[The following talk was presented at an Asia-Pacific solidarity conference in Jakarta on June 7-10, 2001.]

Capitalism is in crisis, and you’d have to be blind, or a particularly gross and stupid billionaire, not to know it. Just look around the world and you’re faced with the squalor of poverty, unemployment, homelessness, exploitation, and environmental devastation. And you also see the obscene wealth, the luxury for a few. In Indonesia the crisis is very visible, in your face.

Global warming is a fact, yet Bush vows to make it worse. Nuclear weapons exist to destroy the planet many times over, and they still want their Star Wars system.

One super power, a real rogue state, with real weapons of mass destruction – nuclear, biological, poison gas – is able to destroy us all, and has strike forces to police the world. We see a ruling class uncaring about the medium- and long-term effects of its greed for profit, willing to gamble the world. Their shaky financial structures are liable to disastrous collapse, throwing half the world on the scrap heap.

This is capitalism, and it’s not working

Activists find it slightly harder to argue the case against capitalism in Australia, “the lucky country”, relatively wealthy, rich in resources, privileged, where the ruling class has been able to deploy the superprofits from its exploitation of the world to buy off sections of the working class, and where they have very sophisticated tools of media manipulation. But the gap, and the consciousness of it, is growing there too.

150 years ago Marx and Engels eloquently described in the Communist Manifesto the dynamics of the capitalist system and the destiny of the working class as the system’s gravediggers. Capitalist apologists since then have tried to refute or ridicule the Marxist prognoses, for example the prediction of the increasing impoverishment of the working class. But each pompous sigh of relief, or declaration of “the end of history” after any temporary capitalist stabilisation or working-class defeat, quickly is refuted by reality.

Today we have even more evidence of disaster and divergence. The gap is widening between rich and poor, between countries, and within countries. A study in July 1997 reported that 447 billionaires have wealth equal to the total assets of the poorest 50% of the world’s population.

A few years ago a senior economist with the World Bank wrote an article: Divergence, Big Time, pointing out that “from 1870 to 1990 the ratio of per capita incomes between the richest and the poorest countries increased by roughly a factor of five.

This stark inequality is not just between exploiting and exploited countries, but within the imperialist countries themselves. In the richest country in the world, the USA, the wealthiest 1% has more assets than the poorest 90% of Americans combined. Bill Gates’ net assets alone are equal to those of the poorest 120 million Americans. American CEOs now earn 419 times the pay of the average US worker.

In the ‘80s and ‘90s the imperialists were touting the “Asian Tigers” as the way out of poverty and underdevelopment. It was never a way out for all, just for some, but then the 1997 Asian collapse put an end to that argument, leaving empty office blocks and half-built towers throughout the region.

More recently a common argument from capitalism’s apologists has been that “globalisation” is the solution, that is, speeded up telecommunications and the internet, and deregulation of barriers and borders to trade and speculation.

The collapse of dotcom firms and the plunge of the Nasdaq high-tech stockmarket index, and their difficulties in installing cash registers on the internet, has punctured those illusions a bit.

But the rich keep getting richer and the poor get poorer. And their own figures prove it.

The British capitalist mouthpiece The Economist carried an article in its April 28 issue which they’d commissioned from Robert Wade, professor of political economy at the London School of Economics.

Wade asked the question: “If the world’s income distribution has become more equal in the past few decades, this would be powerful evidence that globalisation works to the benefit of all. It would give developing countries good reason to integrate their economies closely into the world economy, as the IMF and the World Bank – and their mostly rich-country shareholders – urge them to do. It would answer some of the fears of the anti-globalisation protesters. And it would help to settle a crucial and long-standing disagreement in economic theory, between the orthodox view that economic growth naturally delivers ‘convergence’ of rich and poor countries, and alternative theories [Marxism, perhaps?] which, for one reason or another, say the opposite.”

Wade analysed two recent studies based on extensive data assembled by the World Bank. The compelling evidence was that current policies and practices don’t have the claimed effect of reducing global inequality, but that it was worsening rapidly. In the years from 1988 to 1993, the period on which two key studies focussed, world incomes were becoming increasingly unequal at a rate the author of the study found thoroughly alarming.

One study found that the “share of world income going to the poorest 10% of the world’s population fell by over a quarter, whereas the share of the richest 10% rose by 8%.”

The lesson drawn from all this (for his capitalist readers) was that unless First World capitalists found the political will to make reversing the situation an overarching priority, the world would become dramatically more unstable. It was a case of the members of the bourgeoisie warning one another. But The Economist is a hard line outfit. Having invited Wade to contribute, it has to have its own say, still in smug denial. The poverty of huge regions of the world just proves they haven’t got their dose of globalisation yet!

Far from proving the permanence of capitalism and the futility of hoping for an alternative system, their “globalisation” shows just the opposite. Advances of science, medicine, technology, and communications highlight the fundamental crisis of capitalism.

Advances in humanity’s productive forces show the potential to solve all the major problems facing the world – food and shelter and clean water for everyone; decent health care and education; a high level of culture for us all.

AIDS vaccines are being developed, but if the victims can’t pay the exorbitant prices, too bad!

The IT revolution has tremendous potential to improve our knowledge and our lives. But for the capitalists it’s only good if they can make a profit out of it.

Increased automation and computerisation and rapidly rising productivity, in a logical and sane world, leads to more goods and a better quality of life for all, shorter working hours, more leisure.

But under capitalism, it leads to crisis.

“The real barrier of capitalist production is capital itself,” wrote Marx in the third volume of Capital. “It is that capital and its self-expansion appear as the starting and closing point, the motive and purpose of production; that production is only production for capital, and not vice versa, the means of production are not mere means for a constant expansion of the living process of the society of producers… The means – unconditional development of the productive forces of society – comes continually into conflict with the limited purpose, the self-expansion of the existing capital.”

Capitalism suffers from long-term structural contradictions which threaten its destruction. Far from being something dynamic and new, neoliberal globalisation – the frenetic international expansion of capital, an expansion which has had devastating consequences for the majority of humanity – is a sign of economic decay and increasing instability in a world of obscene and growing inequality.

The massive flows of capital around the world, the easy credit that has financed a global stock market boom, the growing monopolisation of capital through mergers, acquisitions and privatisations, overcapacity in all of the key industries, the unprecedented autonomy of the financial system from real production, the growing rivalry between the major imperialist powers, and the widening inequalities between rich and poor countries and between rich and poor within all countries, have the same cause – an over-accumulation of capital in the heartlands of capitalism.

The frenetic growth of mergers and acquisitions since the 1980s and particularly after 1995 are a sign of a growing crisis of capitalism, as multinational companies attempt to consolidate and defend their positions worldwide faced with falling profitability and increasingly powerful competitors. Many mergers and acquisitions take place in industries that are faced with overcapacity and low effective demand. They are defensive in character, often seen as an effective barrier against takeover rather than a means to enhance productivity and profitability. They aim to increase market share by reducing competition.

The same mechanism always drives the boom-and-bust cycle of capitalism, a crisis of overproduction, a result of capitalism’s thirst for profits and super profits. Little snippets continually pop up on the financial pages illustrating the worldwide problems of overcapacity, and the irrationality of the capitalist system. “Shipping analysts have forecast an upturn in the dry bulk market for the first time in several years as more ships are being scrapped than are being delivered from shipyards.” wrote the London Financial Times on November 29-30, 1997. That is, profits are projected to rise from a destruction of capacity.

In 1998, world manufacturing capacity was operating at around 65-70%. Overcapacity in the car industry illustrates the depth of their problem. In 1999 overcapacity in Europe was as much as 30%, and the global car industry was able to build 20 million more vehicles than it could sell each year.

They’re aware of their problem – even Australia’s Treasury during preparation of last month’s budget recognised the cause: US growth would likely slow through the first half of 2001 “as excess inventories are reduced and surplus stock is unwound.”

The productivity of labour has risen enormously over the past century. Future scientific and technological advances will ensure it continues to rise in the coming century. But this poses a problem for capitalism. Their system is not designed to meet peoples’ needs, but to make profits. So while half the world lives in poverty and billions are without shelter, health care or education, billionaire capitalists around the globe are flush with cash without profitable areas for investment, and there’s a glut of goods.

The end of history idea was ridiculous when first touted around. Now it looks like a sad joke. Since the end of the long boom in the early ‘70s, capitalism has passed through a long period of stagnation and downturn, with chronic problems of overcapacity and declining profitability.

Capitalist responses to their crisis are varied, and nowadays we’re seeing some more sophisticated defenses.

The standard, more traditional line from the bourgeoisie, is denial. “There’s no crisis – capitalism is eternal, the best of all possible worlds.”

More recently, we’ve seen some capitalists and their PR people act a little more attuned to the real world. Yes, there is a crisis, yes, there are problems in the world, but there’s no way out. There is no alternative. Nevertheless, with an eye to their myths not going down too well today, some like [George] Soros say “we better change our language”.

We, the working class, and the world, must respond to their crisis, which no-one can honestly deny.

There are three choices – and they are choices, since what we do does matter, each of us as individuals, and collectively as the majority on this planet.

1. Firstly, the liberal option: Within the framework of the all-powerful market, they hope wealth will increase (yes, certainly for the capitalists primarily,) but it will trickle down, to the workers in the West, and eventually to the world’s poor, and we can patch up the problems. Eventually, the liberal ideologues say, things will get better. Capitalism is basically OK, and let’s hope and work for a bit more of the trickle down, and patch the worst excesses;

2. The second alternative, the fear of an increasing number of activists and workers and conscious young people today, is that the planet is headed to hell. The gap between rich and poor will continue to widen. Environmental disasters will continue unchecked. Global warming will have catastrophic effects on the sea level. Capitalist misuse of technology will deplete the world’s resources. We’re doomed. Capitalism is a disaster, and there’s not much we can do about it. (The best of the youth say, let’s fight anyway.)

3. The third option, is that we make use of the scientific and technological advances in the interests of the world’s people, not capitalist profit. That we use the resources, the wealth, to provide food and shelter and clean water and health and education and culture for the whole world. That we organise society in a fundamentally different way, with the workers in control, with real democracy, not fake democracy tied to money. Capitalism is a disaster destined to be replaced by a more logical, democratic system, that is, socialism.

The rising global movement against corporate globalisation of the last few years gives us encouragement that that third option has a better chance.

Throughout the Third World for decades the workers, peasants, urban poor have been rebelling on a daily basis. They’re directly driven by poverty and repression, the plunder of the multinational corporations. Mass upsurges in the Third World have been frequent, even if imperialism was coping through their standard repression and corruption.

But with this new movement, the First World is now catching up. Seattle was the most dramatic, but it was building up before that. In Australia the wonderful experience with S11 in Melbourne really brought it home, 20,000 people blockaded the World Economic Forum at Crown Casino over three days. We followed it up a month ago on May 1 when 20,000 activists blockaded the stock exchanges and financial institutions in eight Australian cities! A tremendously inspiring experience.

More and more people, especially young people, are waking up to capitalism’s neoliberal offensive, against the workers and poor at home, and to their brutal exploitation of the rest of the world.

This movement is a reaction to the neoliberal attacks of the last few decades, but often it expresses itself in a general rejection of imperialist exploitation of the whole Third World. It’s a reaction to the poverty, the exploitation, the glaring gap. Sometimes it focusses on a specific issue, a particular piece of environmental destruction; a particularly crass multinational corporation.

All agree, something is wrong with the system, but many are not sure about what replacement, and how. The movement is very diverse, but we can identify two key trends – the reformers and radicals.

The reformers, the liberals, are still in conflict with the ruling class, but want a return to the period of concessions characteristic of the postwar long expansionary wave, before the turn to neoliberal policies by imperialism. They want a return to Keynesianism – propping capitalism up with more government spending, ameliorating the worst excesses.

In the movement we’ll push for united actions with all forces willing to organise mass actions with clear, principled demands. But we also need to be clear on the differences, the dividing lines. And the attitude taken to those three perspectives for the future helps us understand the trends.

These issues came to the fore at Seattle, at Prague, at Melbourne, at Seoul, at Nice, at Porto Alegre and in Quebec City where Washington pushed to extend NAFTA to a Free Trade Area of the Americas. The choices are very clear.

Do you demand “a seat at the table”, community or trade union or NGO input into the system, or do you fight for a fundamental change, in the belief that a better world is possible.

Do you ally with the local capitalists, with a nationalist protectionist approach, so rife in the Australian trade union movement, or do you ally with the workers of the world?

Do you try and make some reforms within their framework, knock off the rough edges? Or do you campaign to abolish these institutions, abolish the World Bank, IMF, the WTO?

Unfortunately NGOs and liberals and most union bureaucrats in Australia have a natural preference for reform and tinkering. Not only don’t they want to do anything to fundamentally threaten the existing system, but the process of discussing reforms, negotiating, dialogue with the global institutions of capital gives them an enhanced role, a raison d’etre.

But can it be fixed?

Where do the problems stem from? Is it a problem of maladjustment, wrong settings, not enough NGO or union input, not enough human considerations? Or do they stem from capitalism itself, its fundamental nature?

This is a debate also in the peoples’ struggles in the Third World. It’s not a question of making the system less corrupt, or prosecuting the crooks, or swapping one corrupt dictator for another. The problem is the system itself.

But even if many of us recognise that capitalism is the source of our problems and agree on the need for getting rid of capitalism, what will replace it?

We have a wonderful vision of what society could be like. A society where human beings don’t exploit other human beings, where there are no classes, where there’s equality, freedom, real democracy. Where people produce for need, not for the profit of someone else. Where ordinary people have control over their own lives, where the productive forces of society are used to give a decent life to everyone on the planet, where the waste of capitalism is eliminated, and wars, racial and gender discrimination are relics of a dim barbaric past.

It’s called socialism.

But how can it happen? It looks like an impossible task. Who can do it?

The capitalist rulers have the wealth. They have the guns. They have their police forces, jails and armies. They may be a small minority, but they also control the mass media, schools, courts, churches, and other institutions.

Is it too much to hope that we could overthrow that power? Can the masses of people take over?

The working class has the interest, and the power to do it. Nothing runs without our labour. Workers are used to working together cooperatively, and can organise. 1917 showed that mobilised and organised we can even subvert their army.

Today, the working class of the world is bigger and stronger than ever before. (So much for the myths they try to sell us in the media and university sociology course – that we’re “all middle-class now”.)

But workers internationally are divided, swayed by the capitalists’ propaganda and advertising, cowed by their power and violence. We’re not going to overcome this as individuals. We need to organise collectively, counter their propaganda, use our numbers and united strength to counter their violence.

To organise, and educate, and preserve and spread the lessons of past defeats and victories, we need a party.

We need a party with a socialist program, learning from the past, learning from Lenin and Marx, learning from the lessons of the October 1917 Russian Revolution, learning from the betrayals and distortions of Stalinism. A Leninist party. A party that won’t lapse into past mistakes, revive disproved false theories.

We need a party that learns from current struggles, learns from the Cuban Revolution, still surviving after 42 years of blockade and attack by Washington, still able to stand as a beacon to the Third World, to set standards on health and education envied by people in the so-called developed countries.

The Cuban people would be the first to admit their society is imperfect. But they have shown the way out from the capitalist crisis for their country. And their revolution continued through popular power, through people’s involvement and support for the revolution.

We need a party that helps organise and unite in struggle all the oppressed. A party that is flexible in its tactics, able to build alliances needed to unite the workers and oppressed.

The challenge today is to construct such parties in all countries.

For the last 20 years we in the DSP have been arguing for and pursuing a less sectarian, more uniting, way of operating, both in Australia, and in our relations with other parties around the world.

In the 1980s we sought unity with the other main left parties, and although none of those efforts had lasting success then, the publishing of Green Left Weekly at the beginning of the 1990s was based on those many activists who were yearning for a broad, non-sectarian fighting paper.

Now in Australia we’re seeing a very encouraging development of a Socialist Alliance established for fighting the next elections, providing an alternative to the neoliberal pro-big-business polices of Liberal and Labor. The DSP and eight other socialist groups have got together with other left activists. The Socialist Alliance will build united struggles in other areas, not just elections.

It’s an excellent development, building on positive lessons in Britain, the Socialist Alliances there, and especially in Scotland, with the Scottish Socialist Party, and similar alliances in other countries in Europe, and steps towards greater left cooperation on other continents. We need better organisation, a more united left working alternative, to face the challenges and opportunities ahead.

Internationally we’ve been championing a less narrow way of relating, moving away from narrow factions, fake internationals, proposing an international alliance or network of socialist parties, even if the parties are from different left traditions. Helping each other if possible; not meddling or dictating and distorting the development of parties and leaderships rooted in the experiences and struggles of their own countries. Links magazine is part of that project.

Now we can see a common movement – from Jakarta, Sydney, Seattle, Seoul – as more of us identify the common enemy. Our circumstances are varied, as are the tactics required and the stages of the struggle. But it’s an international struggle we’re in together, and we need each other’s solidarity.

This century will certainly be a struggle for control between the rich, capitalist class in the imperialist countries, and the working class of the world, the majority of the world’s population of poor, exploited, oppressed.

The capitalists think they’ll be able to fence off the problems – erect walls around the countries of the North, high walls around their enclaves in the posh areas of selected cities, retire to fortresses, or cruise the seas in luxury liners, protected by their navies. It happens today, obscenely wealthy retirement ships for the millionaires of the North, voyeurs on the misery of the rest of the world, but increasingly steering clear of the worst disaster areas.

But if we don’t win, don’t curb their greed, their madness, by the end of the century there won’t be much left. Even their fortresses and floating palaces won’t escape. And we can’t hide or avoid a choice either.

Don’t delude yourself that it might be a choice between Option 1 and 2 – gradual reform and improvement of capitalism vs capitalism destroying the planet.

The real choice is between Options 2 and 3 – socialism, or barbarism, as early socialists expressed it, or as we can see more starkly today, socialism or the destruction of humanity. There’s only one real choice.

But we don’t just fight for that option 3, socialism, to prevent disaster; we’re not socialists merely for defensive or negative reasons. There are so many positive reasons to fight for the brighter future that is socialism.

That same rising level of productivity based on fantastic scientific and technological advances that creates contradictions and crises for capitalism – overcapacity, instability, falling profits – holds out the prospect of a golden future, of decent standards of living for the whole world, of greatly increased leisure time.

Imagine the potential of the future, 50-100 years from now, once our resources and technology are properly used, applied to solving the problems of the world we see today.

Imagine, without the fetters of capitalism – its wars and greed and waste and inequities – what life could be like for all. We’d reach new levels of education and health, and culture and art and science that we can only dream of today.

It’s a goal and vision worth fighting for.