[This is an abridged and edited version of a talk to the International Conference on Diego Garcia organised by the Mauritian socialist group Lalit October 30-November 2. See the report on the conference].

Diego Garcia is a very important issue. Mauritian territory was stolen, and the Chagossian people were uprooted to build a huge US military base. The base is there to attack the peoples of the Middle East, Asia, and Africa. It plays an important part in US imperialism’s military control of the world.

There are more than 800 overseas US military bases in 63 countries, and US military personnel in 156 countries. The US Defense Department has real estate in 46 countries and US territories, adding up to 837 overseas locations. The US has 11 aircraft carriers deployed (all nuclear powered supercarriers, more than the rest of the world combined) with six in reserve and three being built. And it has its super stationary aircraft carriers like Diego Garcia.

Is there any prospect of Washington retreating from its strategy of worldwide military aggression? The end of the Cold War and the collapse of the Soviet Union didn’t bring any let-up. The election of a more liberal president, Obama, changed nothing. More troops were despatched to Afghanistan. Anti-democratic raids and spying have stepped up under Obama. Torture is continuing in Iraq. There are more drone attacks on Pakistan than under Bush. The US ruling class will keep up its huge military machine, to try to maintain its economic and political dominance, to try to keep the US ruling class’s profits flowing in.

Profits, political control and military power are integrally connected. Oil is a vital resource for US imperialism, and it will go to any lengths to maintain control. The main wars US imperialism is waging are aimed at securing its control over the largest oil reserves in the world. The Israeli colonial settler state would not exist without the financial and military backing of US imperialism, for which it serves as an outpost into the Arab/Muslim world and the oil fields. The invasion of Iraq was a war for oil and regional power. The excuse for the invasion of Afghanistan was provided by the al Qaeda terrorist attack, but the real motives also relate to oil. Iran is imperialism’s next target and part of its oil plan.

Huge arsenal

The Stockholm International Peace research Institute figure for US military expenditures for 2009 was US$663 billion, 43% of world military expenditure. Another estimate, by the Global Issues website, is that the US had 46.5% of world military expenditure in 2010. But some of the US figures don’t include its spending on wars! And there is military-related expenditure outside the Department of “Defense.” So it’s probably closer to the truth that the US spends more on war than the rest of the planet combined.

Then you also have to consider that most other countries with big military spending are in the pocket of the US: the UK (with the third largest military budget), all the NATO countries, Australia, Saudi Arabia (which has the eighth largest military budget), South Korea (11th largest).

US imperialism has this colossal military machine for the same reason the British Empire had a huge army and navy, and the Spanish empire before that: to conquer and defend its empire and its plunder and profits. As its financial dominance is threatened by the worldwide capitalist crisis and by new challengers, the US will rely more on its military machine.

We need to fight against all the consequences of the system, but also realise we won’t solve the problem permanently until we get rid of capitalism itself. We should be calling for peace; that appeals to the needs and healthy sentiments of people everywhere. But we should also realise that there’s no real peace without getting rid of capitalism.

Capitalism is a relatively recent system, just a few centuries old, and it’s not a permanent state of affairs. Is there an alternative? Yes: socialism. It’s a logical, scientific progression, and the development of the productive forces, the huge increase in productivity, education, scientific and technological advances makes it feasible.

Economic crisis

The need for the elimination of capitalism and its wars and exploitation is starkly visible. The global economic crisis has disrupted the smug functioning of the system. The visible signs of the crisis were the initial spectacular collapse of financial giants such as Lehman Brothers. Why did it happen? Was it a result of deregulation? Certainly, within their system they’ll have to find ways to tighten up. But the underlying cause was a crisis of overproduction. Rather than the actions of rogue traders or poor regulation, the 2008 crisis was the result of a feverish boom based on the overproduction of commodities (in this particular case, houses).

The figures are dramatic. The contraction in production was the sharpest in a hundred years. For the US, in May 2009 the rate of capacity utilisation by industry declined to 68.3%, 12.6% below the average for 1972-2008. In Japan, capacity utilisation almost halved between February 2008 and February 2009. Capacity utilisation in the euro area at the end of July 2009 stood at 69.5%, well below its long-term average of 81.6%. Especially hard hit were the producers of capital goods (67.6%). In the automotive industry, capacity utilization even went below 60%. These are record post-World War II lows. In some of the less developed countries, the situation is even worse, with capacity utilisation of 50% or less.

In 2008 global capacity utilisation in the automobile industry fell to 70.9%, 10% below its average from 1979 to 2008. The world industry has the capacity to produce 94 million vehicles a year. On the basis of present sales, that is about 34 million too many. The big car makers could close one-third of their factories and would still find it difficult to sell everything they produce.

General Motors has a massive restructuring plan that includes cutting more than 21,000 US factory jobs. These are among the best paid jobs, often with union representation, while the few jobs that are being created are usually non-union and offer cut-rate wages. According to Michelle Hill of the consulting firm Oliver Wyman, in order to recover profitability, the US automakers will have to close at least a dozen of their 53 North American factories in the next few years. The only way to eliminate overcapacity is by the systematic destruction of the productive forces.

Global competition

For the US, this global crisis comes on top of growing competition from China, whose rapid economic development has started to place limits on the power of US capitalism. China and India and others are now part of the world market, but for the first time since 1982, world trade has fallen steeply, 14.4% in 2009. Imperialism has initiated a currency war, and there’s a danger of it escalating into a trade war. This situation has led to the rising value of gold, from US$700 in early 2008 to more than $1300 now.

While the US is economically weakened, it still has a number of weapons in its arsenal enabling it to turn things to its advantage. One important trump card is the US dollar’s privileged position as the dominant reserve currency. This tool has been more at the whim of the US ruling class since the early 1970s, when it ceased backing the dollar with gold, as was required under the Bretton Woods system. This means the US can print money virtually at will, enabling it to sustain jaw-dropping and still escalating budget and external account deficits. Using “quantitative easing” (a euphemism for “printing money”), the US Federal Reserve has been able to depress the value of the dollar, manipulating it as a policy tool in its competition with other capitalist states. The hundreds of billions of foreign exchange reserves held by countries like China take an instant “haircut” with every weakening of the dollar.

The last global empire, Britain’s, ruled when capitalism was in its ascending phase. Now US imperialism has that role in the period of capitalist decay. The new stage of capitalism’s crisis consists of an all-out assault on the working class.

Offensive against workers

In the August Direct Action, Doug Lorimer wrote: “Across the capitalist world, the capitalist rulers’ policy has shifted from deficit-financed stimulatory spending to limit the depth of the recession to austerity measures – targeting government spending on social services ... Austerity means that capitalist governments will make their highest priority the repayment of the trillions they borrowed from big capitalists to save their banks and other financial institutions from collapse – ahead of schools, hospitals, the pay and pensions of government employees and ‘job creation’.”

Boosting public spending in order to prop up a declining capitalism plagued by overcapacity is a basic idea of Keynes, and many advanced capitalist governments have adopted this measure to cope with recurring economic crises. With the intervention required getting bigger and bigger, there is a need for the state to borrow an increasing amount to foot the bill, and this is reflected in a ballooning budget deficit.

Previously, that spending mostly took the form of public infrastructure, but more and more it is spent outright on the rescue of capitalist corporations and banks.

“Austerity” means getting the working class to foot the bill for rescuing the capitalists. They are part and parcel of the same process: a massive transfer of wealth from the working class to the capitalist class. The crisis is being used by the capitalists to force the workers in the advanced capitalist countries to accept a lower standard of living. It’s an austerity offensive across the board.

Jobs and social services slashed

In the last three months we’ve seen these policies being implemented, especially across Europe. It’s an all-out attack on wages, social services, public services and benefits in order to claw back any working class gains of the last half-century, weaken trade union organisation and significantly shift the balance of power in favour of capital.

Greek workers were the first to be targeted. The propaganda offensive was that Greece (Greek workers) had been living beyond its means. Workers, the poor, public servants had to suffer, to pay out German and French banks. And it was a PASOK, social democratic government imposing the cuts. Similar attacks followed across Europe, especially Portugal, Italy and Spain. Spain’s austerity offensive was also launched by a supposedly “socialist” government.

Austerity measures were imposed in Ireland, and $50 billion given to the banks. In France, the ruling class has tried to focus the attacks against pensions, thinking it could sell across-the-board attacks against workers and the poor by arguments about changing demographics. It hasn’t conned French workers, however.

Now it’s Britain’s turn. In the UK nearly a million full-time jobs have been lost since the start of the recession. Now the coalition government has launched the largest cut in public sector spending in the UK since the second world war, which will slash even more jobs: a Conservative-supporting think-tank suggested 750,000 to 1 million more.

The US unemployment rate surpassed 10% in 2009 for the first time since 1983, and is still at that level. If those working part time or no longer looking for work were included, the real rate would be closer to 20%. For immigrants and blacks it is even worse: 34.5% of young African American men are unemployed. The biggest falls have been in the public sector.

Resistance

The initial responses from Greek workers and youth were energetic and massive, but the trade union leaders seem to have allowed the steam to go out of the movement.

So far the most inspiring and massive resistance to the austerity offensive has come from the workers and youth of France, battling Sarkozy’s pension “reforms”. The strength of the resistance rests on the revolutionary traditions and outlook of the French working class. But it also probably benefits from the fact that if the SP or an SP-CP coalition had been in office at the time, resistance might have been harder to organise.

In Spain there was a 10-million strong general strike, but no ongoing action. In Italy a protest in Rome organised by the national metalworkers’ union had estimated numbers ranging from 100,000 up to a million. In the UK in response to the massive cuts there’s been a rather flat and token Trades Union Congress action, which didn’t mobilise many people. Now it promises a bigger demo in five months!

Around the world, the cuts are attacks on the gains made in the 20th century by the working class. Rather than token protests, unions and workers’ organisations should be responding with militant, ongoing strikes and actions, putting forward our own demands for a sliding scale of wages and hours. Actions have been shackled by the shameful role of left or centre-left parties, which are either implementing the capitalist cuts or preparing to implement them if brought to power.

These cuts aren’t going to get capitalist economies out of their crisis. The ruling class calculates that there will be a permanent blow to working-class rights, benefits and share of the wealth, but they probably also realise that more people will turn against government policy and an increasing minority will turn against a system which has so patently failed. So rather than cutting back on military spending, reducing their overseas bases, the imperialist ruling class is going to feel a need to be more warlike. It will have hopes of new wars dragging it out of the crisis, and will want strong armies to counter future resistance.

Changing consciousness

There is a changing consciousness. Despite the capitalists’ power, naked and subtle, some truth leaks out, for example the recent Wikileaks releases. The internet has been a mixed blessing for capitalism. And there’s a heart-warming healthy cynicism and suspicion by ordinary people. For example, regarding the war in Afghanistan, there’s still majority opposition to the invasion, even in the US.

Although our wages, jobs, social services and pensions are being hit, those who understand that capitalism is the problem should be welcoming the opportunities offered by the crisis. Capitalism itself is the crisis, and although we should fight every capitalist attack, we should go further. I found Marxist philosopher Slavoj Zizek especially sharp and clear in his response to the capitalist crisis in his article in New Left Review, July-August 2010:

“The best indicator of the left’s lack of trust in itself today is its fear of crisis. A true left takes a crisis seriously, without illusions. Its basic insight is that, although crises are painful and dangerous, they are inevitable, and that they are the terrain on which battles have to be waged and won.”

‘Reform’ or revolution

Crises pose even more sharply the issue of reform or revolution. Reformism, social democracy today, is less than ever for reform; they’re increasingly exposed as just defenders of the system.

There’s already widespread disenchantment, strong opinions against the wars in Iraq and Afghanistan, distrust of banks, media bosses, elites. But the organisations of the workers are weak. There’s only modest organisation of the opposition. There’s no alternative party.

The US is a “two party” system: two pro-capitalist parties. Similarly in the UK and Australia. The Greens are also within the framework of capitalism, though championing environmental issues and taking up some of the space of the old ALP. The left has been talking about the “crisis of leadership” for decades. And it’s certainly true. As Zizek pointed out:

“There is no lack of anti-capitalists today. We are even witnessing an overload of critiques of capitalism’s horrors ... There is, however, a catch to all this criticism, ruthless as it may appear: what is as a rule not questioned is the liberal-democratic framework within which these excesses should be fought. The goal, explicit or implied, is to regulate capitalism … but never to question the liberal-democratic institutional mechanisms of the bourgeois state of law.”

Socialism of the 21st century

But a serious rift with the capitalist system is occurring in Latin America, and showing the way. Cuba has stood fast for 51 years, despite imperialism’s direct attacks, subversion, terrorism and blockade, and now the Venezuelan revolution has enormously expanded the socialist challenge. The combination of the extensive capitalist crisis and the revolutionary dynamic in Venezuela presents the weakened left in the rest of the world with a responsibility to provide support and solidarity to the revolutionary processes that are occurring, as well as an opportunity to build and renew itself in alliance with the Latin American revolutionary forces.

The threat to the future of human civilisation and even life on the planet..posed by the environmental crisis is another challenge to world capitalism, which unfortunately they don’t take seriously. Climate change, brought about by the capitalists’ reckless drive for profits, has to be reversed, but capitalism cannot do it. Socialism is ever more urgently needed to save the planet. The possibility of gaining a wider audience for socialist solutions has increased considerably.

Socialism of the 21st century, the goal of Venezuelan socialists, should be our goal too: a socialism that’s democratic, without fetishising parliamentary democracy or a “peaceful transition”, a socialism that’s environmentally conscious.

From one viewpoint, it’s terrible times for the revolutionary left. Over the last few decades we’ve suffered major defeats and retreats of the working class and its organisations. But it’s also a period of great potential. Capitalism is in global crisis, increasingly exposed. Social democratic parties and governments have moved further to the right, lessening their possibility of misleading any workers’ upsurges.

Revolutionary parties are needed to lead the fight back against the warmongering and attacks of capitalism. Situations can turn around quickly. In times of capitalist crisis, there's a real likelihood of workers and youth radicalising, the possibility of revolutionary socialist parties being built rapidly. We need to build them now. All of us who are aware of the crisis, who open their eyes to the injustice, the irrationality of capitalism, the greed and aggression of imperialism, need to be building revolutionary parties.