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Home ›CWO Annual General Meeting and Perspectives for the Coming Period
Sheffield July 2012
Although the AGM is the sovereign body of our organisation and our Statutes demand that it be held annually this was the first formal such AGM for some years. This was necessitated both by our modest expansion in membership and the recognition that the impasse which capitalism has reached imposes new tasks and responsibilities on revolutionaries and their organisations.
The meeting also had an open session which was attended by other left communists and anarchists (members of the Anarchist Federation) as well as unattached comrades who had been members of the Sheffield No War But Class War group or the Midlands Discussion Forum. Some comrades who were not able to physically attend also sent messages of support.
All participants had been sent two documents prior to the meeting. The theoretical work on the falling rate of profit which we had translated from Prometeo (theoretical paper of our sister organisation, Battaglia Comunista), and a text on our perspectives and tasks. The latter reiterated our perspective of the last few decades that the real crisis of capitalism began with the end of the post-war boom in the early 1970s. This was a consequence of the arrival of the organic composition of capital at such a level that the consequent fall in the rate of profit had led to a crisis. The speculative boom which ended 2007 was just the last in series of phases which capitalism had gone through in order to escape the consequences of the falling rate of profit. Like all previous trends since 1973 it had failed to address the central question which was the need for a massive devaluation of capital before a new cycle of accumulation could restart. To quote the document
The only effective solution is a massive devaluation of constant capital values. This is the very event which the capitalist class of every nation is desperately trying to avoid. For this reason such a devaluation can only be brought about through generalised war. War allows capital to be devalued through elimination of competition, which enables capital accumulation to cease, while existing capital equipment is used until its value is exhausted. In addition modern war destroys capital equipment and infrastructure on a vast scale thereby reducing constant capital values. This was the real economic function of the 2nd world war and the real means whereby the slump of the 1930s was ended. Such a war is not, however, on the horizon though the crisis is leading in this direction.
The reasons war is not on the horizon is that all the powers hope that by hanging together they can somehow transfer the problem of indebtedness (which for them is now the problem) on to the backs of the working class. This though puts them in a cleft stick. The working class in the advanced capitalist countries have seen a continual reduction in their wage levels since 1973 (even the FT agrees). To continue the attacks means to reduce the capacity of the working class to purchase commodities and thus prevents the very growth they claim they need to be able to
Draft Perspectives 2012
The Crisis of Global Capitalism
It is now almost 5 years since the subprime bubble burst leading to the collapse of Lehmann Brothers and the run on Northern Rock in the UK. However, after half a decade of state bail outs and nationalisation of banks, printing of money and draconian austerity programmes, global capitalism still hovers on the verge of an abyss. The collapse of Northern Rock, a minor bank, signalled the start of the present acute phase of capitalism’s crisis. But it soon became clear that this collapse was only a symptom of the general rottenness of the whole system. Today the bourgeoisie openly consider the possibility of the collapse of sovereign states, such as Spain or Italy, the breakup of the Eurozone and a global economic collapse leading to 25% contraction in global Gross Domestic Product.
The ICT argue that the roots of this crisis lie in the sphere of production and can be traced to the tendency of the rate of profit to fall as the organic composition of industrial capital rises. An empirical confirmation of this historical tendency for the USA is presented in the text “The present Crisis” (Graph 1) Prometeo 07 by Fabio and circulated in translation. Although the crisis appeared in the financial sphere, and continues to be expressed in terms of banking debt, sovereign debt and so on, these issues are symptoms of deeper problems in the production of surplus value. The secular tendency of capitalism to increase constant capital at the expense of variable capital leads to a reduction in profit rates. There are counter tendencies which can offset this decline; however, over the longer term the fall in the average rate of profit will assert itself.
As well as all this the crisis itself has been financialised, or rather ever-increasing portions of productive capital are flying towards speculation and the variegated world of finance in search of the profit it is more difficult to make in the real economy. Even this is nothing new. Speculation has always existed and is a natural part of the capitalist economic system. However, this became abnormal once the difficulty of realising returns on capital in the real economy impelled it towards the mirage of extra-profits in the financial sphere. As we know, the financial sphere does not create new value. If someone gains by dealing in derivatives rather than government bonds, on the foreign exchange market or raw materials, somebody else loses. On the one hand speculation — which lies behind the financialisation of the crisis — simply represents the transfer of value which has already been produced. On the other, it inflates a gigantic bubble of fictitious capital (through the loan and credit system) which, once exploded, impacts on the crisis-ridden real economy which provoked the swelling of the bubble in the first place. The consequences have been devastating and the world economy is still feeling its effects. (The Tendency for the Rate of Profit to Fall, the Crisis and the ‘Disclaimers’ Fabio Damen Prometeo 7 [2012])
The present crisis is the latest phase of problems of reduced profitability which struck the system in the early 70’s and marked the end of the post war recovery. The bourgeoisie have attempted to counteract these problems by transferring the burdens of the crisis onto the working class. The principal strategies for achieving this have been:
- Increasing productivity of labour.
The main way this has been done is through the introduction of more productive machinery and expelling workers from the process of production. The dramatic increase in constant capital to labour in the 50 year period to the present is illustrated by the graph (Fig 3) in Fabio’s text mentioned above. US labour is today approximately 13 times more productive than it was in 1960. However, this increase in productivity entails increasing the constant capital in relation to the variable and hence increasing the organic composition of capital. While this may produce short term benefits for the corporations which introduce more productive equipment, once these measures become generalised, the effect is to reduce the rate of profit. In the longer term this strategy will only aggravate the problem.
- Reducing the price of labour power through globalisation of production
This strategy has gathered pace since the 1980s and has succeeded in reducing the average price of labour power. Whole units of production have been moved to areas in Asia, South America or elsewhere where real wages are an order of magnitude less than in the capitalist core countries. This has lowered wages in core countries and brought some oxygen to the system. As a strategy it has not yet been exhausted. However, it is resulting in unemployment in the core capitalist countries. Financing unemployment benefits is leading to increasing state deficits and unsustainable debts. A secondary and unintended consequence of this strategy is the material unification of a proletariat engaged in global production.
- Reduction in the social wage
In order to reduce the amount of the social product that workers receive the capitalist class is also attempting to reduce the amount paid by the state to workers in the form of social benefits for unemployment, health care, pensions etc. The part of the social product taken from the workers will, of course, go to the capitalist class and ultimately be used to prop up profit rates. The reduction in the social wage is an attempt to overturn the post war settlement in the core capitalist countries and reduce workers living standards to those of the peripheral countries. This strategy is producing impoverishment and social unrest. It was a mobilising factor behind the Indignados and Occupy movements.
However, these measures are all insufficient to reverse the tendency of profit rates to fall. Though they may produce periods of stability and short term relief, the mass of constant capital has become too large for such measures to have a lasting effect. The only effective solution is a massive devaluation of constant capital values. This is the very event which the capitalist class of every nation is desperately trying to avoid. For this reason such a devaluation can only be brought about through generalised war. War allows capital to be devalued through elimination of competition, which enables capital accumulation to cease, while existing capital equipment is used until its value is exhausted. In addition modern war destroys capital equipment and infrastructure on a vast scale thereby reducing constant capital values. This was the real economic function of the 2nd world war and the real means whereby the slump of the 1930s was ended. Such a war is not, however, on the horizon though the crisis is leading in this direction.
The earthquakes in the financial sphere have been met with the measures described above, and the hardship workers are facing in countries such as Greece, Ireland, Portugal and Spain have been described in our press. These measures, however, are long term ones while the crisis has demanded immediate action to prevent meltdown of the entire financial system. The measures adopted, however, though they have staved off immediate collapse, amount only to a shifting ownership of the problems from one organisation to another. In general problems are becoming more centralised as institutions and states are bailed out by central bodies. Initially the insolvency of the banks was met by the state. Bank debts became state debts. In the UK some £850bn was expended bailing out the banks and financial system. Once the debts became state debts they could be devalued by devaluing the national currency. This has been done by so-called “Quantitative Easing” or buying of government bonds with printed money. In the UK £325bn has been spent on this so far and another £50bn is being spent at present. The beneficiaries of this have been the banks and the financial institutions themselves since they owned these bonds to start with. Of course, these measures could only be effective where the countries had control of their own currency, and debts were denominated in the national currency. This has given breathing space to countries such as the US and UK. For countries in the Eurozone, such as Greece, Ireland and Portugal, debauching the currency was not possible and the transfer of bank debts to government debt has led these states to the brink of national bankruptcy. The rescue of these states by the European Central Bank (ECB), the EU and the IMF represents a further centralisation of debt and a strengthening of the bonds between the centre and the periphery of the Eurozone. This has again proved a temporary measure. Greece has required a second bailout, and with Spain and Italy approaching bankruptcy new centralisation has been proposed. The project is to create a Eurozone banking union with a treasury and with the ECB as the lender of last resort. The next step will be mutualisation of some of the state debts. All this will bring about a further centralisation of the EU and the transfer of its problems to the central economic organs. If these steps are taken, and we consider they are likely to be taken, they will have to be accompanied by steps towards political union. This will lead to the strengthening of the EU as an imperialist bloc under the domination of Germany.
These measures may provide a breathing space for capitalism as the stronger countries support the weaker, and will cause the crisis to be more drawn out. However, they do not address the debt crisis let alone the fundamental issue of falling profitability and the need for a massive global devaluation of capital. The bourgeoisie, therefore, has the ability to attenuate the crisis but not the ability to solve it.
What has been described above is essentially the strategy of the bourgeoisie to transfer the burden of the crisis onto the backs of the working class, and is a global strategy; a parallel approach is the imperialist one. This amounts to transferring the burden of the crisis onto other opposing sections of the bourgeoisie. This was the approach adopted in the 1930’s and, of course, paves the road towards war.
Imperialism
Since the collapse of the USSR in 1991 we have entered a multi polar imperialist situation. Initially the US considered that the collapse of its Russian rival gave it a free hand to impose its will unilaterally and did not hesitate to launch wars in the Middle East, Balkans and Afghanistan to support its economic interests by military means. Its rivals have found indirect means to oppose these ambitions. Examples of this are the threatened French veto of the UN resolution justifying the Iraq invasion which ensured that the war was launched against the wishes of the UN and therefore illegal and the Chinese support for Iran and Pakistan which has made the Afghan war more difficult. After 2 decades of foreign wars we are seeing the US extricating itself from Iraq and Afghanistan with its ambitions largely unfulfilled.
In these wars the US aims to keep control of the flow of oil from the Middle East and maintain the position of the dollar as the currency of the oil trade in particular and the commodities trade in general. While the dollar remains the currency in which commodities are traded and the US remains the sole issuing authority of dollars, the US gains a tremendous economic advantage. We have estimated this amounts to $500bn annually. The weakening of the US economically and its growing indebtedness to its rivals such as China and Japan has however weakened the thrust of US imperialism.
The creation of the Euro as an alternative international currency, and one in which oil is now being traded, represents a threat to dollar hegemony. The Chinese foreign currency, the Renminbi, is also beginning to establish itself as a competitor to the dollar. Bonds are now being issued in Renminbi via the Hong Kong exchange, Iran is accepting the currency as payment for its oil and it has been accepted as a currency for trading on the London Metal Exchange. Similarly the US ambitions to control the flow of oil and gas from the Middle East and the Caspian basin are being opposed by Russia and China. US attempts to manoeuvre Iran into a position where a military attack can be justified are frustrated while attempts to control oil, and particularly gas, from the Caspian Basin are being opposed via the Shanghai Cooperation Organisation in which Russia and China are the dominant forces. In addition China is attempting to safeguard its shipping route for oil by establishing a line of naval bases in friendly countries and modernising its naval forces. In addition it is building pipelines to avoid pinch points where its enemies could blockade its oil supplies. This indicates that the Chinese ruling class do not expect the present policy of peaceful trade and expansion of influence into Africa and elsewhere will continue forever, and are making plans for war.
Russia has also reasserted itself in the Caucasus via the Georgia war and is again demanding that the US missile shield is not built in Eastern Europe, while threatening in turn to install missiles in the enclave of Kaliningrad.
It is therefore possible to identify 4 independent imperialist forces, US, Russia, China and the proto-imperialist bloc of the EU. At present there are no firm identities of interest and no firm alliances. This means that the road to another global war will be a long one.
War is not, however, an inevitable outcome of the present crisis. The alternatives are war or socialism. Socialism entails the destruction of the capitalist system by the working class. For this to be achieved the working class needs to be conscious of necessity for this change and to have created the means to carry it out.
Situation of the Working Class
As has been mentioned above the bourgeoisie is trying to load the weight of the crisis onto the shoulders of the working class. The working class, in the core capitalist countries, is suffering increases in exploitation, reduction in wages, often direct cuts in pay such as we have witnessed in Greece and Ireland, and reduction of the social wage by means of the savage austerity programmes. In addition there is unemployment on a scale not seen since the 1930s.The response of the working class has in no way matched the severity of these attacks. Explanations for this lie in the material conditions workers now face.
In the core capitalist countries workers have been outflanked by globalisation. The methods of struggle of the 60s and 70s are no longer effective. Because the bourgeoisie is quite happy to close factories and relocate to areas of cheaper labour power, workers in the core capitalist countries find themselves faced with redundancy if they oppose the new conditions of employment which they are faced with. The strategic defeats for the working class in the 80s, particularly the miners and printers strikes opened the way for this. The result has been dissolution of the large battalions of workers and fragmentation of those workers who have retained their jobs into much smaller production units. Workers have been faced with new conditions demanding, speedups, flexibility and part time working. Industrial jobs disappeared to the extent that in the UK manufacturing now represents only 12% of the GDP whereas at the end of the 2nd World War it was 50%. The majority of the European working class now works in the service industries. Unemployment has soared particularly youth unemployment. In March this year youth unemployment in Greece and Spain was over 50%, in Portugal and Italy approximately 35% and in the UK and France about 23%. We are in fact witnessing an absolute pauperisation of the working class in the core capitalist countries. How far this can be taken without a social explosion is the question. However, at present it is clear that all these developments have dampened militancy and eroded class consciousness.
Generally the struggles that have taken place in recent years have been defensive ones against renewed attacks. Examples of this in the UK have been the civil service pensions struggle and the Electrician struggle. Similar struggles have taken place in Europe, a recent example being the Asturian miner’s struggle in Spain.
While the methods of struggle of the earlier period are no longer effective workers are finding it hard to break with these methods. In particular struggles still generally remain dominated by the trade unions despite decades of union sabotage of effective struggle. What is needed is struggle controlled by the workers themselves outside of the trade unions which extends itself to other workers and becomes a threat to capitalism itself.
In the peripheral countries there have been massive struggles in the face of 19th century conditions of exploitation. These struggles are often made up of first generation proletarians and despite their general militancy lack wider class consciousness. At present there is no understanding of the need to link these struggles to those of workers in the central capitalist countries despite the interdependence of workers around the world and their existence as an international class. The material conditions for the development of international proletarian solidarity and international class consciousness are now more developed than ever before and the present situation could change in the coming period.
The developments of capitalism are, however, affecting society generally. Sections of the middle class are being forced into the ranks of the proletariat and joining the ranks of the unemployed or the part time precarious workers. This is leading to outbreaks of social struggle which bypass the political organisations of capitalism such as the political parties and the trade unions and take directly to the streets. The movements of revolt in the Arab countries and their echoes in the Indignados and the Occupy movements are examples of this. These movements point to a new questioning of capitalism as a system and permit open discussion of this. These movements have been tolerated by the capitalist class as they posed no immediate threat to the system. The threat to the system remains the threat from the working class and the true relations of power were shown in Tunisia and particularly Egypt when strike action by workers was the force which caused the authorities to capitulate. While these movements have been dominated by the middle class workers have participated in them as individuals. What is needed is for workers to organise themselves as workers within these mobilisations, take the lead and use them for coordinating struggles against the system. Once such a lead was given the malcontents would follow.
What is needed is struggle of a different order. As the text by Fabio, quoted above states:
“Only the revival of the class struggle for a different kind of society, which breaks from the infernal capital-labour relationship, where the production and distribution of wealth are no longer the means for capital valorisation, where profit is no longer the god and the proletariat the sacrificial lamb, and finally where the condition for the fulfilment of social needs is in keeping with the interests of those who socially produce and socially consume.”
For this to take place on an international scale the construction of a class party is required.
CWO/ICT Tasks
The task of the ICT is one of uniting revolutionary nuclei in key countries which have real roots in the working class and are able to contribute to the formation of a global revolutionary organisation. Such a task is a distant project. At present we can only proceed with the modest forces at our disposal and set ourselves tasks we are capable of accomplishing. Above all it is important that we broadly agree on the nature of the immediate period we are facing. When the financial bubble burst we recognised that the so-called credit crunch and the subsequent announcement of the state spending cuts spelled a new political period. On the one hand, however weak and confusedly, there was the beginning of a revival of interest in ‘marxism’ as capitalism was discredited. A period of political questioning opened and new groups have appeared. There are undoubtedly more opportunities now to get our views across than before 2008. However, we have also to recognise that much of this renewed enthusiasm for political activity is/was predicated on the prospect of a much stronger working class response to ‘austerity’ than has so far been the case. At the moment the evidence is of a decline in the recent political revival as well as a shying away from clarification about what ‘marxism’ and ‘anti-capitalism’ mean amongst the variegated elements who have emerged onto the political scene. In the absence of a much stronger class-wide response to capital’s attacks we can expect petty bourgeois theories and ideas to dominate in this ‘anti-capitalist’ political (increasingly non-political) scene. As for the wider working class, all the evidence so far, is that they are by no means ready to reject the existing political set up: the ground is being prepared for a return to Labour. In terms of the prospect for the coming year we should not exaggerate the possibility for political revival of the organisation. The following represent proposals for the coming period and should be considered by the AGM:
- We need to increase our membership in the UK: how? We need to have a higher public profile; we need to be able to show we can respond to ‘modern’ political ideas.
- We need to identify where we can be most effective in our propaganda. We should be prepared to work with any force which broadly accepts the notion that fighting the cuts means fighting capitalism. We should be ready to debate in an open manner with all those who are close to this perspective. This includes groups like the Commune and AF.
- This is a sine qua non We should try to assist any strike of any group of workers in attempting to find solidarity and support with other workers. We will be listened to more when we can demonstrate in day-to-day life that we are on the side of the working class. We must take up every opportunity to participate actively wherever we can to carry this out.
- We should intervene in the social movements such as the “Occupy” movements if they recur. We should attempt to participate in them, where we are able to do this and direct sympathetic elements towards class positions as our comrades in Rome have been tried to do.
- Publications need to be reviewed. There is a proposal to change RP to an A5 format to save postage costs and to investigate providing it in an electronic format that can be used with the new media instruments such as Kindle.
- Aurora is designed as an instrument for getting our name and politics across in situations of ‘mass’ protest and where workers are out on the streets. Should we try local Auroras, tailored to local events? Keep the present format but we should consider more frequent production and new ways of distribution.
- The successful work on the internet should continue but we need to consider allotting tasks where certain comrades are overloaded.
- We need to re-establish a programme of self-education in which everybody participates. Should we also create situations which are open to ‘outsiders’?
EC
July 2012
Revolutionary Perspectives
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- 1995: NATO Bombing in Bosnia
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- 2001: September 11 attacks
- 2001: Piqueteros Movement in Argentina
- 2001: War in Afghanistan
- 2001: G8 Summit in Genoa
- 2003: Second Gulf War
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- 2006: Anti-CPE movement in France
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- 2006: Second Lebanon War
- 2007: Subprime Crisis
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- 2008: War in Georgia
- 2008: Riots in Greece
- 2008: Pomigliano Struggle
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- 2009: Israel-Gaza conflict
- 2020s
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- 1921: Kronstadt Rebellion
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- 1922-52: Stalin is General Secretary of PCUS
- 1925-27: Canton and Shanghai revolt
- 1925: Comitato d'Intesa
- 1926: General strike in Britain
- 1926: Lyons Congress of PCd’I
- 1927: Vienna revolt
- 1928: First five-year plan
- 1928: Left Fraction of the PCd'I
- 1929: Great Depression
- 1950s
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- 1969-80: Anni di piombo in Italy
- 1971: End of the Bretton Woods System
- 1971: Microprocessor
- 1973: Pinochet's military junta in Chile
- 1975: Toyotism (just-in-time)
- 1977-81: International Conferences Convoked by PCInt
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- 1978: Economic Reforms in China
- 1978: Islamic Revolution in Iran
- 1978: South Lebanon conflict
- 2010s
- 2010: Greek debt crisis
- 2011: War in Libya
- 2011: Indignados and Occupy movements
- 2011: Sovereign debt crisis
- 2011: Tsunami and Nuclear Disaster in Japan
- 2011: Uprising in Maghreb
- 2014: Euromaidan
- 2016: Brexit Referendum
- 2017: Catalan Referendum
- 2019: Maquiladoras Struggle
- 2010: Student Protests in UK and Italy
- 2011: War in Syria
- 2013: Black Lives Matter Movement
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