UN agency predicts global food crisis as prices soar

A United Nations Food and Agriculture Organisation (FAO) report published this month warns that food price increases are “dangerously close” to crisis level. The bill for global imports of food may exceed $1 trillion this year. This level of food costs was last reached in 2008 when prices peaked mainly as a result of speculation and led to riots in different parts of the world.

The FAO’s measure of food prices, the broad global index, is now at 197 points, very close to the peak of just over 200, increasing by 5 percent in the last month alone.

Stocks of some staple crops are set to fall―stocks of barley will shrink by 35 percent, maize by 12 percent and wheat by 10 percent, according to FAO estimates. The US Federal Reserve Board's deliberate policy of devaluing the dollar is also boosting prices, as most commodities, including food, are priced in dollars.

The recently announced round of quantitative easing (QE) by the US will only exacerbate this. A Guardian article November 6, “US under fire for fuelling surge in food prices”, explained “the $600bn of QE announced by the Federal Reserve would hurt consumers by pushing up prices of soy, wheat and other staple foods … Commodities are considered a safe haven when the dollar is falling. There is also an incentive for producers to seek higher prices to offset the falling value of the dollar.”

Last year, the number of people in the world without sufficient food reached one billion (one in six of the world population). Whilst this year the figure has now fallen somewhat to 925 million, the Millennium Development Goal target to half the number of the world’s hungry by 2015 is clearly not going to be achieved.

In some areas of the world, the figures are much bleaker. According to Oxfam, in sub-Saharan Africa in 2009 a third of the population suffered hunger with five countries experiencing staggering levels of hunger of 45 percent and higher. FAO figures show that a child dies of hunger every six seconds. On top of those officially going hungry, the FAO assert that around two billion people―a third of the world’s population―live on diets lacking essential vitamins and minerals. This stunts mental and physical growth, putting them at long-term risk.

The FAO report notes that, as a result of lower harvests in key producing countries, reserve stocks will have to be used and this will lead to a further restriction in supplies next year. Whilst this may lead to more planting by farmers to take advantage of good prices for their produce, the FAO caution: “Cereals, however may not be the only crops farmers will be trying to produce more of, as rising prices have also made other commodities attractive to grow, from soybeans to sugar and cotton … consumers may have little choice but to pay higher prices for their food … the international community must remain vigilant against further supply shocks in 2011 and be prepared.”

The FAO continue: “Sharp increases in international quotations for grains, sugars and products in the oilseed complex in recent months are already a cause for concern … many of these commodities constitute major feedstock ingredients for the livestock or biofuel sectors … global competition for securing foodstuffs is set to intensify.”

Another pressure on food prices is climate change. The FAO notes that “adverse weather effects are undoubtedly a primary driver of wheat production shortfalls and with climate change, may increasingly be so.” Current food crises in the Sahel region of West Africa and in the Horn of Africa are in part produced by erratic changes in weather patterns thought by experts to be related to climate change.

Another factor affecting food production, and hence prices, is the return of some plant diseases once thought to have been conquered, such as a fungal disease that affects wheat, known as wheat stem rust. Scientists in the 1950s and 1960s were able through plant-breeding experiments to produce wheat varieties resistant to the disease. However, a new strain of the rust called UG99 was discovered in wheat in Uganda in 1999.

UG99 has now spread to Kenya, Ethiopia, Sudan, Yemen and Iran, and there is a danger of its spreading to the huge wheat-growing areas of south Asia. Quoted in a recent Financial Times report on global food supplies, Ronnie Coffman, director of the Durable Rust Resistance in Wheat project at the University of Cornell, explained the threat it poses: “It can be absolutely devastating if environmental conditions are right. You can count the number of people who could die from this in millions.”

The FAO note, “Most global commercial cultivars are susceptible to UG99 … in addition, new, highly aggressive races of stripe rust are devastating wheat crops in several regions.”

Speculation in food by big financial operators has also had a significant impact on food prices. “There is no doubt that speculative activities have brought into the market a great deal of volatility,” the FAO state, but downplay the affects of speculators in pushing food prices to the recent record levels.

However, a recent report by the World Development Movement (WDM), “Betting on Hunger”, indicts food speculators for recent food price spikes. “In 2007-8, there was a huge rise in food prices fuelled by financial speculation … the price of wheat shot up dramatically by 80 percent and maize by 90 percent.”

The WDM report notes, “Following the Wall Street crash in the 1930s, regulations were introduced by the US government to limit speculation on food. But these regulations were weakened in the 1990s and early 2000s through aggressive lobbying by bankers to permit rampant betting on the price of staple foods. Additionally, new complicated contracts were created to allow more ways to make money from betting on food.”

The FAO predicts that in the next decade food prices will be higher and more volatile than in the decade leading up to 2008. (WSWS)

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World Bank head calls for monetary system linked to gold

In the run-up to the G20 summit of leading economies, to be held Thursday and Friday in Seoul, the president of the World Bank has published a column in the Financial Times calling for a fundamental revamping of the global currency system involving a lesser role for the US dollar and a modified gold standard. The Financial Times underscored the significance of the column by making it the subject of its front-page lead article on Monday.

In his column, World Bank chief Robert Zoellick, a former US Treasury official, points to the crisis conditions prompting his proposal. He begins by observing: “With talk of currency wars and disagreements over the US Federal Reserve’s policy of quantitative easing, the summit of the Group of 20 leading economies in Seoul this week is shaping up as the latest test of international cooperation.”

Here Zoellick is referring to the announcement by the US Federal Reserve last week of a second round of “quantitative easing”—the printing of hundreds of billions of dollars to buy US Treasury securities—and the sharp criticisms of this move by major US trade competitors including China, Germany, South Africa and Brazil. The US move is seen correctly as an intensification of a deliberate policy to cheapen the dollar in order to make exports less expensive and foreign imports more expensive.

The Obama administration is focusing its economic attack on China. It wants to line up Europe, Japan, India and other Asian countries at the G20 summit behind its demand that China allow its currency to appreciate more rapidly.

However, its cheap dollar policy is roiling relations with other export-oriented, surplus nations, most notably Germany. In unusually bellicose language, German Finance Minister Wolfgang Schäuble denounced the US in an interview this week with Spiegel magazine. Saying the American “growth model” is in “deep crisis,” he added, “The United States lived on borrowed money for too long, inflating its financial sector and neglecting its small and mid-sized industrial companies.”

He went on to declare: “The Fed’s decisions bring more uncertainty to the global economy… It’s inconsistent for the Americans to accuse the Chinese of manipulating exchange rates and then to artificially depress the dollar exchange rate by printing money.”

The US—the world’s biggest debtor nation—is exploiting the privileged position of the dollar as the primary world reserve and trading currency to drive up the exchange rates of its rivals, in essence a trade war measure. It is unleashing a flood of speculative capital into so-called emerging economies in Asia, Latin America and Africa, pushing their currencies even higher and creating the danger of speculative bubbles and inflation.

This aggressive and unilateralist policy on the part of the United States is exacerbating global tensions and destabilizing the world monetary and financial system. It is heightening the likelihood of a breakdown of international relations and the outbreak of the type of uncontrolled currency and trade warfare that characterized the Great Depression and led ultimately to World War II.

In his column, Zoellick urges the G20 to “build a cooperative monetary system that reflects emerging economic conditions.” He continues: “This new system is likely to need to involve the dollar, the euro, the yen, the pound and a [Chinese] renminbi that moves towards internationalization and then an open capital account.”

The new system, he writes, “should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although text books may view gold as the old money, markets are using gold as an alternative money asset today.”

This is a tacit acknowledgment that the monetary system that has existed since 1971 and is rooted in the system established at the end of World War II—and which is anchored by the US dollar—is no longer viable. It is furthermore an admission that there is no other national currency that can replace the dollar as the basis of global currency relations.

One expression of eroding confidence in the US dollar—and the monetary system based on the dollar—is the spectacular surge in gold prices. On Monday, gold for December delivery set new records, closing above $1,400 an ounce.

Zoellick argues that the “scope of changes since 1971” justifies the erection of a new monetary system. However, he is silent on the most important of these changes—the vast decline in the global economic position of the United States and the decay of American capitalism.

The United States emerged from the wreckage of World War II as the unchallenged global economic hegemon. Its industry dominated world markets. The US share of world auto production in 1950 was 79 percent. In 1955, it accounted for nearly 40 percent of world steel production. At the same time, the vast bulk of the world supply of gold was in Fort Knox.

The US engineered the postwar recovery of world capitalism, ensuring that the monetary and trade architecture was favorable to its interests. Key to the postwar recovery and expansion was the establishment of a new monetary system, the Bretton Woods system, under which exchange rates were fixed and pegged to the dollar. The dollar served as the world reserve and trading currency, but it was backed by gold at the rate of $35 per ounce.

However, this arrangement contained a fundamental contradiction—the attempt to use a national currency as a world currency. Even the massive economic wealth and power of the United States could not override the basic contradiction between the global economy and the nation-state system of capitalism.

By the late 1960s, the quantity of dollars held overseas far outstripped US gold reserves, and the US was facing growing competition from resurgent Germany and Japan. The Bretton Woods system collapsed in August of 1971 when the Nixon administration, facing a run on the dollar, removed the gold backing from the US currency.

That ushered in so-called Bretton Woods II, a system of floating exchange rates tied to the dollar—an arrangement that was even more dependent on international confidence in the strength of American capitalism. That confidence has progressively eroded as the US has built up ever-greater debts and its industrial base has withered, leaving its economy increasingly dependent on financial speculation.

The financial crash of September 2008, which was centered on Wall Street, has fatally undermined confidence in the dollar. The fact that the financial crisis takes the form of a currency war and breakdown in the system of exchange rates—what had been the pillar of the postwar recovery of world capitalism—underscores the fact that the current crisis is not merely a conjunctural downturn, but rather a systemic breakdown of the system.

Zoellick’s proposal for a return to some form of gold standard is both utopian and reactionary. There is no possibility that the dramatic shift in economic weight between the older imperialist powers—first and foremost, the US—and emerging economies such as China and India can peacefully produce a new international economic equilibrium based on a reduced role for the US dollar. As in the twentieth century, so in the twenty first, the declining powers will not willingly accept a lesser position and the struggle for control of markets, raw materials and sources of cheap labor inevitably leads toward world war.

Were the proposal for a new gold standard to be carried out, moreover, it would result in a catastrophic contraction of credit, plunging the world into a depression exceeding that of the 1930s.

The breakdown of the currency system is an expression of an insoluble crisis of the capitalist system that can be resolved in a progressive manner only through the international revolutionary movement of the working class and the establishment of world socialism. (WSWS)

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The assault on culture and the crisis of American capitalism

The strike by members of the Detroit Symphony Orchestra (DSO), which began Monday, is a politically and socially significant event. The players walked out in the face of management demands that would mean a severe decline in living standards—a 33 percent cut in base pay and reduction in the pay for new-hires of 42 percent, along with sharply reduced health coverage and a freeze in pensions.

As well, the orchestra is insisting that the musicians carry out all manner of nonperforming duties, turning them into what a players’ representative described as “servants.”

The Detroit Symphony has a long and illustrious history, dating back to 1914, and is regularly ranked among the finest orchestras in the US. The ongoing economic crisis has devastated the state of Michigan and the city of Detroit. The orchestra faces a $9 million budget deficit, as ticket sales have fallen, along with private donations. According to the New York Times, “Banks will no longer lend it [the DSO] money…and it is raiding its endowment to pay for operations.”

The crisis at the DSO is part of a national phenomenon. Budgets for arts groups and arts education are under relentless attack from governments in the US at all levels, while wealthy individuals and corporations are reducing their financial gifts. Pay cuts have been imposed at symphony orchestras in Phoenix, Houston, Cincinnati, Seattle, Indianapolis, Milwaukee, Baltimore, Atlanta, Virginia, North Carolina and Utah, among other cities and states.

One third of museum directors in the US had taken pay cuts by October 2009, along with thousands of museum employees.

Thirty-one state arts agencies predict decreases in funding for 2011. Arts appropriations at the state level have declined 34.7 percent in the past decade. When adjusted for inflation, the 10-year decrease is just over 45 percent.

The entire federal contribution to some 100,000 not-for-profit arts groups in fiscal year 2009—through the National Endowment for the Arts—added up to $155 million (a day or two of spending on the Afghanistan war). The NEA budget in 1978 was $123 million, or $416 million in current dollars.

American capitalism in decline has neither interest in, nor financial support to offer, artistic creation. In more prosperous times, the corporate elite felt there was a certain prestige value in subsidizing various educational and cultural activities. Now the aristocracy that rules the US views every dollar not accruing to itself to be a waste and even something of an affront. Cultural life in America is in serious danger from the vandals who sit in boardrooms and legislative chambers.

The notion that “the money is no longer there” (Detroit News) to support an orchestra—or a library or a public school for that matter—in Detroit, or anywhere else in America, is ludicrous. The financial markets and corporate coffers are awash in trillions. The News argues that “Working harder for less money is not an easy thing to accept. But it’s what the community that supports the DSO has had to do over the past decade.”

Which community? The very wealthy in Michigan (and in the US as a whole) are wealthier than ever. Bloomfield Hills, north of Detroit, ranks number four on the list of highest-income places in America with a population of more than 1,000—even as median household income in Michigan has plunged more than 21 percent over the last decade and Detroit’s official poverty rate has reached 36 percent.

In 2006, Forbes listed 8 billionaires in Michigan worth $16.5 billion. This year the magazine points to 10 billionaires worth $21 billion (a 22 percent increase).

The pseudo-populist attempt to pit DSO players, and other professionals, against lower-paid workers should be rejected with contempt. The interests of the latter are only championed by the media when it comes to beating down the efforts of slightly better-off sections of the population to defend their gains and rights.

The socially decisive differences in income are not between those making $30,000 and those making $130,000, but between this entire class of wage- and salary-earners and the superrich who individually loot the economy to the tune of millions, and in the case of Wall Street hedge fund managers, billionsof dollars a year!

Governments in the US have never adequately supported or funded the arts. On the one hand, the philistine ideologists of “free enterprise” have insisted that artists place themselves entirely at the mercy of the market, i.e., their ability to turn out work that yields profit, and have demanded that artists not be subsidized by the “taxpayers.” The miserable consequences of that can be seen in the current offerings of the for-profit film (Hollywood) and theater (Broadway) industries.

On the other hand, corporations and rich individuals were expected to make up the gap by their beneficence. According to the NEA in 2007, private donations accounted for some 43 percent of not-for-profit arts groups’ income, with governments providing only 13 percent.

This dependence on the largess of the wealthy is degrading and intellectually restrictive in the best of times. In a period of crisis, it threatens catastrophe. Now the very presence of music, art and drama in a given community may depend on the financial vicissitudes of the ultra-rich.

To point out to the bankers and CEOs, the people who “count” in America, that art is one of those activities whose creation and enjoyment renders human beings human, that it is essential to the life and well-being of an enlightened and sensitive people, that reducing the influence of artistic creativity will materially blight the lives of those deprived of it, is an entirely futile endeavor. Such arguments would only be met by blank stares.

The effort to slash the wages and benefits of the symphony musicians in Detroit and elsewhere, backed to the hilt in the big business media, ought to be instructive from another point of view. In effect, the musicians now find themselves in the same position as millions of auto workers, teachers and other workers. They may have thought themselves “professionals,” perpetually insulated from the kind of assault on living standards and jobs so many workers in the US and around the world have known, but the current situation is helping to clarify matters.

In the eyes of the ruling elite and its media, the DSO members are “servants,” expected to function under conditions dictated to them by management. Their strike action, which should be fully supported by every worker and student, is also part of a growing movement of resistance by the working class to the attempt to impose the full burden of the economic crisis on their backs.

As Leon Trotsky explained years ago, the period in which artists enjoyed relatively free rein, and received backing from the powers that be, existed on the same historical plane as the granting of “special privileges to the top layer of the working class.” The destruction of auto workers’ pay and benefits has inevitably preceded and facilitated the frontal assault on the Detroit musicians and other artists.

In the final analysis, the DSO confrontation expresses a stark reality: the survival and progress of art in America are incompatible with the corporate stranglehold over every important aspect of life. The wealth exists in abundance to fund every serious arts group in the US and provide every Detroit orchestra member, as well as popular music performers, painters, photographers, poets, and dancers, with secure economic conditions. But that wealth is jealously monopolized by a handful.

The DSO strike is not simply or even primarily a trade union conflict. It is a political and cultural struggle with enormous implications. The only genuine answer to the attacks on the orchestra musicians lies in conscious opposition to the attacks of the corporate elite, a rejection of their arguments and propaganda, and the emergence of an avowedly socialist movement among workers, professionals and students. (WSWS)

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US House passes anti-China trade war bill

The House of Representatives on Wednesday passed a bill giving the executive branch the power to impose punitive duties on exports to the US of any country whose currency is labeled “fundamentally undervalued.” The measure was pushed by the Democratic leadership and supported overwhelmingly by Democratic congressmen, with substantial Republican support.
The vote was 348 to 79, with 99 Republicans joining 249 Democrats voting in favor, and 74 Republicans voting “no” alongside five Democrats.

The bill was openly directed against China, which has come under mounting pressure from the Obama administration to more rapidly raise the exchange rate of its currency, the renminbi, so as to make Chinese exports to the US more expensive and US exports to China cheaper.

The White House has not taken a position on the House bill, whose prospects for passage by the Senate after the November midterm elections are uncertain, but Obama and Treasury Secretary Timothy Geithner gave a tacit go-ahead for Democratic House leaders to push the measure.

Testifying before Congress on September 16, Geithner declared the renminbi to be undervalued and demanded that the Chinese move more rapidly to increase its exchange rate. He indicated that if China refused to revalue its currency far more than its 2 percent increase since June, the US would take measures to restrict China's access to American markets.
On Wednesday, the day of the House vote, Obama, speaking at a town hall event in Iowa, said the Chinese currency was undervalued and added that “people generally think they are managing their currency in a way that makes our goods more expensive to sell there and their goods cheaper to sell here.”

Obama, who met with Chinese Premier Wen Jiabao September 24th during the United Nations General Assembly session in New York and pressed him on the currency issue, plans to use the House measure to bolster the US government's leverage against Beijing. Washington is seeking to line up international support to force China to revalue its currency at the G20 summit to be held November 10-11 in Seoul, South Korea.

If passed by the Senate and signed into law, the House bill would have little direct impact on US-Chinese trade. A provision requiring the government to impose countervailing duties against any country deemed to be undervaluing its currency was stripped from the bill in the House Ways and Means Committee before it was brought to the floor of the House for a vote. Instead, the bill allows the Commerce Department to define the undervaluation of a currency as an illegal trade subsidy and enables US companies that produce the imported goods to petition the government for relief, in the form of punitive damages on the allegedly offending country.

The Congressional Budget Office estimated that the bill would raise no more than $20 million a year in duties, as compared to $1 billion in daily imports from China, because so many of the goods imported from China are no longer made in the US.

Nevertheless, the bill represents a major step toward open trade war with China and will intensify the spread of competitive devaluations and protectionist measures internationally. It is in flagrant violation of international trading rules and the provisions of the World Trade Organization.

Nobel Prize winning economist Robert Mundell told Bloomberg Television that the bill “would create a very damaging thing to the world economy and the stability of Asia.” He added, “There’s never been any precedent in economic history where a country through any legal system was forced to appreciate its currency relative to another country.”

The timing of the bill, a month before the November 2 congressional elections, reflects the short-term political calculations of its congressional supporters. The Democrats in particular, but also Republicans in industrial regions, seized on the measure to demagogically pose as defenders of American jobs and blame mass unemployment on China.

Speaking from the floor of the House, Speaker Nancy Pelosi said, “We do this because 1 million American jobs could be created if the Chinese government took its thumb off the scale and allowed its currency to respond to market forces.”

This is an attempt to divert public anger over the refusal of the government to provide jobs or serious relief for the unemployed away from the American ruling class and the US government and direct it against a foreign bogey man. These are the same politicians, financed by corporate campaign donations and other forms of bribery, who have funneled trillions of dollars of taxpayer funds to Wall Street and now claim “there is no money” for jobs or schools and that nothing can be done to stop the banks from foreclosing on financially distressed homeowners.

The Democrats pushed the bill as part of their “Make it in America” agenda to revive US manufacturing. At the center of this policy is a doubling of US exports in five years to be achieved by drastically cutting the wages of US workers and increasing their exploitation, so as to narrow the labor cost differential between the US and the so-called emerging economies of Asia.

This promotion of economic nationalism and chauvinism has the full support of the trade unions. On Tuesday, 181 House members sent a letter urging Obama to back a complaint filed by the United Steelworkers union charging China with discriminating against US firms in relation to clean energy technologies.

The House bill is the latest in a series of developments reflecting a descent into international trade and currency warfare. On Monday, Guido Mantega, Brazil’s finance minister, said, “We’re in the midst of an international currency war, a general weakening of currency. This threatens us because it takes away our competitiveness.”

As a result of the cheap currency policy of the US, Europe and China, Brazil has seen its currency, the real, rise sharply against the major world currencies, including an increase of 30 percent versus the dollar over the past year. As a result, Brazil’s exports are threatened with being priced out of world markets.

Mantega said openly what is becoming increasingly obvious. The major economies are all seeking to drive down the exchange rate of their currency in order to gain a competitive trade advantage under conditions of stagnant growth and stagnant markets. The United States is leading the way, pursuing a cheap dollar policy. The dollar has declined by 11 percent since June against a basket of currencies and is now at its lowest level since February.

Europe, led by export-dependent Germany, is doing the same for the euro. Two weeks ago, Japan, whose currency had risen by more than 10 percent in relation to the dollar since May, unilaterally intervened in the currency markets, selling 1 trillion yen to force down its exchange rate.

Six days later, the Federal Reserve Board met and issued a statement signaling a more stimulative monetary policy aimed, in part, at raising the US inflation rate. This had the intended effect of sparking a new sell off of dollars, quickly reversing the 3 percent decline in the yen resulting from Japan’s currency market intervention.

With the passage of the House bill, the stage is set for retaliatory currency and trade measures not only between the US and China, but between all of the major economic powers.

The international currency system is breaking down under the weight of the mounting contradictions and systemic crisis of world capitalism. One stark expression of this process is the staggering rise in the price of gold, now above $1,300 per troy ounce and setting new records almost daily.

As the Wall Street Journal commented Monday: “Many investors are convinced the only truly reliable sanctuary is gold, leading analysts to believe it will continue its climb to record-breaking highs in the coming sessions.

“The unprecedented strength of the ultimate safe haven is a testament to investors’ uncertainty as monetary authorities around the world move into uncharted territory in their efforts to bolster struggling economies. The only certainty is that central banks and other decision makers appear to be united in pursuing strategies that will devalue their currencies, however diverse those strategies might be.

“‘We’re obviously in a competitive devaluation,’” said Drummond Brodeur, vice president for portfolio management at Signature Global Advisors in Toronto.”

The last time the world currency system collapsed was the 1930s, when competitive devaluations and “beggar-thy-neighbor” policies led to a fracturing of the world market into rival currency and trading blocs. The result was not only a deepening of the Great Depression, but the stoking up of international tensions that ultimately erupted in World War II. (WSWS)



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The fear of social and political upheaval haunting ruling circles around the world was graphically expressed at a recent joint conference of the International Monetary Fund (IMF) and the International Labour Organisation (ILO) that reviewed the worsening global levels of unemployment and poverty.

Laszlo Andor, the European commissioner for employment and social affairs, told the conference in Norway that 2010 had been an “annus horribilis” for unemployment. “But if we fail to act,” he warned, “2011 may still turn out to be the annus horribilis for social cohesion”. In other words, Andor’s fear was that mass joblessness could bring a mass upsurge of class struggles and political crises—next year.  

The figures presented to the conference speak for themselves. There are now over 210 million workers jobless globally—the highest level in recorded history—a 34 million rise in the past three years. Around 80 percent of the world’s population has no social welfare of any kind. Approximately 1.2 billion people, or 40 percent of the world’s labour force, do not earn enough to keep themselves or their families above the $2-a-day poverty level..

What particularly concerned Andor and other top officials was that much of the increased joblessness has been in the advanced economies of Europe and the US. In the US, the official number of unemployed has risen from 7.5 million to more than 15 million (half of these are long-term unemployed)—a level not seen since the Great Depression. Across Europe, there are now more than 23 million unemployed—a 36 percent increase since 2007.

IMF chief Dominique Strauss-Kahn told the gathering that the global financial crisis had left a “wasteland of unemployment”. He said that having a job was “often a matter of life and death” and warned that rising unemployment could lead to violent conflict.

Featured speakers included Spanish Prime Minister José Luis Rodríguez Zapatero and Greek Prime Minister George Papandreou, whose governments have already confronted strikes and mass protests against their IMF-dictated austerity measures. Zapatero warned the audience that long periods of high unemployment could set off “a crisis of pessimism” and “lack of confidence” in governments across Europe.

The ruling classes in Europe and internationally are acutely conscious of the extreme social and political tensions being generated by sharply declining living standards. Hostility to established political parties has been expressed in recent elections in Britain, Australia and Sweden that resulted in hung parliaments. In the US, the Democratic Party is facing major losses in mid-term congressional elections in November. Protests and strikes have not only erupted in Europe but have also emerged among the super-exploited in Asia—garment workers in Bangladesh and Cambodia, and car workers in China.

The conference document highlighted the potential for political radicalisation among young people who have been especially hard hit by job-shedding. In 2009 alone, the number of young people out of work globally rose by 6.6 million. Youth unemployment in Spain is officially 40 percent. In Italy, Sweden and France, it is currently around 25 percent and about 20 percent in the US and the UK.

The document warned: “Personal joblessness experience translates into negative opinions about the effectiveness of democracy and increases the desire for a rogue leader ... [This] extends to individuals who do not experience unemployment themselves, but live in a country and period with high unemployment. High and long-lasting unemployment therefore represents risks to the stability of existing democracies.”

Millions of young people—whether jobless or not—are starting to see for themselves that parliamentary democracy and the established parties are nothing but a screen for the interests of the wealthy corporate and financial elites. That disaffection can be exploited by parties of the extreme right that rail against the banks. However, in speaking of “rogue leaders”, what the ruling elites really fear is the rise of revolutionary sentiments among workers and youth, and genuine socialist parties committed to the abolition of the profit system.

The inability of capitalism or its political representatives to offer any solutions to working people was reflected in the poverty of the conference discussion. Of course, the delegates had to feign concern for the unemployed. But these are the very IMF officials, government leaders, corporate CEOs and trade union bureaucrats who are responsible for creating the jobless “wasteland” over the past two years.

As for proposals, the final conference statement promised to work on “employment-creating growth” and “a minimum social protection floor for people living in poverty”—right at the point where major corporations continue to downsize and governments are slashing budgets. It also called for more “social dialogue” and better “tripartite solutions”—that is, the even closer collaboration of the trade unions with governments and big business in imposing the agenda of austerity.

Two decades ago, amid the triumphalism in bourgeois circles that surrounded the collapse of the Stalinist regimes in Eastern Europe, commentators described 1989 as an “annus mirabilis”—a year of miracles that marked the death of socialism. The International Committee of the Fourth International (ICFI), the world Trotskyist movement, was alone in declaring that the collapse of Stalinism represented the end of all nationally-based programs and foreshadowed a profound crisis of world capitalism.

European Commissioner Andor’s declaration that next year could be an “annus horribilis for social cohesion” is a call to arms to the capitalist classes. For all the talk at the ILO-IMF conference about the political dangers facing “democracy”, the ruling elites will not hesitate to resort to their own methods of extra-parliamentary rule to impose pro-market policies and retain their grip on power.

The bourgeoisie and its representatives are extremely conscious of the political dangers posed to their interests by the worsening global economic crisis. The working class must begin to develop its own political counteroffensive on the basis of the perspective of the ICFI to abolish the profit system and establish a world planned socialist economy. (WSWS)


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Economic crisis threatens to unleash global currency wars

Two events this week have highlighted the growth of global economic tensions and the slide toward international trade and currency wars.

On Wednesday, Japan unilaterally intervened in currency markets to drive down the exchange rate of its currency by selling an estimated 1 trillion yen (worth some $20 billion). The move, the first such intervention by Japan in more than six years and the country's biggest ever one-day currency action, breached a tacit agreement among the established industrial powers to avoid unilateral currency moves.

Japan had threatened such action after the value of the yen in relation to the dollar rose by more than 10 percent since May. The Japanese currency also climbed sharply in relation to the euro and the Chinese renminbi. Tokyo, heavily dependent on exports, had warned that it would take action to protect its industries from the negative effect of the yen's rise on its ability to sell goods abroad.

The following day, US Treasury Secretary Timothy Geithner testified in two separate congressional hearings on Chinese currency policy and demanded that Beijing allow its currency to rise faster and more steeply, tacitly threatening retaliatory action if the Chinese regime refused to do so. Congressmen and senators from both parties blamed China for the loss of American jobs and criticized the Obama administration for failing to officially declare China a "currency manipulator" and impose tariffs and other penalties on Chinese exports to the US.

The eruption of currency exchange conflicts is bound up with mounting signs that the global economic crisis is systemic, rather than merely conjunctural, and growing fears that a genuine recovery is not in the offing. The European sovereign debt crisis and the weakening of US economic growth have led governments around the world to seek to secure a greater share of export markets. Under conditions of slowing growth and stagnant markets, this inevitably heightens trade conflicts between competing capitalist nations.

In particular, the US and the European Union, spearheaded by the export power Germany, have aggressively pursued a cheap currency policy in order to gain a trade advantage against their rivals. Of the major economic powers, Japan has suffered the greatest damage from these policies, as investors and speculators have shifted from dollar- and euro-denominated investments to the yen, driving up the currency's exchange rate.

This has embittered relations between Japan and both the US and the EU. Japan has also denounced China for artificially keeping its currency low while bidding up the yen by increasing its purchases of Japanese government securities.

Japanese Prime Minister Naoto Kan ordered the selloff of yen one day after he survived a bid by rival Democratic Party of Japan leader Ichiro Ozawa to unseat him. The markets were taken by surprise, thinking that the defeat of Ozawa, who had called for stronger action to halt the appreciation of the yen, lessened the likelihood of an intervention.

The Japanese currency had hit a series of 15-year highs versus the dollar. By late Wednesday, the yen had dropped nearly 3 percent in relation to the greenback. On Thursday, Kan warned that additional interventions were possible, pledging to take "resolute action" to further reduce the value of the yen.

Japan is the first of the old-line economic powers to intervene in currency markets in response to the global crisis, but the practice is more general and it is spreading. South Korea, Thailand and Singapore have all seen their currencies rise some 30 percent versus the Chinese renminbi. They and Taiwan have been active in currency markets, purchasing dollars to slow the rise of their currencies.

Brazilian Finance Minister Guido Mantega said this week that his country was readying a dollar-buying strategy to curb the appreciation of his country's currency, the real.

While the US and European central banks and governments have not officially commented on the Japanese action, they have let it be known that they deem it to be hostile to their interests. Jean-Claude Juncker, who chairs the 16-member group of euro zone finance ministers, said, "Unilateral actions are not an appropriate way to deal with global imbalances."

US Congressman Sander Levin (Democrat from Michigan), who chairs the House Ways and Means Committee, suggested at Thursday's hearing on Chinese currency policy that Japan's intervention meant it had a "predatory exchange rate policy."

The Japanese move set off warnings of an outbreak of competitive currency devaluations, similar to those that contributed in the 1930s to a collapse in world trade. "It almost gives everyone else the right to intervene unilaterally and trigger a competitive devaluation process," said Noriko Hama of Japan's Doshisha University.

The Wall Street Journal quoted Denis Gould, AXA Investment Managers' director of investment for Asia, as doubting the long-term effectiveness of unilateral interventions in lowering the value of the yen. "To make this move stick," he said, "it needs the US to play, as well as the Chinese." He continued, "Nobody will do it in a coordinated manner because nobody wants their currency going up. Everywhere in the world there are problems with economic growth."

Ted Truman of the Peterson Institute in Washington said, "This action is symptomatic of the sense that at the moment it is every country for itself."

Thursday's testimony by US Treasury Secretary Geithner before the Senate Banking Committee and the House Ways and Means Committee was staged for the purpose of ratcheting up pressure on China. Treasury is required under law to report to Congress by October 15 on international currency relations, and name those countries deemed to be "currency manipulators." Any country so designated is subject to tariffs and other penalties on its exports.

The hearings became a forum for legislators of both parties to fulminate against China, assuming a populist pose of defending American jobs. They exemplified the reactionary use of economic nationalism to divert popular anger away from the American ruling class and government and scapegoat other countries--in this case China--for the social disaster produced by US capitalism.

Prior to the hearings, 100 members of the House of Representatives, the majority of them Democrats, sent a letter to House Speaker Nancy Pelosi calling on her to bring to a vote a bipartisan bill mandating the government to impose tariffs and other penalties on countries that undervalue their currency.

Earlier in the week, the United Steelworkers union filed a complaint with the US trade representative against Chinese practices in the renewable energy field.

The Obama administration, for its part, announced on Thursday the bringing of two cases against China before the World Trade Organization. One accuses China of blocking imports of a specialty steel product and the other of denying US credit card companies access to its markets.

In opening the Senate Banking Committee hearing, Chairman Christopher Dodd (Democrat of Connecticut) declared China a currency manipulator and said its "economic and trade policies" present "roadblocks to our recovery." He went on to accuse China of stealing intellectual property, violating international trade agreements and dumping goods. He also denounced China for acquiring national resources in developing countries and building up its military.

In his opening statement, the ranking Republican on the committee, Richard Shelby of Alabama, declared, "There is no question that China manipulates its currency in order to subsidize Chinese exports. The only question is: Why is the administration protecting China by refusing to designate it as a currency manipulator?"

Senator Charles Schumer, a New York Democrat, said, "China's currency manipulation is like a boot on the throat of our recovery and this administration refuses to try to get China to remove that boot."

In his statement to the committee, Geithner dismissed as inadequate China's moves since June to allow the renminbi to appreciate versus the dollar. The Chinese currency has risen about 1.5 percent since then. On the day of the hearings, it had its strongest close on Shanghai markets since it began trading in 1994.

Geithner indicated a reluctance to officially declare China a currency manipulator and he did not take a position on the anti-Chinese bill in the House. But he stated categorically that the renminbi was undervalued.

"We are concerned," he said, "as are many of China's trading partners, that the pace of appreciation has been too slow and the extent of appreciation too limited… China needs to allow significant, sustained appreciation over time to correct this undervaluation and allow the exchange rate to full reflect market forces."

The treasury secretary suggested that China should raise its exchange rate by at least 20 percent and issued a thinly veiled threat, noting that "China has a very substantial economic stake in access to the US market." (WSWS)

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The World Economic Crisis, the Failure of Capitalism and the Case for Socialism

The following resolution was passed unanimously at conferences convened by the Socialist Equality Party (Australia) and the International Students for Social Equality in Sydney, July 4, and Melbourne, July 11, 2010.

01. The political coup that suddenly erupted in Canberra on June 24 constitutes a striking demonstration, against the oft-repeated mantra of “Australian exceptionalism”, that the country is being swept into the global turmoil produced by the most serious crisis of world capitalism since the 1930s. Orchestrated by a small group of Labor Party factional bosses the coup against Prime Minister Rudd stands as a stark warning to the working class. Without any discussion in the Labor caucus, let alone the party’s membership, and behind the backs of the population, an elected prime minister was deposed within the space of 24 hours. Not a single Labor politician, including Rudd himself, has registered a word of protest.

02. Julia Gillard was installed at the direct behest of the major mining companies and finance capital. Her total capitulation to the multinational mining giants makes clear where political power really lies. Behind the elaborate facade of parliamentary democracy and national elections stands the naked dictatorship of capital, backed, as Friedrich Engels once explained, by detachments of “armed men and also material adjuncts, prisons, and institutions of coercion of all kinds”.

03. Exactly which sections of the ruling elite participated in Rudd’s ousting and the nature of their precise motivation are not yet fully known. Under conditions of growing economic and political tensions between the US and China, geo-strategic questions may well have played a part. Canberra is being forced to conduct an increasingly fraught balancing act between its long-standing military and geo-strategic dependence on the US and its growing economic dependence on China. Throughout the past century, Australian capitalism has always been highly sensitive to such global political shifts. In 1975, during a period of acute international turmoil, the Whitlam Labor government was sacked by the governor-general in a coup involving the highest levels of the state apparatus, as well as international intelligence agencies including the CIA and MI5.

04. Thirty-five years later, Gillard’s installation comes amid the most severe international capitalist crisis since the Great Depression. So profound has been the degeneration and transformation of the Labor Party into a direct political instrument of the bourgeoisie, that the coup of 2010 was executed by forces from within the Labor Party itself.
05. Throughout the world the ruling elite is preparing new authoritarian methods of rule to permanently slash the living standards of broad sections of the population. In 2008 national governments reacted to the financial crash by implementing a series of unprecedented bank bailouts and stimulus spending measures. But these steps have only created new contradictions. The latest stage of the crisis is driven by fears generated by mounting budget deficits and sovereign debts. In response, one regime after another is imposing brutal austerity programs, making the working class pay for the crisis through cuts to public spending, wages, jobs and living conditions.

06. In the US, President Barack Obama’s intervention into the auto industry, slashing wages in half and gutting conditions, encouraged the American corporate elite to unleash an unprecedented wave of mass layoffs and wage cuts. In Britain, the Conservative-Liberal government has implemented budget cuts on a scale not seen in the post-war period, outstripping the measures taken by the Thatcher government in the 1980s. Across Europe, pensions are being gutted, the retirement age lifted, public sector jobs cut and wages slashed. In Japan, Yukio Hatoyama’s resignation after less than a year as prime minister has been accompanied by a rapid shift to austerity measures.

07. The economic crisis is of a systemic, not a conjunctural character. Class relations are being restructured on an international scale. Mounting tensions within nation states coincide with escalating geo-strategic rivalries between the major powers, fuelled by the historic decline of US capitalism. The criminal and predatory US-led wars in Afghanistan and Iraq have been aimed at ensuring the domination of the US, and its access to resources, against its rivals in Europe and Asia. Other powers, major and minor, are seeking to shore up their own “spheres of influence”—with Australia launching neo-colonial operations in the South Pacific, particularly East Timor and the Solomon Islands. Potential military flashpoints are emerging across the planet. There is no solution within the existing social and economic order. Once again humanity confronts the alternative of socialism or barbarism. The Socialist Equality Party, the Australian section of the International Committee of the Fourth International, advances, in collaboration with its sister parties throughout the world, a revolutionary socialist perspective as the basis for a new international political movement of the working class.

The global crisis of the profit system

08. The capitalist system has failed. The 2008 financial crash and its aftermath stand as a devastating refutation of the various ideological nostrums advanced in defence of the so-called “free market” by the right-wing opponents of socialism. For the overwhelming majority of the world’s people, the profit system has nothing to offer except worsening exploitation, poverty, repression and violence.
09. More than 200 million people are unemployed internationally. One billion, about one out of every six human beings, are undernourished. Even more endure what is officially described as “extreme poverty”, living on less than $1 a day. Such statistics could be augmented by many more, detailing the pervasive incidence of preventable disease, premature death, and other effects of poverty and extreme social inequality. There are ample resources to ensure that every man, woman, and child has a high standard of living—but under capitalism, the accumulation of obscene levels of private profit and private wealth by a tiny minority takes priority over all else.

10. In Australia, millions of ordinary working people confront growing social uncertainty and hardship. Behind the official rhetoric that Australia “defied the laws of economic gravity” stands the stark reality of widespread unemployment, job insecurity, and debt stress. Even according to the official figures, there are 610,000 unemployed—about 200,000 more than when the financial crisis erupted in 2008—while another 1.2 million are “under-employed”. Many of those with jobs are permanently stuck with casual or part-time positions, with little or no job security. Stagnant or declining real wages, combined with huge increases in the cost of housing and other necessities, have fuelled an explosion of personal debt and homelessness. The situation is especially dire for youth. Young workers confront between 25 and 40 percent unemployment in working class areas, while university and college students struggle to fund their education only to graduate with huge tuition debts. International students comprise a super-exploited layer, treated as cash-cows for the private education sector, which is now Australia’s third most lucrative export behind iron ore and coal. In the wake of the 2008 crash, bank and corporate profits have soared at the direct expense of the working class, sending social inequality to new levels. During 2009, the wealth of Australia's 173,600 millionaires (excluding their homes) rose 37 percent to almost $600 billion.

The record of the Labor government

11. The Gillard government’s priorities have been established from day one. The spectacle of senior Labor ministers huddled in a week of closed door negotiations to appease the chiefs of BHP, Rio Tinto and Xstrata underscores Labor’s role as a representative of big business and finance capital.

12. Many workers and young people who voted for Kevin Rudd, regarding Labor as an alternative to Howard, or at least a “lesser evil”, feel deeply disappointed and betrayed. In 2007, Rudd sought to appeal to mass anti-Howard sentiment, promising a more humane approach on foreign, economic and social policy and to improve social services. At the same time, he won the backing of key sections of the corporate elite for his pledge to be an economic conservative and to prosecute its “reform agenda”. Once in office, the Rudd Labor government effected a seamless transition from the Liberal-National Coalition. It continued the so-called “war on terror”, deploying even more Australian troops to the war in Afghanistan; maintained its imperialist occupations in East Timor and the Solomon Islands; deepened the Northern Territory intervention, extending its punitive system of “welfare quarantining” as a prelude to enforcing it throughout the country; continued the incarceration of refugees in violation of international law; and established the new Fair Work Australia regime with even harsher anti-strike provisions than those contained in Howard’s WorkChoices legislation. Rudd also moved to undermine the public education system even further, with the NAPLAN and MySchool standardised testing regime, and to drive down long-term health care costs through the federal takeover of the hospital and primary care system and the extension of the market-based “case-mix” system nationwide.

13. While opinion polls over the past weeks have certainly been highly manipulated, they have also given some idea of the extent of the shift in popular sentiment against Labor. And Gillard’s new Labor government will go far further than Rudd’s. At every opportunity she has sought to emphasise her strong “reform” credentials. As deputy prime minister she staged provocations against construction workers, school teachers, and other sections of the working class, winning support from the Murdoch media and the most right-wing commentators. As prime minister, her second priority, after axing the Resource Super Profits Tax, will be to launch an even sharper attack on asylum seekers, while seeking to incite, in the reactionary “White Australia” tradition of the Labor Party, the most backward and xenophobic sentiments as a means of diverting mounting social anger and political opposition to the government’s policies and program.

14. Whenever the federal election is held, it will constitute yet another conspiracy against the Australian people. None of the policies of either of the major parties will be openly discussed. As Rudd’s political assassination has demonstrated, the program, policies, and even personnel of the next government, whether Labor or Liberal, will be determined behind-the-scenes by the corporate elite, not by ordinary voters.

For the political independence of the working class

15. Mounting anger and hostility towards Rudd, and now disquiet and opposition towards the Gillard coup, can find no avenue for expression within the official political set-up. The working class needs a new perspective and a new political party.

16. The 120-year-old political experience with the Australian Labor Party has proven a disaster. While formed in the 1890s as a mass party of the working class, Labor’s program was bourgeois from the outset, furnishing the new Australian nation-state with its founding ideology of racial exclusivism, protectionism, and arbitration. Now under conditions of globalisation, Labor has abandoned its old program of limited national reform and become an instrument for defending the interests of Australian big business and finance capital on the global arena: prosecuting militarism and war, initiating the privatisation of social infrastructure, gutting public services, and attacking the wages and conditions of the working class in the name of ever higher productivity, profits, and international competitiveness.

17. Similarly, the objective logic of the organically nationalist program of the trade unions stands clearly revealed. In every country they offer their services in policing job losses and plant closures, wage cuts, and productivity drives, on behalf of the employers, suppressing all resistance from workers. In Australia, the Hawke Labor government and the union bureaucracy collaborated in drafting a series of Accords that enshrined the unions as enforcers of Labor’s anti-working class “free market” policies. Under the current Labor government, bureaucrats sit alongside corporate executives on multi-billion dollar superannuation fund boards, their lucrative incomes tied to profitable investments and largely independent from their membership and dues.
18. The deepening crisis, in Australia and internationally, will propel the radicalisation of the working class. This radicalisation will see the development of mass struggles that strive to break free of the bureaucratic shackles of the reactionary trade unions and assume an increasingly political and anti-capitalist dimension. This process has already begun in the general strikes and mass protests that have erupted in Greece, Spain, France, Germany and Ireland—and in China, where highly exploited workers, many of them young, have staged mass strikes demanding higher wages and improved conditions in opposition to the regime’s state-controlled unions.

19. The middle-class outfits that operate as satellites revolving around the trade union and Labor apparatus seek to prevent the working class from making a conscious political break from these outmoded, outlived organisations. The Greens, who have initially benefited from the discrediting of Labor, are a thoroughly bourgeois party, entirely integrated into the official parliamentary establishment. Experience internationally, especially in Germany and now in Tasmania, where they have joined bourgeois governments, points to the Greens’ loyalty to the capitalist state. Greens’ leader Bob Brown has insisted his priority is “parliamentary stability”, and will do whatever necessary—including collaborating with Labor or Liberal in implementing austerity measures—to ensure it is maintained.

20. The demoralised pseudo-left protest organisations, which occasionally seek to utilise “socialist” rhetoric, have proven themselves to be the most determined opponents of an independent political movement of the working class. The record of the Labor government since 2007 stands as a devastating refutation of their support for Rudd as a “lesser evil” to the Liberals, and their claim that mass pressure could somehow force Labor to the left.

A political program for the working class

21. All over the world workers are seeking to fight, but they require a new political strategy. The starting point must be the recognition that their struggle is against the capitalist system, a system based on the exploitation of the working class in the interests of private profit. Only through the socialist reorganisation of economic life to meet social needs and not private profit can a solution be found to the urgent problems confronting billions of ordinary people.
For the international unity of the working class

22. This conference affirms that there is no national solution to the problems confronting working people in Australia or any other country. The working class is the only truly international class, and its interests transcend all national boundaries. Only to the extent that working people begin to forge the closest unity with their class brothers and sisters internationally can a successful struggle be waged against international finance capital. This class unification requires a rejection of all forms of national chauvinism, including the entire reactionary framework of so-called “border protection”. Workers and refugees must have the right to live and work wherever they wish on the planet, with full citizenship rights.

For an end to militarism and war

23. This conference condemns the US-led wars in Afghanistan and Iraq, and demands the immediate and unconditional withdrawal of all Australian and foreign soldiers and security personnel from both countries, as well as from East Timor and the South Pacific. We denounce the repeated provocations and threats by the US and its allies against Iran. We condemn the entire so-called “war on terror”, including the onslaught on democratic rights legislated by Liberal and Labor governments at the state and federal level.

For an emergency social and public works program
24. This conference advocates an emergency program to address the economic crisis in the interests of the working class. Urgent measures must be undertaken to alleviate the hardships produced by the world capitalist crisis, including an end to housing evictions and homelessness, the raising of pensions and benefits to a living wage, a guarantee of employment to all workers, a doubling of the minimum wage to $30 an hour, and a reduction in the workweek to 30 hours at 40 hours’ pay. Quality, free public education must be provided for all young people, from kindergarten to university, as well as technical training. Student fees must be abolished, including for overseas students, and the loan debt cancelled. First-class health care, including access to the latest medical advances, must be guaranteed to all, without fees or caps on treatment.

For the nationalisation of the banks and major corporations. For social equality

25. There is no shortage of resources to provide these programs, but economic life must be totally reorganised. The accumulated wealth created by the working class must be directed to the satisfaction of pressing social needs, with the banks and major corporations nationalised and transformed into public utilities, democratically controlled by the population. Social inequality in Australia, as in the US and other countries, has developed to such extreme levels that democratic forms of rule are becoming untenable. As a first step towards social equality, this conference calls for the introduction of a genuinely progressive taxation system which includes the abolition of the myriad loopholes and evasions utilised by the corporations and ultra-wealthy to evade paying tax, and an immediate reduction in the level of taxation imposed on the majority of the population.
For defence of the earth’s environment

26. The subordination of society and the earth’s eco-system to the requirements of capitalist profit must be abolished. The BP oil spill in the Gulf of Mexico has revealed the complicity of successive US governments with the profit-driven recklessness of the major oil corporations. America’s worst ever environmental disaster stands as a stark demonstration of the incompatibility of the profit system with an inhabitable world environment. The climate change crisis is impossible to resolve outside of an independent political movement of the working class directed against both the major private polluters—who do everything in their power to resist any curtailment of their destructive activities—and the various national governments, whose concern for the fate of their own bourgeoisie takes priority over the long-term interests of humanity and the planet. Proposed “market-based” schemes, including a so-called carbon tax, backed by the Greens, among others, and Emissions Trading Schemes (ETS), are inherently incapable of delivering the scientifically required restructuring of the carbon-based economy. The central goal of the Labor government’s proposed ETS was not to reduce greenhouse pollution but to establish a lucrative new transnational market in carbon credits for the major Australian financial institutions and banks.

Build the Socialist Equality Party

27. The Socialist Equality Party will stand candidates in the forthcoming federal election as a means of advancing an independent and revolutionary alternative for the working class. This conference expresses its support for the SEP’s campaign, which will be aimed, not primarily at votes, but at raising the political consciousness of the working class. Above all, the campaign will stress the unpostponable necessity of building the SEP as the new mass party of the working class. Its aim is not the reform of capitalism, but the creation of a socialist, democratic and egalitarian society through the establishment of a workers’ government and the revolutionary transformation of world economy.

28. The SEP, and its predecessor, the Socialist Labour League, has an unbroken record in fighting for the independent interests of the international working class, in opposition to Stalinism, Laborism, the trade union bureaucracy and all those tendencies that have sought to subordinate the working class to the capitalist system and its political representatives. We seek to unify workers in Australia and internationally in the common struggle for socialism.

29. This conference makes an urgent appeal to workers and youth throughout Australia and internationally: Build the International Committee of the Fourth International, the Socialist Equality Party, and its student organisation, the International Students for Social Equality! Take up the fight for socialism! (WSWS)

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