The “New World” and the Course of Events

The “new world order” was pronounced with promises of “paradise”. A new “age” had begun which was supposed to become an “eternal golden age”. The “new world order” was not all “doom and gloom” which was the case for the working class and the dependent countries. There also existed social sections for which this order was a “paradise” and a “golden age” which was not seen since the Second War: the monopolistic classes of the capital and the strata of high-level governors which served them. In this “golden age”, while monopolistic groups spread at such levels never seen before; high-rank bureaucrats and governors also obtained fortunes through official or unofficial means. Despite this, it was a fact that the “new order” was a “paradise” and a “golden age” for the class of capital and governors; but it had never implied an unleashed growth of the productive forces or at least the “recording” of a stable economic growth by the advanced countries.

Leaving aside the destructions experienced by the crises of Mexico, Russia, South Asian countries, Brazil, Turkey, Argentina and others, the facts had demonstrated that the year of 1993 in Europe, the years of 1993-1998 in Japan were crises years; despite the noting of minor activity over few years, stagnation in Europe and particularly Japan had made itself felt throughout the 90s and 2000s. Amongst the developed countries, the US was the only country which passed the 1990s with an almost uninterrupted growth. Nonetheless, by 2001, next to German and Japanese economy which “grew” only 0.7 % and -0.6%, the “motor of the new order”, the US economy, could only and solely “grew” 0.3%.

In the later period, while the situation did not change very much in Germany and Japan; the US economy had raised its growth trend by a certain quantity1 with “measures” of reducing the tax obligations of the capital, undertaking certain financial risks, increasing the preventive measures and heading towards militarization, etc. However, the issue was not the growth or non-growth of this or that economy by this or that proportion; the issue was that the world economy, did not note a development parallel to the colossal magnitude and enormous level of development of the productive forces; capitalism was “moving forward” by systematically increasing the destruction it inflicted on the productive forces.

The “new world order” has been characterized by the dominance of the economy by the monopolies at a level never seen before. Even by the mid 1990s the world economy was being controlled by 4000 monopolies which, with their “subsidiary” and “off-spring” firms, were active on the international scale. The total share of 1% of these in world production was in excess of 30%. As for the 500 greatest monopolies, they were controlling 70% of the world trade and 80% of all investments. The total market shares of the 5 biggest companies active in the most important branches of industry including steel, oil, electronic, durable consumption goods, computer parts, automotive, aviation, and also media recorded proportions around 50 to 70%. On the other hand, the escalation of mergers and acquisitions between 1995 and 2000 had also implied the extreme contraction of the pyramid of monopolies sitting on the economy and the extreme growth of the weight of2 monopolies as a whole over the world economy.

No matter how one chooses to look at it, what could be seen from the facts is that capital groups which have captured the peak points of the economies in the developed countries are today positioning themselves “once again” on the world scale within monopolistic companies whose numbers have been reduced to a handful. Having penetrated and settled into the industrial, agricultural, commercial economy and the financial system and covered every sector of the economies like a giant spider web (also increasing and sharpening the division between countries inevitably), a few hundred monopolies, with a few dozens dominating at the top, that belong to seven or eight different countries have increased their colossal weight over the world economy at an unprecedented level.

The contraction of the pyramid of monopolies and the increase in great degrees of the dominance of monopolistic groups over the world economy is, despite being regarded as a “possibility” and as a “positive” development for the world economy in general and for the economies of the developed countries in particular, not accurate. Indeed the data presented by the economies, as will be agreed by anyone who is relatively informed, shows not only the “good progress” and “positives” of the economies but at the same time and mostly, far more than these, demonstrate the negativities, contradictions and deficiencies.

The facts are evident: despite its growth over a decade and its current “growing” appearance, the US economy actually faces serious problems. The borrowing in this economy has long ago surpassed the levels where borrowing is regarded as “useful” for the developed countries. The US economy is under a hefty burden of debt, with the half being foreign debt, in excess of 85% of the GNP.3 However, it is not only the US economy which is indebted; in contrast to 300 billion dollars increase in their income in 2003, the US public’s debts increased by 700 billion dollars.4 Alongside other things, the orientation towards “militarization” is yet another problem of the US economy which is disabled by foreign trade and budget deficits amounting to 500 and 700 billion dollars5 which will progressively increase its influence.

On the other hand, the EU and Japanese economies which have been living in stagnations (with ups and downs, but affective) have come to contravene even more the economic and financial criteria considered as indicators of “stability”. It is general knowledge that the big countries of EU attempt to alter the limits regarded as “stability criteria” concerning deficits and borrowing, and that Japan has ended its financial support to companies and “markets” in difficulty.6 Moreover, it is also known that these countries have been forced to appeal to measures7 such as the institutions’ and income taxes of the capital and taxing even more the workers and labourers and to utilising the most important of the “possibilities” in this field.

All these demonstrate that the following is incontestable today: the many-fold increase of the profits of the monopolies and their extraordinary growth in the last decade has not resolved any of the fundamental problems of economies, with primarily those of the developed countries. The point to which the burden put on the workers and labourers by the capitalist classes and their relations with one another has come is not preparing a stable future for the “new world”; on the contrary, in the course of the last fifteen years, the hunches on the back of capitalist economies have grown even more and the weights have become heftier. The monopolies having greater influence in the economy lead to the increase of degeneration and stagnation and to deepening the imbalance of the already defected economic “balances”.

Indeed the capitalist monopolies, quite similar to the previous period, have followed a line expressed in seeking maximum profit every where, every time and every situation, and not evading any attempt, agreement or conflict which suffocate and destroy the productive forces for this. In so far as any question concerning the development of agriculture and industry, the improvement of economic balances, the decrease of unemployment and increase of wealth do not have the prospect of and bring about the “maximum profit”, it has never entered the field of interest of the monopolistic groups. The big monopolies and capital groups have identified the greatest profit not in new productive investments but rather in speculative “investments”; and in the absolute increase of the exploitation over the oppressed and in the destruction and takeover of the small to large industrial, financial and commercial enterprises and in enlarging the monopoly through this or similar ways.

It is true that maximal profit is a fact specific to the entirety of monopolistic capitalism. Despite this, it is also an undeniable reality that the monopolies’ search for maximum profit has also intensified to unprecedented levels in the last fifteen years. Indeed, this fact, in the last ten to fifteen years have constituted one of the most important reasons for the spasmodic increase of the interest and parasitism towards rent of the monopolistic capital and for the “breakthroughs” made by the rapidly returning speculative investments.

Decay, stagnation and crisis

Facts demonstrate that in contrast to every dollar invested in production 20 to 50 dollars are invested in the “solely financial” field. The rule it is to acquire the entirety of the income of this 20 to 50 dollars from the back of the “productive economy”, in which 1 dollar is invested, and to get the financial capital grow as a parasite that extortions the industry, agriculture and the entirety of society in a way that sabotages its development. It is incontrovertible that credits, shares, foreign exchange, each “transaction” in the bond “markets” is an additional expenditure to labour, industry and agriculture. It is a striking expression of this determining reality that the expansion of the “transactions” made in holdings, banks, stock markets, insurances and finance investment companies 20-50-fold of the investments made in industry and agriculture.

Another piece of data is that the daily “transaction volume” which remained around 10-20 billion dollars in the 1970s has increased to 4.2 trillion dollars in 1994, and this figure is much greater in the 2000s. Similarly, the statistics indicate that 40% of the income of 6 US and 4 major British banks during 1995-1996 (excluding other ‘transactions’) is obtained through the trade of foreign currency and shares only. This, together with “transactions” in stock markets exceeding the GNPs and reaching trillions of dollars in a large number of major banks, clearly demonstrates the excessive accumulation and intensification in the stagnation as well as the increasing degeneration. And indeed, some bourgeois economists who may be considered as “rational” had felt the need to express that the course of the world economy is a rather alarming one. The fact that they had begun to declare the transformation of the “financial system” into a “parasitic beast that eats the flesh of its host (productive economy)” is but a “miserable” expression of the destructive and disturbing proportions reached by the parasitism and degeneration in economy.

On the other hand, alongside the entirety of this parasitism and decay, the further increase of monopolistic agreements, the progressively increasing support given to these monopolistic agreements by the governments of developed countries through a range of means has been a factor which disrupts the development of technology, its application to production and the possible development of the productive forces far more than it always did. Alongside the implicit or explicit agreements made by the monopolies, the G-8, WTO and EU agreements supposedly made in order to “regulate competition” and government decisions which “evades” these to create privileges to its own monopolies do function also as monopolies8 which dents technical advancement, the development in productivity and which encourages the tendency of stagnation.

The following are of great importance for characterising the past decade: the last fifteen years of capitalism have been affected far more and far deeper by the tendency of stagnation due reasons such as a- the growth of parasitism in the capital, and b- the increasing of the influence of monopolistic agreements. It is clear that the world capitalist economy, in the period following the Second War when it made a fresh “start” and throughout each decade since then its rates of growth declined even more, continued with its decline also in the 1990s. Despite the expectation of a “start” and “wave of growth”,9 the world economy grew only by 2.5% in the 1990s in contrast to the growth rate of 3.2% in 1980s, drawing attention also to the indicators concerning the continual decline in the forthcoming years. Furthermore, it is widely known that, due to the poor course of events especially in the economies of the developed countries, the “growth” in world production and trade is poorer today compared to the previous decade.

On the other hand, it is not only decay in capital and stagnation in economy that is on the rise: in the conditions of intensification of capital and monopolistic “rivalry” expanding in the 1990s, partially due to reasons such as new technologies10 and “work intensification”, while the circulation of capital accelerated (as a result of the acceleration of internationalisation and communication), the rates of profit11 also entered into a tendency of decline. As for the “measure” taken by the monopolistic capital and governments on the face of this tendency of decline of the rates of profit and the de facto decline, it is a known method: instead of expanding the fields of work and living workforce, increasing the rates of surplus value and the imperialist exploitation over dependent peoples through relative and absolute methods and by forcing all the limits. The multi-folded increase in parasitisation; the deepening stagnation and the growth of the destructive capability of the imbalances and decline in the rate of profits – all these have the semblance of a description and a summary of the line of development of the world economy. Indeed, the attacks put forward in the aftermath of the collapse of the Eastern Bloc and “renewed” in 1995-96 in the name of “reforms” have also meant individual burdens of these illnesses of the economy apportioned to the working class and the peoples of dependent countries by the capital and monopolies.

What is more essential and far more important here is that, with primarily the attacks against the workers and the peoples of dependent countries, all these economic facts have formed and ripened not as the elements of any “ordinary” period the world economy is undergoing but rather as the elements of a special period and of a special process. The current period is one conditioned by a vibrancy of capital possessing some idiosyncrasies and by a special turning point of economy. The originality of this process no doubt lies firstly in the deepening of the imbalance and inequalities, and the acceleration and intensification in the impasse and spasms of capital’s movement of intensification, centralisation and monopolisation;12 secondly, in its conditioning and encirclement by facts which were renewed and “surfaced” with the collapse of the Soviet Union. In conditions where the movements of capital have acquired such features and originalities, the kind of threats the economies face and the drives with which capitalist classes and the imperialist countries tend to move were seen many times in the previous century.

The fact that there currently exists no economic crisis which has an international importance does not do away with the specificity in the period we are undergoing or the course of events. Moreover, the factors of crisis within the world economy are evident as of today and are growing. The increasing factors of decay and stagnation and the progressively increasing fluctuations in some of the basic sectors indicate ripening crises. Also, the problems generated by monopolistic rivalry will inevitably turn into “crisis provoking” factors when certain conditions mature. Furthermore, the economic imbalances deepened by the contest between the major powers have always been amongst the most important reasons for the acceleration and deepening of crises. As for the increasing decline in the “purchase power” of the masses of workers and labourers; it is, with no doubt, far more real today as the basis and the most fundamental reason for the acceleration of excessive production and its emergence here or there.

It is undoubtedly accurate that the capital has taken steps in “flexible work-flexible production” and in making “bins of crisis” out of the dependent countries and that due to these and similar reasons it has “expanded” “its possibilities of struggle and resistance against crisis”.13 Nonetheless, despite presenting a number of weapons against crisis, this situation does not give the capital any “magical device” through which it could remove capitalist crises and destruction. On the contrary, the advancement of “globalisation” has matured even more the conditions for the far more rapid and far more effective spread of economic crises across the world. Further, it is not possible for the “measures” such as deregulated production and the use of dependent countries as the “bin of crisis” always to remain as “measures” providing service to the capitalist classes. In the conditions of monopolistic rivalry and some conditions accelerated by the workers’ and the popular movement, it is unpreventable for these, in turn, to turn into “hefty burdens” by which the capitalist classes will become entangled.14

Towards conflict and collapse

Today’s capitalism, despite the entire drivel of liberalisation, is a monopolistic state capitalism that is intertwined with the state in an unprecedented way. One of the most important features characterising this capitalism (socially and politically) is the intense buyoff of the state by the financial capital and its reduction of the mediation in its political influence and governance through completely stunting democracy. Today’s capitalism, with its antagonisms sharpening under these very conditions, its general depression and its other features emphasising its inevitable collapse, is a capitalism that is far more “matured” today compared to the past century.

What characterises the world capitalism today is, though not as yet erupted and manifested with all its features, the intensification of the factors and imbalances of stagnation within economies, and the rise of indicators related to economic crisis and the “risks” of their spread across all countries. However, in the face of this course of events, there is no “effective weapon” in the hands of the capitalist classes and imperialist major powers other than “ensuring” the continuous progression of the attacks on the working and toiling classes and the peoples of dependent countries.

To achieve the flow of capital from the lower classes to the higher classes and from the dependent countries into developed countries without interruption and in greater volumes is the only “possibility” in the hands of capital and imperialism. Yet, despite purporting the apportioning of all the burdens of the entire destruction and ruins of capitalism on the shoulders of the working class, toiling masses and dependent countries; it has been proven again and again in the course of the past century that this is not a real “possibility” and “solution”.

Also, even if the working class and the toiling masses “accept for ever” the burdens loaded on their shoulders, it is impossible for capitalism to save itself from aggravating imbalances, crises and collapses and to achieve a continuous line of development. Further, the workers and peoples exploited under repression do not surrender to the attacks of capital and imperialism “for ever”. The struggle and uprisings of popular masses against the attacks and the oppression they are subjected to could never be prevented anywhere. It is predictable that the “acceptance” and “endurance capacity”15 of the workers and labourers will come to an end somewhere.

The last fifteen years, referred to as the “new world order”, has been a period when the attacks towards the working and toiling masses and the peoples of dependent nations have intensified and when the exploitation over them has accelerated rapidly. Indeed, anyone can clearly see the worsening of the lives of lower classes in all countries and the driving to the limits of the “endurance capacity” of the working and toiling masses and peoples of dependent nations. The first consequence of the reduction, congestion and interruption of the flow of wealth and value from lower classes to high classes and from backward countries to developed countries will surely be the eruption and further aggravation of the conflict between capitalist monopolies and imperialist countries. No matter what its current status is and no matter which hardships it faces, it goes without saying that the workers’ and popular movements which erupt against the attacks in all countries where the conditions have matured, whether backward or developed, will orientate towards confrontations with capital and imperialism.

On the other hand, the fact that the capitalist world is heading towards collapse, that each crisis lead to economic devastations and serious workers’ and popular movements does not necessarily mean that each reaction of the workers and labourers will emerge as “uprisings”. So long as the working class and peoples have weaknesses, there is no crisis that cannot be overcome and no hardship that cannot be dealt with by the capitalist classes which usually capitalise on these capably. Nonetheless, it is unpreventable that every “measure” taken for every crisis makes the next crisis even more destructible and every defeat conceded functions also as an instance for later struggles to turn into far more experienced, far more advanced and resisting struggles. The overcoming of this or that crisis, the stability of economies for a period, etc. cannot completely be disregarded; nonetheless, for the capitalist classes and the imperialist world, there is no “garden of roses without thorns” where it could maintain unilaterally a general stability and offensive. Economic crises, collapses, political turmoil, expanding and aggravating struggles and conflicts are inevitable.

On the one hand, the workers’ and popular movement expanding and heading towards definitive confrontations against the capital and imperialism; on the other, as this workers’ and popular movement advances, the aggravating and expanding rivalries between monopolies and imperialist countries. No matter where one chooses to look at it from, it is inevitable to get crises which erupt here and there in the world economy and collapses which set off in a sector or country and spread to other sectors and countries. The accelerating process of the intensification and centralisation of the capital breeds, expands and increases all the reasons which will transform the crisis into tremors and depressions, leading towards political crises. It is impossible for the capitalist classes and imperialist countries to evade “till the end” economic crises which lead into great and profound depressions and political crises which result in violent conflicts and upheavals.

The facts demonstrate that the entirety of oppositions within the capitalist and imperialist world are consolidating and sharpening as individual “elements of explosion”. The polarisations between all the opposing classes, countries and powers are becoming apparent as well as the disagreement and struggles between these classes, countries and powers. Capitalism and imperialism, drawing also attention to facts which point out its general crisis and are expanding, have already entered the path of collapse and into a status of being dragged towards extermination. The route to which the capital and imperialism has turned its ship, despite the differences in many respects of the level of development and conditions, is one which had led to the great events of the first half of the previous century. Independently from how it will transpire, there is no future for the capitalist and imperialist world other than collapsing and departing from history as a result of conflicts and wars, great uprisings and upheavals.

Either a new world war that emerges by suppressing revolutionary wars and revolutions or a revolution erupting by either preventing or ending such war! The collapse of capitalism, its departure from the stage by leaving its place to socialism, for which it has become the “eve”, is unpreventable. However, whether this will take place following a brutal war that will drag the world into devastation, or else by not permitting such a war and smashing the groupings of war is not possible to be anticipated from today. Despite this, one can expect that the divisions of the working class in the countries which will be shaped as the weak link within crises and struggles to smash the foci of war and capturing, with persistence, the state power by placing before themselves all the historical experiences of the movement. There is no reasons to doubt that the divisions of the international army of the working class in this or that country will undertake the tasks befalling them against the world of capital which could be seen as not having extracted any lessons from its brutality in the last century.

The world, albeit arduously, is heading towards this direction, towards a new stage of the general crisis of capitalism (which implies the breakage of the imperialist chain from its weak links and the standing upright of socialism as a concrete, living alternative). This is certain; however, what is important today is not this. It is that whether the working class and peoples of dependent countries will be condemned to “eternal” defeats coming through hopelessness despite struggling, or whether they will succeed in advancing by utilising the possibility and dynamics of the movement and containing the hardships with the least harm. This is the determining question of the day; the fundamental importance of the approach and the current response of the working class and its advanced forces to this question is linked directly with the vital quality of this concerning question.

Notes for Section II on the “New World” and the Direction of the Course of Events

1 The US economy had grown by 2.4% in 2002 and its growth in the later years, according to not extremely reliable US reports, had taken place as around 3%.

2 In the 20 key sectors of the world economy; 15 major monopolies in each have reached the power where it could control the entire production by as early as mid 1990s.

3 The US economy is under debts of 9 trillion dollars. The “experts” are in agreement that this debt is of a magnitude which will yield results of narrowing down the manoeuvrability area of the US government in monetary and interest policies and which will shake the “reliability” of dollar.

4 While the debt stock in US was 1.4 trillion dollars in 1980, this increased to 6.5 trillion dollars in 2000. The borrowing in 2001 is one that arrived on the top of this borrowing.

5 Budget deficits which became chronic in the US, by exceeding twofold the limits regarded as criteria have reached to 6.4% of GNP. On the other hand, the foreign trade deficits of the US have been following a course way over acceptable proportions now for many years.

6 The major countries of EU, Italy, Germany, France and others, have been recording progressively increasing deficits in terms of financial balances and now, alongside many indicators, criteria concerning borrowing is sought to be changed. As for Japan, which was not familiar with deficits; due to extreme rise of the ratio of its budget deficits to its GNP, the demand of “markets” for support came to a status where it cannot be addressed.

7 The taxes taken from fundamental goods which the people readily consume and some cuts in insurances have been increased, directly or indirectly, in almost all countries. The increasing once again of VATs [Value Added Tax] in Germany, is an indicator in terms of the course of VATs in the world. As for institutional taxes, they have already entered into the path of being nullified in the name of “increasing investments”.

8 90% of the entire registered property and patent rights in the world belong to 4000 international monopolies currently dominating the world. The leaving of scientific and technological business to monopolistic groups and armies; the linking of the advancement of technology to the goal of maximum profit, just as well as permitting its restraining and its one-sided development in so far as it develops; practises such as the impositions of governments on backward countries, the rules of competition which they introduce generally and placing their own monopolies under protection, even though it cannot be seen if considered crudely, do function as the most effective and broad monopoly. And these are being used more effectively today in contrast to previous period even if they appear to be different.

9 Capitalism creates new opportunities for growth by destroying through usually crises and wars etc what is done and accumulated. The collapse of East was a great “possibility of beginning” for the capital, albeit not on the scale of post war. What is observed is that the opportunities for capitalism to “make new beginnings” and great scale growth have also been blunted.

10 There is also rivalry in conditions where monopolistic dominance is on the rise and is aggravated, and monopolistic dominance, despite restraining possible development, the monopolies identify maximum profit in advancing technology to this or that extent. In 1990s (essentially depending on defeats and set backs in the workers and popular movement) alongside work intensification; there has been renewals in many fields and this situation is one which does not exclude what has been proposed concerning the increasing weight of monopolies over economy and stagnation, but rather one that proceeds entwined with and parallel to them.

11 Technological development is the rising of the organic composition of capital. This development and intensification of work; once the other conditions remain constant, means the decrease of living workforce, in other words the number of workers working, and since surplus is extracted from this work force, the rates of profit fall into a tendency of decline due to the decrease in the number of workers and due to fluid capital decreasing in contrast to immutable capital (the growth in the rate of immutable capital in contrast to fluid capital). This tendency forces the capital to increasing the rates of surplus through absolute and relative means. And conflict between monopolies aggravates even more. Once the facts are considered; it could be observed that the rates of profit are within a tendency of decline throughout the world; for instance in Germany, where rates of profit in industry increased from 7.2% to 9.9% in 1980s, these rates decreased to 5% in 1995; indeed this decrease which continued (the growth in the profits of monopolies is a different issue) in the later years is valid also for the other developed countries, although not as deep as in Germany. On the other hand, even though the monopolies increased their profits with the latest attacks, that the fall of rates of profit maintains even today its effect and activity could be observed even if considered crudely.

12 The intensification of capital is a continuous process in capitalism; despite this, the movement of intensification and monopolisation does not follow a straight line, it develops within a spasmodic process.

13 Deregulated working; since internationalisation, production, transport, communication have accelerated, provides the bosses with the opportunity to work by knowing more about and planning the market. At the same time, the intensification of exploitation and the apportioning of the burdens of crisis on backward countries render the developed countries and “deregulated” economies durable against crisis for a time.

14 One of the meanings of deregulated production for the class of capital is the opportunity to be rid of stocks and work without stocks. Being without stock, once utilised properly, is nothing but the extraordinary increase of the power of strikes to bring capital to its knees. The driving of backward countries under burdens of crises; has been acquiring a meaning of packing the aspects of eruption in these countries and working class’ finding of ready reserves and the provocation and easement of its coming to head the people.

15 The working and living conditions of the workers and labourers has been getting progressively worse. The wages, including in the US and with primarily in the European countries, are in a state of decline across the world. Even in developed countries such as the US, Germany and France, in the course of last three years 12-13% of the population has fallen under line of poverty. Also in almost all of the backward countries, poverty embraces half or even more of the population. In the backward countries, progressively increasing sections of the masses are being driven out of health insurance and education systems. These countries are under debts in excess of 2 trillion dollars and the majority of these do not have the opportunities to draw these masses forced into poverty into a relatively civilised environment. As for starvation, taking the form of a great disaster, is spreading in many countries.

Click here to go to Chapter III

Click here to return to ICMLO main menu