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The revolution developing in the Stalinist states will clean out the bureaucracy and introduce workers'
democracy and the participation of the working class at all levels of administration, industry and the state Poland is in reality a mirror of the general crisis facing the Stalinist states. The bureaucracies have become an absolute fetter on any further development. Their narrow nationalism has resulted in 'socialist' Russia and border battles between 'socialist' China, and the Balkanisation of Eastern a genuine workers' democracy, Europe. Under these countries would come together as a Socialist Federation, commonly dove-tailing their economies to the needs of the populations.
Yet what is clear is that the bureaucracies will not their power, privileges and income without a struggle. As Trotsky once explained: 'No devil ever yet voluntarily cut off his own claws. The Soviet bureaucracy will not give up its position without a fight. The development leads obviously to the road of revolution."
The revolution developing in the Stalinist states will not be to return back to the horrors of capitalism, but will be a political revolution on the lines of Hungary 1956. Its aim will be to clean out the bureaucracy and introduce workers' democracy and the participation of the working class at all levels of administration, industry and the state. The establishment of a genuine workers' democracy in the USSR would sound the death knell of all the Stalinist dictatorships and trigger off revolutionary waves in the capitalist West. A Socialist United States of Europe leading to a Socialist. World Federation-the aim of Lenin and the Bolsheviks-would usher in a new epoch of super-abundance for the world's masses.
Within 10 to 15 years, a world plan of production would completely transform the planet. As society progressed towards socialism and a classless society the state, together with all the left-overs of capitalism, would wither away, giving way to the simple administration of things. A harmonious socialist society, using the colossal advantages of modern sciencę, would result in an unparalleled increase in the productive forces, and allow society to give, in the works of Marx, 'from each according to his abilities, to each according to his needs". As mankind developed to undreamed of heights, capitalism and Stalinism would be relegated to their rightful place-the dustbin of history. O 22
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INTERNATIONAL NOTES Assembly line workers at Ford's Brazilian car factory voting at a mass meeting in July 1981 during their strike against sackings. This photograph is banned from publication in Brazil. New workers'
party takes shape On 15 November the first reasonably 'free' elections since the May 1964 military coup are scheduled to be held in Brazil. These elections will take place against a background of mounting economic crisis and provide an indication of the support which the Workers Party (PT) has been able to gather in the four years since its inception.
23 PHOTO: Popperfoto . Brazil, like the rest of Latin America, has been hit hard by the world economic crisis. It had been one of the few semi-colonial countries to undergo a massive industrialisation during the post-war boom years, a development which was mainly financed by international borrowing. but once the world capitalist economy entered into crisis Brazil found it harder and harder to export its products and earn enough to pay off its debts and buy imports. The Brazilian capitalists were forced to try to cut workers' living standards and borrow more simply to pay off old debts.
This year the situation has worsened. In mid- August President Joao Figueiredo announced that Brazil's foreign debt amounted to $ 80 billion, a massive increase since March when the Brazilian Central Bank estimated it at $ 62.9 billion. By early August the Brazilian Cruzeiro had already been devalued 22 times this year and lost 45.76% of its New Year value, and 92.25% of its August 1981 value. New devaluations were occurring every week in July. Exports, which had increased on average 17% each
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year between 1974 and 1981 in the first half of 1982.
While the past decades have seen giant developments of industry the Brazilian workers have not shared in the bonanza. Between the 1964 military coup and 1975 real industrial wages fell by 15%. In 1970 the richest 5% in the urban areas got 30% of urban income, by 1980 they got 34.7%, but the share of the poorest 50% went down from 16% to 13.1%. It was even worse in the rural areas where over a third of the population live. There the share of the richest 1% increased from 10.5% to 29.3% while the share of the poorest 50% went down from 22.4% to 14.9%.
One third of Brazil's 40 million economically active people earn only the £55 a month minimum wage. In 1977 trade unionists discovered that since 1970 the government had cut the real value of the minimum wage by 34.1% by fiddling the cost of living index. Now the trade unions estimate that a realistic minimum wage would have to be f150 a month.
From 1964 the military regime used physical force and repressive laws to suppress workers' struggles. But the late 1970s saw a tremendous rebirth of the labour movement which forced the military to retreat and introduce reforms in an attempt to prevent revolution. This revival was centred at first in manufacturing, which accounts for 16.5% of the economy, particularly in the so-called 'ABC' region of Greater Sao Paulo, the industrial areas of Santo Andre, Sao Bernardo and Sao Caetano.
For two years from May 1978 this area was shaken by mass strikes involving hundreds of thousands of workers, first metal and auto workers but later textile workers, transport workers and teachers also. This movement culminated in the 41-day, 350,000-strong auto workers' strike in early 1980, which was partially defeated after the military arrested and removed from office the strike leaders.
From the beginning this revival of the labour movement took both an industrial and political character. Soon after the May 1978 strikes the militant unions in the 'ABC' region began to prepare the launch of a new working class party to be called the Workers Party (PT). 'Lula'
(Luis Inacio da Silva, the then President of the
Sao Bernardo metalworkers and now PT Presi-
dent) stated then that he saw the PT as a party "without bosses, without foremen and without
sell-outs. A party that would fight to defend the
economic and democratic rights of the workers
and for socialism." In December 1978 the
'Movement for the Workers Party' was formed
and during the next fourteen months a series
of conferences worked out a 'Charter or Prin-
ciples', a 'Political Declaration' and a 'Political
Platform' all of which were very radical.
The July 1979 'Charter of Principles' states
that the PT "seeks to win political power and
establish a workers' government based on
24
representative bodies created by the working masses themselves in order to have fundamental direct democracy." The October 1979 'Political Declaration' called for the "formation of a free, democratic and sovereign national Constituent Assembly" and "a workers' government". The February 1980 'Political Platform' contained various economic demands and calls for the nationalisation of most of the economy.
However by the time of the February 1980 meeting it had become clear that concerted attempts were being made to 'moderate' the PT and slow down its leftward development. As the PT became more popular some MPs and many councillors from the 'official' opposition party which had been allowed to exist under the dictatorship joined the new party and were given voting rights, without having to be elected as delegates, at the PT's First National Conference in May 1980. About this time as well the Socialist International also began to pay more attention to the PT.
For a number of years now the Socialist International's leadership has been actively intervening in Latin America, attempting to restrain the workers' movement in the same way that the German and Swedish social democrat leaders played a key role in moving the Spanish Socialist Party to the right in the mid-1970s. For some time the Socialist International has had links in Brazil with the PMDB (the old 'official' opposition) and the PDT (Democratic Labour Party), which despite its name has no real basis in the working class. As always the Socialist International leadership's method of gaining influence is by gradually drawing leaders of parties towards it, thus the Socialist International Bureau invited Lula personally, not the party he leads, to the November
1980 SI Congress.
The first draft 'Political Platform' presented
to the PT's February 1980 meeting by some
academics was overturned by delegates as be. ing too moderate. But at the PT's First Na-
tional Conference in May 1980 all references to
socialism and a workers' government were
removed. However this setback did not last long
as the crisis in Brazil intensified and the PT
grew from 26,000 members in May 1980 to over
200,000 members in September 1981.
Despite the defeat of the April-May 1980
autoworkers' strike the Brazilian labour move-
ment is still in turmoil, a situation which, along
with its rapid growth in membership, is mak-
ing it extremely difficult for those trying to
'moderate' the PT.
Central to the radicalisation of the Brazilian
working class has been the questions of the
strengthening and democratising its organisa-
tions and the struggle against the military
regime. These issues were thrashed out at the
21 August 1980 'First National Conference of
the Working Class' (CONFLAT 1), attended by
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Crowds smash the windows of the Mercantile Bank in Sao Paulo's banking district during a bank workers' strike in September 1979. Brazil, like other Latin American countries, has crippling debts with the international banks. 5,247 delegates representing 1,800 Trade Unions. At this Conference the PT argued for the rapid formation of a democratic trade union centre, the CUT, and the organisation of a general strike against the regime's economic policies. The opposition to the PT came from the 'Unidade Sindical', an alliance of 'pelegos' (the popular name for pro-government bureaucrats), the pro-Moscow Communist Party (PCB), the former Maoist CP (PC do B) and the former guerrillaist MR-8. While the PT won a majority for the call for a general strike the voting for an executive committee was split almost equally behind two lists of candidates, with the pelegoheaded list having a slight majority. At the PT's Founding Congress in September 1981 the perspective of organising a general strike against the regime was re-affirmed. This Congress came out against any 'social pact' with the regime and for the PT to put forward its own independent list of candidates in the coming elections, although the question of alliances with other parties, including the procapitalist PMDB, was not finally resolved. The presence at this Congress of many diplomats (including the British Ambassador!), foreign social democrats and christian democrats showed the growing importance of the PT and the mounting pressure which its leaders are com- 25 TANCO MERCANTI. DE SÃO PAULO S.A PHOTO: Popperfoto ing under to moderate their programme and link up with the other, pro-capitalist, opposition parties.
Lula, the Party President, summed up the Congress by saying that "we are marching towards socialism, the type of socialism that suits us. We know what doesn't suit us is a socialism that seeks palliative measures for the social evils of capitalism. We also know that we do not want a bureaucratic socialism which serves the new castes of technocrats and privileged more than the workers and the people. The socialism we want must be the emancipation of the workers. And the liberation of the workers will be the work of the workers themselves."
The PT's membership is moving rapidly leftwards although at the present it still does not have a rounded-out programme. The vital question facing the Brazilian workers is to ensure that the democratic rights which they have won in recent years are not lost again in the future to a new military dictatorship. For this to be assured it is essential that the PT carries through a plan of action to create a workers' government in Brazil which will overthrow capitalism and set an example for the workers of the world to follow. O
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Spain
PSOE leaders fear a socialist majority
Despite desperate efforts to keep the conservative UCD government alive a general election will be held in Spain in October, five months early. The steady disintegration of the UCD has forced Calvo Sotelo, the Prime Minister, to accept that there was very little chance of his government surviving for long. From having won 176 seats in the 1979 election the UCD had only 123 MPs left at the end of August.
The break-up of the UCD (Union of Democratic Centre) after only five years in existence is testimony to the sharp swing to the left which is taking place in Spain. The sweeping Socialist Party (PSOE) victory in the Andalusian regional elections in May was only the latest confirmation of this trend. The PSOE won 52% of the vote, while the conservative UCD fell to third place with 14% behind the extreme right Popular Alliance (AP) which won 17% . Overall the workers' parties won over 60% in Andalusia, a very poor mainly agricultural region in Southern Spain.
In August one opinion poll indicated 37% support for the PSOE throughout Spain on average, 10.7% for the AP, 7% for the UCD, 1.7% for the Communist Party with 40% not decided.
This leftward movement has been caused fundamentally by the sharpening crisis of Spanish capitalism, rather than by any energetic campaign by the workers' leaders. For a long time the PSOE leaders, led by Felipe Gonzalez, had tried to prop up the UCD government, even to the extent of offering them a coalition. The Financial Times commented that the PSOE leaders "helped the UCD survive the last days of the summer parliamentary session by assuring that enough of its MPs would be absent"
In addition the Communist Party leader Santiago Carrillo offered the UCD the support of his MPs at the same time. But despite these ef-
26
forts the UCD had continued to lost its parliamentary majority.
Far from welcoming the prospect of victory the PSOE leaders give the impression that they are terrified at the possibility that for the first time in Spanish history a workers' party will win an overall majority. They are clearly fearful of the demands which workers will make on them and are doing all that they can to dampen down expectations about what a PSOE government would do.
But the economic situation and the national tensions within Spain will place enormous pressures on a PSOE led government. Already with unemployment over two million, 15%, The Times has spoken of the 'monotonous frequency' of workers' mass hunger strikes demanding work in Andalusia and workers' riots in the rest of Spain. Despite the catastrophic economic situation the PSOE's election programme will be an extremely moderate right-wing social democratic one with no mention of nationalisation, except possibly of the electricity pylons! With such a uninspiring programme the PSOE leaders may still succeed in snatching defeat from the jaws of victory!
If elected Gonzalez has made it clear that he is "likely to incorporate moderate independents into his government to appease bankers, the church and the military" (New York Times). Gonzalez would actually like the PSOE to emerge from the elections as the largest party but without a overall majority. This would enable him to form a coalition government with some of the UCD left-overs who would then provide an excuse for the government not carrying through any radical measures.
Suarez, the former UCD Prime Minister who has now split from the UCD and formed the CDS, has already said that the PSOE "will find us a great aid". . He plainly hopes to play a key role in restraining a new PSOE led government. But it is not at all assured yet that Gonzalez will be able to prevent the PSOE gaining an overall majority. As the Financial Times commented: "events are forcing Gonzalez to go alone." Already in the Asturias pressure from below has forced the PSOE and Communist Party there to form a joint regional government against the wishes of their national leaderships who fear that it will set an example for the rest of Spain.
While it is possible that for a period of time the manoeuvres and regular expulsions of oppositionists by the workers' leaders will be able to hold the labour movement in check, this will not last indefinately. No matter what the PSOE leaders say their entry into the government will
arouse great expectations. The inevitable disap-
pointment which the PSOE's right wing policies
will create will prepare the way for new
upheavals within the Spanish workers'
organisations and growing support for the ideas
of Marxism.
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World banking crisis Is the big crash coming?
The recent suicide, or perhaps murder, in Lodnon of the Italian banker Roberto Calvi is linked to a crisis in the affairs of the Banco Ambrosiano, in which both the mafia and the Vatican's bankers appear to have had an interest. This scandal, which comes when a number of other banks and finance houses in the world's financial centres are in trouble, is a symptom of a growing crisis for the world banking system. Two of London's big four clearing banks, which are among the biggest international lenders, stand to lose $40,000,000 and $115,000,000 through the default of Ambrosiano's Luxembourg subsidiary.
The big "primary" banks became involved with small or "secondary" banks like Ambrosiano in the period when international lending was growing rapidly. All the banks scrambled to place loans and rake in big profits from high interest rates. Then they did not enquire too closely into the security and propriety of some of the methods used by secondary banks. Today it is a different story. Some of the big lenders have burned their fingers, and while they are anxious not to precipitate panic measures, they are beginning to rein in on their loans. World big business is haunted by the prospect of a major default on the part of a major debtor state, which would send incalculable shock waves through the world banking system and the world economy as a whole.
At the moment the big banks are feeling just the first ripples of a crisis. Apart from the Ambrosiano scandal, there has been the collapse of two American finance houses, the Drydale bond dealers in New York and the Oklahoma Bank, Pennsylvania Square. For the first time in its history, moreover, the major Chase Manhattan Bank, which lost money through Drydale, has to report a profit this year. In the Netherlands a building society has collapsed. Fearful of even worse collapses and defaults the big four British banks have had to reduce their otherwise enormous profits by putting aside $330,000,000 to cover bad debt in the first half of 1982. Internationally other banks are doing the same.
These developments mark the end of the massive expansion of bank lending, which has risen at over 20% a year in the last 15 years. One of the main sources of funds of international lending has been the so-called "Euromarkets". These are in effect a pool of currency which is held by banks outside its country of origin. These funds have grown from $219,000,000,000 in 1972 to $1,800,000,000,000 in 1981. These funds have undoubtedly been a major source of inflation within the world economy. In the period of rapid growth in 1972 until 1980 an average of 66 new banks entered the international loan syndicate market every year.
In the last couple of years, however, nearly every major capitalist economy has been threatened with the collapse of a number of major industrial companies. AEG-Telefunken is just the latest, "rescued" by the banks under the direction of the West German government. But the biggest threat to the international bankers are the enormous debts piled up by the under-developed countries. These have now reached staggering proportions, and the recession in the world economy makes it impossible for a number of the biggest debtors to repay even the interest on outstanding loans. Lending to the under-developed countries now totals about $300,000,000,000, most of which is held in dollars with the interest rate adjusted every three or six months. Almost half the debt is due in one year or less. The annual interest bill alone of these countries is $50,000,000,000.
There are a number of countries which are clearly unable to meet their repayments. Eastern Europe (the Comecon countries and banks Yugoslavia) Western owes $90,000,000,000. Poland's repayments of capital and interest in 1982 should be $10,000,000,000, Rumania's $3,000,000,000. Neither can pay, and if they were companies would be declared bankrupt. As they are states, and their default could precipitate a major financial crisis internationally, they are allowed to "reschedule" their debts. This means they are allowed to postpone repayments and even to raise new loans in order to pay off their debts. Clearly, in the absence of an economic upswing, this only postpones the problem.
In the under-developed world there are a number of countries which have, in effect, reached a state of bankruptcy. In Latin America alone, for instance, Argentina, Brazil and Mexico are all incapable of meeting their current repayments.
Early in September, in fact, Mexico announced that it could not pay the interest on its
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$80,000 million debts. A rescue plan was worked out with the big banks and the IMF, with stringent conditions about cuts in workers' living standards attached. One immediate repercussion, however, was that the Mexican government nationalised all the banks accusing them of systematically "looting" the country. This is a warning for big business. If they push poor countries too far in an effort to recover their interest, they may well provoke radical measures against the capitalist interests which are bleeding these countries.
The under-developed countries have been hit by the world economic slump, by the rise in oil prices, and by the slump in commodity prices. Many minerals, like copper, are now fetching lower prices in real terms than in the 1950s, while agricultural products like grain, cocoa and sugar are being sold at rock bottom prices, well below the cost of production. Demand in the advanced capitalist countries has declined with the recession, and on the other hand favourable weather and good harvests have produced a glut on many of the world commodity markets. Yet the manufactured goods required by underdeveloped countries have not become any cheaper. On the contrary, inflation and changes in the relative rates of currencies have made them much more expensive. And the non-oil producing countries have been hit especially hard by the rise in oil prices.
The oil producing countries themselves, however, whose oil revenues helped swell the Euro-markets after the 1974 oil price increase, are now facing severe difficulties. The last OPEC meeting had difficultes in getting all the oil producers to agree to limit production in order to keep up prices, and it is doubtful whether they will maintain their agreed price of $34 a barrel for crude oil. Formally the price may be upheld, but already a number of big producers are selling cheaper to the oil giants.
The major world banks are trying to put on an optimistic face. Their international spokesmen have been warning that an "over reaction" could, by putting even more pressure on the debtor countries, precipitate an even worse crisis. However, while their spokesmen are trying to adopt a balanced, long-term view, the loan managers are in practice taking a much more cautious approach. In the last quarter, according to the International Bank of Set-
28
tlements, the average new loans were running at less than half the level of half the quarterly rate of the last few years. In order to raise loans recently countries like Hungary and Mexico have had to pay well over the average interest rate. To raise a mere $100,000,000 worth of 6to 15-year Euro-bonds, Mexico recently had to pay 18½%, the highest ever in the Euro-bond market's 20-year history. When international lending was booming, the big private banks were eager for most of it to be in their hands. Now there are problems they are increasingly looking towards the IMF to step in and bail out their bankrupt client states, and to act as a financial sherrif imposing austerity measures on "profligate" governments.
The conditions being imposed by the IMF and the banks are throwing intolerable burdens on to a number of states, which in turn are being off-loaded on to the workers and exploited peasants of thsoe countries. The cuts in living standards being carried out in order to repay loans and re-establish "credit-worthy" status are preparing the ground for social explosions which will shake the whole world economy.
Leading bankers are now calling for the IMF to establish a $20,000,000,000 "safety net" in order to help countries with "short-term liquidity problems • This is intended as a kind of insurance against the defaults of one or several of the major debtor countries. Undoubtedly, the big international banks, as well as world capitalism's institutions, are today more able to ride the effects of major bankruptcies than they were at the time of the 1929-30 crash.
The big banks are desperately trying to help one another out, covering re-scheduling and losses to head off a major crisis. The strategists of capital fear that if the recession is prolonged a number of smaller banks may fold and start a domino-like collapse of the whole system.
The crucial question is: how long will the world recession continue? If there is an upturn in world trade and production in the next year or so they may be able to ride out the crisis. But this will not resolve the underlying problems of either the advanced or the under-developed countries. Even during a new upturn the contradictions will intensify. And when the next slump comes, how will capitalism then avoid another great crash?
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Printed by Cambridge Heath Press Ltd (TU) 1 Mentmore Terrace, London E8 3PN COVER PICTURE: Nurses demand their 12% and join other trade inionists in protesting against Tor: olicies at the Holiday Inn, Glasgow PHOTO by Rick Matthews (IFL)
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