Athens Meeting 18-20 November 2005, Contribution of CP of
Ireland
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From: SolidNet, Monday, 28 November 2005
http://www.communistpartyofireland.ie ,
mailto:cpoi@eircom.net
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International Meeting of Communist and Workers' Parties
"Current Trends In Capitalism: Economic, Social And
Political Impact. The Communists' Alternative"
Athens, 18-20 November, 2005

Speech by: Joe Bowers. National executive Committee
Communist Party of Ireland.

Current Trends in Capitalism
Dear comrades:

If capitalism can be said to have a single purpose or theme
in the 21st Century it is to create a single, integrated,
unified world economy. This was always the project of
capitalism. Marx & Engel's pointed out in the Communist
manifesto that capitalism must, of its very nature,
penetrate every possible nook and cranny of the world and
subject all human activity, wherever possible, to the laws
of the market; it must reduce everything in the world to
the callous cash nexus.

Until recent years, it was never really been possible to
achieve this. Large areas of the world remained outside
the capitalist market system because they were too remote,
or still engaged in subsistence agriculture, or because
economic and political barriers were erected which
prevented the free flow of capital, labour and goods across
all markets. For most of the 20th century, a third of
humanity were cut off from capitalist markets by the
existence of the socialist world, dominated by the USSR and
the Peoples Republic of China.

Another barrier to unfettered capitalism is the modern
state. The welfare state kept the private market out of
huge areas of activity health, education and all public
services. In addition, state regulation in areas such as
labour market standards, environmental and health & safety
controls, licensing systems, etc. made it difficult for the
private market to function in many areas, and in areas
where they did, their profits and market power were
constrained in the interests of society as a whole.

Finally, trade barriers between different countries,
although they usually served the interests of local
capitalists or farmers, prevented the emergence of
integrated global markets.

The most striking feature of modern capitalism is that all
of these barriers are now being removed in one form or
another virtually everywhere in the world.

The collapse of the Soviet system and the growing
integration of China into the global capitalist system
means that capitalism now has access to almost all the
world's markets and almost all the world's resources. The
next round of trade liberalisation in the World Trade
Organisation, due in 2007, will make a significant
contribution to lowering barriers still further and
increasing the volume of world trade in all goods and
services.

With free trade comes free movement of capital. A great
deal of basic manufacturing industry has already been
outsourced from the US and Europe to India and China. Many
services industries are following. This process will
continue for several decades.

Politically the various centres of power in the world are
trying to manage the process of globalisation in their own
interests. The United States is trying to circumvent the
WTO global system of tariff reduction by doing special
preferential deals with poorer countries where it can
impose conditions preferable to US capital. They are
trying to control the hemisphere through the existing North
American Free Trade Association and by setting up another
regional trading bloc between the US and the South American
countries, again on US terms.

The EU is also a regional bloc attempting to compete with
both the US and the rising economies of the east. They are
trying to create a unified European economy, which will in
turn give the dominant forces in Europe greater power in
the new global economy. This is a large and difficult
project for European capital. It faces many obstacles.

Firstly, it is still very fractured, compared to the US.
There are, e.g., 20 different stock exchanges in Europe;
they have still not achieved integration in financial
services; there is still no integrated energy market; there
are 25 different legal systems with 25 different systems of
taxation; 25 different labour markets, etc. etc. All of
this makes European capital less efficient and therefore
less profitable than the US and so there is along way to go
before the leaders of EU Capital feel equipped to cope with
the emerging new world. Many of the things they have tried
to date have failed:

The Lisbon agenda was designed to make the EU the most
competitive and technologically advanced economic region in
the world by 2010. This was meant to be achieved by
deregulation, privatisation and undermining the welfare
state as well as weakening the legal rights of workers. It
failed dismally and EU leaders now accept that the targets
cannot be met.

The Draft EU Constitution, designed to make the EU function
more efficiently as a political entity supporting European
capital, also failed. The Bolkestein Directive, designed to
reduce the market for cross border services to the lowest
existing standards for health, safety, consumer protection,
etc in the EU, had to be recalled and is being revised.

An even bigger problem for European capital is the power
and popularity of the welfare state. A unified world
economy means far greater levels of competition than ever
before. Greater competition means lower prices and lower
prices means lower profits unless costs can be reduced at
least as much as prices. The big problem for European
capital is labour costs. They are high because of the
historic power of trade unions but also because of the
`non-wage costs'. Non-wage costs are a high proportion of
total labour costs in most of the western EU member states,
except Ireland and Britain. Non-wage labour costs include
pension and other social solidarity contributions by the
employer.

To significantly reduce these costs, social programmes must
be savaged. In addition of course, core wages also must be
reduced "in order to compete with low wage economies". This
is happening within the EU and between the EU and the rest
of the world. Relocation of some companies from countries
like Ireland to Poland has taken place and in other cases
immigrant labour from the new accession states is being
used, legally and illegally, to undermine wages and
conditions in areas like the building industry in Southern
Sweden to the shipping-ferry business in Ireland.

Attempts to dismantle the welfare state, as well as using
competition to undermine established wages and conditions,
are being added to the Lisbon Agenda of rolling back
workers' legal rights, privatisation and deregulation: the
is the agenda of capitalism in Europe and will remain so.

The important thing to remember is that, so far, they have
largely failed in this agenda because of the huge
resistance of ordinary people, not just organisations of
the left.

As a result of the development of a unified world economy
trade unions in developed capitalist countries face a loss
of market power principally due to the impossibility of
competing with, for example, India and China in so many
areas of activity. The demand for better wages and
conditions which reflect the growing productivity of these
economies must be part of a strategy to defend the
influence of the organised working class.

While a more unified world economy leads to reductions in
prices of consumer goods and services, due to intense
competition, it also leads to increased prices for oil and
other raw materials because a growing world economy will
have more demands for resources which are limited in
supply.

For the foreseeable future, energy and other commodity
prices will increase. This is good for the oil and gas
producing countries but the biggest consumers and importers
of these commodities are the US, the EU and China. The
struggle to control these resources leads to tensions
between the competing centres of economic power in the
world and between them and the energy producing countries.

The first great resource war of the 21st Century has
already begun. We do not yet know the precise details of
how it will finish but we can say at this stage that it is
not going according to the plan laid out by Washington. The
people of Iran and Venezuela are asserting their rights
over their own resources.

Capitalist states are still carving out spheres of
influence in a world where there is no non-capitalist bloc
to constrain them. There are similarities with the
conditions which preceded the First World War but
Capitalism has over-reached itself in the first war it has
sparked off this century. The consequences will be
far-reaching and profound. The international forces for
peace should press the advantage to maximise opposition to
capitalist states ever go to war against each other again.

The real war in this era of globalisation is the war of the
rich against the poor. It is fought in many guises but is
to be found all over the world:

The war of rich countries against poor or weak ones: e.g.
the US against Iraq threats against Syria and many other
countries.

The war of the rich against the poor, which is most acute
within developing countries.

The war of those who do well out of the current system
against those who "cost" money in taxation i.e. elderly,
poor, unemployed, the sick dependent on public health.

The war against the public service and all public services,
especially in the richest countries being waged by those
who stand to make huge gains by unlocking the resources
tied up in public services: private companies who want
contracts to run prisons; financial corporations in the US
who want to abolish Social Security there so that the tens
of billions of dollars locked up in these public funds will
be released into private funds controlled by them.

Those who stand to make a lot of money through the
privatisation of public utilities like electricity
companies at the expense of workers and communities,
especially the poor.