Eleven years ago we made the following analysis of the international economic situation:
"In the era of declining capitalie n the State is faced with a choice between crisis and inflation. It cannot avoid one without making the other worse. Thus the moderating influence of the State over the economic cycle is presented with an insurmountable obstacle, the capacity of RED CAT ted in time doilar as an anticyclic instrument and the dollar as a money of account on the world market has become insuperable "
Events have not contradicted this analysis. It expresses a dilemma that most bourgeois commentators on the present monetary crisis do not vet seem able to understand.
The Permanent Crisis of the monetary system The international monetary system which was set up at Bretton Woods at the end of the second World War is now a state of almost permanent crisis. The first blows fell on the pound sterling then on the French frane while the dollar itself seemed out of danger, because of US gold sales. This time, however, the dollar itself has been dragged into the storm. The "dollar standard" condemned by some us a permanont drain on the riches of capitalist Europe has not even lasted two years.
Bourgeo is experts on this side of the Atlantic pretend to beliave that the US balance of payments deficit is at the root of all the evil, If only possible time. the US would put its house in order, everything would be for the best in the best of all possible worlds What the falsely naive protagonists of this theory ovarlook is that in 1970 with :. record military budget and a 6% rate of monetary inflation, 25% of the productive apparatus was idle. They forget, in other words uncontested that the roots of the evil are not to be found in inflation but in the internal contradictions of the capitalist system. The absurd survival of private ownership of the means of production and the commodity character of products• means that these products cannot reach every last consumer" unless they are sold and furthermore sold at a price which realizes the average rate of profit for their owner.
This inflation is in the last analysis nothing more than the result of this permanent iftness which is rotting away the foundations of decli ning capitalism: the wider and wider divergence beteen the productive capacity of society and the buying power of the workers. The formidable pyramid of inflation was erected! (well before the Vietnam war which only acelerated its growthl in order to hridge this Karl Schiller with the President of the Bundesbank Kari Klasen ployed in the US. The European bankers advise Washington to stop the inflation but where would the European capitalist economy be if there were 12 or 15 million unemployed in the US 2.
No less naive however are those on the other side of the Atlantic who pretend not to under. stand all these domestic unset They conso e themselves by thinking that "it's just a question of speculation. " Really7 In a society which is based on private property and thus on compe tition, the richtwhether they are businessmen, bankers,, industrialists or landlords) will get rid of any money which systematically depreciates. The dollar is in crisis not only because it is depreciating but above all because it is depreciating faster than any other currency| for a start the Deutschmark and the Swiss franc), It's not speculation but the unequal rates of inflation which have brought about the break-up of the system of lixed exchange rates set up at Bretton Woods.
The most remarkable aspect of the whole affair is that the multinational companies, that is above all the giant Americen corporations which have many firms abroad, are the main the pound just as it was the British capitalists who speculated against the pound five years ago. Capital quite clearly has only one allegiance:to the maximum profit made in the quickest They are fooling both themselves and their public because they show only one part of a reality which is based on the insurmountable dilemma outlined above.
West Germany's supremacy will not stay Today the German Foderal Republic has an ansolutery creber quemety onexcnange rosares than the US. The sensational rebirth of West German imperialism to a dominant position in capitalist Europe, which the role of the Bonn cabinet during the last monetary crisis already demonstrated, is today openly declared, German kankers decided all on their ovin to devalue the dollar that's the deeper significance of last week's crisis. The fact that they can play God all on their own, the fact that they can carry it through: that's how much things have changed in the capitalist world in the last six years. But their victory is hardly reassuring for the capitalists beyond the Rhine. They have failed to get their associates in "'Little Europe"' to achieve monetary consolidation. Even the post Caulists are saying a little too late that it where Britain counterbalances West Germany than a "Little Europe" under the constant grip of Frankfurt and the Ruhr, This is the most severe crisis the Common Market has known. The plan for monetary and industrial integration-which was to allow the creation of a European currency taking over from sterling and, who knows, maybe abo the dollar, as an international reserve currency seems seriously compromised In the monetary storm going on, at this very initial stage reached in European capital interpenetration, each monetary crisis starts off classic reactions of "sicred egoism" so characteristic of regimes of private property. We will quote again what we wrote, this tima in 1968:
*If inflation, as long as it remains moderate, is not incompatible with the more or less normal functioning of monopoly capitalism in the main imperialist countries, it increasingly provokes a serious crisis in the international monetary system through the inflation of the international reserve currencies. This is the stage that has now opened in the history of neo-capitalism. The imperialist powers will search for and apply partial remedies, each reflecting besides the desire to reform the system itself, particular interests at each specific stage. Inflation itself will not be halted", The French capitalists who had already profited from the devaluation of the franc to wevisen-Notierung y 5574
COATES.VISHINSKY AND RED MOLE Dear Comrade, On the 8th March 1971 the Red Mole pubIshed a story, which it had invented, claiming that The Spokesman, of which I am editor, was "reputed to be " the "marriage-broker" between "decre pit reformism and senile stalinism", in the shape of a "more or less formal merger between Thibune and the Moring Star"
I protested that this story was untrue.
Now, in the issue of 8th April, the editor of the Red Mole, after publishing my short letter of protest, far from retracting and apologising. offers a "reply" seven or more times longer than my complaint, which repcats the original slanders and descends to even deeper levels of dishonesty and misrepresertation.
The reply is headed The Proletarian Revolution and our old friend Coatsky" by use of which subtle rubric, with characteristic modesty. the Red Mole polemicist implies not only that he sees me as the inheritor of the old German social-democrat, but also that he is himself the suthentic reincarnation of Lenin. Which of these identifications is the more amusing may be left to the reader to decide.
The Mole's editorialist goes on to deny that he ever accused The Spokesman of being "engaged in the technicalities" of a merger between the Morning Star and Tribune, but "merely implied" that "the politics" of The Spokesman aimed to produce that effect. To paraphrase very slightly, the argument runs "The Spokesman has never been actually proved to have administered ground-glass to the ricepuddings in the works canteen, but since its politics are as they are, objectively it is guilty of poisoning the workers". The last time I was tried in such a way (You're guilty, of course, although we know you're far too wicked to ever have actually done anything wrong) it was by the old-guard right-wing of the Labour Party, headed by Sara Barker. But the style does have its fore-tunners in Russian history: not in the work of Lenin, but in that of Andre: Vishinsky. The first point that Vishinsky always made was that his victims, whatever they had done or failed to do, were objectively very wicked indeed What is the objective state of the case? I have, in fact, written several articles in The Spokesman and elsewhere, urging a fight for the formal ending of all bans and proscriptions in the Labour Party. I have appealed for the affiliation of all tendencies of socialist opinion to that party, In doing so, 1 have not only named as relevant the communist party, but also, quite specifically, the Socialist Labour League, the International Socialists, and the International Marxists, My appeal has, in short, been for the right of every tendency to participate, with full rights, openly and unimpeded, in the affairs of the Labour Party. To represent this appeal as a call for a fusion between the communists and the Labour Left is not only crooked but stupid. Even in the Red Mole remains totally disinterested content. in the raising of the buns and proscriptions, the existence of the Socialist Labour League, which is greatly more serious in its organisation and considerably more numerous in its membership. than is the I.M.G.. guarantees that at least onc major Trotskyist grouping would benefit from success in such a campaign. And this means that the victory of the campuign I proposed could not have the effects suggested in the Red Mole at all: I'm sorry, comrade Vishinsky, but "objectively" things are otherwise than you claim.
Instead of discussing the politics of this issue, and the fight to open up the Labour Party to a serious attempt ut socialist development, the Red Mole puts up a smokescreen of invective against anyone who secks to raise these issues.
When it comes to analysing my own writings, this prevarication becomes visible. My formulations about the meaning of "revolution", for instance, contains nothing whatever that could not be found in at least a dozen key statements of the Socialist Workers Party, in the United States, from the time of the second world war onwards. My urticle in the Listener (published in fuil in the Socialist Leader) says nothing that I did not say, just as explicitly, in my essay in Towaris Socialism, once praised by many of The Red Mole 1 June 1971 Page 4 the Mole's contributors, and now allowed to go out of print because its editors appear to be ashamed, not of what I wrote, but of what they wrote themselves. But the Mole quotation from my article does me the favour of omitting a few lines, which are themselves quite revealing: what 1 really wrote in the Listener included the following words deliberately left out of the Mole's rehash:
*We have insisted from the beginning that people cannot be "tricked" or manipulated into exercising greater democracy, but that they must develop, themsolves, both the individual self-confidence and the collective authority which can enable them to insisz upon the changes which are necessary."
Not only does comrade Vishinsky quote selectively, but he also resorts to a famous device: that of amalgam. In this case, he quotes a long extract from a letter by Ken Fleet, who is a left-wing Catholic, as if this automatically represented my own view. This letter said, amongst other things. that the majority of WC members were not marxists. No more they are. Does the Red Mole really think that all the hundreds of thousands of T&GWU members affiliated to the IC are "marxists'"? Would the Red Mole have the IWC reject their membership until they conformed? In fact, the TWC makes its own policies without benefit of the help of the Red Mole, and it unites people of many tendencies, who are able to work together for limited purposes, and to discuss general issues in u fratemal way.
Finally, the Red Mole scoffs at my claim that none of the liberal criteria of democracy would he invalid if the media were self-managed in a self-managing society. These criteria were admirably expressed during the English Revolution by John Milton, in Areopagitica Which of them, precisely, is invalid in a socialist society?
Of course, Comrade Vishinsky isn't terribly keen on democracy anywhere, leave alone in the press. But hasn't the Red Molc, for all its developing narrowness, a wider view than that? Doesn't socialism offer wider freedoms than capitalism? it doesn't, then you can count me out. More important and more decisive, you can count the working class out, too.
Yours fraternally.
Ken Coates.
REPLY TO KEN COATES It is good to see Aen Coates back on forn again -why is it that he can find a ciear and forceful style in repiying to the Red Mole which seems quite to escape him when be is repiying to Charles Wintour, editor of the Evening Standard, in the pages of the Listener? Buf if the style of Coates'attacks on the Left has a clarity and force missing from his attacks on the Right, the same cannor be said for the political Readers' memories of what we originally wrote about Ken Coates may have been clouded by Coates' subsequent glosses and interpretatious, so here it is:
After reporting the rumoured production rie-ap berween the Morning Star and Tribune, we polared our nur the wider strategy was "2 formal application by the CP to affiliate to the Lohour Party. Marriage-broker for the alliance of decrepit reformism and senile Stalinism is reputed to be none other than The Spokesman magazine which we bellere has some connection with a Mr. Ken Coates of Nottingham. "
What is at stake here is the political line pursnee by Coates in the WC the Spokesman, and del his letters to the bourgeois press. We are certainly against bans and proscriptions of the Left operated by the Labour Party and we Never criticised Contes argument for lifting them. Now that Coates mentions it, we wordd poit out that the Lodour Porzy Has from its inception souplit to exclude revolutionary Marxists and the bureaucrats who harre riways controlled it are unlikely to change their minds at the behest of Coates and kis friends. Only a revolutionary mess movement of woriers would be able to break tiss bureaucratic grip, and such a movement might have more urgent tasks to confront. Perhaps it is because he knows that revolutionaries do not iast long in the Labour Party thar Coates has so successfully sought to shed his revolutionory pass. Be that as it may, Coates must expect to be judged on his public statements and actions For some time now these have implied that there con be some parliamentary road to socialism-it is of course precisely this illasion which unites the Labour Left and the Communist Party. U Coates does not believe in the Parliamentary road, then it is very curioss that he does not say so since he assures us he does not beliese that people can "be "tricked' or manipulated into exercising greater democracy". One of the most decisive dividing lines bezween revolutionary Marxists and all varleries of reformist and revisionist is the knowledge that the institutions of bourgeois democracy, becarse they exclude the masses by their very nature and are embedded in the capitalist state apparazus, cannot be used by the working class to bring about the transition to socialism. To emancipate itself and all oppressed groups the workers mast destroy the hollow democracy of the hourgeoisie and esrablish a dictatorship of the proletariar based on sowers or councils of workers and all other oppressed and exploited groups, in which the bourgeois conception of politics. with its separation from everyday life and in division of execufive and legislative is completely transcended Of course revolutionaries cannof just ignore bourgeois parliamentary instirutions and where they still dominate the political consciousness of the messes they should be prepared to work within them to expose them but they should make it clear that this is precisely what they are doing. Coates recent pronouncements completely lack this clarity: that is why we drew attention to them Once the parliamentary road to socialism has been embraced, ir is perfectly logical and rational to encourage closer links berween the Labour Left and the Communist Party, and to promote the latter affiliation to the Labour Party. Our belief that this is what the Spokesman and THC are engaged in derives purely from a scrutiny of what they say and do, of whom they mobe and whom they exclude, of whom they flatter and whom they gore Such a scrutiny suggests thar Coates prefers established bureaucrats ond their hangers-on to mass movements No doubt this is one of the few points on which Contes will find himself in agreement with the Socialss Labour Lengue: consider that both withdrew support front the Vietnam Solidarity Campaign as it developed into a militantly anti imperialist mass movement of pouth, consider that both fertchisticadly regard the Lobour Party as still the essential political expression of the working cles, foth encotmare dEtestons about the Labow Left and the possibilities of a Labour govemment committed to socialist, policies. However when it comes to the Communist Party and its role in British working class politics, Contes at best mumurs a few discreet reservations witle the SLE screams Sectarian abte. What is lacking in both is a principled and comradely debate with those layers of awnced workers who are influenced by the Communist Party.
On other questions raised by Coates just some brief comments. 1. Does Coates really believe that a production Reap beiween Tribune and the Morning Star is comparable to adultering the rice pucking in the works canteen with ground glam? Sounds to us more like adulterating nice pudding with rice pudding. 2. Ir is nor the Red Mole who hes amalgemated Ken fleet with the / WC nor was it is religious News we were questioning but rather er officio statements like the following:
"(The IC'/ Influence so for as it exists expresses itself through the established organism tons of the Labour Movement. It is the functior of these bodies to curry workers control anto effect and the Institute has no wish to usurp these functions "
Quite simply this is a betrayal of the great potential of the workers control movement as a focus for the development of a mess movement of the most militant workers rather than a paper coalition of "estabilshed organisations of the Labour movement" that it has now бесоже. 3. One liberal principle that any socialst resoJution would have to volute is thar of the sanctity of private property -if Coates doubts the centrality of this theme be classical liberal political philosophy he should starz by consulting C. B. MacPheerson 3 "The Political Theory of Possessive individuatism "or even read some John Locke 4 The Red Mole editor who contributed to Towards Socialism assures as that for from being ashamed of his essay in thor volume, he is planning to republish ir without substantive alterations 5. Is there no trace of the amaigan, technique iu Coates 'remurks on the supposed imitators of "Comrade Vishinsky"? Would, for ecomple. Comrade Pishinsky have published Coates"
6. Far from Cannon agreeing with Cores" toadying artifide to the Labour Party here is what he wrote obout it in Feb 1948 in his report on Section Policy to the National Cornister of the SHP:
"But then the question is raised the fict that the question is raised shows some confusion on the question of the Labor Party: comrades ask: "Well, what is the British Labor Party?" If we judge it by composition alone, we must say it is a 'workers' party for it is squarely based oil the trade union movement of Great Britain. But this designation workers" party must be put in quotation marks as suon as we examine the program and practice of the party. To be sure, the formal program and the holiday speeches of the lenders mutter something about socialism, but in practice the British Labor Party is the governing party of British Imperialism, It in the strongest pillar upholding this edifice. That makes it a bourgeois party in the essence of the matter, doesn'T it? And since 1914, haven't we always considered the Social Democratic Parties of Europe as bourgeois parties?, *Our fondamental attitude towards such parties is the same as our attitude towards a bourgeois party of the classical Type._. that is an atticade of irreconcilable opposition. Bur the composition of such parties give them a certain distinctive character which enables, and even requires, us to make a different tectical approach to them. If they are composed of workers and even more, if they are hased on the trade unions and subject to their control, we offer to make a united front with them for a concrete struggle against the capitalists, with the aim of promoting our program of class against class". We try to push them into class actions aguinst the bourgeoisie. But we do not paint them as gontine organs of the worcing class in the political sense. That would be a great mistake..?" (emphasis in original] As this exchange is clearly overspilling the correspondence colons of the Mole and must now be closed to these pages, we would be happy to engage Coates in a public discusion on the porifical issues involved or continue a written debate in the pages of the ever "broadening" Spokesman.
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V.StV AMERINA 1S GROSSBRITANNEN IE AUSGESETE
better their position on the market-above all in Germany-hope to enlarge their outlets yet again, thanks to the fixing of the parity of the franc. This is a shortsighted calculation. The policy of monetary stabilisation decided by the Bonn cabinet through pressure from the banks-risks turning into a recession in Germany. And a German recession means not an expansion of French exports but a decline.
"THE WORKERS MUST PAY"
The whole stabilizing mandeure much more fragile than in Autumn 68 and 69 has basically one aim: to make the working class, especially the American and West German working class pay for the costs of the struggle against inflation. But inflation is the cause and not the consequence of wage demands, although these are taken as the privileged targets of the "stabilizers". On this point at least the Nixon administration, and the regimes of Pompidou, Heath and Professor Schiller are unanimously agreed: "The Unions must moderate their demands":
The monetary crisis combined with a serious slowing down of economic growthithree major capitalist countrias are in recession now:the USA, Great Britain and Italy, and a fourth, Japan, is drewing closerl, narrows down the room for mandeuvre of "social conciliators". Hence the open attack on the right to strike in Great Britain. Hence the scarcely veiled threats of a similar attack in the US. In Germany the social democratic leaders will go on the offensive in the next few weeks, in order to "bring to reason" the trade unionist who is caught between two fires: the "moderating" prassure from Bonn and radicalizing" pressure from the base(wildcat and token strikes in Autumn 69 and Autumn 70).
It is useful to keep in mind that the functioning of the capitalist economy is not a simple result of automatic mechanisms. The class struggle and the revolutionary struggle affect its course. The crisis is not just a result of the exhaustion of reserves or the growing Internal contradictions of the system. It also reflects the heroic struggle of the Vietnamese masses which has cost imperialism tens of thousands of millions of dollars. It also reflects the revolutionary upsurge of May 68 in France, Italy's hot autumn, the wildcat strikes in Germany and throughout much of Europe, the growing militancy of British workers throughout 1970, It reflects an economic and social system whose very foundations are challenged more and more.
The long period of neo capitalist expansion and prosperity is over. Thin cows are replacing fat ones. And if fat cows couldn't stop May 68,thin cows will have a few other surprises in store for us. "The worker will pay?" But the western working class is not prepared to pay, It's not demoralised. It hasn't suffered big defeats. The decline of the dollar opens the road ro an increase in the struggles of the working class, including the American working class. The worsening international monetary crisis is a serious invitation to oppose the international struggle of the workers to the international speculation of capital.
10 May 1971