interests powers. (eg BHP/Billiton, Rio Tinto, Exxon/ Mobil, GMH, Chevron, Shell, Bank Agents of imperialism and the State of America, Deutsche Bank, Citibank, apparatus etc.). It includes the dominant fi nance capitalists and bankers who lend the Serving these corporate interests are investment capital to support industrial various parliamentary politicians, senior and commercial ventures and who, by public servants and bureaucrats, some virtue of their speculative and parasitic in the hierarchy of the armed forces and pursuit of capital accumulation, police agencies of the state, assorted contribute to the periodic economic lobbyists, a small corps of academics, crises of capitalism. Media monopolies a few top trade union leaders and the are also part of the ruling class. major media interests. Their function Murdoch’s News Ltd holds an important is to defend, facilitate and promote the position in the imperialist bourgeoisie economic activities of the foreign and as its main mouthpiece, protecting and local monopolies and particularly the promoting US imperialist interests and interests of US, European and Japanese capitalist ideology. imperialism in Australia.

Local monopoly capitalists The Business Council of Australia is a powerful peak body comprising Allied to the imperialist bourgeoisie is a mainly the imperialist bourgeoisie and section of the local corporate monopolies Australian monopoly capitalists. It and larger capitalists and land- exercises a great deal of infl uence and owners enmeshed and integrated into power over Australia’s political and foreign fi nance capital and monopoly economic institutions, ensuring the corporations, including trading and/ interests and power of foreign and local or fi nancial arrangements, and are, to monopoly capital are protected and varying degrees, dependent on them or advanced above all else, by whichever dependent on the global economy of parliamentary political party is in offi ce. western imperialism. A small number For the past 15 years, the Minerals

40 Council of Australia (a key member national bourgeoisie, particularly in of the BCA) has been one of the main local manufacturing, food production driving forces behind the attacks on and agriculture. They seek economic unions, workers’ rights and conditions independence from foreign and local and intensifi ed exploitation of the monopoly capitalist interests and the working class. The BCA is relentlessly fi nancial power of the banks. The demanding cuts in company taxes and national bourgeoisie’s confl ict with heavier taxes on ordinary people to pay imperialism and local monopoly capital for the economic crisis of capitalism. objectively gives them a patriotic and progressive character that often compels This imperialist bourgeoisie and local them to side with the people against monopoly capitalist ruling class is imperialism. The imperative to survive spearheading the restructuring of forces them to align with the people Australia’s economy from an industrial and the working class, for example, manufacturing base into a quarry and supporting the resources super profi ts the neo-liberal policies of making the tax against imperialist interests. The people pay for the economic crisis. It most signifi cant aspect in the national is the main class aggressively resisting bourgeoisie’s position in relation paying for the development of renewable to imperialism is that it enables the energy processes and technology that working class to form wider alliances can reverse climate warming. of the people, and with other smaller classes. This isolates the imperialist bourgeoisie and the local monopoly 2. National Bourgeoisie capitalist class, the principal class On the fringes of the ruling monopoly enemies of the working class and people class are the shrinking number of local in the struggle for anti-imperialist capitalists who possess neither the independence and socialism. These monopoly characteristics of the big alliances are nothing new. In the day Australian bourgeoisie nor the latter’s to day economic battles the working ability to penetrate overseas markets. class regularly forms temporary, tactical Owing to increased penetration of the alliances against the main boss, (this Australian economy mainly by US includes with competing capitalist/boss) imperialism in the past 30 years, their – to advance the interests of workers. size and position in the economy is much weaker than in earlier times and their political infl uence substantially 3. The Working Class diminishing. The most numerous are the medium to large local capitalists. Their The working class is by far the largest survival is under constant threat from single class in Australia’s capitalist imperialist globalisation. Imperialist economy. It is made up of workers in free-trade agreements and restructure many different sectors of the economy of the Australian economy and and defi ned by their position in the industries has substantially weakened production of surplus value (profi t). It is the more independent position of the the most disciplined and cohesive class

41 and the only class that has the capacity is pocketed by the capitalist/imperialist to unite and lead the people and bring owner(s) individually and as a class. about far sighted change in society. The broad defi nition of working class The proletariat is quite varied, consisting is those in a capitalist society who sell of a mix of highly skilled and relatively their labour power (physical or mental) well-paid workers, semi-skilled workers for a living, to the owners of capital and unskilled, poorly paid workers. (individual employers or to the capitalist Although there are low rates of class as a whole). They are mainly wage unemployment measured according to and salary earners. The working class Australian Bureau of Statistics criterion in capitalist society does not own the of employment as “paid work for at least means of production but creates all the one hour…in a week” there are very high wealth. levels of precarious employment, with a growing number of workers locked into part-time, casual, and sub-contracting Proletariat and other sections of the work with low levels of job security, working class no holiday and sick leave provisions and few opportunities for retraining and skills development.

Although workers organised in trade unions are only 20% of the workforce, ABS data shows that they tend to have better wages and conditions.

Generally, women workers have lower wages and even less job security, particularly in industries where the majority of workers are female, such The proletariat is the core of Australia’s as certain assembly and process work, working class, directly creating surplus textile and clothing and offi ce work. value. Immigrant workers predominate in The Australian proletariat consists of the unskilled, low-paid jobs, such as industrial workers and rural workers cleaning. who have “nothing to sell but their labour power”. In the factories, Using the broad Marxist defi nition of workshops, mines, construction sites, “those with nothing to sell but their transport systems and farms, their labour power”, are also included those labour creates “surplus value” that is sections of workers whose labour power expropriated by the owner(s) of each does not directly create ‘surplus value’, productive enterprise and the capitalist but contributes indirectly to its creation class as a whole. Profi t is realised when overall and are essential to capitalist the value-added products are sold, and economic production. This includes

42 workers engaged in such activities as There are also many other workers organising the supply of labour power who sell their labour power but do and materials, designing computer not directly produce surplus value and software, marketing the fi nished are a part of the working class. They products, accounting for the distribution include cleaners, workers in the services of income, and the retail workers who industry, academics, administrative sell the products. workers, and so on.

Sub-contractors are spread amongst Finally, there are unemployed workers the working class, with many on the in all categories, who nevertheless, periphery of that class. do not cease to be working class just by virtue of losing their jobs, and are Further removed from the direct ready to return to further exploitation production process is yet another when capitalism requires them. Many category of workers engaged in the indigenous workers, older workers and production and maintenance of the disabled workers are also in this situation working class as an army of labour for for long periods, if not permanently. capital to exploit. Although they do There are also individuals from other not directly create surplus value, their classes in society who have been thrown labour indirectly contributes towards into the unemployed working class as the overall creation of surplus value for a result of business failure, investment the capitalist class, and the capitalist losses or retrenchment due to mergers, state, as a whole. Included here are the restructuring etc. teachers who prepare both the working class and also the bourgeoisie, for their Indigenous Australians future roles in society. Doctors, nurses and other health and community workers British colonisation of Australia imposed who sell their labour power are also a capitalist economy on indigenous a part of this group of workers whose Australians, destroying their economy role is the maintenance of the whole and society. They continue to suffer of the working class for the capitalist dispossession, genocide and poverty exploitation. and are pushed out to the margins of society. In their traditional lands in rural However, there is an inherent Australia they are mostly unemployed contradiction in the role of these and in confl ict with large landowners, workers between the imperatives of agribusiness and mining monopolies. capitalism to exploit the working class In the urban centres many are in the on the one hand, and the nature of ranks of the unemployed. They have these industries for improvements in a shared interest with most Australian the conditions of people’s lives, on the people in achieving self-determination, other. This contradiction underlines sovereignty and independence from the many struggles of workers in the imperialism as the fi rst stage towards education, health, community and the full transformation of society. The services industries. vast majority of indigenous Australians

43 have nothing to sell but their labour or family businesses and often employ power and are an important part of the a small number of workers. They are working class. mostly at the mercy of the banks and fi nancial institutions, heavily in debt and lead a precarious existence. They Lumpen Proletariat live in constant fear of extinction by This section, derived from the working local and foreign monopolies and the class, has no links to the productive banks. Objectively, their position in process. It consists mainly of more or relation to imperialist domination and less permanently unemployed working monopoly capital makes them natural class people who exist on the fringes allies of the working class. There are of capitalist society. Some are broken many, many progressive individuals in spirit by poverty, lack of education amongst this section who sympathise and opportunity, health failure, drugs, with the working class and identify alcohol, etc. Some engage in petty themselves as allies of the working crime to survive and a handful try to class. However, left to the infl uence of assert some power by criminal activity the monopoly bourgeoisie ruling class and gang violence and do not identify some sections of the petty bourgeoisie with the working class. In some cases, at times direct the blame for their they are a sub-group which the ruling diffi culties and struggle to survive at class can deceive, bribe or intimidate workers and unions. In reality the main to undermine and attack the organised threat to their survival comes from being working class. The capitalist state squeezed out by the big monopolies and actually needs their criminal activities larger capitalists. The petty bourgeois (often linked to “respectable” business class is an important ally of the working connections within the bourgeoisie) as class in the anti-imperialist struggles of an excuse for attacks on the rights and the people. liberties of the working class and allied classes. They are miniscule in size. Professional workers An important section of the petty- 4. Petty-bourgeoisie Class bourgeoisie are the professional workers who have technical, legal, medical, Small business and contractors military or educational expertise, Prominent in this class are the small and who work as doctors, lawyers, business owners, shop-keepers, small psychologists, academics, senior farmers and contractors of various managers and administrators, senior types who carry out specifi c services police and military offi cers, government and trades, sometimes on their own and bureaucrats and functionaries. Often sometimes sub-contracting others to they are self-employed or have their assist. As a class the petty bourgeoisie own businesses employing a small do not sell their labour power to another number of people. They are among capitalist for the creation of surplus the better paid sections of the people. value. They are usually self-employed They should be distinguished from

44 doctors, lawyers, technical experts, in alliance with the local monopoly academics and others who sell their bourgeoisie, together with a supporting mental labour power to employers chorus in infl uential political, social and of private or public institutions (eg. media circles, but especially within the universities, hospitals, law fi rms, state apparatus. research centres, pharmaceutical and medical corporations). Their economic domination ensures that government policies and the wealth and resources of Australia Intellectuals, creative and cultural serve imperialism, mainly the US, now workers established as the most powerful of the The position of university academics, competing imperialisms currently active mass media journalists, artists and in the economy. In political terms, this performers of various kinds objectively domination has stolen the right to aligns them with the interests of the independence and sovereignty of the working class and the broader sections Australian people and their right to of the people. Most only have their own and manage Australia’s wealth and mental labour power to sell to an resources in their own interests. employer for a living. More recently the increased monopolisation of media, The economic class struggle between privatisation and corporatisation of bosses and workers never ceases. universities and the previously publicly It is in the very nature of capital to funded cultural sector has brought the relentlessly drive down labour costs intellectual and creative workers closer (wages, conditions, etc) and intensify to the working class, objectively and the exploitation of workers (increase subjectively. Many cultural workers productivity), to extract greater surplus advocate protection and development value for itself. Equally, workers are of local artists and the Australian compelled to struggle to resist attacks people’s culture, and fi ght for their by capital and for improvements in working conditions. Increasingly, more wages and conditions. The struggle ebbs cultural workers, academics, artists and and fl ows with the economic cycles of journalists consciously identify their capitalism. In the course of struggle, interests with the struggles of working workers can learn something of the people generally and are less hesitant to power of collective action and unity of take industrial action to advance their their class, the nature of the state and the conditions. main class forces aligned against them. Lessons can be learned in struggle about allies from other classes. But, no matter Development of revolutionary how militant or well organised, such strategy economic struggle does not, of itself, From this brief class analysis of lead the working class to a realisation of Australian society, we conclude that the the necessity for socialism to end class dominant class that holds state power in exploitation. Australia is the imperialist bourgeoisie

45 This only comes from political class The imperialist bourgeoisie not only consciousness that contradicts the exploits and suppresses the working ordering of society in the interests of class, but also directly threatens the a parasitic minority. Therefore, while livelihood and interests of many small revolutionary activists are always to medium local capitalists and farmers, involved and engaged in the economic as well as many sections of the petty- struggles of the working class and the bourgeoisie. Whilst the working class people, these must be linked to the does not give up struggles on the main target of political struggle, the economic level, it should also take dominant exploiter and oppressor of the opportunities to forge temporary unity Australian working class and the people, on the political issue of imperialist US imperialism, the heart and soul of domination of Australia, without the imperialist bourgeoisie. Imperialist abandoning its own struggle. Patriotic domination is the biggest obstacle to individuals and sections can be won to the eventual winning of socialism, and the cause of anti-imperialist revolution, the political struggle is a revolutionary while the more vacillating elements struggle to overthrow this dominant can be neutralised. This is what Mao class. Zedong called, “narrow the target and broaden the base” and is the method The leading class in the revolutionary of identifying the main contradiction. struggle for Australian independence Imperialist domination (foreign fi nance and socialism is the working class, the and industrial capital) is monopoly class most exploited by the imperialist capitalist rule in Australia and is the bourgeoisie, but also the most numerous main exploiter of the working class. class, the most cohesive, disciplined and most capable of powerful collective In summary, this means, in relation to action. It is the only class with the small to medium capitalists and farmers, capacity to lead, organise and mobilise and the petty-bourgeoisie, there can be the whole of the people, including other both struggle and unity. In relation to smaller classes. the imperialist bourgeoisie, there can only be struggle. Other classes and sectors will also participate in this struggle, to the extent The most recent example of this objective that imperialism exploits and confi nes unity is the battle over the resources them. Unlike other classes and sectors, super profi ts tax, where some sections the working class has a fundamental of the local capitalist class aligned interest in continuing revolution with the working class and the people beyond the stage of anti-imperialist in common interest. Another united independence, continuing onto the struggle was the broad and spontaneous stage of socialism and the eventual coalition of printing workers, Australian elimination of all classes, communism. authors, and book publishers and local printing companies that fought to save the Australian book and publishing industry. Printing workers and their

46 union, Australian writers, local book Based on our assessment of Australia publishers and the few remaining as a dependency in the grip of global national bourgeoisie in the printing monopoly capital, the Communist industry were compelled to unite against Party of Australia (Marxist-Leninist) a common threat to their livelihoods has identifi ed the anti-imperialist, from the global book publishing and democratic struggle of the people as retail monopolies. They built a broad integral to the socialist revolution alliance, mobilised the public around in Australia. The anti-imperialist, the protection of Australia’s cultural and democratic national independence manufacturing industries and jobs and struggle will unite and mobilise the isolated their common enemy. They overwhelming majority of Australia’s won the fi ght, even if temporarily. people. It will isolate the ruling class of foreign and local monopoly capitalists This examination of Australia’s classes and lead the way to the next stage of the and class relations reveals that the main revolution for socialism. and most important class contradiction in Australia is between the ruling class Australian communists will use infi nite of imperialist and local monopoly fl exibility, investigate and take account bourgeoisie and the vast majority of of constantly changing local and global the people, with the working class as conditions, continuously re-assess class the most powerful and far-sighted class forces and constantly work to raise and leading the anti-imperialist movement. deepen the political consciousness and struggle of the working class and the people.

47

48 building industry. There are literally thousands of small businesses carrying The State Of out niche activities. Most small business Small Business In people I talk to will readily admit that times are very tough but they also see 2009 the present situation as a ‘glitch’ in the system and have absolute faith (for the time being) that things will return to ‘normal’ before too long. Any other alternative is totally unthinkable. Some are also faced with crucial decisions about keeping staff on during the down turn. It is not unusual for a small operator to have 2, 3, or 5 staff who are reasonably highly skilled, experienced and valued. If the operator lets these It’s very diffi cult to get a clear picture, people go due to lack of work he/she from government or private fi nancial/ may not get them back again, but the economics gurus, of how small business business cash fl ow could be so perilous in general is travelling. that he/she cannot hold them for long, even working reduced hours, without The government seems intent on talking more work coming through the door. up the supposed re-emergence of consumer confi dence, that the economy It’s no accident that the Administration has bottomed out and that recovery and Liquidation industry is booming in is under way, even going so far as to the current environment. Bankruptcies declare that Australia won’t actually are at an all time high. In recent months experience a ‘technical’ recession. The Age newspaper has carried up to 20 Winding Up Notices in the one edition, I prefer to gauge the situation from and they are right across the whole ground level, based on what I see spectrum of small business. and hear from other small to medium businesses. It’s acknowledged that the I have heard that quite a number of very Australian economy is 65-70% driven small business operators did not receive by consumerism, so any sharp decline Rudd’s $900 bonus payment because in consumer spending has a very they operated in the ‘red’ in the previous signifi cant impact on small to medium fi nancial year and failed to qualify. businesses. Looking at the much more publicly Some small business operators don’t scrutinised antics of the larger business realize how closely they are linked to groups shines a fair bit of light on the consumer spending because they don’t problems that small business will have operate in the retail world directly, to encounter and overcome if they are they may operate in a service industry to survive. capacity, or as a supplier to the larger

49 Despite the talk of big-ticket adult children who can neither fi nd nor government-backed priority projects, afford to rent a house. So, small budget the construction industry is languishing alterations, rearrangements or extensions and in deepening crisis. In 2009 Monash are popular and people are doing a University pulled the plug on what was good deal of the work themselves and to be the largest university expansion sometimes all of it. Bunnings highlight programme ever under taken in this this theme in their advertisements and country, due to the fact that the chosen actively promote DIY as a great cost developer GroCon (one of Australia’s saver to bolster sales. biggest) could not raise the capital to fi nance the project. The writing is well and truly on the wall for the independent supermarkets, Huge retailers are in strife; Clive smaller hardware chains and smaller Peters have nose diving sales turn over, retail goods merchants, etc. Harvey Norman have put a hold on recruitment, cancelled the construction The Federal Government’s much of 15 new stores and terminated their vaunted Business Tax Incentive is a long term interest free payment schemes very attractive scheme on paper and as the lines of credit from GE Finance has appealed strongly to big business. and HSBC Bank have ceased or It is certainly one of the Federal been seriously curtailed. At the most Government’s incentives that have recently opened Bunnings (Wesfarmers) helped to distort the real business shopping complex in North Coburg, investment statistics, which in turn have Melbourne, which opened in February led to ridiculous announcements that the 2009, 4 out of the total 10 showrooms/ fi nancial crisis is over (even as another warehouses were still unlet! This would large car components supplier goes have been unthinkable 5 years ago. into administration). The tax incentive certainly bolstered new car sales fi gures Recent years have seen the arrival of the for a time and no doubt a number of German Aldi Chain Store Corporation, smaller businesses and tradees have and the opening of the US giant purchased new vehicles under this never Costco in Melbourne. Woolworths has to be repeated scheme. The incentive announced a new partnership with the sounds very generous (it genuinely giant US hardware chain Lowes in a does cost the government revenue), bid to grab a slice of the huge hardware 50% of the purchase price of qualifying market that Bunnings is monopolising. equipment can be claimed against your The Bunnings performance is actually end of year tax assessment. very revealing. Of all the businesses that make up Wesfarmers portfolio, This is all very well if your business is Bunnings is the only one performing large and has big equipment/machinery well, which refl ects the situation on the investment requirements, is operating ground. People are keen to maintain well in the black and accruing taxable and even extend their houses (even in a income. But for many small businesses small way) with many families having that are operating just in the black or in

50 the red, taxable income won’t be a major Even bicycles sales have slowed, with issue, quite the reverse in fact. And large discounts available on new bikes considering that many small businesses and accessories and even the big chain would need to take out a loan to fi nance stores are under immense pressure from a large (by their standards) purchase low overhead internet sellers. and the loan, if they are able to get one, would need to be serviced from the At our own workshop we are cash fl ow of the business. This means a experiencing a huge increase in cold small business operator would need to calling by sales representatives from all feel pretty confi dent that turn over will sorts of supply and service industries. remain positive over the next 2-3 years. We have had trade accounts with some A very big ask in the present climate. suppliers for more than 10 years and The federal government has already have never seen their representatives extended the deadline for this scheme before. Now even they are cold calling once; it will be interesting to see if they in the hope of more business, giving out move it again. promotional stationary and pens etc.

A truer indication of the state of consumer Anecdotal evidence of the poor state of spending can be obtained by looking at small to medium business comes our the sales fi gures recently released for way almost daily. The franchise holder motorcycles. ATVs are the only motor of a Jim’s Test and Tag service van cycle category that are maintaining tells us that his service calls are well near record sales, and the only category down and he hasn’t had a new client of motor cycle eligible for the Federal for months. We take deliveries from Government’s tax incentive (as well suppliers often between 11.30 & 12.30. as primary producer allowances). For Now many times our goods are the last the rest of the fi eld, sales fi gures are or second last delivery and the drivers heading for disaster land. Honda, the tell us “that’s all we’re getting lately” market leader has suffered a 22.7% drop and they generally head home for the in volume, Yamaha 16.4% and so on. rest of the day. Scooter sales fell a staggering 29.3% in the fi rst half of the year! The recent Thousands of workers have been forced boom in scooter sales was driven almost onto reduced working hours or part time exclusively by fi rst time motorcyclists employment. Overtime and penalty looking for cheap, effi cient, fuel miserly rates have all but disappeared in some commuter transport, which was in turn industries. The effect on discretionary brought on by rising fuel prices and income spending is acutely apparent. the ineffi ciency and over-crowding For the fi rst time in 15 years credit card of public transport. Every motorcycle spending has dropped. manufacturer in the world ramped up scooter production and in Australia new Even before Northern Rock and the sales agencies appeared from nowhere. GFC, this country was heading for a Now the bubble has burst and many consumer spending disaster. Real wages people will get burnt. were well down, the growth in part

51 time work was masking the growing unemployment and under employment position; credit card debt spiraling out of control and national savings were virtually nonexistent. Add to that the fact that many middle class people have taken a serious blow to their superannuation entitlements.

There is no guarantee that consumer spending, the life blood of all the myriad small businesses that have fl ourished in the last 40 years, will recover to anywhere near previous levels.

52 While Bernstein may not have shared these particularly reactionary views, The Significance Of he did use mechanical evolutionism Revisionism to argue that western society had evolved to the point where it no longer required revolutionary change. Social development would be peaceful from now on. Capitalism would evolve into socialism.

Lenin observed in his letter Marxism and Revisionism (1908) that Bernstein Within the Marxist context, revisionism “… argued that by that time German refers to that body of ideas that society had disproved some of Marx’s emasculates Marxism and strips out its predictions: he asserted that capitalism revolutionary heart, and does this in was not on the verge of collapse, capital the name of Marxism. Consequently, was not being amassed by fewer and revisionism has profound signifi cance fewer persons, the middle class was not in both the theory and practice of disappearing, and the working class was Marxism and a profound impact on not affl icted by ‘increasing misery’…” the Communist Party, the capacity of the working class to have the clarity of At the time, capitalism had moved into vision, organisation and determination a boom period. Some concessions had to assert its own class interests. been won by the working class on the basis of their strengthened organization The history of revisionism in the and level of struggle. Along with the socialist movement gains there was also a fostering of the illusion that the hard face of capitalism Revisionism is not new. The term was had softened. coined when Engels took on the ideas of Bernstein in 1898. He had been a History proved that this situation was disciple of Marx, but in a book published temporary and eventually capitalism in the same year, titled Evolutionary progressed in the opposite direction Socialism, he put forward the classical to that prophesised in Evolutionary mechanical evolutionism that was in Socialism, leading to more exploitation, vogue amongst capitalist intellectuals oppression and war. It resulted in the at that time, suggesting that capitalism increased class polarization and social must eventually transform itself into upheavals that led to the October socialism. Mechanical evolutionism Revolution in 1917. had been taken up by open reactionaries to justify the political doctrine of the In the period just before World War One, survival of the fi ttest and used it to argue revisionism rose once again. This time for the superiority of white civilization its theoretical leader was Kautsky. He and to justify colonialism. outlined his position in a pamphlet called

53 The Dictatorship of the Proletariat leadership over society is branded as published in 1918. Note that he had totalitarian dictatorship. Thus political put forward the revisionist position in power and democracy are stripped various other writings since 1913, a year of their class content as revisionism before the outbreak of World War One. eagerly grabs hold of the often repeated Kautsky obviously learned very little false refrain of the capitalist ideologues. from the experience. Another characteristic of revisionism Lenin dealt with Kautsky extensively in has been to pit individualism against the his book The Proletarian Revolution and collective. It does so under the spurious the Renegade Kautsky and demolished slogan of freedom of criticism. What a position that was essentially based this really means in practice is that there on a revival of Bernstein, except should be no challenge to the imposition that Kautsky argued that in the age of revisionism. of imperialism, this highest stage of capitalism had developed to the point Revisionism undermines the discipline where it was doing away with intra- of the individual and the will of the imperialist competition and imposing collective, and rejects struggle against the need for cooperation amongst the opportunism. Ultimately, there should imperialist powers. Thus imperialism be no ideology within the Party, was no longer going to propel the meaning of course, except revisionist world to war. This and the spread of ideology. Revisionist ideology uses a universal suffrage, which gave the whole arsenal of the capitalist way of working class a say in the management thinking and activities, such as intrigue, of the capitalist system, would bring in rumor mongering, fueling suspicion an era of peaceful development. There and disunity, destabilising the Party is therefore no need for revolutionary and undermining comrades inside and change. The working class could win outside the Communist party. It thrives socialism by voting a majority into on petty factionalism. parliament. Because government now truly represented the will of the people, The Great Depression and World War support for one’s national government is Two reasserted the practical truths of support for the people, the majority of Marxism regarding capitalist crises which is the working class. This position and imperialist contention. Faced with led Kautsky and those who shared a such a stark reality, many adherents of similar position to openly side with the revisionism left Marx completely, to capitalist state against the working class. become open reformists, embracing When world war broke out, they happily capitalism wholeheartedly. rallied behind their own imperialist class against the workers of other countries. Modern revisionism in the socialist Capitalist democracy is lauded as true countries democracy and a socialist society where After World War Two and the death of the organized working class imposes its Stalin, the Soviet leader Khrushchev

54 followed in the revisionist footsteps. war in the world, it stands to reason that In this case, revisionism emerged there should be much in common and in a socialist society. Nevertheless, there are solid grounds for cooperation. it borrowed the position espoused Differences would no longer be on the by Bernstein, Kautsky and other basis of opposing ideologies and social revisionists, imposing on the global systems, but competition for markets communist movement the theories and spheres of infl uence. It was never of peaceful evolution of capitalism stated precisely in these terms, but into socialism and the development this was what the subsequent practice of imperialism in the direction where amounted to. it no longer led to war. The modern revisionists alleged that imperialism This same view in relation to war could no longer afford to carry on was also applied within the national recklessly. The emergence of nuclear scale. Revisionism aimed to put a weapons made this even more so. brake on workers’ resistance and Imperialism now had to compromise battles against capitalist exploitation. with socialism. The idea of maintaining The intensifi cation of class struggle peace at all costs was raised as the is to be avoided or muted to avoid the ultimate goal of humanity. There was potential for confl ict, leading to social no longer any class content to war. No and industrial upheavals, political distinction was made between unjust instability and even civil war. Instead wars launched by imperialism and just of allowing this, the Communist Party wars fought for liberation. This outlook must lead the working class as a force actually worked to hold back struggle. for “peace” between classes, above It assumed equality between capitalists all else. Revisionism promoted ideas and workers, between exploiter and of reforming the capitalist system by exploited and took no account of the fact imposing limits on its “excesses” and that the ruling class utilised state power giving workers a say in its management, to enforce its rule. eventually reconciling confl icts between the working class and the capitalist The vast majority of humanity is class. The same view applied to the opposed to war and willingly struggles liberation struggles of the time against against it. But imperialism and reaction colonialism. make the prospect of war a reality. Time and again this has been shown by real More to the point, it was said that class life. confl ict between the working class and capitalist class would no longer be as When it comes to the relationships intense as in the past. Revolutionary between countries of different social struggle was no longer necessary. systems, it was argued that they should Capitalism would evolve into socialism. proceed on the basis of securing peace at All it required was a correct government all costs, including accommodation with policy. This requires no more than imperialism. If imperialism is no longer voting in a majority into parliament. the principle source of exploitation and Hence the Bernstein and Kautsky theory

55 of the peaceful transition to socialism This new revisionism emanating from was resurrected once again. The state the Soviet Union joined forces with the “of the whole people” was repackaged new revisionism that was simultaneously as being above particular class interests. raising its head in the capitalist world once again. The experience of building socialism was undermined through a personal The post World War Two period was also attack on Stalin who stands out as a great a time for the generation of revisionism defender of socialism and its principles. in the socialist nations. It did not come His was also a time when socialist about by accident or only because of bad development in the Soviet Union was leaders like Khrushchev. Socialism had at its peak. It was a time of enormous not yet done away with the remnants and advances in the economic, industrial, infl uences of the old society. The roots educational, scientifi c and cultural lives of socialism were not deep enough yet of the Soviet people. The immense and the socialist economic and industrial improvements in the living standards of base had not been consolidated. the Soviet people was in stark contrast The constant pressure of bourgeois to the destitution of millions of people ideology emanating from the local in the capitalist world ravaged by the bourgeoisie in concert with the power Depression of the 1930s and during of the international capital weakened Second World War. The Soviet Union the still young socialist country. The became a beacon for the exploited devastation of World War 2 destroyed and oppressed throughout the world. the powerful productive forces built It was imperative for the international by the Soviet people in the fi rst 20 capitalist ruling class to demolish the years of the Soviet Union. Ultimately, edifi ce of socialism. Without attacking international capital, led mainly by US Stalin, revisionism would have been and European imperialism, achieved extremely diffi cult to impose. Once it its long held dreams of destroying the was imposed, it set the conditions to turn Soviet Union. around the direction of development. Capitalism was eventually restored. With no previous experience and lessons to learn from, there had also been both The peaceful transition to socialism, “left” and “right” errors that brought accommodation of capitalism at home about some diffi culties. Revisionism and imperialism internationally, were could fi nd a base in the force of habit imposed on communist parties in other and the spontaneous regeneration of countries, on the basis of the prestige capitalist ideas. The lack of experience and authority that the Communist in building socialism, the still early Party of the Soviet Union still enjoyed. development of Marxism-Leninism and Consequently communist parties in the effect of errors, provided fertile soil all continents were divided, lost their for revisionism to generate the illusion revolutionary soul and in practice pulled that it could provide solutions to real back from the struggle to put an end to problems. But in practice, revisionism capitalism. began to attack the foundations of

56 socialism and commenced the process no surplus value was created to begin of the restoration of capitalism. with let alone extracted. …surplus value didn’t fl ow from Comecon nations to Revisionism can only fi nd purchase the Metropolis, USSR, there were other because it has a social base. It is a natural criterias for trade, and making Rubles part of capitalism that is generated wasn’t one of them.” each and every day, emerging from the relationships between class forces. It The comment is typical of some activists fi nds its roots in the capitalist base and who believe that once a socialist capitalist relations of production. economy is established the appropriation of surplus value from workers and its This is what Lenin had to say on the matter realisation as profi t through the sale in the same letter that was quoted above. of commodities (ie exploitation under “…The inevitability of revisionism is capitalist conditions) is ended. To the determined by its class roots in modern extent that they understand the law of society…Because in every capitalist value, they say that it has been overcome country, side by side with the proletariat, under socialism or deny that it has any there are always broad strata of the role to play under socialism. petty bourgeoisie, small proprietors. Capitalism arose and is constantly When Stalin discussed the fi rst draft of arising out of small production. A the Soviet text on political economy, he number of new “middle strata” are took its principal author, Leontiev, to inevitably brought into existence again task for just such a mistake. Stalin said: and again by capitalism….These new small producers are just as inevitably “Here it is written that the law of value being cast again into the ranks of the has been overcome… As yet the law of proletariat. It is quite natural that the value has not been overcome. It is not petty-bourgeois world-outlook should true that we are in control of prices. again and again crop up in the ranks of We want to be, but we have not yet the broad workers’ parties...” achieved this. In order to be in control of prices you need tremendous reserves, The phenomenon of revisionism arising an abundance of goods, and only then in socialist countries has the capacity to can we dictate our prices…When we demoralize working class activists in shall be able to distribute according to the capitalist countries. It needs some need, it will be a different matter, but understanding. On a recent chatline as of yet the law of value has not been devoted to the legacy of the Soviet overcome.” 1 Union, one correspondent stated: “…surplus value a la Capital was not The signifi cance of the law of value created in these countries as there was continuing into the socialist era is that no property running under market surplus value continues to be created by conditions with free entry and exit from the labour power of the working class. said market, production being, *totally* However, it no longer has the character for human needs and not for profi t. Ergo of exploitation because socialism

57 has eliminated the appropriation of the social appropriation of surplus value socially produced surplus labour by under socialism and the possibility the handful of private owners of the of its social distribution according means of production that occurred under to the needs of the working class in capitalism. The appropriation of surplus its role as the ruling class of socialist labour still occurs, but it is appropriated society. Socialism allows unprofi table by its creators through their party and but socially necessary enterprises their government and distributed for to be supported through just such a the benefi t of society according to a distribution. So long as the proletariat is planning mechanism that cannot exist elevated to the position of ruling class, it under capitalism. This means that the can enforce such a socialist alternative. profi ts from the labour power of the So long as the working class exercises proletariat can be turned to socially leadership in everything, socialism can useful purposes rather than being denied be maintained and developed. So long to society as they are under capitalism. as there is proletarian dictatorship, exploitation in the old-fashioned sense Speaking of planning under socialism, can be eliminated by giving workers Stalin told Leontiev: control over the rate and intensity of work at the point of production. “It needs to be put simply: under capitalism it is impossible to conduct However, if persons in power take production according to plan on a the capitalist road, then even under societal scale because of competition state ownership and in the absence and there is private property that of private property relations in the disconnects things. But in the USSR commanding heights of the economy, all enterprises are united by socialist the social appropriation of surplus property. Therefore we can and must value can be tampered with and a new conduct a planned economy. The bourgeoisie can be generated within planned economy is not our wish; the Communist Party, and even in the it is unavoidable or else everything Central Committee. will collapse… Capitalist industry, agriculture and transport cannot be The private appropriation of part or all of run by plan. In capitalism the cities the surplus value, realised as enterprise must gobble up the countryside. For profi t through sales, can be channelled them, private property interferes. Say to private bank accounts or distributed it simply: for us things are unifi ed, for as state sanctioned bourgeois rights them things are disconnected.” as encapsulated in differential salaries and elite privileges. (“Bourgeois The requirement for planning recognizes right” to use Marx’s term, will exist

______1 http://www.wilsoncenter.org/topics/pubs/ACFB07.pdf Mao Zedong, in his analysis of Soviet eco- nomics under Stalin, acknowledged the continuation of the law of value but argued that it “should not be made the main basis of planning” (Mao Tsetung, A Critique of Soviet Economics, Monthly Review Press, 1977, p. 87)

58 in the socialist transition period when associated with the Communist Parties the principle of “from each according of some socialist countries succumbing to ability, to each according to work” to revisionism and taking the capitalist must apply and will take the form of rather than the socialist road we can only different salary levels and greater and accept that such phenomena are part of lesser degrees of material comfort. In the learning process for the proletariat. the later stage of communism, bourgeois A learning process can only be positive right, like classes, will cease to exist and in the long run, however regrettable the principle of “from each according to the need for its lessons may be at any ability, to each according to need” will particular time or place. Thorough-going apply.) materialists need not be demoralised by the appearance of revisionism under If allowed to continue, a “red” conditions of socialism, but heartened bourgeoisie can grow in power and that the revolutionary movement will infl uence to the point where it condones be strengthened in its future endeavours the emergence of private entrepreneurs through having learned the need for the and the transfer or sale of state-owned adoption of ideological, political and enterprises to its own members. The organisational measures to ensure that transformation of the Communist Party real power, once seized, remains in the into a revisionist party is promoted hands of the proletarian class. through rejection of the Marxist-Leninist thesis that the party represents the Revisionism and trade unions proletariat in the organs of state power; instead of leading all productive forces, under capitalism now it represents “all productive forces” In the capitalist countries, an important in society and membership is offered to aspect of this non-working class outlook entrepreneurs and millionaires. within the ranks of the working class is the outlook of a few of the most It seems that surplus value, transferred privileged section of the working to the whole of society when the class that have taken up the language working class is dictating terms, can be of Marxism. This is a section of the transferred to a new bourgeoisie when working class in the capitalist countries the working class is disempowered by who are provided with certain material revisionist policy. And when the surplus comforts from the super exploitation value of allied (“socialist camp”) of the colonies, and, after colonialism working classes is siphoned off through generally ended, of underdeveloped unequal trade terms by a more powerful nations in the Third World, and even from nation no longer led by its working class, the most exploited sections of their own but used for the further enrichment of class brothers and sisters in their own the elite of the more powerful nation, country. The conditions of the existence would that not be a case of “socialism in of the better paid and more socially words but imperialism in deeds”? advantaged section of the workers in the advanced nations becomes an argument In so far as there have been setbacks in their minds for living with capitalism,

59 of not wanting to push demands on removed from the struggles and realities capitalism to an extreme which would of working class life. They have book see the end of the system that provides learning knowledge but relatively little them with more than just a survival practical experience of complexities and level of existence. This was the case of the zigs and zags of class struggle. Elite old revisionism that turned into openly universities are the main centres for the reformist social democracy and it is true manufacture of bourgeois ideology, in for the new revisionism that emerged in particular bourgeois economic ideas the second half of the twentieth century. that either ridicule or dismiss Marxism This privileged section of the working as irrelevant, or take the essence out of class seeks to protect its privileges and Marxism by presenting it in a sanitised in doing so, is on the one hand caught abstract form detached from struggle. in struggle against the most obvious This in turn adds some intellectual abuses of capitalism, and on the other, credibility to revisionism. has a stake in the continuation of the same order. Because of this, it is not That the main periods for the emergence able to remain steadfast and vacillates of revisionism were in the aftermath between the two poles. of the Paris Commune in 1871, the time that culminated in World War Over the years, revisionist infl uence One, as well as the time of the Great within the trade union movement Depression that led to World War Two strengthened the ideology of social is no accident. These were periods of an democracy and this legacy continues immense lifting of working class and today in sections of the trade union revolutionary struggle. Each of them movement’s leadership. They are was also a testing time, imposing great attracted to accommodation with the diffi culties and sacrifi ces. Lessons were employers, the worship of legalism and being learned by the working class and parliamentary politics. Objectively, they the popularity of Marxism rose. Class work to protect the capitalist order and consciousness and willingness to act system of class exploitation. Based surged. on their sectional class interests and a life of relative comfort they fi nd it The capitalist class feared for its future hard to identify with the working class and took the course of suppressing as a whole and are imbued with the revolutionary Marxism and promoting factionalism of the ALP and competing safe revisionism as a counter. Utilising craft rivalries. Their work is not guided the armoury of deception, concessions from a whole working class outlook. were offered to that portion of the privileged section of the working class Another specifi c source of revisionism attracted to revisionism. For these is in the higher learning factories of concessions, revisionist ideology capitalist ideology – the universities. objectively worked to disorganise, The main elite universities of the demoralise and tie the working class to capitalist ruling class comprise a the coattails of the capitalists. relatively privileged section of society,

60 Periods of advance of revolutionary conditions tend to coincide with the Revisionism in Australia bust phase of the economic cycle. For Australia there were two important The bust is followed by a period of factors that need further attention. One expansion, where the revisionist base was that US imperialism paid attention that had germinated in the previous to and economically and politically and period is fortifi ed and expanded. During culturally invaded Australia in a big way a period of boom a larger section of during the post World War Two period. the social surplus value can be turned This was the country’s greatest period towards providing more concessions of industrialisation and it occurred and creating the illusion of ever lasting largely on the basis of American capital. progress and prosperity. This too, has US imperialist infl uences extended fed the growth of revisionism. in all spheres and even affected the Communist Party of Australia. This Closely associated with revisionism is was natural. The problem was that there the infl uence of capitalist trade union was not suffi cient understanding of this ideology. Trade unions by their nature are infl uence and therefore effective counter organisations to defend the interests of measures were not taken against it. the working class against the employer. They are not organisations aiming to put For a long time, the focus had been on an end to exploitation of workers and breaking away from Britain. During the capitalism. Wages and conditions are war against Japanese imperialism there improved on the basis of recognition of had been a measure of unity with US the capitalist’s right to be a capitalist. imperialism against the common enemy. Otherwise there would be no negotiation Britain proved to not be particularly and no agreement. The problem is that interested in the defence of Australia. trade unionism on its own, isolated The standing of the US rose. The from Marxism, confi nes workers to historical dependency of the Australian the acceptance of the permanency ruling class on the superiority of colonial of capitalism and the substitution of and imperialist powers, culture, etc. trade union struggle for revolutionary also infl uenced the Communist Party. struggle. Communists immersed in the These conditions provided a conduit for essential day to day struggles of the revisionism from the US in the form of working class are more vulnerable to the ideas of Earl Browder in the 1950’s. the infl uence of bourgeois economism Leader of the Communist Party of the and, in the absence of Marxist political United States of America, Browder study, criticism and self-criticism, preached the classical positions of can be easily overwhelmed by the all revisionism, adding that there should surrounding force of bourgeois ideas be no Communist Party. A substantial and succumb to revisionism. number of communists were infl uenced to turn away from the Communist Party and to seek the answer in the reformist Labor Party. Many of those who remained in the Communist Party

61 were also infl uenced in some ways. The better world for the working class and Communist Party offi cially accepted people exemplifi ed by the socialist what Browder was putting forward for a Soviet Union also attracted many to the period of time. Only when Browder was Communist Party of Australia. The refuted by the international communist practice of Marxism-Leninism was movement did the Party in Australia still in its infancy. Lacking in political offi cially turn away from his ideas. Even experience and the development and so, the turning away was to a signifi cant study of Marxism-Leninism, it was extent more in words than deed. Even inevitable that some would succumb to this would not have occurred in the bourgeois and revisionist ideas in new, absence of the fi erce struggle waged diffi cult and changing circumstances. by those who did take a stand against revisionism. Revisionism reached its highest point in Australia and other countries during The kernel of Browder’s ideas continued the 1960’s. Its effect was to contribute to have an infl uence, largely helped by largely to the separation of communists the great strength of the trade union from the working class. Communist movement in Australia and the strong leadership of the trade union movement position of the Communist Party within and the political struggle in general was this, and the signifi cant hold of trade weakened. This resulted in sections of union ideology on the Communist Party. the working class left without leadership, lacking in direction and exposed to all sorts of alien ideas that further weakened The Communist Party was already its position. It was only because of the vulnerable to revisionism ongoing effort of those who fought The post World War 2 period in the against revisionism that the essence of late 1940s, throughout the 1950s and Marxism-Leninism was salvaged and early 1960s was also a time of intense the core of the revolutionary movement international capitalist anti-communist in Australia was retained. The core propaganda and stepped up suppression of this revolutionary movement was of communists and communist evident in the most advanced and organisation. For a short time, the leading sections of the union movement Communist Party of Australia was and working class that were led by the declared illegal. This and the fascist- CPA (M-L) at the time. like anti-communism over ten years wore-down and demoralised some who A struggle for the reconstitution of the found the relentless witch-hunts and Communist Party as a Marxist-Leninist sacrifi ces diffi cult. Some abandoned organisation led to the formation of ship and instead chose respectability in the CPA (M-L) in 1964. Over a period the world of reformism. Many of these of time after the early 60s, the residual people were drawn to the Communist revisionist Communist Party split into Party on the basis of an inspiring and a camp embracing “Eurocommunism” strong leadership that had led the anti- and a group who retained an overriding fascist struggles. The possibility of a loyalty to their vision of the Soviet

62 Union as the birthplace of socialism and However, the Soviet people cherished victor in the war against fascism. The the collective spirit of socialism and former group did what Menzies had been remained supportive of Stalin and their incapable of, leading the Communist country’s immense achievements under Party into voluntary dissolution. Of his leadership, making it impossible this it can be said that there is no better for the Khrushchevite or subsequent proof of the service of revisionism to regimes to offi cially renounce adherence capitalism. to Marxism. This remained the situation until the advent of Gorbachev and his The latter group went through various clique, who completed the restoration of metamorphoses before eventually capitalism, including dismantling what taking back for themselves the name had been left of sections of the economy of the Communist Party of Australia. owned by the State. They include that older generation of Soviet loyalists and a newer generation During the entire period from recruited after the formal collapse of the Khrushchev’s coup through to the Soviet Union and its Eastern European formal destruction of the Soviet Union satellites around 1990. Most within by Gorbachev and Co, it was absolutely these two categories of membership appropriate to refer to the Soviet Union concede that Khrushchev was a as a “social-imperialist” nation, a nation revisionist, but the infl uence of the older still proclaiming itself socialist in words, group ensured that this does not extend but being imperialist in its behaviour. to the recognition of the emergence of Soviet social-imperialism which Combating revisionism occurred following the Khrushchev revisionist group’s coup in 1956. Revisionism is a scourge that can be successfully held at bay. Real life tends After the death of Stalin and the to expose it over time. However, because revisionist coup led by Khrushchev, it is a natural product of capitalism, the Soviet Union changed its colour it keeps on raising its head. Struggle and cooperated with US imperialism to against it must therefore be relentless. suppress national liberation movements Revisionism as a system of ideology, that threatened to draw the Soviet politics and organisation must be Union into war with the US, whilst at fought. Revolutionary Marxist ideology, the same time, competing with US politics and organisation must be won. imperialism for the control of spheres of infl uence, sources of raw materials But this is not all. Revisionism also and markets. It abandoned proletarian affects individuals. Each communist has internationalism and began to act like to exist in a sea of capitalism that pulls an imperialist superpower, subjecting towards the revisionist way of looking other countries to bullying, interference, at things. The only way to counter this control and invasion, as in the invasion is through engagement in the struggles of Afghanistan in the late 1970s. of the people and a continuous effort to study Marxism, constant review

63 of practice, honest criticism and self- criticism and self-criticism aimed at criticism and a spirit of learning from ideological and political improvement, the people. can these tendencies be countered.

It also means accepting the existence In Australia it is appropriate that at the of organisational structures within the present time we should seek to unite Party that make constructive criticism around practical tasks that we share an essential part of the relationship with other Communist parties, whilst between comrades, and in particular, that acknowledging our differences on allows scrutiny and criticism of higher certain questions of ideology, politics levels of the Party by lower levels. and organisation. There is no room for commandism and arrogance in our Party organisation that strives to serve the working class and people. It requires lifelong investigation of objective reality, improving the grasp of theory and constant immersion in struggle, where the knowledge of contemporary reality and theory are applied, developed and reviewed in the light of experience.

It also means consciously striving to overcome tendencies within oneself for the cravings of seeking limelight, self- importance, seeking the easy life and over emphasis on advancement in one’s career and the practice of arrogance towards other people. If manifestations of negative qualities are seen in one’s comrades or party, then there needs to be an ease of mind in making constructive criticism. To do otherwise is to commit the error of liberalism as described by Mao Zedong in his Combat Liberalism. An environment of bourgeois liberalism corrodes the revolutionary soul of the Party and disarms Party members ideologically in the face of emerging revisionist trends. These are the tendencies that land one on a slippery slope. Only through a lifelong commitment to the working class and revolutionary struggle, and

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