To say that these are difficult times for revolutionaries is to take understatement to the point of caricature. We are living through one of the longest economic crises in capitalism’s history (at least 32 years) and yet there has been neither a resolution to the crisis nor even the beginnings of a proletarian response. In the last few months some have actually voiced the view that the crisis either does not exist, or, it is of such longevity that it no longer matters. The capitalist crisis does exist and it does matter. Empirically the statistics demonstrate the consequences of the crisis. World per capita GDP growth in 1961 was 3.6%. After the devaluation of the US dollar in 1971-3 growth rates fell until in 2003 the global figure stood at just 1% (figures from “A Fair Globalisation” by the International Labour Organisation’s World Commission on the Social Dimensions of Globalisation, 2004). If we remember that capitalism “must expand or die” (Marx) these figures can only represent stagnation.

The devaluation of the dollar, as we have argued many times, was the clearest sign of the opening of the crisis of accumulation which followed the post war boom that began around 1950. This devaluation was not simply the drop in value of an important currency on the world market. The dollar was the gold standard of the system set up at Bretton Woods in 1944. It price was fixed at $35 to an ounce of gold. It was therefore the benchmark against which all other currencies were set. The dollar thus had, and still has, pivotal importance for the world trading system. In analytical terms we are at the end of the third cycle of accumulation in modern capitalist history brought about by the law of the tendency of the rate of profit to fall. When we say that rate of profit has fallen we do not mean that profits themselves have necessarily fallen (even if individual firms also show this feature). What we mean is that the average rate of profit, the rate of return on invested capital, has fallen so low that it actually discourages new placements of capital, new investments in productive activities. Economically the system can limp along but capitalism cannot get out of this without some massive devaluation like an imperialist war. The mini devaluation brought about by the collapse of the USSR was completely insufficient to restart accumulation largely because the devaluation was confined to the old Soviet empire. There was no general devaluation which would have allowed a new round of accumulation at a higher rate of profit to begin. As Marx noted even in the lesser crises of the Nineteenth Century, when the fall in the rate of profit provokes a periodic crisis of accumulation, capital that cannot be invested productively looks to speculative activities. In the last twenty years this is precisely what has happened in the centres of capitalism. There has been a massive development of the financial sector, of speculative capital based on the use of money to create money. This activity can attenuate the crisis so long as everyone accepts the rules of the game but it cannot raise the rate of profit.

In attempting to raise the rate of profit the bourgeoisie therefore has to resort to a massive increase in both relative and absolute exploitation of the working class. This is going on all over the planet. From the bestial exploitation of 250 million children in conditions of semi-slavery to the more sophisticated (and worker for worker, even more profitable) demands of “flexibility” on those in jobs previously deemed “professional” in the heart of the system itself. Whilst millions have been expelled from productive labour under capitalist restructuring, those left are facing more and more speed-ups for declining real wages. Right-wing capitalists still denounce the nostrums of Keynes but as far as exploitation goes they are working better than ever. Keynes counselled his fellow-exploiters that attacking wage rates to reduce them provoked working class resistance. It is much safer to raise prices to devalue existing wages so that real wages can be cut by the backdoor. Currently all the leading capitalist states are playing this game with renewed vigour. A classic case is Britain where Chancellor of the Exchequer and Prime Minister-in-waiting, Gordon Brown has limited wage rises in the public sector to 2%, claiming that this is roughly commensurate with the Retail Price Index (RPI). But the RPI is a “basket” of arbitrarily chosen commodities (with an admixture of basic necessities to make it look representative) which does not include fuel costs. If gas (price rises equal 39% in three years) and electricity (up 29% in the same period) plus Council Tax are included, then the rate of inflation would really reflect the declining purchasing power of wages. And after a lifetime of increased productivity and declining purchasing power the workers in the heartlands of capitalism now find that their masters have robbed their pensions funds. However the solution is on the way. Our bosses are telling us that we have to work until 70 and beyond because we are living too long (although given the new levels of exploitation even this is open to argument for the next generation!)

So much for the centre of the system. On it edges we find the most brutal conditions of all. 800 million people will starve to death this year as they find they have been displaced by regional wars financed by big capital. Slightly more lucky are those who can get to live on the margins of the cities acting as a reserve army of labour helping to drive down wage rates to derisory levels. There are at least 250 million in China alone, and another 120 millions in Latin America and the Caribbean area. The secret of China’s growth is no big mystery. A typical month’s real earnings for a Chinese woman working in a factory making Nokia mobile phones is £5. The cheap clothes and electronic commodities produced by massively underpaid workers in the periphery appear in the shops of the world’s richest countries and allow millions of workers there to make their wages go a little further. Once Marx could talk of the industrial production of Europe “battering down all Chinese Walls”. Today it is the industrial production of China which is helping to shore up a decaying social system in the capitalist centres like Europe.

And even all this exploitation has not enabled a significant increase in accumulation. This in its turn has led to a scramble amongst the major imperialist powers to extort surplus value from each other. Foremost of all in this is the USA which is trying to ensure that others pay for its crisis. For twenty years we have been reading that the budget and trading deficits have reached ever more record levels. In January 2006 the US trade deficit reached $770 billion yet it does not seem to matter. In fact these deficits are expressions of the US’ success in deflecting the weight of the crisis on to its rivals. As the dollar overwhelmingly dominates international trade transactions the US can print them knowing that they will not return to the US itself to create domestic inflation. Those (like Japan and China) who hold dollars cannot shed them without causing a devaluation of much of their international currency holdings. The whole trick though is only possible if international commodity exchange, particularly for oil, takes place in dollars. And this is the material root of the war in Iraq. When Saddam Hussein changed to using euros to price Iraq’s oil the US had to stop him. They knew that he was no threat to the international community as they call it, but the hunt for weapons of mass destruction had to be used as an alibi to hide the real agenda. This is why the US military defence of its economic power is the single greatest cause of war in the present epoch. US attempts to ensure that the dollar remains the currency of international trade are not limited to trade negotiations.

The outlines of the period ahead are fairly clear. We have lived through thirty odd years of the most managed crisis in world history. The state and the international institutions which exist today have evolved to meet the needs of international finance capital. They have ensured that no critical collapse has taken place in any area however severe its debt crisis. Mexico (twice), Brazil, Russia and Argentina have all been baled out in order to avoid a generalised collapse of the global economy. Even so this crisis has not gone away and it cannot be managed forever. The contradictions of the system are becoming, little by little, ever so more acute. These contradictions are dominated by three inter-related phenomenon.

The first is the increasingly permanent wars of the dominant imperialist power on the planet which reveal its imperialist interests in a more naked fashion every day. These wars have no solution and the US has reached a point where it has to be militarily present in over 100 countries around the world. Recently it has also faced renewed challenges. Russia, China and even Iran are all working (with some success) to expel it from the stranglehold it had achieved in Central Asia. Currently mired in Iraq and Afghanistan, the US government has had to rein in some of its unilateral agendas and try to rebuild relations with former European allies it had previously brushed aside. The manoeuvres and manipulations on the international stage have entered a new phase.

Connected to this is the so-called “war on terror”. Every state is using it as a cover for following its own imperialist agenda as it fights to extend its power. Besides the US and British examples, Putin has used it to excuse the massacres that the Russian Army has carried out in Chechenya, whilst the Chinese Government uses it to justify repression in Tibet. And besides providing a front for an expansionist foreign policy it is also the excuse for increased repression at home which is the third feature of the contemporary political scene. Never mind the horrors of Guantanamo Bay, forget the “extraordinary rendition” which allows suspects to be tortured in countries of the West’s choice, the basic erosion of civil rights is giving the capitalist state increasing power of control over the working class. The article on “Democracy and Terrorism” in this issue seeks to demonstrate that these two concepts are not so separate as the leaders of the West pretend. In the USA the Patriot Act creates an internal regime equivalent of a real war situation. In Britain suspects can now be held prisoner for 28 days (the Government wanted, and still wants, 90) without charge and without trial. Outside of Northern Ireland it has not been possible for the state to do this since 1685. This latest step towards a police state is linked to the fact that our arrogant rulers are so confident that they have completely cowed the working class. There has never been a time when capitalist ideology has penetrated so far into every corner of society. This is because the working class has not yet recovered from the defeats it suffered in the 1980s when it tried to fight restructuring and wage cuts. For some it means that the working class is a lost cause. Indeed we have even encountered some ex-revolutionaries who talk of the working class “failing them”. This is a mistake on two counts. In the first place we revolutionaries are part of the working class and our existence proves that there is still a subjective will and an objective need to destroy capitalism. In the second place the working class has been written off many times in history. Bernstein thought it had become too affluent in the 1890s, and a whole raft of thinkers from Herbert Marcuse to Paul Cardan and Andre Gorz wrote it off in the post war boom of the 1950s. And yet it returns to fight time and time again. This is because the contradictions of the capitalist system, such as those we outlined at the beginning of this editorial, never go away. They inevitably force the working class to struggle, even after long periods of social peace. The recent riots in France may not have been the right way forward for the working class (see the Bureau Statement “On the Events in France” printed in this issue) but they did indicate deep discontent with the life that capitalism has to offer. Similarly workers who have recently organised themselves such as the Milan tram workers, the Boeing engineers in the USA, the port workers of Marseilles or even those of Gate Gourmet at Heathrow have given glimpses of what we can do when we fight collectively. In all cases these workers succeeded when they organised themselves in wildcat strikes which showed no respect for the framework of the state or the unions. And in that fight, wherever it takes place, internationalists like ourselves have to pose the bigger question of an alternative society which will abolish the horrors of the capitalist system. We are not simply waiting for capitalism to collapse of its own accord (since it still has to be replaced by something we the working class create). As the attacks on living standards increase to pay for the wars provoked by the capitalist economic crisis the same old question is posed: war or revolution, barbarism or socialism. More than ever the working class needs to build a political organisation to lead the fight against a decaying social system.