The neoliberalism debate in the ISA – Minority positions November 2020

We publish below the third part of the documents concerning the “neoliberalism debate” that took place in the ISA. This is a document representing views of the Minority (written by four comrades from Greece, Sweden and the US), circulated on November 2020.
You can read the Majority document of November 2020 here.
To get the general picture for this debate, read our introduction to the publication of this material here.
You can also read the initial documents:
-Majority positions of May 2020 here.
-Minority positions of May 2020 here.

And the second part of the debate:
-Majority positions of July 2020 here.
-Minority positions of July 2020 here.

A Balance Sheet of the Debate on Neoliberalism

By Andros P, Eleni M, Alan J & Kristofer L, 30th of October 2020

I. Some general points

There is general agreement in the international organization that we have in front of us a very deep crisis of capitalism which will have major repercussions on all levels – economic, social and political. This crisis represents a turning point in global developments. The 2008-9 crisis was also a major turning point but this time the crisis can be expected to have far more long-term effects because all the contradictions of the system are now even bigger than at the time of the previous crisis.

That the crisis would be extremely serious and deep is something that we had predicted before the arrival of the Covid-19 pandemic. On the basis of this general understanding, we had also predicted that the ruling classes globally would provide huge stimulus packages to their economies to avoid a complete collapse. This stimulus would be a combination of monetary and Keynesian measures of state intervention. The ruling classes had followed similar policies in the course of the 2008-9 crisis but this time we correctly predicted that it was going to be on an even higher level. They would be forced to do this in order to cushion the crisis so as not to have a massive destruction of capital and major social convulsions which could destabilize their system. In relation to the above points there is agreement by all in the international organization.

Within this general agreement there are points of difference that need further clarification and debate. These relate to how we characterize the new epoch that is opening up after the pandemic and the new economic crisis; whether it represents the “end of neoliberalism” and the beginning of a new period of “Keynesianism” or not; the existing class consciousness and the contradictions that exist within the process of the development of class struggle and consciousness; regional differences; the complications that arise due to the lack of mass parties of the working class and the weakness of the subjective factor; the rise of right wing populism and the far right, etc.

Mass radicalization processes and contradictions

Writing in 1929 (“What is Radicalization of the Masses?”, 18.12.1929) Trotsky emphasized:

“The political feelings of the proletariat are far from changing automatically in one and the same direction. The rising of the class struggle is followed by its tailings, the flood-tides by the ebbs, depending upon complicated combinations of material and ideological conditions, internal and international. The activity of the masses, if not utilized at the right moment, or used wrongly, goes to its opposite and ends in a period of decline, from which the masses recover faster or slower, again due to the influence of new objective stimuli”.

This is a dialectical approach to the development of class struggle and consciousness. We find that this kind of approach is missing from the material of the comrades who defended the position of the “end of neoliberalism” and of a new “Keynesianism”.

We should note that the above excerpt from Trotsky is written at a time when the degeneration of the Soviet Union was far from understood by the masses internationally, and when there existed mass parties of the working class (“Socialist” and “Communist”, in name) with the idea of revolution and socialism deeply ingrained in the minds of tens of millions of workers and youth.

The debate in the International was initiated by the comrades of the International Center after the Greek comrades disagreed with the description of the epoch as the “end of neoliberalism” and the beginning of a new “Keynesianism” and proposed a number of issues to be discussed (“Contribution by Greek IC-members to WP discussion”, IMB #8) in order to amend the “World Perspectives Update”. In their document “Reply to Greek IC Members on the End of the Neoliberal Era, Consciousness and

Perspectives for Struggle,” (IMB, #10, 15.07.2020) cdes Eric B and Tom C try to add more flexibility to the terms they have used, which is welcome. However, they do not accept any mistakes in their initial positions. Furthermore, in the course of the debate the comrades shifted the emphasis from the issue of the “end of neoliberalism” to that of class struggle and consciousness, stating on quite a number of occasions that it is not really the “terminology” that matters (“end of neoliberalism”, new “Keynesianism”) but what is important is the perspectives for class struggle.

We all agree that the reason why we map out perspectives and changes in the political economy of capitalism is not out of abstract considerations but precisely to try to understand better the short and mid-term perspectives for events, politics and the class struggle. Unfortunately, we find that on these issues too, the comrades present the development of class struggle in a linear way, as if it can continually rise to a higher and higher level. This type of approach can be unbalanced and can lead us to false conclusions.

We can use another quote from Trotsky in this context (Trotsky, The Art of Orientation, 8 January 1930):

“Directing the struggle to one or the other direction, it is necessary attentively to follow the changes in the objective and subjective elements of the movement, in order to introduce opportunely into the tactics corresponding corrections. Even though the actual development of the struggle never fully corresponds with the prognosis, that does not absolve us from having recourse to political prediction. One must not however, get intoxicated with finished schemas but continually checkup the course of the historic process and conform oneself with its indications”.

Countering a linear and simplistic perspective about mass consciousness Trotsky went on further with this comment from the same article:

“In the pre-war period, the basic as well as the conjunctural processes developed much more regularly than in the present period of brusk turns and steep breaks, when the comparatively less important vacillations in economy breed tremendous leaps in politics. But from this it does not at all flow that it is possible to close one’s eyes to the actual development and to repeat three incantations:

‘Contradictions sharpen’, ‘the working masses are turning to the Left’, ‘the war is imminent’– every day, every day, every day… If our strategic line is determined in the last analysis by the inevitability of the growth of contradictions and the revolutionary radicalization of the masses, then our tactics, which serve this strategy, proceed from the realistic evaluation of each period, each stage, each moment, which may be characterized by a temporary softening of contradictions, a rightward turn of the masses, a change in the correlation of forces in favor of the bourgeoisie, etc. If the masses were to turn leftward uninterruptedly, then any fool could lead them. Fortunately or unfortunately matters are more complicated particularly under the present inconstant, vacillating ‘capricious’conditions”.

Of course, there is no comparison between the conditions prevailing in 1929 and 1930, when Trotsky was writing the above and today. Then we had a period of revolution and counterrevolution in the most direct and immediate form. But still Trotsky felt the need to warn about the dangers of oversimplification and of imagining uniform processes on an international level.

We have today a massive crisis of the capitalist system. The attempts at any “solution” further pile up new contradictions. But of course, as Lenin said, there is no final crisis of capitalism. The new situation that is unfolding before us will provide very important opportunities for the forces of revolution.

We have to boldly seek them out and use every opportunity to build our forces. We can see such opportunities in the struggles that are developing today in a whole number of countries – the Black Lives Matter movement, Bellarus, Chile, Bolivia, Thailand, Indonesia, Nigeria, Poland, etc. We saw the potential, particularly in the huge wave of revolutionary struggles and explosions that swept the planet in the course of 2019. These opportunities, are of course of a general character, because in most of the countries that we see social explosions we have limited forces. But still, they provide the general framework, the general potential.

The ISA can and must grow in the new period. But opportunities will not be the same everywhere. The processes in the US are of a very different character than in Europe. And within Europe there are important differences between the north and the south. Movements can develop, take an explosive and revolutionary character but, in the absence of leadership, can also suffer severe defeats. Isn’t this one of the lessons of the revolutions of 2011-2 in the Middle East? We cannot simply extrapolate perspectives from one or two countries, reflecting a particular situation (e.g. the favorable situation in the US) and then use generalized exhortations. We must “call things by their name” to use another expression by Trotsky – i.e. when it comes to perspectives, we need to have a careful approach so as to prepare our forces properly for the positive as well as the negative features in the situation. We should prepare the International not only for the possibility of victories, like the ones we see right now in Bolivia and

Chile, and the eruption of movements of resistance in Belarus, Indonesia, Thailand, Nigeria etc, but also of setbacks and even serious defeats, like we see in Hong Kong (which was correctly anticipated and warned by our comrades there, without being at all “pessimistic”).

These contradictory features and elements should be included in a perspectives document, or in any “perspectives update”. This is necessary because it correctly prepares the organization to grow, develop tactics and slogans, make turns and develop not only in “easier periods” of rapid radicalization but also in more complex situations. A good example is the correct orientation in complex-difficult circumstances by our comrades in Russia in the past period as well as the role played by the Greek organization in the antifascist movement and recent defeat of the neonazis. The International must be prepared to take maximum advantage of the opportunities that we see in countries with favourable conditions but also in difficult conditions, which require persistence and patient work.

II. On the “End of neoliberalism”

In May, an article by cde TC was posted on the ISA website which claimed (in the title) that what we were seeing was the “end of neoliberalism” (Bernie Sanders and the End of neoliberalism, 13.05.2020). The expression “demise of neoliberalism” was used in the text and the prediction of a return to a new Keynesianism similar to that of the 1930s was made. In the words of cde TC:

“The new reality will look more like the 1930s with even deeper social crises and political polarization… …There is no basis for return to postwar structural reforms; this will be more like the Keynesianism of the ‘30s which only ameliorated but did not resolve the crisis”.

These positions were further developed in two more documents, in the “Update to World Perspectives” approved by the majority of the IC (IBM #8, 03.06.2020) and in the “Reply to Greek IC Members on the End of the Neoliberal Era, Consciousness and Perspectives for Struggle” by Eric B and TC (IMB #10, 15.07.2020).

The comrades who support the idea of the “end of neoliberalism” and of a new Keynesianism consider the three documents to be supplementary to each other (they have explicitly stated so) – in other words together they comprise one position. We think that the positions expressed in these three documents are one-sided and that this has been manifested in the course of the debate that has taken place.

The end of an epoch

The IC majority comrades base their position of the “end of neoliberalism” on the argument that what we are seeing is the end of an epoch, the main characteristic of which was globalization. This is now in retreat, with global trade and investment falling drastically, as a result of the trade wars of the US particularly with China, but especially due to the Covid-19 pandemic of this year.

These are, of course, correct points we all agree with. However, as the comrades from Greece, the Spanish state and Germany have explained in their written interventions, neoliberalism is not simply about globalization. The epoch of neoliberalism, the last 30-40 years, are also characterized by other key features:

Financialization – i.e. the domination of the global economy by the financial markets to an extent which was never seen before.

Free movement of capital again to an extent never seen before, based essentially on the qualitatively new characteristic of the elimination of currency controls which used to be the norm in the post WWII period and up to the 1980s.

Deregulation of the internal market, i.e. mass privatizations of the public utilities, public companies and public/social services.

Deregulation of the labor market – the mass replacement of permanent jobs by precarious work, 0-hour contracts, slashing of wages and services, destruction of trade union rights.

Export oriented economies – national economies on a global scale are export-oriented to a much greater degree than ever before in history. On average, globally, about 25% of the GDP is based on exports, compared to about 5% until the middle of the 19th century, or around 10% in the 1970s.

While there will be countervailing factors and features in the future, under the impact of events and new crises, none of the above features of neoliberalism can be expected to be ended in the new period we have entered. We believe that no one disagrees with this position. Despite this, these features of neoliberalism were never taken into account or described in the initial article by TC or in the “Update to World Perspectives”. No attempt to define what neoliberalism is and why it’s coming to an end was made in either in TC’s article or in the “Update.” The supposed end of neoliberalism was simply stated as a matter of fact.

In the “Reply to the Greek IC…” by cdes EB and TC but also in the course of the debate, the cdes conceded that austerity, attacks on living standards, democratic and trade union rights will continue, financialization, privatisations, deregulation of the labour markets will continue, economies will remain export-oriented, etc.

But then the question is: if all these features will continue, why speak of “the end of neoliberalism”?

“De-globalization”, decoupling, relocation

The main argument behind the “end of neoliberalism” is the fact that globalization is in a phase of retreat. As mentioned above, in the past years and particularly in 2020, global trade and investment fell back rapidly. But this is not something that can continue indefinitely. These processes are indeed taking place at the present time and that is an important change that has to be taken into account. But the dramatic fall that we are experiencing in 2020 will not last forever – global investment and trade, will find a new balancing point and then start to grow again. Globalization cannot be eradicated. It can speed up and slow down but it cannot stop. Capitalism cannot return to a “self-sufficient” national state. Globalisation is an organic part of capitalist development. This was understood and explained by Marx from the middle of the 19th century, and it is no accident that many analysts of the ruling class accept Marx as the “father of globalization”.

According to the latest report from the World Trade Organisation, global trade will be on the rise from 2021 onwards compared to 2020, with an expected 7.2% increase next year. Τhis is natural (the % may differ) after the drastic fall of 2020 []. The same will be true for global investment (Foreign Direct Investment – FDI).

Geopolitical tensions and the trade war, particularly between the US and China are important features of the new world relations as was explained in the World Perspectives document from the Congress. And these will continue. However, it is important to note that at the same time as the trade war between the US and China is in progress, new trade agreements are concluded between China and other countries, including some of the US’s allies. One such example is the recent agreement on Geographical Indications (GIs) between the EU and China, described as a “land mark agreement” by the European Commission itself, on 14.09.2020. []

Relocation and disruptions of supply chains are important factors in the situation. But relocation is not, fundamentally, taking place from China back to the US (with some exceptions of military or strategic considerations) but essentially from China to other Asian countries and less so to L. America. The conclusion that many multinationals have drawn from the collapse of the supply chains during the pandemic, is not the need to relocate to US or to Europe but to have alternative supply chains (mainly in Asia).

Trade war, relocation and decoupling are important features of the epoch. But is it proposed that we’ll end up into two distinct trade blocs on the globe? That decoupling will take “absolute” dimensions similar to what existed until the 1970s between the Soviet bloc and the West? There’s no ground for such conclusions, at least at this stage. China is valuable to western multinationals not only as a huge market of nearly 1.5 billion consumers, but also as a crucial part of supply chains for the foreseeable future.

In an article in Asian Times titled “US-China Decoupling: A Reality Check” [] we read:

“The US doesn’t have the engineers to make a smartphone. In fact, we don’t have enough engineers to expand US manufacturing output by any significant margin. As of 2015, China graduated six times as many engineers as the United States… That was five years ago.”

Apple CEO, Tim Cook explains why Apple makes I-phones in China:

“China has moved into very advanced manufacturing, so you find in China the intersection of craftsman kind of skill, and sophisticated robotics… The thing that most people focus on, if they’re a foreigner coming to China, is the size of the market… But for us, the number one attraction is the quality of the people… we want to make things on the scale of hundreds of millions, and we want the quality level of zero defects… The tooling and working with the materials that we do, are state of the art… In the US you could have a meeting of tooling engineers and I’m not sure we could fill the room. In China you could fill multiple football fields”.

In the given economic conjuncture, trade wars and decoupling, most likely will be of a controlled, prolonged character, punctuated by periods of agreements as well as escalation of tensions – but not of the character that protectionism took after the 1929 crash.

Also, we should not confuse decoupling as meaning, de facto, further massive falls in global trade. Theoretically, the decoupling of US and Chinese economies can reach a high degree (after a prolonged period of integration) and move in the direction of creating two or more distinct trading blocs globally, but international trade can continue to rise within the blocs. This was the case in the post-war period between the Soviet block and the West. Despite “decoupling” in those conditions having reached “extreme” dimensions, that was the period with the highest increase in global wealth in the history of capitalism (and actually humanity) but also it was the period with the highest rates of growth in global trade in capitalist history. This of course cannot happen today, but it is useful to have such analogies in mind.

The fastest growth in global trade –a key feature of globalization– was in the period after WWII when its rate of growth was nearly twice that of the previous great period of globalization, 1850 to 1913. And actually, in the “epoch of neoliberalism”, between 1980 and 2008, global trade was growing at a slower rate, not only in relation to the post WWII period, but also in relation to 1850-1913.

Global trade has been in relative retreat (a decline in the rate of growth) in the past 3-4 decades. This decline in growth accelerated after the Great Recession of 2008-9. Due to the pandemic, global trade is estimated to drop by around 20% this year according to the WTO, but next year it is going to start rising again, because this decline is mainly a result of the restrictions imposed by the lock downs. It will begin to grow again, after the lockdowns are over but at a slower average pace than before.

In relative terms, as a percentage of gdp, the value of global exports has grown from 5.51% in 1850 to 13.9% in 1974, to 25.11% in 2011 and it’s been stable with small variations, around 25% in the past 10 years.

As mentioned above, this 25% of exports as a percentage of gdp makes it impossible for the capitalist economies to retreat to national borders without facing a massive collapse. For this reason, we should not expect the same kind of protectionism that we saw in the 1930s.

So, when we speak about “de-globalization”, in the sense of a decline in global trade and global investment, we should have in mind that these factors do not have an absolute character but only a relative one. What is described as “de-globalization” is in essence a certain reconfiguration/realignment of globalization that is taking place, which like all transitions will be a factor of instability and new crises for a sick global capitalism.

On Keynesianism

In their “Reply to Greek IC Members …” comrades EB and TC say that they never used the expression that we are entering a Keynesian era. The truth is that while in their material they didn’t use the word “era”, the content of what they say implies precisely that.

In para. 49 of the “World Perspectives Update” the cdes refer to a “a new variant of Keynesianism”, arguing:

“The new variant of Keynesianism will not correspond to the expectations of the masses but rather raise further demands from below”.

Cde TC, in his article, refers to the “end of neoliberalism” and the “demise of neoliberalism” and argues that this new Keynesianism will be more like the Keynesianism of the 1930s. He also uses expressions like “we are entering a new era” and “a new historical phase”. The issue of a Keynesian “era”, therefore, is not a question of the words used but one of content and substance.

In this discussion, the cdes who disagree with the position of the “end of neoliberalism” have also argued that the Keynesian measures which are currently being taken cannot be sustained for long.

The central idea of Keynesianism is to use the government budget to increase aggregate demand in the economy, through public investment, the provision of jobs to the unemployed and by increasing, up to a point, wages and welfare benefits. This is what Roosevelt did in the US in the 1930s and this is what took place on a far larger scale internationally but particularly in Europe after World War II and until the 1970s.

But Keynesian policies push in the direction of budget deficits and public debts (which, under certain conditions, can lead to inflationary pressures). Then it has to be followed by austerity, i.e. counter- Keynesian measures. Therefore, essentially Keynesianism can be applied in a (relatively) sustained manner only in conditions in which either there are no major public debts or in which there are high rates of economic growth which enable the creation of budget surpluses to eliminate the deficits and decrease the debts.

In the course of the discussion the example of the US at the time of the 1929 crash was cited. Then, the public debt of the US was at the level of 16% of the GDP. But today the US entered 2020 with the debt in the region of 100% and is expected to reach 130% by the end of the year. This is not to mention countries like Greece where the debt will be above 200% or Italy which is galloping to 160% of the GDP and others who are on the verge of default such as Argentina.

The IMF is estimating that by the end of 2020 the average public debt in the industrially-developed countries (of the OECD) will be in the region of 130%. Budget deficits in the course of 2020 in most industrially developed countries will be in the region of 10 to 20% and in some cases, like in the US even higher.

These imply that Keynesian policies cannot be applied for a prolonged period of time.  The ruling class, even in the rich industrial countries will have to move quickly from Keynesian expansion to expenditure cuts. And if this is the picture of the rich industrial countries, what hope is there for the so- called “developing countries” to seriously apply Keynesian policies for any sustained period?

It is true that in the course of the discussion, the comrades conceded that Keynesian policies will essentially apply only to rich countries and that even in those it will be temporary. But if that is true, then how can we speak of a fundamental or qualitative shift from neoliberalism to (some version) of Keynesianism and why do the comrades insist that this new epoch has to be described in the way they describe it?

We have entered a new epoch indeed – an epoch of deep, prolonged crisis of global capitalism. But this does not mean the “end of neoliberalism”, nor the beginning of a “Keynesian variant”.

Throughout the history of neoliberalism, state intervention has often been employed as part of the neoliberal framework, from bailing out banks to providing subsidies to private industries to massive deficit-funding the military in the case of the US. As has been shown also by cde Georg in his document, not every form of state intervention is Keynesian. Furthermore, state intervention should not be confused with “state capitalism” – but this is another issue that cannot be developed here.

Not an academic discussion – neoliberalism in practice

As mentioned in the course of the debates so far, this discussion is not academic, it’s not about scoring points and it’s not just “theoretical”. It is very important to see that debate and discussions are necessary in order to grapple with these important new processes and developments. Let’s have a look at some examples of what the ruling classes are doing globally, in practice, today.

India was one of the examples used in the debate. An editorial in “The Economist”, on May 18th, titled “Let them eat structural reform”, explains that at the same time as applying Keynesian policies, a large number of Indian States (9 out of 35 at the time of the article) are applying savage neoliberal policies to a hair-raising degree. In these states, weekly hours of work were increased from 48 to 72! In other words, Indian workers will have to work 12 hours a day 6 days a week. This of course is taking them back to the beginning of the 19th century. But as if this was not enough, capitalists who make new investments are offered 3 years free of taxation. And on top of this they will be exempted from any checks by labor inspection!

South and East European countries were also used to provide examples (though there are differences from country to country) of how at the same time as applying Keynesian measures, mass neoliberal policies were also applied. In other words, despite the big stimulus provided by the EU and the ECB, particularly to the South, the ruling classes were using the pandemic as an opportunity to attack living standards, further deregulate the labour market, apply anti-union and anti-strike legislation, limit the right to demonstrate, attack Education, divert funds massively to the private health sector further undermining public Health Systems, further advancing privatisations, further attacking the environment and so on.

A quick look at the ISA website and FB page will provide many examples similar to the above.

In Brazil, our cdes explain that the Bolsonaro government is going ahead with the privatization of the water supply, of public transport and of the ports.

In Argentina, comrade Marcos A. explains that Alberto Fernandez who is supposed to be a “progressive” president coming from the Peronist tradition, is stopping payments to workers but continues subsidies to private companies. Those who will be more severely affected will be the pensioners.

On Indonesia, a quote from “Redfish”, about the demonstrations there (posted on the FB page by cde Jeremy T, 10.10.2020) reads:

“Indonesian students and workers protested into the night and clashed with the police during a mass strike against a neoliberal Omnibus Bill… Protesters have vowed to fight the bill which when implemented would push through a wide range of policies serving business interests, including deregulations for investors, erosion of workers’rights and weakening environmental safeguards”.

On a broader scale, cde Vlad B posted (16.10.2020) an important summary of IMF policies in relation to the countries (80 in total) which were forced to take loans from it to tackle the pandemic. According to the European Network on Debt and Development (Eurodad, development):

• 72 countries are to begin a process of fiscal consolidation as early as 2021.

• 80 countries implemented Covid-19 response packages amounting to 2.2% of GDP in 2020.

• But between 2021 and 2023, these countries will implement austerity measures worth on average 3.8% of GDP.

• At least 41 countries will be left with below pre-crisis public expenditure levels.

• For 46 countries for which data is available, a decade of austerity measures will reduce public expenditures from 25.7% to 23 % of GDP between 2020 and 2030.

In short, the IMF is proposing massive neoliberal attacks from next year onwards. It is the same IMF which in the course of 2020 is advocating Keynesian measures (including nationalisations)!

The bourgeois press offers an abundance of similar evidence. An article by the Financial Times (14.06.2020) titled “Poverty and populism put Latin America at the centre of pandemic” refers to Ecuador:

“The president says the budget deficit will be at least $12bn this year, around 12% of GDP. To help fill the gap, his government has announced $4bn of spending cuts, including scrapping state-owned companies, liquidating the national airline and asking government employees and teachers to reduce their hours and pay”.

Neoliberal policies are not restricted to the neo-colonial countries.

In Australia, reports (October 6) that because of the pandemic, the government spent about $125 billion Australian dollars as stimulus to the economy (25 of which were financing the unemployed under the programme “job seeker”). But in the new budget discussed at the beginning of October:

• tax reductions for businesses to the level of 31 bn dollars were voted through

• personal income tax was cut to the level of 18 billion dollars

• only 14 billion were directed to infrastructure Investments

• the government will reduce unemployment benefits by 50% over the next 2 years!

The article concludes:

“The flirtation with big spending Keynesianism was exactly that: a flirtation and a brief one at that”.

Last but not least is the example of Sweden.

The “Red-Green” government in Sweden plans to carry out the biggest attack on the working class in 100 years “in silence” when people’s concerns and attention are turned in the direction of the pandemic. The present government can be described as the most neoliberal government ever! It rests on the January agreement of 73 points, which attack labor law, attack tenants’ rights, introducing “market rents”, attack the right to strike and worsens job security. In the January 73 points, the Red-Green alliance has agreed that the employment protection act, LAS, will be amended from 2021 onwards. The aim of this will be to make it easier to fire workers. Swedish ISA, Rättvisepartiet Socialisterna, wrote about the January agreement.

“The agreement that the Social Democrats have concluded with the Center Party, the Liberals and the Green Party is a shameful document. The political direction that has been set out is extremely neoliberal and antiworker. Now it is a matter of immediately mobilizing the greatest opposition possible against the right-wing policies that are being announced”.

Sweden of course is not an “accidental” country. It is highly developed industrially, rich, “famous” for its welfare state and… under a “Red-Green alliance” (of Social Democrats and Greens)!

The picture is more than clear: neoliberalism continues more or less everywhere, despite being in the midst of the pandemic.

III. Debate Procedures

There is another important side to this discussion: the procedures that have been followed.

The position on “the end of neoliberalism” contradicted the Congress decisions (see the proposed amendments by the Greek cdes “Contribution by Greek IC-members to WP discussion”, IMB #8, pages 23 – 30) but TC’s article was posted without prior discussion on the IE or IC. In this article, the “end of neoliberalism” was declared without any explanation of what is neoliberalism and why it ends. The Greek comrades’ proposal for more time to discuss the issue, to understand the differences and to prepare detailed amendments for the “world perspectives update”, was rejected. Comrade Andros P. asked for the right to write an article on the ISA website defending different views from TC’s, but this was rejected. Cde Vlad B. did actually write an article supporting different views from TC’s and asked for it to be published on the International’s website, but this was also rejected. The International Editorial Board (IEB) refused to publish VB’s article arguing that the “world perspectives update” was not posted on the website either. But VB was putting an alternative view to the “end of neoliberalism” arguments, already posted on the website.

In the process of the discussion on the “end of neoliberalism” comrades moved on to another issue: They turned attention away from the “end of neoliberalism” and “Keynesianism” to the issue of “class consciousness”, “class struggle” and “pessimism” from comrades who did not agree with them. On a number of occasions comrades argued that the issue of “the end of neoliberalism” was not actually the most important thing, what was important was the issue of class struggle and class consciousness.

But if this is the case then why did the comrades propose a “debate on Neoliberalism?”

Having taken note of these points, we can move to make a few comments on the question of class struggle and class consciousness.

IV. Class struggle and class consciousness

In their document, EB and TC criticize the Greek IC comrades for writing that “The coronavirus is a complicating factor compared to 2008-9”. They conclude that:

“… the approach outlined in the document of the Greek IC comrades, in particular their apparent view that the situation now is more complicated than in ‘08-’09, is based on an underestimation of the scale of the crisis now unfolding, the impact this will have on consciousness of the working class and the youth and the favorable features of consciousness as it emerges from the last period”.

Nothing is further from the truth! The comrades here are, actually, changing the subject under discussion. The Greek IC comrades were criticised of being pessimistic on quite a few occasions.

This accusation was based, supposedly, on the defeats that had taken place in Greece in the past years. The Greek comrades answered these allegations explaining that they are unfounded. This method of argumentation is flawed because it seeks to divert the discussion from the main point under debate, to another one, i.e. whether the Greek cdes are “pessimists” or not… and to the reasons for this supposed pessimism.

The truth is that the pandemic is indeed a complicating factor. How could it be otherwise? How could such a powerful factor in the objective situation not influence developments in one direction or another?

Under some conditions the pandemic can push class struggle and consciousness forward but under other conditions it can have the opposite effect! There are countries where governments have failed to tackle the pandemic in an “efficient” way (i.e. less badly than others) and as a result we have mass anger against them. On the other hand, we have countries in which the governments have been relatively successful in checking the pandemic and have gained in popular support. The most recent example is the elections in New Zealand.

In the US there is mass anger against Trump. But in continental Europe (excluding the UK) the situation is different. The fact that the European Union has provided 750 billion Euros to finance different member States (particularly the South) to tackle the pandemic, with more than 50% of this being in the form of grants, creates a different situation. In the 2008-9-10 crisis, support for the EU collapsed in Southern Europe, but this is not the case now. Nine months after the pandemic became a factor and 8 months after the lockdowns began, there have been no major social upheavals in EU countries. A number of strikes have taken place but nothing that can be considered as exceptional and nothing that can correspond to the depth of the crisis that we are faced with. Compare this to what happened in southern Europe in the aftermath of the crisis of 2008-9, when it was one of the epicenters of major revolutionary struggles and revolts.

Does the fact that the corona virus can be a complicating factor mean that consciousness and struggle will not develop against the system in the next period? Absolutely not! What all the above mean however is that the speed of events can be different in different parts of the planet, in some cases it can vary widely from what we had after 2008-9-10, and this is partly because the pandemic complicates developments.

Class struggle and consciousness are not solely determined by the objective situation, they are also determined by the leadership of the working class (as a secondary, but very important factor). Unfortunately, the role of the parties of the Left (and that of the TU leaderships) is essentially missing from the world perspectives update.

The explanation that the cdes provided for such deficiencies is that the document is only an update and not a complete document on world perspectives. But this update is around twenty (20) A4 pages – it is actually of a similar size to the word perspective document voted for at our Congress last February. There is no justification for having such major imbalances in any document particularly when it is of such length.

The fact is that the state of the parties of the Left (which is also reflected in the trade unions) is a very negative factor in the objective situation today. It seems that there is ground to argue, and this alone should perhaps be a matter of discussion in our ranks, that the cycle of the development of new left formations (NLF) that started in the 1990s after the collapse of Stalinism, is coming to some kind of a conclusion, without clear signs as yet about how and when a new generation of NLFs will re-emerge. There seems to be a potential for positive developments in North and South America, but the picture is still unclear.

The idea that new mass parties of the Left can come and go every few years is flawed. It can take a long time before a new mass formation comes into being after the betrayal/capitulation of a previous one. Perhaps, the best example in relation to this, today, is Italy. Nearly 15 years after the crisis which devastated Rifondazione Comunista (PRC) there is still no sign of any viable new Left developing in Italy. In Greece, more than 5 years after SYRIZA’s capitulation there are no signs of any revival of a NLF in the horizon as yet. These processes, however, can be speeded up by international developments.

Unfortunately, the lack of reference to the leadership of the working class in the “Update” is coupled with the lack of sufficient attention to the development of nationalist parties, Bonapartism, right wing populism and the far right. This is also a serious omission as in many countries these are now a factor – Spain, Italy, Portugal, Germany, Brazil, US, Philippines, India, Russia, Poland, Hungary, Turkey, etc. If the working class and the popular masses have no leadership coming from the Left then they can turn to the right or be defeated or both.

An oversimplified approach

The “World Perspectives Update” has an oversimplified approach to the issue of perspectives, with the obvious aim to stress only the optimistic aspects of the objective situation. This is not only one-sided and flawed, it can be dangerous. Let’s look at some examples from the “Update”.

Paragraph 2: “The global working class, in its response to the pandemic, has begun to demonstrate that it is capable of leading humanity to a new stage of development, once the current parasitic, inefficient and degenerate ruling class is forced off the scene of history.” (our emphasis).

Paragraph 27 predicts: “…mass struggles by the working class on every continent and a radical shift in the consciousness of hundreds of millions of working-class people to search for an alternative to capitalism and towards the need for a socialist transformation of society”.

Paragraph 81: “The pandemic and lockdowns have had a profound impact on consciousness. For tens of millions of working-class people, it’s become abundantly clear that it is they who really make the economy run.”

These are obvious exaggerations. Of course, the class struggle never stops. And there are very important movements taking place now, globally, as mentioned at the beginning – whether this is the BLM in the US, the youth revolt in Nigeria, South Africa, developments in a number of Latin American countries particularly Bolivia and Chile, Thailand, Indonesia, Poland, etc. But they do not demonstrate that “the global working class… is capable of leading humanity to a new stage of development” or that hundreds of millions “search for an alternative to capitalism and towards the need for a socialist transformation”. Consciousness has not developed to this level as yet. Also, they are not “in response to the pandemic” as the document states (although there is of course anger related to the pandemic in the background) but a result of the various manifestations of the general crisis of capitalism – neoliberal attacks, police repression, suppression of democratic rights etc. Actually, the pandemic has largely cut across the huge wave of global struggle and revolutionary explosions that swept the planet in 2019. Often, the explosions we see now (which up until now are on a lower level than in 2019 and with exceptions, like the US) are a response of the masses to the neoliberal policies and not, as the “Update” states (paragraph 49) to “the new variant of Keynesianism” which will “raise further demands from below”.

In a certain sense, this should have never been an issue of debate because we all agree on the importance of the struggles that are taking place. The main thing is to intervene in them, where we can, and build our forces. The debate becomes inevitable, however, when the great events that we are living through are approached in an exaggerated or unbalanced manner. Overoptimism can be equally dangerous as pessimism. It can lead to the demoralization of the membership and to the burnout of the cadre if our organizations are not able to understand the difficulties and the dangers in a given situation. Under some conditions, this could lead to a very serious crisis in our organizations.

The example of Hong Kong

Take for example Hong Kong. The movement in Hong Kong has been defeated. Any organization that was not able to predict the possibility of defeat would have ended up in a major crisis. Our comrades, of course, always warned about the dangers of a defeat. But even if we correctly warn in advance about the dangers of a retreat or of a defeat, this does not mean that we are in a position to avoid the costs of the defeat. According to the evidence provided by the comrades in HK, the mood in the mass movement is in favor of American imperialism as a “savior” from the Chinese dictatorship and suppression. What will be the repercussions of the defeat in Hong Kong on mainland China and Taiwan? This is something that we should discuss. Is it possible that despite the defeat in Hong Kong we can expect mass struggles in China which could revive the movement in Hong Kong? Or will the developments in Hong Kong create a feeling of loss of hope in mainland China? There are no predetermined answers to these questions, they have to be discussed with our comrades on the ground and the whole ISA with an open mind.

This example is used to indicate that such developments can take place when there is no leadership. Then the ground is open to nationalism, right wing populism and the far right.

Southern Europe and the revolutions in the Middle East

This is the experience from S. Europe which, as mentioned above, was one of the epicenters of revolutionary struggle in the aftermath of the 2008-9 crisis but also throughout the 20th century.

That crisis led to the development of the New Left in a number of countries – the most notable being SYRIZA and Podemos. These parties provided inspiration to the masses for a period of time, but of course the end result was defeat for the reasons that we all know very well. This pushed the mass movements into retreat, out of which they have not recovered yet although there are differences from country to country with Italy and Greece being the worse compared to Portugal and Spain. The picture in Cyprus is similar to Greece and Italy.

The other epicenter in the aftermath of 2010 was of course the Middle East and the revolutions that shook the area in the course of 2011 and after. They were mighty revolutions of tens of millions. But they had no leadership. The defeats in Egypt and particularly Syria and Libya have been devastating. Tens of thousands of deaths, hundreds of thousands of refugees, devastation of the lives of millions, civil war, dictatorship, struggle for day to day survival – an extremely difficult situation for left-wing activists and revolutionaries.

But such complications, difficulties and dangers in the objective situation, are not taken up seriously in the “Update”. It has a kind of linear approach which says that the crisis means struggle, struggle means rising consciousness and that this provides enormous opportunities everywhere.

This, unfortunately is not the case, in the sense that there are major differences from country to country and from region to region. And any document, whether an update or not, has to take these into consideration.

As mentioned already the situation in the US is very different from Europe and the situation in northern Europe is different from southern Europe, just to cite an example. But even in the countries with the most developed movements, we have to warn about the dangers that are entailed in the situation at the same time as stressing the opportunities that are present.

On another point in relation to consciousness, cdes EB and TC write the following:

“The defeats in Greece and elsewhere do not mean that consciousness return to the point where it started”

This is a serious mistake. Consciousness can retreat much more than that. It can go further away from where it started. Doesn’t the collapse of Stalinism present a clear example of this on a global scale? Of course, the working class and the youth will be back – but at different speeds. In countries where the mass movement experienced serious defeats in the previous period, it will take a while for it to return. It is not correct to expect that it will come back automatically just because of the new crisis.

The masses know “neoliberalism”

It was mentioned before that this discussion is not academic or abstract. There is another aspect to this: the mass movements in many countries know the basic features of neoliberalism – they identify it with austerity, and rightly so. If at the time of the new neoliberal attacks, that we see in so many countries, our organizations proclaim the end of neoliberalism, they will find themselves in a ridiculous situation trying to argue something that the masses simply cannot understand. The working class is not interested in discussions about the rate of fall of global trade and FDI or statistics about globalisation. This is not what neoliberalism means to them – to the masses, neoliberalism means attacks and these will continue.

In addition, the cdes have said in several instances that this debate should not be about “semantics” and “definitions” – as if the “end of neoliberalism” is some kind of an academic exercise. Correct understanding matters, when deciding how to describe the end of the framework that has defined the last 30 or more years of capitalism. Much more so when these are linked to the lives and the consciousness of millions.

In conclusion

There is no question that we are faced with a huge crisis of the capitalist system and of neoliberalism. It is a long-term crisis. It’s an epoch of crisis. And this will provide big opportunities for our revolutionary ideas. In the period we are passing through, the ability of the ISA to take advantage of such opportunities is best revealed by the work of our US section and particularly the huge achievement of electing Kshama and building our forces in Seattle. There are valuable lessons for all sections in this work.

We are confident in the ability of the working class to rise up even without adequate leadership and affect the course of events as we saw in the case of Chile in 2019, in the Yellow Vest movement in France, etc, etc. But we don’t need a superficial, simplistic over-optimism, to be able to take advantage of these opportunities. We don’t need to underestimate the inherent difficulties and dangers in the situation. We should not solely select what is positive from the objective situation to put forward in our perspective documents but should also be clear about the difficulties in front of us. We could emphasize the favorable aspects of perspectives, in our agitation or propaganda – and even then, within limits. But perspectives have to be carefully grounded (and debated and corrected) in order to orient correctly ISA. We have to show the opportunities and potential as accurately as possible, given the objective situation but also our small forces. We need to be concrete – always. We have to discuss the dangers and the complications that exist and the differences from region to region. It is not a uniform process but a process full of uneven and unpredictable new factors that will affect the speed of events and the tempo of the struggle. Only in this way can we train our cadre correctly and can consolidate and educate the new members. And only in this way can we take full advantage of the possibilities that are open to us.

October 29, 2020


Andros Payiatsos – Greek section Executive Committee, International Executive

Eleni Mitsou – Greek section Executive Committee, International Executive

Alan Jones – US section Executive Committee

Kristofer Lundberg – Swedish section Executive Committee

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