Capitalist Crisis Makes Socialism Necessary

Statement on the 20th Anniversary of the Fall of the Berlin Wall, 9 November 2009

Chairperson, International Coordinating Committee
International League of Peoples’ Struggle
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Since the fall of the Berlin wall on 9 November 1989, the world capitalist system has sunk deeper into crisis. It is now undergoing its most severe crisis since the Great Depression of the 1930s, with some commentators calling the present crisis “the Greater Depression” in terms of its effects on the jobs and livelihood of the workers and peoples of the world.

After emerging as the world’s sole superpower in the wake of the collapse of the former Soviet Union, the US itself is wracked by a severe crisis and is further plunging the world with it. The imperialists and its propagandists perorate on how value and value-creation in the economies of the socialist states and then the modern revisionist regimes were distorted by the state bureaucracy.

Now all the countries of the world in varying degrees are reeling from a crisis driven by unbridled private greed under the slogan of “free market globalization” involving the fantastic accumulation of immense wealth by the financial oligarchy and monopoly capitalists through unrelenting super-exploitation of the working people, financial manipulation and the berserk generation of fictitious capital.

Since the fall of the Berlin Wall, the social conditions of the workers and peoples of Eastern Europe and the former Soviet Union have plummeted under the conditions of unbridled capitalist exploitation, oppression and violence. Poverty levels have risen due to massive unemployment and depressed incomes. Inflation has been cutting down the value of wages, pensions and savings.

State investment in production and job creation has been significantly reduced. Public allotment to education and other social services has plummeted. The educated have difficulties finding work and illiteracy is spreading. The workers’ and peoples’ health have taken a beating, causing severe malnutrition, stunting growth among the youth and shortening the average life span of people.

The number of children living in the streets and left to fend for themselves in these very cold countries has multiplied. The suicide rate has grown among them by significant percentages. The situation of the street children and society at large is being further aggravated by the current financial and economic crisis.

The anger and discontent of the workers and peoples of Eastern Europe and the former Soviet Union are becoming manifest in different ways. Parties of the Left are becoming popular and are gaining strength in national elections.The workers and people are speaking out against the accelerated escalation of exploitation, oppression and violence of the big bourgeoisie.

Survey after survey shows that the people feel they are plunging deeper into poverty and that they are increasingly disillusioned and angry with capitalism and its unfulfilled promises. With the onslaught of the current economic and financial crisis, there is rising interest in and study of Marxist and progressive writings. The imperialists and the local ruling classes are responding to this by deflecting the workers and peoples from the class struggle and anti-imperialist solidarity by promoting divisions and hatred based on chauvinism, racism, ethnocentrism and religious bigotry.

The Comecon is gone. But all the former revisionist-ruled countries are now in the tight grip of the US-controlled world capitalist system and are caught up in the turmoil of the gravest economic crisis since the Great Depression. The crisis is whipping up fascism and aggressive wars. The room for inter-imperialist competition has become more cramped and more intense, with Russia and China joining in as big power players.

The Warsaw Pact is gone. But the NATO has been expanded as to include the former revisionist-ruled countries in Eastern Europe, reaching the borders of Russia. Most of the former revisionist-ruled countries are potential hotbeds of fascist repression and aggressive wars as already indicated by the violent disintegration of Yugoslavia by a series of wars instigated by the imperialists and by wars involving Chechnya and Georgia. Mercenary forces from the former revisionist-ruled countries have been deployed by the NATO to distant lands like Iraq and Afghanistan.

The crisis of monopoly capitalism has brought ever-greater suffering among the workers and peoples of the world. The imperialist-controlled multilateral agencies underestimate world hunger when they report that only 1 billion people go hungry out of the more than six billion human population. They say that this is the largest number of people going hungry in history, and the same number of people suffer from malnutrition.

This situation is bound to get worse, as world economic output is predicted to decrease this year, the first time since World War II. The contraction of employment is estimated to last for another eight years. The number of people living on less than $2 per day will increase by hundreds of millions. Decreasing demand for consumer goods, semi-manufactures and raw materials impacts heavily on millions of workers and peasants in neocolonial economies.

The workers and peoples of the world are waging various legal and illegal forms of organized action to protest the anti-people policies of imperialism. International gatherings of the monopoly capitalists, the finance oligarchy, and heads of imperialist states have become occasions for mass protests by indignant workers and peoples in the meeting areas and in various countries. Countries assertive of national independence are exposing and lambasting the dictates and impositions of imperialism.

Armed revolutions for national liberation and democracy are continuing and gaining strength in the Philippines, Colombia, India, Peru and Turkey. The people of Iraq and Afghanistan are waging armed resistance against the occupation and colonization of their countries by the US. The armed forms of struggle are bound to grow in strength and advance as a result of the intensification of the crisis of monopoly capitalism.

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  1. Yes, we need a different kind of socialism and certainly not the one that proved utopian in the former USSR. Marx had good intention but in the process of developing economic systems, he had not followed the economic theories and Nature's laws. As such it could not become immortal. Marx once said,"Laws should bring people together and not to divide them. Laws dividing people are against the Nature as such not moral. What is immoral cannot be immortal." We know the result of this. He on the other hand, developed classes between wage-wokers, farm labour, state employees, capitalists etc. His 'reserve army' was not in forefront of revolution.He instead banked on organised workers.

    Capitalism, like Marxism, has severe internal contradictions and lack of adherence to Nature's laws. Monopoly in capitalist economic system has no economic theory.Free market does not exist. Paul Samuelson says' "Free market cannot exist any time now or in future". Yhis is his lame excuse to protect capitalism. Capitalism has to collapse sooner or later. The signs of its death are very clear. Pope Benedict XVI has said in his Encyclical dated 7th July 2009 that capitalism has now become "obsolete". This is the death certificate given by him for capitalism. Gorbachev did not understand the phenomenon of economic laws as such he started copying Western capitalism of so called free market (?). He did not check that monopoly market which was being sold under the garb of free market. Free market as defined in any economic textbook. If implemented in its true spirit and letter, capitalism cannot survive even for short period.

    What we need now? We need new concept of socialism as visionary Marx had a dream of. It has to be based on true free market with oversight of omnipotent state to ensure that no one use coercive influences on prices and supplies and demands of goods in the market.Creator of surplus value, as defined rightly by Marx, to be retained fully with himself. State to provide all the necessary infrastructure support along with finance at zero rate of interest to all the needy working population. Family units would be the final form along with working people's cooperatives and partnerships. Socially essential monopoly production activities (electricity, railways, water supplies, public transport etc) should be with state. There has to be a competition between socially necessary units with private units, if any, and transperency about cost of production of each good supplied in the market. Pigou's empty boxes could be filled up wherever required.

    This new form of socialism would see full competition as defined by Hayek and other economists who were free from influence of business people. This will bring in a trend of constantly lowering prices of goods and services which in turn abolishes interest and inflation as elements of economic activities. Abundance of goods is the mantra in this kind of socialism. All capitalists including Keynes and Adam Smith were afraid of this but could not distance from this any time. Prof. J. Pen, a Keynesian follower, had said that abundance would destroy the industrial world so asciduously built by us in no time. He said the truth.

    New socialism of Hindu-economics promises FULL employment with freedom to each individual to apply his naturally available talents and innovative mind to face free competition.He becomes a proprietor instead of a wage-worker. As such the class war between workers and capitalists gets completely wiped out. Family members, including physically incapable old and young people, can also join these units to increase value added. Stagflation and economic theory of distribution is demolished and the system becomes an eternal economic order. Direct taxes too can be reduced and over time abolished in the same economic order to avoid black money generation.

    This is fully backed by all the recent known economic theories. This new theory of socialism (a much improved version of Marxian socialism) was presented by an Indian economist Dr. M G Bokare in 1993 for world discussion. This is based on first books of world knowledge Hindu-Vedas. As such the new economics is called Hindu-economics. The second edition of this book is now available from The author was a member of Indian Communist Party for over three decades. He was sacked from the Party as he wanted to present an improved version of Maxian economic theory. It is expected to have open mind in developing any economic model. This was not available during period earlier to collapse of former USSR. This amended format of Marxian socialism was offered to then President Gorbachev when he was applying peristoica and glasnost principles in the initial stages of his efforts in opening the economy. However, he preferred to stick to Western model of economics and got into trouble. Hope we have now an option for a more scientific socialism to be implemented to save the mankind and the planet itself from collapse and destruction.

    Hindu-economics subsumes Mahatma Gandhi's decentralization, interest-free society of Islamic economics, socialistic ethos, etc. This is one hundred percent eco-friendly economic system.

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