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News :: International : Politics
IMF Releases Paper on Ending Predatory Behavior: Paper Propels IMF Board Financial Stability Decisions
20 Jun 2014
The International Monetary Fund (IMF) officially released a major paper focused on increasing stability in the financial system and preventing predatory hold-out behavior in debt restructuring. Last Monday's ruling by the Supreme Court in NML Capital vs. Argentina has legitimized predatory behavior that the IMF, US Government and legitimate investors seek to stop. The IMF paper was the second paper that reviewed potential aspects of an international bankruptcy process for the IMF Executive Board.
The International Monetary Fund (IMF) officially released a major paper focused on increasing stability in the financial system and preventing predatory hold-out behavior in debt restructuring. Last Monday's ruling by the Supreme Court in NML Capital vs. Argentina has legitimized predatory behavior that the IMF, US Government and legitimate investors seek to stop. The IMF paper was the second paper that reviewed potential aspects of an international bankruptcy process for the IMF Executive Board.

"It's clear that the IMF is looking for innovative ways to thwart the predatory behavior that was just legitimized by the Supreme Court," stated Eric LeCompte, Executive Director of the religious financial reform coalition known as Jubilee USA Network. "You can see in the paper that long before the Supreme Court ruling, the activity of these hedge funds has been on the IMF's radar."

The IMF paper notes the problems with current approaches to deter predatory behavior and promises a stand-alone paper in the near future on restricting the practice. Primarily, the paper focuses on creating more predictability in the financial system and preventing the "contagion" that spurs regional and global financial crises. IMF staff are attempting to build consensus on a set of financial issues in a series of papers and board discussions. A third paper on creating greater predictability in the global financial system is expected from the IMF by year's end.

"Greater predictability in the markets protects the vulnerable and ensures that the financial system serves all of us," noted LeCompte. "It's unclear how far the IMF can go. It's imperative that global decision makers take seriously the threat of another financial crisis. It's not a matter of if a financial crisis will strike again, it's a matter of how soon it will strike."

Read the IMF's paper:

Jubilee USA Network is an alliance of more than 75 US organizations, 400 faith communities and 50 Jubilee global partners. Jubilee's mission is to build an economy that serves, protects and promotes participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people.

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Re: Financial Stability Decisions
21 Jun 2014
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A dramatic moment when a $24 million dream yacht went up in blazing flames, sending plumes of black smoke up in the air in San Diego, California, was caught on video by a drone.

The yacht caught fire in the Chula Vista Marina before 9:20am PDT on Thursday, local ABC affiliate 10 News reported.

The video of the Polar Bear yacht engulfed in flames was filmed 10-15 minutes after the fire started, said Kurt Roll, the author of the footage posted on YouTube on Saturday.

“I was filming a friend’s boat in South Bay close by, when we saw the smoke coming from the Marine Group’s yard. This was fascinating to watch through my monitor, but having a boat myself I couldn’t help thinking of how horrible it would be to have your dream boat go up in flames. I’m sure the insurance will replace it, but wow what a bummer and a hassle,” he wrote.

The intensity of the fire was so fierce that “you could feel the heat coming off it," even about 90 meters away before the yacht was fully engulfed, marina worker Bill Cavanaugh told 10 News.

About 100 workers on site were evacuated as the fire started, while one was treated for smoke inhalation, the local fire chief said.

The 34-meter (112-foot) yacht was set ablaze supposedly due to a welding accident, but that has not been confirmed, local media reported.
Former Goldman trader involved in fraudulent activities says $8 million bonus too low
23 Jun 2014
By Andre Damon 21 June 2014

A former Goldman Sachs trader who helped the bank bet against toxic mortgage-backed securities it was palming off to investors is attempting to sue his former employer because he says his multimillion-dollar pay package did not reflect the billions of dollars the bank earned as a result of his trades.

Deeb Salem, the former head of trading for Goldman’s Structured Products Group, complained that he received an $8.25 million bonus in 2010, though he said informal comments made by company executives led him to believe he would get closer to $13 million that year.

Salem filed a petition with the New York State Supreme Court last week, demanding that he get an additional $7 million from Goldman, after the Financial Industry Regulatory Authority—a Wall Street self-regulator—ruled in favor of Goldman in an earlier arbitration.

Salem claims his pay was docked because, as noted in a written warning he received, he showed “extremely poor judgment” by bragging in print about trades that his trading desk had made under his supervision in his 2007 annual self-evaluation. It should be noted that Salem’s pay was docked not because he carried out illegal trades, but because he left a paper trail.

This document was a source of embarrassment for the company after it was used as a major source in the Senate Permanent Subcommittee on Investigations’ 2011 report into the financial crisis. Salem called Goldman’s $10 billion bet against the subprime mortgage market “HUGE” and “enormous,” in his report.

Citing Salem’s self-evaluation and emails, the Senate report concluded that Goldman Sachs “used net short positions to benefit from the downturn in the mortgage market, and designed, marketed, and sold [mortgage-backed securities] in ways that created conflicts of interest with the firm’s clients and at times led to the bank’s profiting from the same products that caused substantial losses for its clients.”

In order to maximize the company’s profits on its “short position”—or bet against mortgage-backed securities—Goldman undertook a so-called “short squeeze” that was “intended to compel other market participants to sell their short positions at artificially low prices,” which Goldman would then purchase. The tactic was unsuccessful, apparently because other major financial players realized, like Goldman did, that the mortgage-backed securities market was about to implode.

As the Senate report made clear, Goldman’s “short squeeze” was illegal, as “trading with the intent to manipulate market prices, even if unsuccessful, is a violation of the federal securities laws.”

Salem bragged in his self-evaluation that “the market was trading VERY SHORT and was susceptible to a squeeze. We began to encourage this squeeze, with plans of getting very short again, after the short squeeze caused capitulation of those shorts.”

He lamented, however, that even though the strategy was “do-able and brilliant,” the bad news about the mortgage market kept coming in, overwhelming Goldman’s ability to manipulate prices, and Goldman was forced to take a less complex bet against mortgage-backed securities. It was not all that bad for the bank, since Goldman still made billions of dollars betting that millions of families would be driven from their homes as the foreclosure crisis intensified.

Despite the clear and pervasive violations of securities law documented in the report—theoretically enough to land dozens of Goldman Sachs executives and traders in jail—there have been no criminal charges brought against Goldman stemming from its findings.

Salem’s report refutes the 2010 claim made by Goldman CEO Lloyd Blankfein under oath that “we didn’t have a massive short against the housing market, and we certainly did not bet against our clients.”

In a press conference to announce the Senate Report, committee chair Carl Levin said that Blankfein and Goldman “attempted to mislead the Congress and I believe they did mislead their clients in very significant ways.” He added that he would not “make the determination as to whether or not he [Blankfein] committed perjury,” but said he had turned over transcripts of Blankfein’s testimony to the Justice Department. The Justice Department, predictably, did nothing with the report’s findings.

Salem’s petition comes as Blankfein’s image is being quite consciously rehabilitated. Earlier this month, Vice President Joe Biden, Treasury Secretary Jacob Lew and Energy Secretary Ernest Moniz attended a conference on the environment at the company’s headquarters. As the Wall Street Journal noted, Blankfein was “front and center at the conference, and in several television appearances before the event,” including an interview with PBS’s Charlie Rose.

In his testimony before the earlier arbitration hearing, Salem bemoaned his pay cut. “Let’s be very clear: I was one of the most sought-after investment professionals in the mortgage industry,” adding, “I had the opportunity throughout the course of my career… to leave for other opportunities.” He subsequently left for the hedge fund GoldenTree Asset Management, which manages some $15.7 billion in assets.

The entire episode reads as like a satirist’s parody of the ridiculous and absurd corruption of American society: A Wall Street trader sues his old employer for insufficiently compensating him for the billions of dollars it made from his trading activities in a court that, if it actually followed the law, would hold everyone involved legally accountable.

The whole sordid episode reveals the absurd, remorseless greed that dominate the upper echelons of Wall Street, the criminality that pervades all of its activities, and the complicity of the government in aiding and abetting the banks’ crimes.
Economy slumps, Wall Street booms
23 Jun 2014
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Markets! Finance! Scandal! Keiser Report is a no holds barred look at the shocking scandals behind the global financial headlines. From the collusion between Wall Street and Capitol Hill to the latest banking crime wave, from bogus government economic statistics to rigged stock markets, nothing escapes the eye of Max Keiser, a former stockbroker, inventor of the virtual specialist technology and co-founder of the Hollywood Stock Exchange. With the help of Keiser's co-host, Stacy Herbert, and guests from around the world, Keiser Report tells you what is really going on in the global economy.

Economy slumps, Wall Street booms

20 June 2014

The Federal Reserve on Wednesday cut its projection for US economic growth in 2014 and scaled back its annual growth estimate in the longer term to about 2 percent—far below the post-World War II average of 3.3 percent. It is an outlook that promises no relief for the vast majority of the population from six years of unemployment, falling wages, and cuts in education, health care and other vital social programs.

The Fed’s assessment amounted to an admission that slump and falling living standards for the masses of people are here to stay.

The bleak assessment was in line with two other economic reports released in recent days. Last week, the World Bank cut its projection for global growth this year to 2.8 percent from its earlier estimate of 3.2 percent, and downgraded its prediction for the US from 2.8 percent to 2.1 percent. On Monday, the International Monetary Fund revised downward its projection for US growth from 2.8 percent to 2.0 percent.

The IMF said unemployment in the US would not return to normal levels until the end of 2017 at the earliest.

Wall Street responded to the Fed’s assessment and policy statement Wednesday with a celebratory rally, pushing the Standard & Poor’s 500 stock index to a new record high and boosting the Dow by 98 points. The reason is not hard to fathom.

In keeping with the policy of central banks and governments around the world, the Fed made clear that it intends to continue pumping virtually free and unlimited credit into the financial system for at least another year. Fed Chair Janet Yellen went out of her way at a press conference following the close of the central bank’s two-day meeting to reassure the bankers and speculators that she would keep the benchmark federal funds interest rate at its present zero-0.25 percent level for months to come, and that extraordinarily low interest rates would continue indefinitely.

This is precisely the policy—a vast public subsidy to the financial aristocracy—that over the past five years, since the low point of the crisis that erupted in September 2008, has enabled the stock market to nearly triple in value, boosting the fortunes of bankers and CEOs to record levels, even as the real economy remained mired in slump and the living standards of the overwhelming majority of the population declined. The income of a typical US household fell 8.2 percent between 2007 and 2012.

The Fed, as expected, pared back its monthly bond purchases (its so-called “quantitative easing” program) by another $10 billion. In her remarks to the press, Yellen stressed that even after QE had ended, interest rates would remain near zero.

She went further, stating that the stock market—whose astronomical rise is entirely detached from the dismal state of the real economy—was “not overvalued.” In other words, as far was Wall Street was concerned, the fix was in.

Two days before, IMF Managing Director Christine Lagarde had urged the Fed to keep rates at their current level beyond mid-2015, when the financial markets believe small rate hikes are likely to begin. Warning of the fragility of the financial system, she implied that the central banks had to keep the flood of virtually free money flowing to the banks and hedge funds.

The justification given by Yellen, Lagarde and their like for what is essentially a systematic policy of redistributing wealth from the bottom to the very top is the need to create jobs and reduce unemployment. This is a fraud.

They know full well that pumping cash into the financial system does not lead to an expansion of productive investment and decent-paying jobs. There is no requirement that the bankers and big investors who benefit from this diversion of public funds use their windfalls to build factories or schools. For the past six years, government bailouts and central bank subsidies have gone to fatten the bank accounts and stock portfolios of the super-rich and finance ever more reckless and criminal forms of financial manipulation.

To cover the resulting debts incurred by governments, brutal austerity programs are imposed, destroying social services, jobs, wages, pensions and the living standards of the working class. Between 2007 and 2012, US government spending and public investment fell by almost 8 percent, the largest decline in more than half a century. Corporate investment has been minimal.

Alongside the massive diversion of social wealth to the financial elite, the IMF, World Bank and Fed continue to demand the gutting of past social reforms and protections for workers, in the name of “job creation” and “competitiveness.” Calling for cuts in government subsidies that hold down food and energy costs and privatization of state-owned industries, the World Bank in its June 10 Global Economic Prospects report stated: “In a world where external financial conditions are expected to tighten and remain challenging, future growth must increasingly be driven by domestic efforts to boost productivity and competitiveness.”

The same quasi-criminal and socially destructive methods that characterize the financial operations of the ruling elite find expression in the warmongering foreign policies of imperialist governments. Lagarde warned this week that the collapse of Iraq—the product of US war and subversion in that country, Libya, Syria and throughout the Middle East—could drive up oil prices and further derail the US economy.

Workers in the US are already being hammered by rising food and energy prices fueled by the inflation of stock prices and other financial assets and the crises precipitated by US policy in places such as Ukraine and Iraq. The national average price of gasoline is the highest for this time of year since 2008. More than half of all US states have reported rising gas prices. Retail beef, pork, poultry, egg and milk prices are all up sharply from last year.

Last week, the IMF warned that the inflation of real estate prices in a number of major countries was increasing the risk of another financial crash. But the very policies the IMF promotes—starting with the infusion of cash into the banking system—produces asset bubbles that must inevitably implode.

This contradiction reflects the dead end of the system which all of these institutions of the ruling class defend—capitalism. It is a system that has produced a vast sea of human misery and oppression, along with the stagnation and decay of man’s productive forces, exacerbated by the plundering of social resources to finance soaring stock markets, record corporate profits and the personal fortunes of a numerically minuscule financial aristocracy.

One statistic, often cited but nonetheless extraordinarily revealing and damning, encapsulates the irrationality and bankruptcy, moral and historical, of the capitalist system: 85 billionaires today have as much wealth ($1.68 trillion) as the bottom half of the world’s population—3.5 billion people.

This situation is not sustainable, either economically or politically. More and more workers, in the US as well as internationally, are coming to the realization that there is no way out within the framework of the existing system—one that barely conceals its single-minded focus on the further enrichment of the few at the expense of the many.

The turn must now be to the building of the revolutionary leadership required to arm the coming mass working-class struggles with a socialist and internationalist program.

Barry Grey
Life in the Capitalist Paradise
23 Jun 2014
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Homeless US.jpg
The luck of the few is the misery of the many. Life in the Capitalist Paradise.
Karl Marx Was Right
26 Jun 2014
Karl Marx Was Right

Capitalist Barbarism and the Fight for Revolutionary Leadership

Last fall, the Trotskyist League/Ligue trotskyste held public meetings in Montreal, Toronto and Vancouver on the relevance of the writings of Karl Marx to the struggle against capitalism today. We print below an edited version of the presentation given by John Masters of the TL/LT Central Committee in Toronto on 28 September 2013.

In 1867, roughly 150 years ago, Karl Marx finished the first volume of Capital, his groundbreaking analysis of the nature of capitalist exploitation. This book has a reputation of being difficult, and there’s some truth to that. But its depiction of the barbarism of the capitalist system is very powerful, in places even elegant. I’d like to cite two short passages. “Capital,” wrote Marx, “is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks.” And later in the same book: “to complete the process of separation between labourers and conditions of labour, to transform, at one pole, the social means of production and subsistence into capital, at the opposite pole, the mass of the population into wage-labourers, into ‘free labouring poor,’ that artificial product of modern society,… capital comes dripping from head to foot, from every pore, with blood and dirt.”

Well, not much has changed. Everywhere, the working class—“that artificial product of modern society” which must sell its labour power to survive—is under siege from the ruling capitalists. In April, more than a thousand women workers were killed in a factory collapse in Bangladesh. Why? Because using safe construction methods, even the most elementary, would have meant lower profits. Or look at the train accident that devastated Lac-Mégantic, Quebec, in the summer. The rail bosses refused to pay for safety or basic maintenance or hire enough workers, and the government gutted safety regulations. Why? The chase for profits. The result: dozens of people killed and an entire town centre destroyed.

Under capitalism, incredible riches sit cheek by jowl with abject poverty. Corporate profits and CEO salaries keep going up, while the conditions of work and of life for the vast majority continue to deteriorate. I’ll give just one example. Just six heirs to the fortune of the Walton family, the original proprietors of Wal-Mart, have more wealth than the 48 million poorest American families combined. And that’s in the richest country in the world. If you go to South Asia or Africa or Latin America, where the big imperialist powers collaborate with the local capitalists to exploit the workers in the most brutal fashion, conditions are much worse.

Let me again cite Bangladesh. Earlier this week thousands of striking garment workers clashed with police during protests demanding an increase in the minimum wage. About four million Bangladeshi garment workers, overwhelmingly women, are forced to toil in sweatshops for up to 80 hours a week producing clothing for export to the U.S., Canada and West Europe. Their average weekly wage is about $10, while the sweatshop owners rake in $20 billion a year.

Marx’s analysis of how capitalism is rooted in the savage exploitation of human labour is among his greatest contributions to humanity. He showed how such exploitation is at the very heart of capitalism because it is the means through which the bosses obtain their profits. Flowing from this understanding, Marx explained that capitalism cannot be fundamentally ameliorated by pleading for reforms. Rather, he said, the only way to end this exploitation is the overthrow of the entire system through workers socialist revolution.

Marx also demonstrated in Capital that the bourgeois profit system is deeply irrational, constantly producing economic crises marked by factory closures and mass unemployment. The global economic crisis that began in 2008, the worst since the Great Depression of the 1930s, is only the latest example. And Marx’s successors in the communist movement—notably the Bolshevik leader Vladimir Lenin—showed how and why capitalism also constantly produces wars. This is especially the case in the modern era, the epoch of imperialism. For more than a century, a handful of big capitalist powers such as the U.S., Germany, Japan and their secondary allies like Canada have engaged in ongoing competition to dominate markets and exercise control over the neocolonial world. The results include two bloody interimperialist world wars and countless wars of predation by the big powers against weaker, dependent countries, as in Iraq and Afghanistan or Washington’s recent threats against Syria. It’s estimated that since the end of World War II, U.S. imperialism alone has killed about 10 million people in such wars.

The title of this presentation is “Karl Marx Was Right.” With such a subject, I could discuss many things. What I decided to do is apply some of the core principles developed by Marx a century and a half or more ago to certain contemporary events, both internationally and in Canada. I’ll explain why the working class uniquely has the social power and objective interest to sweep away this deeply unjust system. I’ll lay out why and how the workers must defend the interests of all the oppressed, including immigrants and national and religious minorities. And I’ll highlight the need to learn the hard-earned lessons of history in order to advance the interests of workers and the oppressed.

If I have a central theme, it is the necessity of revolutionary leadership—a leadership that is conscious of these historical lessons and bases its activities upon them. That is what we mean by a vanguard workers party, for which the best model is the Bolshevik party that led the October 1917 socialist revolution in Russia. History has shown repeatedly that without such a party, the working class cannot end the rule of capital. So my talk will refer to some of the key communist leaders who followed Marx—especially Lenin and Leon Trotsky, who continued the fight for world socialist revolution after the degeneration of the Russian Revolution under a nationalist bureaucracy headed by Josef Stalin. I hope my speech will stimulate your interest to seriously study Marxism, because it is the only road—I emphasize, the only road—that can lead to human liberation.

The Centrality of the Working Class

I’ll start with the question: why focus on the working class? Why not just talk about “the poor” or “the oppressed”? The working class has a specific social role under capitalism. The capitalist class is a tiny minority that controls the means of production—factories and the like—and derives its astronomical profits from exploiting the workers. This is not a “natural” state of affairs. Nor is it a question of “the 1 percent” against “the 99 percent,” as claimed by the populist Occupy movement or certain anarchists. It’s a question of the exploitation of a specific class and the latter’s consequent role in social struggle.

Capitalism cannot function without the working class. Workers produce the wealth of society in the factories, mines, transport and construction industries. But this wealth is expropriated by a handful of parasites in the form of what Marx called surplus value. The workers are paid only enough to survive and reproduce, while the capitalist skims off the rest. At the same time, the workers possess huge potential power. They can attack the profit system at its core. When they stop production and go on strike, this has an immediate impact on the capitalists’ profits. Other sectors of society utterly lack this power. Students, for example, have no direct relation to the means of production.

A social crisis erupted in Quebec in 2012 around the militant six-month student strike. In our leaflets and other interventions, our central call was: Students, ally with the working class! We emphasized that that is where the social power lies to defeat the capitalists’ attacks, and ultimately to overthrow their entire system. A small example: when construction workers in Quebec went on strike in the summer, the economy lost hundreds of millions of dollars a week. That’s why the bourgeois-nationalist Quebec government quickly moved to break the strike. And a bigger example: in France in May 1968, the entry of the working class into a struggle that began among radical students threatened the rule of French capitalism.

Anyone who has ever worked in a factory knows that there are ongoing, daily battles between the capitalists and the workers. Such battles, small and large, are what we mean by the class struggle. But it is not an equal struggle. The working class is far, far more numerous than the capitalists—indeed, most people who today call themselves “middle class” are actually workers. But the capitalists have a virtual monopoly of armed force including the police and the army, the core of what we call the capitalist state. They also have mechanisms of social control and indoctrination ranging from the media to the schools, churches and the family.

Since the global economic crisis began, the bosses and their governments have stepped up their austerity attacks. The crisis was not caused by the working people; far from it, it grew directly out of financial manipulation by the big banks. But it is the workers and the poor who have been made to pay. There has been resistance, including 24-hour general strikes in various European countries, notably Greece. In South Africa, black mineworkers have staged repeated bitter strikes, suffering numerous deaths at the hands of the cops. You can read about this in our Black History and the Class Struggle pamphlet, which includes articles by our comrades of Spartacist South Africa that lay out a road to victory through breaking with all wings of the exploiters.

There have been struggles, often bitter ones, but the war on the workers has been one-sided. Just about everywhere, the capitalists are the winners. Why? Answering this question requires addressing the interlinked questions of working-class leadership and consciousness. The trade-union bureaucracy and the social democrats—in Canada, the NDP—have accepted, often openly supported and in some cases directly implemented the capitalists’ attacks. Let’s look again at South Africa. The government there is led by the African National Congress, a bourgeois-nationalist party, with the active support of the Communist Party, which is of Stalinist origin, and the central union leadership. This is the same government that in 2012 sent the police to shoot down miners and break their strikes.

But it’s not just South Africa. From France to Greece and Canada, the union bureaucracy and its political allies criminally divert workers’ struggles into supporting a wing of their “own” capitalists. To this end, they use nationalism and anti-immigrant demagogy. The protests against factory closures and lockouts that we’ve seen over the last few years in Ontario have all too often been dominated by nationalist protectionism. Just before Labour Day, the leaders of the new Unifor union organized a protest in Toronto in defense of Canada’s big three telecommunications companies—Bell, Rogers and Telus—against their international rivals like Verizon. The union bureaucracy says “No” to American, Japanese and Brazilian bosses, and “Yes” to the Canadian bosses who are the workers’ most direct exploiters.

Even worse was the reactionary campaign against Chinese temporary foreign workers organized by union bureaucrats in British Columbia in 2012. Leaders of the Steelworkers union demanded “B.C. jobs for B.C. workers,” while the Canadian Labour Congress insisted that these workers be barred from working in Canada. A class-struggle union leadership would do the exact opposite. It would fight to organize such foreign workers, demanding equal pay for equal work. It would combat all forms of anti-immigrant racism, demanding full citizenship rights for all immigrants. That is the only way to counter the divide-and-rule schemes of the ruling class, which plays one nationality against the other to drive down wages and working conditions for everyone.

The hold of nationalism and chauvinism in the working class is far from a new phenomenon. Nor is it just a question of “bad ideas.” It has material roots in the superprofits accrued by the big imperialist powers from their domination of the world. This understanding again began with Marx. In a letter written in 1858, Friedrich Engels, Marx’s closest collaborator, described the privileges of an upper layer of the British working class. “The English proletariat is actually becoming more and more bourgeois,” he wrote, concluding: “In the case of a nation which exploits the entire world this is, of course, justified to some extent.”

Engels was referring to the role of British imperialism as the dominant world power of the nineteenth century, which gave the rulers scope to bribe, or buy off, a section of more privileged workers. Half a century later, after most of the European social-democratic parties and their allies in the union bureaucracy ignominiously supported their own bourgeois governments in World War I, Lenin generalized this understanding globally. He wrote: “The last third of the nineteenth century saw the transition to the new, imperialist era. Finance capital not of one, but of several, though very few, Great Powers enjoys a monopoly.” He continued:

“The monopoly of modern finance capital is being frantically challenged; the era of imperialist wars has begun. It was possible in those days to bribe and corrupt the working class of one country for decades. This is now improbable, if not impossible. But on the other hand, every imperialist ‘Great’ Power can and does bribe smaller strata (than in England in 1848–68) of the ‘labour aristocracy’…. Now a bourgeois labour party’ is inevitable and typical in all imperialist countries.”

—“Imperialism and the Split in Socialism” (1916)

At the same time, Lenin emphasized, “the trusts, the financial oligarchy, high prices, etc., while enabling the bribery of a handful in the top layers, are increasingly oppressing, crushing, ruining and torturing the mass of the proletariat and the semi-proletariat.”

Lenin concluded that a split was necessary in the socialist movement. The revolutionists, the genuine Marxists, must break with the social-democratic traitors who, based on more privileged layers of the working class, support their own capitalists. The Marxists must forge new, vanguard parties based on proletarian struggle against these same capitalists. Lenin’s perspective was vindicated very quickly. Only a year later, his Bolshevik party led the Russian working class to power, over the bitter opposition of the reformists in Russia and beyond.

Against “Unity” With Reformism

Here we have one of history’s most important lessons: the need to forge a revolutionary leadership counterposed to the pro-capitalist social democrats and their left hangers-on. Reformist leftists who tell you today that we must support the NDP or the British Labour Party or the German social democrats are misleading workers and radical youth.

Trotsky developed this point in a 1940 article titled “The Class, the Party, and the Leadership,” which drew the lessons of the recently defeated Spanish Revolution. He wrote:

“The proletariat may ‘tolerate’ for a long time a leadership that has already suffered a complete inner degeneration but has not as yet had the opportunity to express this degeneration amid great events.

“A great historic shock is necessary to reveal sharply the contradiction between the leadership and the class. The mightiest historical shocks are wars and revolutions.”

He concluded: “even in cases where the old leadership has revealed its internal corruption, the class cannot immediately improvise a new leadership, especially if it has not inherited from the previous period strong revolutionary cadres capable of utilizing the collapse of the old leading party.”

Lenin and Trotsky argued that the struggle for revolutionary leadership is essential, even if socialist revolution itself seems a distant prospect. The workings of capitalist exploitation will necessarily generate struggles and crises, during which the workers’ consciousness will undergo rapid changes. Marxists can’t predict exactly when and where these struggles will erupt. In January 1917 Lenin gave a speech to socialist youth in Switzerland, where he said that “we of the older generation” are probably too old to see the socialist revolution in our lifetimes. But such a revolution broke out in Russia only a month later!

So it is necessary to prepare, to, as Trotsky wrote, build “strong revolutionary cadres.” A perspective that consists of going to the library to read philosophy for several years with no intervention in the class struggle can solve nothing. The same applies to attempts to mitigate a few of the worst excesses of capitalism by pushing a program of reforms. It is necessary to build the nucleus of a revolutionary vanguard around clear Marxist principles, even if it is small in the beginning and the immediate prospects seem unpropitious.

Russia again provides a good example. The first Russian Marxist nucleus was formed in 1883 by five people, all exiles in West Europe. But you can draw a direct line from this first Marxist circle, the Emancipation of Labour group, to the founding of Lenin’s Bolsheviks 20 years later, and to the Russian Revolution itself another 14 years on. Thirty-four years might seem a long time if you’re a first-year university student, but in terms of world history—or even an individual lifespan—it is very short indeed.

Marxist Perspectives in a Reactionary Period

In the years that followed 1917, revolution seemed on the horizon in much of Europe. Again after the carnage of World War II, there were revolutionary upheavals from Italy to Greece and China. As late as the 1960s and ’70s, we had the Cuban and Vietnamese revolutions, anticolonial revolts in countries like Algeria, social upheavals in North America including black struggles in the U.S. and the rise of a militant working class in Quebec, and prerevolutionary crises in European countries like France, Italy and Portugal. Such developments radicalized hundreds of thousands of workers and young people around the world. Today, however, the situation seems far more difficult, even bleak. The workers suffer defeat after defeat, while U.S. imperialism rampages seemingly unchallenged as the master of the world.

Marx wrote something very important in an 1852 article titled “The Eighteenth Brumaire of Louis Bonaparte.” “Men make their own history,” he said, “but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly encountered, given and transmitted from the past. The tradition of all the dead generations weighs like a nightmare on the brain of the living.”

The key event that has shaped the political period we live in—the tradition that “weighs like a nightmare” on the workers’ consciousness—is the capitalist counterrevolution that destroyed the Soviet Union just over two decades ago. This followed decades of Stalinist betrayal as nationalist bureaucratism supplanted the liberating, internationalist goals of the October Revolution. Marxism remains unambiguously the only road forward against capitalist rampage. Yet it is also widely, if falsely, perceived to be an impossible utopia or a failed experiment. Faced with such a situation, many ex-leftists, even entire organizations, have openly abandoned the perspectives developed by Marx, Lenin and Trotsky in favour of abject reformism.

The perspective upheld by our organization—forging a communist nucleus that can reimplant Marxism in the working class, starting with its most advanced elements—is the very opposite. Marxists must certainly be involved in daily struggles, and we defend even the most partial gains that working people are able to wrest from the exploiters. But at every step, we explain to the workers and radicalizing youth that the rulers will claw back these gains as soon as they are able, and that nothing fundamental can change without the overthrow of capitalism.

The eruption of struggles in various countries over the past few years highlights the chasm that presently separates the Marxist program and the prevalent consciousness among workers and the oppressed. In North Africa, for example, the “Arab spring” revolts have been channelled into religious fundamentalism or bourgeois nationalism. Egypt, the country at the heart of these uprisings, is now polarized between two reactionary forces—Islamists and the military—with no independent proletarian pole. In Latin America, a host of reformist groups, who no longer even pretend to fight for workers revolution, tout bourgeois populism à la the late Hugo Chávez as the so-called “socialism of the 21st century.” Most of our pseudo-Marxist opponents seek to build “broad” reformist or populist parties, a perspective explicitly counterposed to Lenin and Trotsky’s understanding of the need for a vanguard party. Such formations are obstacles in the struggle to do away with capitalist exploitation.

In this country we have the example of Québec Solidaire, a petty-bourgeois nationalist party that is supported more or less uncritically by just about every self-styled socialist group in Quebec. But Québec Solidaire doesn’t even pretend to be socialist. There are many other examples. In France a few years ago, the Ligue Communiste Révolutionnaire, a fairly large group that once claimed to be Trotskyist, dissolved itself to create an openly reformist formation called the New Anti-Capitalist Party (NPA). More recently, a big part of the NPA left to join an even more openly reformist, French-nationalist group, the Left Front of Jean-Luc Mélenchon. In Greece, the reformists push support to Syriza, a left prop for Greek capitalism. Perhaps the worst example is provided by the Egyptian group known as the Revolutionary Socialists, which has supported one bourgeois force after another, including backing the reactionary Muslim Brotherhood in the 2012 presidential election.

When I gave a version of this forum in Montreal a week ago, representatives of a group known as the Committee for a Workers International intervened to tout a new group in South Africa known as the Workers and Socialist Party. This is yet another “broad” party organized on a purely reformist, in this case trade-union economist, program. The nature of this tendency is further shown by its grotesque view that police are “workers in uniform.” Even the brutal police murder of striking mineworkers could not convince them of the suicidal nature of this position. Whether it is South African cops or those in Canada—those responsible for shooting down Sammy Yatim, Dudley George and so many more—authentic Marxists understand that these are not “workers” but a core component of the capitalists’ violent state machine that is used to defend their rule against workers and the oppressed. As Marx and Lenin explained, socialist revolution requires sweeping away the capitalist state, which must be replaced by a workers state based on democratically elected councils of the working masses.

We seek to intersect those struggles that erupt—not to immerse ourselves into an amorphous “movement” but to fight for a perspective of anti-capitalist class struggle. But under today’s circumstances—an overall reactionary period where the workers’ consciousness has been thrown back—the tasks of the Marxist vanguard are in the main propagandistic. Our activities centre on explaining our worldview to what is necessarily a relatively small audience, while recruiting, educating and training revolutionary cadres.

Lenin and Trotsky both used a phrase very appropriate to the present period: we must swim against the stream. One of our most important tasks is the production of our quadrilingual theoretical journal Spartacist​​. The latest issue includes an extensive explanation of the need for a vanguard party of the Leninist type, as opposed to a “party of the whole class.” Another article exposes the fraud of bourgeois “democracy”—actually a democracy for the rich exploiters—and counterposes the perspective of the rule of workers councils, one of the signal achievements of the 1917 revolution.

A “Tribune of the People”

Now I want to discuss why the working class must defend all the oppressed. Let’s again go back to Marx. He wrote the following to Engels in 1869: “The English working class will never accomplish anything before it has got rid of Ireland…. This is why the Irish question is so important for the social movement in general.” At that time, the fight for Irish independence was a major political issue, and Irish workers in England suffered particular discrimination.

Marx’s point was that the workers in an oppressor nation cannot emancipate themselves unless they actively champion the rights of all the oppressed, and in particular the right to independence for oppressed nations. Once again, Lenin generalized this understanding. As he wrote in his 1902 book, What Is To Be Done?, “the Social-Democrat’s ideal should not be the trade union secretary, but the tribune of the people, who is able to react to every manifestation of tyranny and oppression, no matter where it appears.” Lenin emphasized that Marxists must “produce a single picture of police violence and capitalist exploitation” and “take advantage of every event, however small, in order to set forth before all his socialist convictions and his democratic demands, in order to clarify for all and everyone the world-historic significance of the struggle for the emancipation of the proletariat.”

How do we apply such an understanding to Canada today? I’ve already discussed the need to defend immigrant rights. The same points apply to the fight for aboriginal rights. I want to take a few minutes on the Quebec national question, which is a central instance of special—i.e., non-class—oppression in this country. The historic subjugation of the francophone Québécois in a country dominated by English Canada has produced divisions in the working class that persist to this day; indeed they have in many ways become deeper over the years. Thanks to the union misleaders and the social democrats, most workers in English Canada are imbued with Canadian nationalism, and often falsely blame “the French” for the problems they face. Meanwhile most workers in Quebec have been pulled behind their own bourgeois nationalists, politically represented by the Parti Québécois and now also its left appendage Québec Solidaire.

In our fight to unite the workers against capital, Marxists oppose all forms of discrimination and oppression. In the particular circumstances of Canada, we advocate independence for Quebec, both to combat the dominant Anglo chauvinism and as the best means to break the grip of nationalism that this engenders among Québécois workers. Chauvinism and nationalism bind workers to the belief that “their” capitalist masters are their allies, not their class enemies and exploiters. We support the call for independence as a means of removing the national question from the historic agenda, which can lay a basis to bring the issue of class to the forefront. The workers must come to see that all nationalisms are ultimately instruments of the bosses and that, in the words of the Communist Manifesto, “The working men have no country.”

Opposition to Anglo chauvinism is a litmus test for the left and labour movement in English Canada. In our work in Quebec we emphasize our opposition to bourgeois nationalism. Take the language question, for example. We oppose laws that restrict the rights of linguistic minorities in Quebec, for the same reason that we oppose the laws that have restricted French language rights in English Canada. Conflicts over language serve only to divide the workers. Trotskyists fight for equal language rights for all as part of our struggle to break down such divisions.

For the same reason, we denounce the PQ government’s Charter of Quebec Values, which would ban the wearing of religious symbols by workers in the public sector, from government offices to schools and daycare centres. Under the guise of a defense of secularism, this is an attack on the rights of immigrants and other minorities, especially Muslim women, but also Sikhs and Jews.

Marxists are by definition atheists, and we fight unstintingly for women’s liberation. Thus we oppose the Islamic veil as both a symbol and an instrument of women’s subordination. But we unequivocally oppose any prohibition or restriction of this or any other religious symbol by the capitalist state as necessarily racist and discriminatory. The claim that banning the veil is designed to integrate Muslims into society is false to the core. Such prohibitions will only deepen the isolation and oppression of Muslim women by pushing them out of the workplace. And it is important to understand the context of these attacks: the imperialists’ so-called “war on terror,” in which Muslims are singled out for state repression.

Before concluding, I’d like to briefly address two other issues that illustrate the gulf between our Marxist perspectives and those of various reformist left groups. First, the trade unions. Some would-be leftists denounce the unions as “bought off” and even reactionary. The Montreal-based Maoist group known as the Revolutionary Communist Party (RCP), for example, claims that the unions “have become a tool in the hands of capitalists to control and subdue the working class,” adding: “It is not only a matter of changing the union’s orientation that would change its nature.” (The quotations are from the RCP’s program.)

This eliminates any distinction between the working-class base of the unions and the pro-capitalist bureaucracy. Having renounced the unions, the basic defense organizations of the working class, the RCP lays out its own class-collaborationist program, claiming that “the path of revolution in Canada” lies through “protracted people’s war.” This perspective, in which “the people” replaces the working class, is flatly counterposed to Marxism. And the idea of “protracted people’s war” in Canada today is frankly quite demented.

The unions must be defended against the bosses’ attacks. Any other position is in practice reactionary, whatever pseudo-“left” rhetoric its proponents may marshal. The destruction of the unions would inevitably mean lower wages, worse benefits and more dangerous working conditions. At the same time, the pro-capitalist labour bureaucracy must be ousted by a class-struggle leadership. Only then can the unions be transformed into organizations fighting for working-class emancipation.

I’d also like to talk briefly about environmentalism. As part of their overall shift to the right, many reformist groups now call themselves “ecosocialists.” We are well aware that degradation of the environment in the name of profit is among the many crimes of capitalism. But the ideology of ecosocialism signifies something very different. A clear example is provided by the founding declaration of the Ecosocialist Network in Quebec, created and backed by several reformist left groups including Gauche Socialiste, Socialist Alternative and the International Socialists. This declaration denounces what it calls “the ‘socialisms’ of the 20th century,” claiming that these all “failed in terms of ecology, democracy and social equity.” It calls for “a socialism cleared of the logic of productivism.”

This is an attack on the very core of Marxism. We are for the authentic “socialism of the 20th century”: the Bolshevism of Lenin, Trotsky and the Russian Revolution. The reformists have long rejected this tradition in practice; now they’re junking it in theory as well. The same can be said of their attack on “productivism.” The basic goal of Marxist socialism is to liberate the creative powers of humanity, which have been shackled by the capitalist system and earlier forms of class-divided society. Marxists regard the development of the productivity of human labour power as the prime mover of social evolution and the underpinning of historical progress. We look to a qualitative increase in the application of known science and the development of new technology. In their promotion of schemes to “save the environment” under the existing capitalist system, the eco-radicals help perpetuate this system in which science and technology are so often used in ways destructive to humanity.

Socialist Consciousness and the Working Class

There are a lot of subjects that I haven’t had time to take up tonight. I haven’t addressed how we Trotskyists opposed the Stalinist degeneration of the October Revolution, and fought to the very end to defend the revolutionary gains against imperialism and capitalist counterrevolution. Those who would like to read more on this should get our pamphlet How the Soviet Workers State Was Strangled, which includes examples of our active fight against counterrevolution from the Soviet Union to Poland and the former East Germany.

I’ve also not discussed the contemporary role of China, by far the strongest of the remaining deformed workers states, with an industrial proletariat that is now the largest in the world, but ruled by a particularly corrupt, nationalist Stalinist bureaucracy. We stand for the unconditional military defense of China against imperialism and counterrevolution. At the same time, we advocate a workers political revolution to oust the bureaucratic rulers. Finally, I haven’t taken up in any depth the question of women’s oppression, another crucial issue for the working class, which must fight for women’s liberation through socialist revolution. What I have tried to do is highlight some of the key lessons from Karl Marx and apply them to today’s struggles. I hope this gives you a sense of ​​Marx’s continued relevance, and of the need to continue the revolutionary perspectives that he developed.

We live in a particularly brutal and dangerous world. Nuclear weapons in the hands of the imperialist powers, especially the United States, threaten our very existence. The future of humanity lies in the hands of the working class, and in the struggle to imbue it with revolutionary consciousness. World socialist revolution would place unimagined material abundance in the service of humanity. It would create the conditions to do away with class divisions, to eradicate social inequality based on sex, to eliminate the social significance of differences based on race, nationality or ethnicity. For the first time, humanity will seize the reins of history and control its own destiny, producing an emancipation of human potential beyond what we can imagine today. Only then will it be possible to achieve the free development of each individual as part of the free development of all.

I’ll end with a short quote from a speech by the Polish Marxist Isaac Deutscher to a socialist student conference in New York City in 1966. It was later published under the title “On Socialist Man.” Deutscher joined the Polish Communist Party in 1927 at age 19. He was expelled several years later for supporting the ideas of Leon Trotsky. At the time of his speech in New York he was 59 (he died the following year). His audience included many students who were left-inclined but nonetheless skeptical about the prospect of winning the working class to Marxism. Here are Deutscher’s concluding words to these students:

“We have to raise socialism back to its own height. We have to explain to our working classes and intelligentsia why the Soviet Union and China have not been able to produce and could not produce socialist man, despite their remarkable achievements which give them a right to our recognition and solidarity. We must restore the image of socialist man to all its spiritual splendour…, and then, fortified in our conviction and rearmed politically, we must carry socialist consciousness and the socialist idea back into the working class.”

That, I think, is a good general summary of the tasks that face revolutionary Marxists today, in Canada and around the world.