Lisbon Meeting 10-12 November 2006, Contribution of CP of
Britain
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From: Portuguese Communist Party, Monday, November 13, 2006
http://www.communist-party.org.uk ,
mailto:office@communist-party.org.uk
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Contribution from the Communist Party of Britain

Sexta, 10 Novembro 2006

Britain and the US strategy for world domination:
The struggle for popular sovereignty and democracy

Two apparent paradoxes underline the contradictions and
dangers posed by imperialism today. The US, the world's
biggest debtor, runs the world's banking and financial
system. Britain, with the weakest industrial base of all
leading capitalist nations, received by far the largest
share of foreign direct investment in 2005: 17 per cent of
the world total.

This contribution from the Communist Party of Britain will
argue:

That Britain plays a key role in pulling together
subordinate alliances for the US inside the EU and
traditional spheres of British interest such as Central and
Southern Africa.

That the objective of the US is not simply to control world
resources such as oil, important though this is, but the
maintenance of a wider financial dominance within a trading
structure that gives free scope to its giant monopolies in
IT, biogenetics, pharmaceuticals, armaments and aerospace

That in this process there is a high level of strategic
intervention and control by US state monopoly capitalism
which also gives significant advantages to British finance
capital in its international operations.

That it is important not to over-estimate the power of even
the biggest US transnational corporation, independent of
the US state.

That it is equally important not to underestimate the
fraught, error-prone exercise of state power, in the US and
Britain, faced with the pressures of internal democracy and
external resistance

In view of the contemporary myth of the all-powerful
character of US transnationals, it is important to start by
stressing the real power exercised over them by the US
government. Both right-wingers and some on the left have
claimed that such companies are beyond the control of any
particular state and can now move capital without detection
across any border. These claims are misleading and
dangerous. They disarm the workers' movement by suggesting
that governments no longer have the capacity to exercise
any control over capital.

A moment's reflection demonstrates the opposite. Remember
Cuba, PDR Korea, Zimbabwe and Sudan among several others.
The US government has been able to track and block
virtually all trade credits for Zimbabwe and for Korea for
the past four years. It has been able to compel even
foreign banks to halt dollar transactions in favour of
Cuba. The case of Sudan is even more revealing. Sudan has
very large oil reserves. The US oil major Chevron, one of
the biggest, was the first to take control of these assets
in the 1970s and 80s. When in 1989 the US identified the
new Sudanese government as a strategic enemy swift and
effective steps were taken to force Chevron's withdrawal
at just the point when it was about to bring the most
lucrative oil fields on stream. Chevron's losses were in
the region of $1 billion although the US government gave
it a tax write off of $600m. When in 1998 Chevron's
Sudanese assets passed into the hands of one of the biggest
Canadian oil firms, Talisman, equally effective steps were
taken. Talisman left Sudan in 2002 at a time when oil from
this source contributed 20 per cent of its profits. What
were the weapons? The share holdings controlled by US based
financial institutions and US-funded NGOs that raised human
rights abuses through the Canadian government. By the time
Talisman had sold its Sudanese assets its shares were
discounted by 20 per cent

This is not to claim that transnational companies are
puppets of the US government. Simply that even the biggest
are subject to pressures from banks and fund-holders and
that the US government possesses comprehensive sources of
information and influence. The US government also
influences, directly or indirectly, the markets for
virtually all US transnational companies whether this is
through Defense Department contracts, credits to overseas
governments or through the military protection of overseas
assets.

The big and difficult question is who does control, in
whose interests and within what limits. The term state
monopoly capitalism indicates that in our era it is not the
capitalist class as a whole that is paramount. Nor is it,
of course, the will of the people, despite the democratic
forms of most such states. State monopoly capitalism
requires a direct linkage between the dominant strategic
controllers of finance capital and the capitalist state
apparatus. This gives the capitalist state in the US,
Britain and elsewhere immense powers of coercion and
persuasion. But it does not mean that the state power of
monopoly capital is free from constraints or that its
handling of the interests of finance capital in general is
always smooth and successful. Far from it. We will come
back to this later.

What this contribution wants to focus on is the nature of
current US strategy and Britain's role within it.

US finance capital still enjoys major strategic advantages:
Its economy is by far the biggest and recently has been
growing faster than those of its main capitalist rivals
Its transnational companies technologically dominate most,
though not all, of the main areas of global growth
Its banking system is globally dominant: over 50 per cent
of trade denominated in dollars; in 2005 US banks handled
over 70 per cent of Europe's mergers and acquisitions.

The US owns three of the top five oil trading companies and
has significant share ownership within the other two, one
based in Britain, the other in the Netherlands. The US
thereby dominates the oil supply of most of the other main
capitalist economies.

Its military alliances cover all continents and tie its
allies to purchases from the US military industrial
complex.

The problem for US strategists is that these advantages,
largely mutually dependent, are in slow, long-term decline:

The US share of world industrial output has declined from
over 50 per cent in 1950 to 25 per cent today

The US balance of payments has been in deficit for well
over a decade. This deficit now equals between 7 and 8 per
cent of US GDP

Other economic centres are emerging as potential rivals in
Europe and Asia

US oil trading is now dependent on external sources of
which the great bulk, 96 per cent in terms of global
reserves, are owned by the state oil companies in countries
that are either politically unstable or politically outside
the US sphere of influence

The US exercise of regional dominance is meeting increasing
resistance in Latin America, the Middle East and Asia.

In addition, the past decade has seen the US only able to
avoid long-term downturns in the capitalist crisis cycle by
a number of risky short-term expedients: doubling the size
of the military budget, depressing labour costs by
large-scale outsourcing of production and large-scale
immigration, and finally by interest rate policies that
have created unprecedentedly high levels of household debt.
The rise in outsourcing and the level of internal debt have
together severely worsened US problems of financial
management.

Over the past two decades the general US strategic
response, broadly shared by Democrats and Republicans
alike, has been to build on its strategic strengths and to
develop alliances with the other main capitalist powers to
extend the geographical scope of the capitalist market
unfettered by any form of democratic political intervention
usually under the guise of introducing fully liberal
democratic institutions. This geographical expansion has
applied both to existing capitalist states in Europe with
social democratic traditions as well as the former and
existing socialist countries and others states in the
Middle East and Asia. Economically and strategically, this
brought most benefits to the US and its dominant
monopolies. But it was also sufficiently beneficial to the
big monopolies of other capitalist powers to secure their
consensus and support. It was a strategy that seemed to
mark up major successes in Eastern Europe and even Russia
in the 1990s. Indeed, the combined NATO and EU military
intervention in Yugoslavia indicated what might be possible
in other regions.

For US financial capital the weakness of this strategy was
that it only delayed and did not reverse the long-term
relative decline in US dominance. Hence the Project for a
New American Century report of September 2000. This focused
particularly on two things. One was the sharp worsening in
US controls over strategic raw materials, particularly
energy, during 1990s and the danger that traditional allies
would begin doing deals directly with producing countries.
The other, linked to this, was the emergence of China and a
consolidated EU as economic counterweights to the US. The
authors argued that the US had to take urgent steps to
reassert control over global energy if there was not be a
wider and more precipitate slippage in US dominance. The
report challenged existing US thinking by explicitly
identifying Europe as potential base for rival
(inter-imperialist) policies and by arguing that, if
necessary, there would need to be a break with the
traditional US commitment to multilateral action. It was
essential, the report argued, to secure a political
transformation of the oil-bearing regions of the Middle
East and Central Asia and create liberal market democracies
that would open its energy resources to full commercial
operation. In this the US should be prepared for the kind
of intervention used in Yugoslavia. If this could be done
with multilateral support, all the better. If not, the US
would have to act with those allies on which it could
directly depend.

In implementing these plans the US link with Britain
assumed critical importance. The US has more external
investment in Europe than the rest of the world put
together. However, the investment is highly concentrated.
Over two-thirds is invested in just four countries: Britain
($300,000m), the Netherlands ($200,000m), Ireland
($73,000m) and Sweden ($46,000m). In Ireland it is
equivalent to 35 per cent of GDP, in the Netherlands 31 per
cent, in Britain 13.5 per cent and in Sweden 12 per cent.
US Investments in Germany equal only 2.7 per of GDP and in
France 2.6 per cent. Britain is also special in the degree
to which its mass circulation press is US owned (over 40
per cent) and its own key areas of overseas superprofit in
oil and financial services are highly dependent on US
support and protection.

In the event the US attack on Iraq had to be undertaken
without the support of Germany, France, the EU or the UN.
Britain, however, took on a key role in rallying minority
support. Since 2003 Britain has played an even more
important role in changing the political balance inside the
European Union. The entry of the Eastern European accession
states brought in countries in which the neo-capitalist
elites were highly dependent on US-influenced structures of
support. In 2004-5 Britain succeeded in forcing a
redrafting of the EU Constitution that consolidated a new
voting block within the Council of Ministers and required
EU military planning and armaments to be synchronised with
those of NATO. In parallel Britain pushed forward the
neo-liberal Lisbon agenda for a fully flexible trans-EU
labour market and the opening of existing state-controlled
sectors in oil, gas, electricity generation, postal
services, communications and particularly financial
services and pensions. This primarily benefits US and
British banks and transnationals but also draws wider big
business support from elsewhere in Europe. As a policy it
represents a direct attack on the state monopoly capital
base of French and German big business.

Although the Constitution itself temporarily failed, there
has been a decisive shift in the political balance within
EU institutions since 2003. Right-wing and neo-liberal
forces now dominate the EU Commission, Council of Ministers
and Parliament. Ideologically, there has also been a shift.
The `war on terror' is now taken as an objective
justification for EU policy. Explicit anti-Communism,
directed against countries such as Cuba and China and the
workers movement in Europe, is beginning to cohere a new
alliance stretching from Poland, the Czech Republic and the
Baltic States to Merkel in Germany, the right-wing
government in Sweden and New Labour in Britain.

Yet these changes have been at a heavy cost. Popular
attitudes in Europe have shifted. There are the beginnings
of a new Popular Front politics that unites broad strata
around the labour movement and the left against the big
business domination of the EU and in defence of the
democratic rights of national parliaments. EU directed
attacks on job security and on retirement ages together
with the privatisation of docks, rail transport, energy and
postal services are creating mass movements of opposition
around the organised working class. These have major
potential. They raise the issue of popular sovereignty, of
isolating the anti-democratic forces of monopoly capital
and at the same time exposing the anti-democratic character
of the EU.

Overall, on a global scale, the new US policy of
unilateralism appears to have failed. The plan for a
reconfiguration of a greater Middle East in terms of
liberal market democracies now looks impossible. US policy
has left Syria and Iran strengthened and Saudi Arabia still
more unstable. Recent attempts to open a new front in
Lebanon (ultimately directed against Iran) have been
equally counterproductive. Meanwhile, on the American
continent itself challenges to US domination have developed
a quite new momentum.

Even in Britain New Labour is no longer a reliable
instrument for US policy. The united trade union movement,
through the British Trades Union Congress, has rejected the
neo-liberal project and subservience to US policy
including Britain's US supplied nuclear weapons. The
strength of this trade union opposition was reflected at
the 2006 Labour Party conference that overwhelmingly
rejected further privatisation within the health service or
education. The right-wing `New Labour' clique, which has
dominated the Labour Party for the past decade and been a
key instrument of US policy, is now deeply divided and in
crisis - though still controlling the Labour Party machine.

In terms of the objectives set by the authors of the 2000
Plan, US finance capital is today is in a weaker and more
vulnerable position. It is the persistence with which this
highly dangerous and flawed strategy has been pursued, as
demonstrated most recently by Israel's criminal assault on
Lebanon, which brings us back to the final issue of
democracy and the nature of the state power of monopoly
capital.

Conclusion: the importance of the fight for democracy and
popular sovereignty

The current US government presents itself as the global
defender of liberal democracy. This democracy, as everyone
knows, is of a special kind. It is defined by the private
ownership of the means of production and communication, the
existence of a plural party system and a wider pluralism by
which civic society can bring influence to bear on
government. In the era of monopoly capital it is the only
kind of democracy that can safeguard the dominance of the
strategic controllers of finance capital over government.
But it is also a dominance that is highly problematic even
for finance capital itself.

In the origins of capitalist states, before democracy had
to be conceded and before the era of monopoly capital,
systems of constitutional government were developed that
directly and proportionately represented capitalist
property. These constitutional procedures provided explicit
checks and balances to prevent the monopolisation of power
by any particular capitalist interest.

The problem for liberal democracy in our era is that such
safeguards do not and cannot exist. The whole process by
which finance capital influences government is out of
bounds and constitutionally invisible. At one and the same
it is essential to the political economy of monopoly
capitalism and a process that cannot be admitted or
discussed. As such it creates great dangers even for
finance capital itself. Without safeguards there is immense
scope for proponents of failed strategies to use the power
of the state to pursue them long after they no longer serve
the interests of finance capital. In Britain the period of
Nazi appeasement in the 1930s or the defence of formal
empire in the 1950s illustrated the dangers. But in the
21st century these dangers are infinitely bigger - both in
terms of the future of humanity and slippage towards more
directly authoritarian regimes.

Communists have a prime responsibility to raise these
issues and mobilise to defend democratic institutions. Our
understanding of democracy is of course different. We know
that in a society owned and controlled by monopoly capital,
it is only by drawing on the countervailing collective
force of the working class movement that democratic
institutions can be utilised to defend the interests of the
majority. But the integrity and existence of these
institutions remains essential. Within the EU in particular
they are under immediate threat. The project for a
constitution has not been abandoned. Even without it, the
EU current treaty provisions prevent national parliaments
from exercising effective controls over the economy or
capital. This is why the mass movements of the past year
against neo-liberalism are so important for developing the
new politics of popular sovereignty. It is critical both
for the immediate needs of working people and the
longer-term defence of democracy.

For working people in Britain the stakes are particularly
high. Britain did indeed receive 17 per cent world foreign
direct investment in 2005. But it was not investment in
Britain. It represents mergers and acquisitions of
British-based companies that operate largely under US
suzerainty elsewhere in the world. Much of this investment
is part of the colossal debt piled up in the US, money used
by US fund managers to control economies elsewhere. In
Britain's case these transactions will intensify the
parasitism of its economy with British assets overseas now
equalling 170 per cent of the country's GDP. Britain's
domestic economy is, by contrast, starved of investment and
progressively weakening and in doing so threatening the
future of the great majority of the population.

Our party's fight for an Alternative Left Wing Programme,
now largely adopted by the trade union movement, is
therefore essential economically. But it is also key
politically. It represents an assertion of popular
sovereignty, of mass democracy which would also break the
lethal alliance with US finance capital.