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Letters to Jose Maria Sison




November 9, 1998

By Jose Maria Sison

Contribution to the International Conference on Alternatives to Globalization
Tagaytay City, Philippines

Dear Colleagues and Friends,

Thank you for inviting me to make a written contribution to your conference, even if on such short notice.

I am happy to participate in an autopsy. "Neoliberalism" or "free market" globalization is practically dead. It has been killed by the current global recession. The economic policy-makers of monopoly capitalism have themselves declared that the disease could not be cured by the monetarist medicine prescribed by Dr. Milton Friedman.

They say that the problem is no longer simply one of manipulating interest rates but it is one of stimulating growth to counter the recession. The social-democrats of Europe are considering how to mix pump-priming with "neoliberal" reforms. But, of course, Japan has been trying to pump-prime its own domestic economy since the bursting of its bubble more than seven years ago.

As far as baby doctors are concerned, Dr. Paul Krugman is acclaiming Malaysia’s exchange controls and even Dr. Jeffrey Sachs has come around to prescribing a dose of protectionism for Thailand after his ill-fated prescriptions of large "neoliberal" doses to Russia and Brazil.

I wonder how far the OECD countries can go in pushing the Multilateral Agreement on Investments (MAI) as an international treaty whereby the prospective state contracting parties, including the imperialists, explicitly and totally give up their economic sovereignty and national patrimony and allow multinational enterprises to sue them for unfair and unequal treatment of foreign investors and traders and for hindering the free flow of capital or cases amounting to expropriation.

This proposed treaty would have been the peak of "neoliberal" globalization, surpassing all the previous peaks attained by the IMF, World Bank and WTO. But the "free market" dreamworld is dissipating. The global recession comes as a reminder to the imperialist countries that they have contradictory interests among themselves. Some prominent think tanks have begun to whip up their protectionist instincts as well as remind them of pump- priming methods for their respective domestic economies.

Our conference should diagnose the fatal disease not only of "free market" globalization but also of the entire capitalist system, whatever policy stress it adopts. In that way, we have a better scientific grounding for the socialist alternative in the imperialist countries and the necessary sequence of new-democratic and socialist revolutions in most countries that are similar to the Philippines.

  1. The Meaning of "Globalization"

As used by the monopoly bourgeoisie and its retinue of "neoliberal" apologists, the catchword "globalization" is meant not only to oppose the Keynesian theory of state intervention within the capitalist system but, more importantly, also to undercut the Leninist critique of imperialism and proposal of socialist revolution. And, of course, "neoliberalism" dogmatically and atavistically misrepresents monopoly capitalism as "free market" capitalism.

Beyond the era of free competition capitalism of the 19th century, the imperialists have always dishonestly called monopoly capitalism as "free enterprise" capitalism in the 20th century. But in recent decades, they attach a certain set of meanings to the slogan of "globalization".

They contrapose the "free market" to state intervention as they demand the liberalization of trade and investments, the privatization of public assets and the deregulation against social and ecological concerns. It does not mean that they reject the role of the state. They recognize it as the most important instrument of domination over the working class domestically and the oppressed peoples and nations abroad; and that it is a necessary political instrument as much as multinational firms and banks are necessary economic instruments.

In fact, imperialist states in the G-7 and OECD directly and through such multilateral agencies as the International Monetary Fund (IMF), the World Bank and World Trade Organization (WTO) dictate upon client states to open up their domain and make way for multinational firms and banks to invest and trade and to facilitate the exploitation of the people. There is a hierarchy of states as much as there is a hierarchy of business corporations.

In economic and social policy-making, the imperialists have shifted from a Keynesian position to a "neoliberal" position since the beginning of the ‘80s after so much ideological work by Milton Friedman and the Chicago School since the ‘60s. With Reagan and Thatcher taking the lead, they have adopted the official line that the cause of the phenomenon of stagflation in the ‘70s is supposedly the rising wage levels and the government’s big social spending. The bias is against the working class and the people. However, the imperialists obscure the cost-push effect of their high military spending.

They wish above all that the state give free rein to the "free market" and the central bank act sparingly in managing public securities, money supply and interest rates. They wish at all times that the state collect more taxes from the mass of consumers and to deliver to big business a plethora of tax cuts, revenues and assets. Their line is: corporate welfare, yes! social welfare, no!

For the state to engage in any productive activity and expand any system of social welfare is supposed to be inflationary and inefficient. According to the "neoliberals", the best thing to do is for the state to deliver public funds to the corporate giants in order to boost production, generate employment at the proper pace and avert inflation.

To deal with the ups and downs of the economy, they favor the monetarist policy of manipulating interest rates when necessary and contrapose this to the state making direct investments. In times of bust, such as the current one, they are willing to use public funds for bailing out the ailing companies, reluctant to engage in public works pump-priming and hostile to any nationalization of private companies.

The "neoliberals" wish to maximize capital in the hands of the monopoly bourgeoisie by pushing down wage levels, cutting back on social spending and accelerating the delivery of funds from the state, private banks, securities markets and pension funds. The rationale for accelerating the accumulation and concentration of capital is to promote retooling and adoption of higher technology.

Then in self-fulfilling prophecy, the "neoliberals" proclaim that the multinational enterprises and high technology suit each other and tout the former as irresistible throughout the globe. Information technology under the control of the monopoly bourgeoisie is supposed to break all barriers and spell freedom in all aspects of social life throughout the globe.

The "neoliberals’" most outlandish claim is that multinational firms and banks have lost their national character and basing and have become so powerful internationally as to render impotent all kinds of states and reduce to irrelevance all questions of national sovereignty. But in fact, multinational enterprises have most of their capital, stock owners, personnel, research and development in their home countries and depend on their own imperialist states and multilateral agencies of states for protection, insurance and subsidies in their overseas operations and expansion.

The "neoliberals" deliberately gloss over the reality of imperialist states and the dominated states for a certain reason. They wish to make people forget that there are contradictions between the imperialist states and the oppressed peoples and nations, among the imperialist states and between the monopoly bourgeoisie and the proletariat in imperialist countries.

They have as collaborators pseudoprogressives who criticize multinational enterprises as having become more powerful than states in order to insinuate that imperialist and client states are more benign than the MNEs and in order to beg for reforms from both MNEs and states.

Front door and backdoor "neoliberals" collaborate in disregarding distinct national modes of production and superstructures in different countries and, most importantly, in denigrating the need for the broad anti-imperialist struggle and class struggle in the specific circumstances of various countries.

Under the banner of "free market" globalization, the imperialists have aggravated the exploitative and oppressive conditions of neocolonial domination. They demand the complete surrender of economic sovereignty and the free flow of imperialist capital and goods and oppose the use of state intervention in the dominated countries to undertake national industrialization and genuine land reform, protect local industry and agriculture and exercise controls on foreign exchange and imports.

They hope for the realization of the Multilateral Agreement on Investments, an international treaty being cooked up by the OECD countries, to make the underdeveloped countries give up their economic sovereignty, accord national treatment to multinational enterprises and allow these to sue client-states for unfair and unequal treatment and compel them to pay damages.

They have put aside previous Keynesian pretenses at aiding the development of underdeveloped countries, which they so well drummed up in the UN decades of development and in World Bank and UNCTAD propaganda. They have simply sapped the general run of third world countries through repeated IMF structural adjustment or austerity programs, which in the absence of industrial development actually aggravate their problems of chronic accounts deficits and debt burdens.

Under "free market" globalization, the global flow of foreign direct investments has been concentrated on the imperialist countries themselves to the extent of 80 percent or even more after the capital flight from the few "emerging markets" which receive the remainder of that flow. The private financial transactions which the "neoliberals" favor and which are intra-MNC or between MNCs and local big compradors, are concentrated only in some ten countries.

Since the fall of the revisionist regimes in the Soviet bloc countries and the undeniable restoration of capitalism in China, the "neoliberals" have proclaimed that history cannot go beyond capitalism and liberal democracy and that socialism is simply impossible in the face of the liberal utopia of the "free marketplace of goods and ideas".

The least intelligent among the "neoliberals" are so carried away that they call themselves anti-statist, even as they are devoted creatures of an imperialist or client-state and propose the development of "civil society" within the trilateral frame of the bourgeois state, big business and civil society of NGOs. The imperialist-funded NGOs are the most vociferous in mocking the anti-imperialist struggle and the class struggle and in trying to separate these from or collide these with such important social concerns as community self-determination, gender equality and the environment.

In the face of the current grave crisis of the world capitalist system, particularly the proven bankruptcy of "free market" globalization, the exponents of "neoliberalism" should be utterly embarrassed. Their imperialist paymasters themselves are at a loss about solving the crisis and fear that the crisis is generating social unrest and the resurgence of revolutionary movements.

  1. The nature and gravity of the crisis

As Marx and Engels pointed out a long time ago in the Communist Manifesto, the basic contradiction in capitalism is between the social character of the forces of production and the private character of appropriation by the capitalist class. This contradiction became manifest in the commercial crises of the 19th century and in the far bigger crises and global wars of the 20th century in the era of imperialism and proletarian revolution.

This contradiction has grown more acute than ever before with the rapid rise of social productivity, through the adoption of higher technology and the availability of a more knowledgeable and skillful workforce, and with the extremely rapacious and accelerated accumulation and concentration of both productive and finance capital by the monopoly bourgeoisie.

The current crisis involves the overaccumulation of productive capital in the hands of the monopoly bourgeoisie, overvaluation of assets through finance-capital manipulation, excessive leveraging in the imperialist countries as well as in the "emerging markets", chronic mass unemployment and overproduction relative to the shrinking market demand. The illusion of growth in the past decade, even if low and stagnant at the average of two percent or lower for the OECD countries, has been conjured by ever growing overvaluation of assets.

At the moment, all basic contradictions in the world are sharpening in the socioeconomic sphere. These include those between the monopoly bourgeoisie and the proletariat in imperialist countries, between the imperialists and the oppressed peoples and nations and among the imperialist powers.

In the imperialist countries, constant capital (plant and equipment) is being increased at the expense of variable capital, the wage fund for living labor. The monopoly bourgeoisie systematically reduces regular industrial employment, extracts a larger amount of surplus value from those who remain on the job and imposes a higher rate of exploitation relative to the higher productivity made possible by higher technology.

There is job insecurity and all the rights and benefits gained in past struggles are being cut down. Those who remain employed are subjected to increasing work stress. The computer is a far faster device for speed-ups than the old conveyor belt.

Those who are laid off are diverted to lower-paid, temporary and part-time jobs, mainly in the service sector. In the US, full employment is conjured by the generation of this type of jobs. But in the European Union and Japan, the high rate of chronic unemployment can no longer be concealed either by this type of jobs or by statistical manipulation.

Social benefits for the employed, underemployed and unemployed and the rest of the people (including the aged, children and single parents) are being cut back. The "neoliberal" reasoning is to combat inflation and deliver public funds to the "supply side", the corporate giants that are supposed to expand production and generate employment. The monopoly bourgeoisie is deemed as the productive force and not the working class.

Among the imperialist countries, the US is relatively the strongest not only because it has the lead in technology but also because it receives the most investments from the other imperialist countries. It carries the factors of implosion which include its accumulated federal debt and unceasing trade deficits. In all imperialist countries, there is overvaluation of assets through the workings of finance capital, such as bank loans, stockmarket sales, speculative mergers and excessive leveraging by hedge funds.

In addition to the basic class contradictions, every imperialist country is beset with problems in its relations with "emerging markets" in its particular region and in other regions. The economic collapses in the "emerging markets" have already caused two big waves of prolonged and steep stockmarket declines in the financial centers of the imperialist countries, in the fourth quarter of 1997 and another one in the third quarter of this year.

The contradiction between the imperialists and the oppressed peoples and nations in the socioeconomic sphere is now the sharpest in the world. It involves the overwhelming majority of the people of the world who suffer the worst forms of exploitation and oppression in the hands of the imperialists and the local exploiting classes.

Under the imperialists’ "neoliberal" policy, countries of Asia, Africa and Latin America, which depend on the production and export of raw materials and which have suffered the crisis of overproduction in raw materials and the ever deteriorating terms of trade and crushing debt burdens since the late ‘70s, have been reduced to a permanent condition of depression and have continuously deteriorated economically and socially.

Since the beginning of the ‘80s, the imperialists have shifted from the pretense of officially aiding "development" to promoting the "free market" between them and the client-states at whatever given stage of development. They have chosen only some ten countries as "emerging markets", to which 20 to 25 percent of global foreign direct investments (FDIs) flow in and out. The rest of the third world are also made to follow the IMF and WTO prescriptions, without receiving significant amounts of the speculative kind of funds that flow into the "emerging markets".

China has been getting more than one third of FDI for "emerging markets. The reason of the imperialists behind this is to penetrate the huge Chinese market, promote capitalism, cause lopsided development towards dependence on exports and undermine the industrial foundation previously established under socialism.

The few chosen "emerging markets" have been assigned different export specializations. China and Southeast Asia are assigned the export of such import-dependent low value-added semimanufactures as semiconductors, garments, shoes and toys; South Korea, Taiwan and Brazil, such higher value-added manufactures as cars, some machinery, home appliances and basic steel; and Russia, oil and gas.

These "emerging markets" have been targeted for the largest flows of FDI outside of the imperialist countries not only for the purpose of financing the production of their types of export but also for stimulating high consumption among the exploiting classes (imported cars, communications equipment and materials for private construction) and speculating on the budgetary and trade deficits, the need for debt service and new loans and the fluctuations in interest rates, exchange rates and stock prices.

Under the "neoliberal" policy of privatization, deregulation and liberalization, the multinational enterprises and their big comprador accomplices can freely acquire public assets, expand their holdings and exploit the natural resources. Under the policy of the free flow of capital, the central bank is deliberately blind to private transactions, which are intra-MNC and between MNCs and big compradors. Thus, capital outflows always outrun inflows, leading ultimately to currency and stockmarket meltdowns, loan defaults and capital flight that started in July 1997.

The "emerging markets" have collapsed in one country after another and in one region after another since July 1997 because their types of goods are overproduced on a global scale and their falling export incomes expose their gross inability to pay back the foreign funds that they receive. There is a limit to the generation of superprofits by the monopoly capitalists from highly speculative finance capital on the basis of a real economy that is subject to the global crisis of overproduction.

The economic collapse of the chosen models and copycats of the export-oriented "emerging markets" has permanent or lasting effects. The belated aspirants for the status of "emerging markets" will not give up contributing their share of overproduction to give a breather to the earlier "emerging markets". In general, they sink to the level of the long-depressed overwhelming majority of the third world countries.

The Southeast Asian countries have abruptly exposed their fundamental semifeudal backwardness and have plunged to a new depth of poverty and misery. Gone are the illusions of development conjured by real estate speculation, droves of late car models and proliferating sweatshops for slightly processed products.

China only seems to be the least ravaged by the East Asian economic collapse, because it has devalued the renminbi since 1994 and cheapened Chinese labor to lead in the overproduction of semimanufactures for export and because it uses the defenses available to state monopoly capitalism. But the bureaucrat capitalist rulers and the imperialists have succeeded in making China a capitalist country, with a new comprador big bourgeoisie in power. Many of the private and state enterprises have gone bankrupt. Mass unemployment has risen.

South Korea, Taiwan and Brazil are in serious trouble. Their types of higher value-added products directly compete with those of the imperialist countries. They cannot export their way out of their problem by producing more of what is already overproduced by their imperialist masters.

Under the rule of the new comprador big bourgeoisie, Russia and the rest of the former Soviet-bloc countries have continued to suffer sharp falls of industrial and agricultural production and deterioration of wage and living conditions. Russia has become a big dumping ground for surplus goods and a beggar of food and foreign loans from the West.

The contradictions among the imperialist powers are becoming conspicuous as a result of the global recession. They are certainly united under the leadership of the US against the proletariat and people of the world and against certain states assertive of their national independence. But they have increasing differences over a comprehensive array of issues.

The economic crisis is driving the imperialist powers to maneuver against each other for advantageous position and for a larger share of the global market. As the leader of the imperialist alliance, the US tries to divide the costs of policing the world but is always poised to grab the entirety or lion’s share of the spoils of aggression and intervention.

In East Asia, we see the conflicting economic strategies of the US and Japan. The US wishes to take over the key ailing technological and financial firms and have the rest declared bankrupt. But Japan would rather use taxpayer money to bail out the Japanese monopoly firms and banks and revive the Japanese and East Asian economies with public works pump-priming. It advocates state restrictions on the outflow of foreign funds. As principal creditor in East Asia, it wishes to retain the largest chunk of the market in the region.

In Europe, there is resistance to the US demand for lowering interest rates. At the same time, the US keeps its interest rates higher than those in other imperialist countries in order to attract foreign investments from them and avert the dumping of US bonds and stocks in their hands. As principal creditor of Russia and Eastern Europe, Germany wishes to keep the largest chunk of the market there.

War among the imperialist powers is still a remote possibility. The crisis of the world capitalist system must first worsen to a level that brings to power the forces of fascism in specific imperialist countries. Even in much-weakened Russia, which is imperialist relative to many nationalities, the rise of military fascism is still a possibility.

The inherence of war in imperialism is currently manifested by the expansion of NATO to the borders of Russia, the beefing up of the US-Japan security treaty partnership in East Asia, the stirring up of local wars and aggressive acts and threats by US imperialism in the name of peacemaking and humanitarianism.

Right now, the conditions for interimperialist wars in the 21st century are being laid by the worsening of economic conditions, the rise of fascist and racist movements, the acts of aggression and intervention of US imperialism and the growing complexity of a global situation in which interimperialist collisions can occur in the future.

  1. Popular Resistance and Socialism

The basic conditions for socialism grow within the very womb of industrial capitalism. The social character of the forces of production rises with higher technology and with higher knowledge and skills of the working class. Ultimately, the capitalist relations of production can no longer contain the growing forces of production.

"Neoliberalism" has coldbloodedly brought about the worst of the capitalist relations of production. The style of exploitation is that of laissez-faire capitalism but it is carried out by monopoly capitalism. An unprecedented crisis of monopoly capitalism has broken out just before the end of the 20th century and has laid the ground for the great struggles for national liberation and socialism against imperialism in the 21st century.

But the subjective forces of the socialist revolution must arise and develop to take advantage of the basic conditions, especially during prolonged periods of serious crisis of the world capitalist system such as the current period. The proletariat must build its revolutionary party for fulfilling its historic mission of building socialism. There must be mass organizations and movements to involve the broad masses of the people in the revolutionary process and to fight the adversary in every aspect of social life.

The exploiting classes (industrial monopoly bourgeoisie in imperialist countries and the big compradors and landlords in the dominated countries) control the economy, politics and culture. They wield both the coercive and persuasive apparatuses to maintain class rule. When their rule meets with serious challenge, they do not hesitate to unleash the full force of state violence.

The optimal economic and technological conditions for building socialism are available in the industrial capitalist countries. But it is also in these countries where the capitalist class is strongest in using both the coercive and persuasive means to prevent socialist revolution.

So far, in its epochal struggle against the bourgeoisie, the proletariat has been able to make use of the very crises and global wars generated by monopoly capitalism to seize political power and build socialism at the weakest points of the world capitalist system. But now, at the very centers of imperialism, new conditions have arisen to sharpen the class struggle between the monopoly bourgeoisie and the proletariat.

The so-called third stage of the technological revolution (high technology spearheaded by information technology) under capitalism initially allows the monopoly bourgeoisie to tighten its control over society. But the growing disparity between imperialist propaganda and reality ultimately incites the proletariat and the rest of the people in imperialist countries to fight for their social liberation.

The adoption of high technology within capitalist relations of production accelerates the concentration and centralization of capital at an unprecedented rate and the monopoly bourgeoisie is driven to counter the tendency of profits to fall by further cutting down employment and bringing down wage and living conditions of both the blue collar and white collar workers.

The inevitable consequence is the intensifying protest and resistance of the proletariat and people against mass unemployment, job insecurity and rapidly worsening social conditions, and the demand of the proletariat and people for the reduction of working hours at full time pay in order to spread the dignity of employment and expand the domestic market.

The monopoly bourgeoisie uses the high-tech mass media to spread disinformation and false illusions as well as petty bourgeois mentality among the workers, underemployed and unemployed. But the people can as well use electronic techniques to conduct revolutionary propaganda in ever widening and intensifying guerrilla fashion, if there is a party of the proletariat to raise the level of revolutionary consciousness and militancy.

General strikes and strikes in key companies manifest the sharpening class struggle between the monopoly bourgeoisie and the proletariat. These are breaking out increasingly beyond the control of the labor aristocracy. In view of the growing social discontent, the blatantly conservative parties that push "neoliberal" policy are discredited. But the other bourgeois parties push the same policy and sugarcoat this with deceptive phraseology in order to win elections. There are also the parties and movements which whip up neofascist and racist currents.

Conditions are becoming favorable for the working class to build up their revolutionary parties and break out of the lingering influence of relatively better times in the past, widespread petty-bourgeois mentality, the bureaucratic control of unions by the labor aristocracy and reformist and revisionist parties and organizations. The working class must include into its ranks the white collars who do repetitive work with their fingers rather than with their full arms and shoulders.

For so long as there are no revolutionary parties of the proletariat that are capable of overthrowing the monopoly bourgeoisie, the boom-and-bust cycle will continue to recur. But new conditions in social production worsen the structural crisis, involving chronic overproduction, chronic high rate of unemployment and chronic abuse of finance capital.

The "neoliberal" policy stress of sucking up resources under the pretext of averting inflation, which is blamed on rising wage levels and social spending, has wrought havoc on the lives of the proletariat and the people. Even if there were a swing back to Keynesian or whatever policy mix of "neoliberalism" and Keynesianism, the basic contradiction of rising social productivity and the rapacious capitalist appropriation will persist.

The overwhelming majority of third world countries that have been excluded from the "neoliberal" category of "emerging markets" remain under the sway of neocolonialism, wallow in the mire of semifeudal conditions and have continued to deteriorate economically and socially since the end of the Keynesian policy stress on "development" left them with crushing debt burdens, austerity programs and ever-deteriorating terms of trade for their raw-material exports.

The general level of political struggle in these countries has plunged to one among reactionary factions hogging the center of the political stage and mouthing the slogans of bourgeois nationalism, religion and ethnocentrism in the course of electoral competitions or in the course of unleashing violence against each other in an increasing number of countries.

Under these conditions of political disorder among the reactionaries themselves, the proletariat and the people have ample opportunity to build the revolutionary party, the people’s army and the united front to wage a new-democratic revolution towards the socialist revolution.

In this regard, a number of third world countries have revolutionary parties of the proletariat guided by Marxism-Leninism and are waging the new-democratic revolution through a protracted people’s war. They play a signal role for the spread of armed revolution against the imperialists and the local reactionary classes. There are also some states, like Cuba and the People’s Democratic Republic of Korea, that fight for national independence and the socialist aspirations of their people.

The economic collapse in the few "emerging markets" in the third world has brought about conditions of social and political disorder and revolutionary mass struggles. The withdrawal of Suharto from his position of power is remarkable. But his replacement by one of his stooges underscores the need for a new-democratic revolution.

In such countries as China and Russia, genuine communist parties can arise to avail themselves of outstanding revolutionary legacies, such as those of Lenin, Stalin and Mao. They can easily target for popular condemnation and overthrow the new bourgeoisie, which has so flagrantly robbed the people of their social wealth. In Russia, general strikes and mass protests have erupted on a widescale. In China, workers’ strikes, local peasant uprisings and other forms of concerted action have occurred.

The intensifying exploitation and oppression compel the proletariat and the people to wage the revolutionary struggle for socialism against imperialism and the local reactionaries. For this struggle to succeed, the revolutionary party of the proletariat must lead the broad masses of the people in the process of overthrowing the class dictatorship of the bourgeoisie and building socialism.

The scientific socialists of today must learn from the basic teachings and great achievements of their predecessors and draw lessons from both positive and negative experience in order to fare better and win greater victories in the forthcoming struggles against the imperialists and reactionaries.

The victory of socialism over monopoly capitalism is inevitable on the scale of a whole historical epoch. The revolutionary party of the proletariat and the broad masses of the people must master the circumstances, pursue the correct strategy and tactics, defeat the imperialists and reactionaries in one country after another and build socialism until it prevails over imperialism on a global scale. #



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