Category Archives: Eastern Bloc

The Greek Debt Crisis: A Misnomer for the European Imperialist Crisis

Anti-austerity demonstration before the Greek Parliament, July 3, 2015

Anti-austerity demonstration before the Greek Parliament, July 3, 2015

August 2015
Hari Kumar

1. An Introduction to Greece
2. The Truman Doctrine – Greece becomes dependent upon the USA after the Second World War
3. The Greek Junta – Greece by now fully a client state of the USA
4. Capitalist Class of Greece Moves to “Democracy” and Europe
5. The USA Makes Its Move to Become the World Imperialist Leader – The Character of the European Union – from pro-USA states to anti-USA coalition
6. The Greek Economic Crisis 2009-2015
7. The Marxist View of “National Debt” under capitalism
8. The Debt Crisis leads to increasing struggle of the growing Greek working class and gives rise to The United Front of Syriza – the political parties of the left
9. What was the elected programme of Syriza?
10. Elections of 2015 and Negotiations with the Troika
11. Conclusion
APPENDIX: Select Chronology 1975 to 2015

Synopsis:
After the Second World War, Greece was a client state in the Mediterranean of the USA. The revisionist collapse of the Yugoslav communists in the neighbouring state of Yugoslavia was key in this development. Tito’s degeneration into revisionism deprived the minority of the Marxist-Leninist forces in the Communist Party of Greece (KKE) of crucial support. We describe this in a subsequent more detailed article.

This article is restricted to the post Second World War development of Greece, up to the present-day debt crisis. It argues that the entire post-war history of Greece was effectively that of a neo-colonial state serving initially the interests of USA imperialism and British imperialism. The Greek people did not have a non-revisionist proletarian leadership that could develop an independent democratic path. The Junta and the imperialist machinations in Cyprus of the island further retarded the people of Greece. Both Greece and Cyprus – endured military oligarchic dictatorships sponsored by the USA.

The later history of Greece became inextricably entwined with the slow but sure evolution of the European imperialist bloc. This bloc took multiple only slowly coalesced, and eventually it later became the European Community. However during its coming into being, it took several class forms. The post-Marshall Plan in Europe had ushered in a dominant USA which fostered the first steps towards a federal Europe. In its hopes to control the European content as a market, the USA was at first successful. During this period the elements of a united Europe adopted a pro-USA comprador position.

This is also characterised the initial European Economic Union (EEC). But the Euronationlists finally, and haltingly, moved to release Europe to some extent, from the USA embrace. Following the fall of the former Comecon countries, Germany was able to move into a new market itself. This began a new phase. Now the rising German imperialists used their industrial superiority and new market share to re-vitalise their hegemonic ambitions.

Such events were milestones on the road to today’s debacle in Greece. They were the pre-history of the chronic indebtedness of the Greek state.

After the Junta “democratised” itself, Greece swopped the USA master for that of the EU. The EU progressed to be firmly dominated by the unified single unitary state of Germany, where German capitalists became the dominant faction. German capital exported both capital and industrial exports, including… to Greece. Over-riding the total market share of Greece accruing to Germany, are the huge debts of Italy and France to Germany – both at risk of potential default. This underlies the harshness of the German ruling class towards the Greek capitalist representatives in Greece today. Finally, current differences between the International Monetary Fund leader Christine Lagard (representing the USA interests) and the German leaders Angela Merkel and Schauble, show the continuing inter-imperial contradictions. This has engulfed Greece today.

1. An Introduction to Greece

Greece is set in the Eastern corner of the Mediterranean Sea and surrounded by the Aegean Sea:

“Greece has more than 2,000 islands, of which about 170 are inhabited; some of the easternmost Aegean islands lie just a few miles off the Turkish coast. The country’s capital is Athens, which expanded rapidly in the second half of the 20th century. Attikí (ancient Greek: Attica), the area around the capital, is now home to about one-third of the country’s entire population.

(http://www.britannica.com/place/Greece)”

In the modern era industrialisation has been slow, leaving Greece dependent upon agriculture, fishing and tourism. The only segment of industry that could be considered substantial is shipbuilding and related industries:

“The manufacturing sector in Greece is weak. …. In the 1960s and ’70s Greek shipowners took advantage of an investment regime that benefited from foreign capital by investing in such sectors as oil refining and shipbuilding. Shipping continues to be a key industrial sector—the merchant fleet being one of the largest in the world—(but) are extremely vulnerable to downturns in international economic activity, as they are principally engaged in carrying cargoes between developing countries.”

(http://www.britannica.com/place/Greece/Demographic-trends#toc26455)

As far as agriculture is concerned, produce is hampered by small peasant holdings, resulting from an early restriction on large land holdings:

“large landowners appeared relatively late (with the annexation of Thessaly in 1881) and only lasted till the agrarian reforms of 1917, which abolished big landed property in Greece irreversibly.”

(Mouzelis, Nicols. ‘Capitalism and Dictatorship in Post-war Greece”; New Left Review; I/96, March-April 1976).

In addition dry conditions and poor soil make agriculture at times tenuous.
In recent years the European Community has helped with various grant subsidies. Overfishing has hampered that other resource:

“Greece’s agricultural potential is hampered by poor soil, inadequate levels of “precipitation, a landholding system that has served to increase the number of unproductive smallholdings, and population migration from the countryside to cities and towns. Less than one-third of the land area is cultivable, with the remainder consisting of pasture, scrub, and forest. Only in the plains of Thessalía, Makedonía, and Thráki is cultivation possible on a reasonably large scale. There corn (maize), wheat, barley, sugar beets, peaches, tomatoes, cotton (of which Greece is the only EU producer), and tobacco are grown. Other crops grown in considerable quantities are olives (for olive oil), grapes, melons, potatoes, and oranges, all of which are exported to other EU countries. … Although inefficient, Greek agriculture has benefited substantially from EU subsidies… In general, however, the importance of the agricultural sector to the economy is diminishing…
Greece’s extensive coastline and numerous islands have always supported intensive fishing activity. However, overfishing and the failure to conserve fish stocks properly, a problem throughout the Mediterranean, have reduced the contribution of fishing to the economy.
Greece has few natural resources. Its only substantial mineral deposits are of nonferrous metals, notably bauxite.”

(http://www.britannica.com/place/Greece/Demographic-trends#toc26455) (http://www.britannica.com/place/Greece/Agriculture-forestry-and-fishing)

The early development of modern-day Greek capitalism was that of a merchant capital that weaved itself into the matrix of the Ottoman Empire. Both these traders and arising shipping magnates, were based outside of Greece. Being non-resident they could not transfer easily all their capital resources for later industrialisation needed to keep pace with the rest of the European economies:

“The development of the Greek bourgeoisie must be traced back to the sixteenth century when Greece was under Ottoman rule…. Greek merchants… accumulated vast fortunes and control (over) Balkan trade and most of the Ottoman empire’s commercial transactions with the industrialising West. …..
With the decline of the Ottoman empire in the eighteenth and nineteenth centuries, the Greek bourgeoisie….contributed to the development of Balkan nationalism. It thus played a crucial role in the Greek war of independence against the Turks (1821). For while the Greek peasantry constituted the main revolutionary force in the war, the bourgeoisie and the intellectuals managed to direct this force towards nationalist goals. ….
The first Greek constitutions, for instance, were inspired by the French experience; and although Capo d’Istria and later King Otto tried to implement an absolutist model of government, their efforts were ultimately frustrated.
Of course, it is true that in the nineteenth century the autochthonous merchant class was rather weak. But its counterpart living abroad, the Greek diaspora merchants and ship-owners, with their formidable financial power, greatly influenced the shaping of most institutions in nineteenth-century Greece itself… .. these (Greek) merchant communities.. were flourishing both in colonial centres (Alexandria, Cairo, Khartoum, etc.), in the major capitals of ninteenth- century Europe and in Constantinople and Asia Minor.”

(Mouzelis, Nicols. ‘Capitalism and Dictatorship in Post-war Greece”; New Left Review; I/96, March-April 1976).

This large overseas Greek bourgeoisie was already prone to comprador positions. Although it helped transfer some capital to Greece itself, this was largely in the mercantile and finance sectors:

“Although relatively small by international standards, the Greek diaspora bourgeoisie, by exploiting inter-imperialist rivalries and playing the role of intermediary between metropolitan and colonial centres, managed to master formidable financial resources, some of which were channelled into mainland Greece. However, given its cosmopolitan and mercantile character, as well as the weakness of the indigenous bourgeoisie, these resources contributed to the development of a top-heavy state and a parasitic tertiary sector, geared to support a mercantile and finance capital, rather than to the development of industry and agriculture.”

(Mouzelis, Nicols. ‘Capitalism and Dictatorship in Post-war Greece”; New Left Review; I/96, March-April 1976).

By the end of the Second World War, the population of Greece can be characterised in the following break-down:

  • A very small working class, of whom the most militant were in the tobacco industry; also some in shipping (often overseas for long periods) and fishing;
  • A substantial number of small to medium petit-bourgeoisie in the urban areas (artisans, small businesses) and an even larger number of small peasants in the rural areas
  • A small but dominant comprador bourgeoisie with significant financial overseas capital – based in the shipping industry and in bank capital – with many connections to foreign traders
  • A much smaller but ambitious section of industrial capital anxious to develop their ‘home’ base of Greek production.

The first two sections of society in particular, had suffered enormous losses and hardships under the Italian-German fascist occupation; and then in the ravages of the Civil War. A good summary of the position of the Greek people following the Second World War can be taken from Enver Hoxha:

“When our people are rebuilding their country which was devastated during the war, when our country is working with all its might to strengthen the people’s democracy and advance on its peaceful and progressive course, Greek monarcho-fascism is employing a thousand and one of the basest methods to inflict harm on our people. You know what a terrible tragedy is occurring in Greece. The unfortunate but heroic Greek people are fighting against monarcho- fascists and the foreign intervention. The progressive and democratic world is profoundly indignant when it sees the great tragedy of that people who deserve to live free and sovereign, but who, unfortunately, are being mercilessly oppressed and killed by collaborators of Italo-German fascism who are now under the direct orders of Anglo-American reaction.”

(Hoxha, Enver; “We Sympathize With the Efforts of the Greek People for Freedom and Democracy.” Speech 3 October 1947; In: “Two Friendly Peoples
Excerpts from the political diary and other documents on Albanian—Greek relations
1941 — 1984”. Marx, Engels, Lenin, Stalin Institute Toronto, 1985; pp. 47-48. http://www.enverhoxha.ru/Archive_of_books/English/enver_hoxha_two_friendly_peoples_eng.pdf

2. The Truman Doctrine – Greece becomes dependent upon the USA after the Second World War

The USA implemented an overall strategy known as ‘The Truman Doctrine’ – to counter the ideological threat of the USSR after the victories led by the Marxist-Leninists had inspired the world proletariat. In the Aegean the Truman Doctrine aimed to:

“Prevent Greece and Turkey from passing under Soviet Control.”

(Woodhouse C.M. “Modern Greece, A Short History”; London 3rd Edition
1984; p. 258).

Both the USA Marshall Plan and the creation of NATO, were tactical instruments of the Truman Doctrine. They were used in Greece to build and develop a modern capitalist state structure. But before they were deployed, first the potential proletarian victory of the Greek Civil War had to be stopped.

While the British General Scopus and his forces had defeated the combined forces of the Greek Communist Party (KKE) and their military wing (ELAS), significant distrust remained in the population against British imperialism. So, after the battle of Athens (Dec 3rd 1949) was won by the British, a democratic façade was placed onto the imperialist proceedings. By this stage all leftist opposition had been essentially neutralized and no longer posed any threat to the Greek capitalist class.

When the British imperial chief Winston Churchill understood the degree of Greek popular distrust – he reversed his prior opposition to a plebiscite. The plebiscite following the defeat of left forces enabled the return. The ensuing Plebiscite supported the return of King George II to Greece. (Woodhouse C.M. “Modern Greece” Ibid; p. 254).

The Americans also dropped their previous support of the King, and become “ostentatiously neutral” (Woodhouse C.M Ibid; p. 254) – they tacitly supported the British crushing of the communist forces. Archibishop Damaskinos was appointed a Regent in the King’s stead and General Plasitiras (head of EDS) was appointed Prime Minister and head of government in lieu of George Papandreuou. Papandreuou had previously “approved” the British suppression of the mutiny of 1944 (Woodhouse C.M Ibid; p. 252).

Both the American covert support, and the British repudiation of the King’s intent – enabled the predominantly capitulationist ELAS some pretext to accede to British overlordship. Accordingly ELAS now agreed to the infamous Varizka Agreement of February 1945. Only Aris Veloukhiotis and the Political Committee of National Liberation (PEEA) had resisted Varizka – and these forces were simply hunted down and eliminated.

A succession of shaky governments was capped by the first post-war General Election of March 1946. The Communist Party of Greece (KKE) abstained and the Populist party of Constantine Taldaris, formed a government. This election:

“Marked a watershed in Greece’s foreign relations. For the first time the Government of the USA was directly involved in Greek affairs alongside Britain, though occupation in the Allied Mission for observing the Greek elections. It was a first step towards the Truman Doctrine”. (Woodhouse C.M Ibid; p. 257).

The defeat of left and communist forces at Athens had decimated left resistance.
Behind both the King and the Parliament lay the Army, and the most right-wing section of the army – the group known as IDEA (Sacred Bond of Greek Officers):

“After 1949, the ruling class was no longer threatened. … their enemies had been effectively destroyed for a generation.…..
After its victory, the Right imposed a quasi-parliamentary régime on the country: a régime with ‘open’ franchise, but systematic class exclusions. The Communist Party was outlawed and an intricate set of legal and illegal mechanisms of repression institutionalized to exclude left-wing forces from political activity. The job of guaranteeing this régime fell to the agency which created it: the army. The state was nominally headed by the monarchy and political power was supposedly vested in parliament. In reality, however, the army, and more specifically a powerful group of anti-communist officers within it, played the key role in maintaining the whole structurally repressive apparatus… in particular IDEA (Sacred Bond of Greek Officers), which was to play a key role in post-war politics.”

(Mouzelis, Nicols. ‘Capitalism and Dictatorship in Post-war Greece”; New Left Review; I/96, March-April 1976).

The Tsildardis government gave way to the more right wing Demetrios Maiximos with General Zervas (Formerly of EEDS) as Minister of Public Order. Brutal repressions of left forces continued despite both international protests and the presence of a United Nations observership. We will examine the Civil war and the Varzika Agreement in detail in a subsequent article.

By October 1948, martial law was imposed. Under this direct attack by the right-wing forces, and the simultaneous Yugoslav revisionist turn and exposure by the Marxist-Leninist Cominform of 1948:

“The rebel leaders admitted defeat by proclaiming a ‘temporary cessation of hostilities’… a caretaker government.. lifting of martial law, .. withdrawal of the British service missions and the renewal of friendly relations with Yugoslavia.”

(Woodhouse C.M Ibid p. 260)

The Greek government joined NATO in 1951, as well as the Council of Europe; and the Security Council of the UN.

Although throughout this period numerous governments based on varying participation of right-wing forces were only able to hold power for brief periods. The National Progressive Union of the Center (EPEK) – led by General Plastiras and Emmanuel Tsouderous held power until displaced by the virulently anti-communist General Papagos leading the Greek Rally:

“The days of Plastiras’ government were clearly numbered when not only the Greek public but also the US authorities became impatient … Under pressure from the US Embassy the government resigned in 1952… (leading) to electoral overwhelming victory for the Greek Rally.”

(Woodhouse C.M Ibid pp.261-263).

Army vicious actions purged all state structures – which was key to the state through the immediate post-War period:

“Military reaction established firm control over the whole of Greek territory and consolidated a system of ‘repressive parliamentarism’ or ‘guided democracy’. This was controlled by a triarchy of throne, army and bourgeois parliament. Within this power bloc it was the army, the victor of the civil war, which played the dominant role.”

(Mouzelis, Nicols. Ibid; New Left Review; 1976)

Industrial Policy of the Greek Capitalists in this Period

For the next 11 years, both the Army (Marshall Papagos) representatives, or parliamentary figures (George Papandreou before the coup and later Constantine Karamanlis) wanted to consolidate the neo-colonial status to the USA. This started with an economy based on agriculture, tourism and a small manufacturing base.

“the country was far from self-sufficient. .. the chief market for tobacco was revived (West Germany).. expenditure of tourists which came to take second place only to agricultural products as a source of foreign exchange. The development of manufacturing industry and mining with indigenous capital, in place of foreign concessions, (was) a healthy trend. But the lack of home produced source of energy was a severe handicap. It remained true that Greece was still dependent upon foreign aid and there was no end to this condition in sight.”

(Woodhouse C.M Ibid p. 267)

Five special features of the Greek state’s path to modernisation, can be seen:

1. The political and organisational strength of the working class and peasantry was weak, having been decimated during the second world war and after by the brutality of the state. The KKE was almost devoid of leadership, with key leaders in exile.
2. The small native capitalist class was out-numbered by the many Greek capitalist who were based overseas (shipping) – and did not have the necessary local capital to invest. Hence the small resident Greek capitalists used the State machinery to develop. This state machinery swelled the size of the bureaucracy who became a large state dependent stratum. They aspired to ‘middle-class’ status but were objectively privileged sections of a growing working class.
3. The state still needed the heavy investment of the overseas imperialists. They first aligned themselves to the USA, and then by the 1970s to Europe.
4. These strategies effectively left Greece a dependent state with the beginnings of large overseas debt.
5. An immiseration – poverty and desperation – of the working peoples, led to increasing emigrations to both the USA, Canada and Europe

After the devastation of the Second World War there had been an impressive return to Greek per-war levels of production:

“The Second World War and the civil war had devastating effects on the Greek economy. For instance, at the end of the Second World War, 9,000 villages and 23 per cent of all buildings had been destroyed. It was partially a sign of the vitality of Greek capitalism that by the middle fifties, pre-war levels of output had been reached again and the economy was growing at a fast rate (the average rate of growth in the fifties was 6 per cent).”

(Mouzelis, Nicols. ‘Capitalism and Dictatorship in Post-war Greece”; New Left Review; I/96, March-April 1976).

However, despite this growth, manufacturing industry remained undeveloped. Nor did the rise of the shipping industry enable Greek capitalists to retain revenues within Greece to more easily enable a home manufacturing base to be built up:

“the Greek economy of the fifties did not manage to overcome a major feature of its underdevelopment: its weak manufacturing sector. Greek capital, whether in its mercantile, industrial or finance form, was unable to orient itself towards the manufacturing sector—especially in those key branches (chemicals, metallurgy) which, through their multiplying effects and their great transformative powers, can contribute most to a rapid growth of the industrial sector”

(Mouzelis, Nicols. Ibid; New Left Review; 1976).

“shipping… assumed colossal proportions in the post-war period. …..Greek seamen helped the economy by reducing unemployment and by providing valuable foreign currency through their remittances home. On the other hand, since shipping capital lies outside the effective control of the Greek state (it can always move elsewhere if the state bothers it with heavy taxes or other restrictions), it becomes increasingly an avenue of escape for Greek merchant capital. In this way, if migration robs Greece of its most valuable human resources, shipping plays a similar role with respect to the country’s financial resources..”

(Mouzelis, Nicols. Ibid; New Left Review; 1976).

“Greece’s age-old specialization within the inter- national economy had gradually given rise to a spectacular concentration of capital among a handful of shipping magnates, mainly based in London or New York, whose aggregate holdings are widely reckoned to exceed the GNP of Greece.”

(Petras, James. “The Contradictions of Greek Socialism“: New Left Review; I/163, May-June 1987)

In conclusion, Greece did not break out of the strait-jacket of a dependent economy. Despite large state structure support, Greek capitalists did not establish an effective manufacturing base:

“from a ‘under-developed’ economy: i.e. a fast-growing, highly parasitic tertiary sector, a weak and more or less stagnant manufacturing sector with a low labour absorption capacity, and a large but inefficient agricultural sector……Whereas in 1938 manufacturing output amounted to 85·6 per cent of all industrial output, it declined to 79·7 per cent in 1948–9 and to 73 per cent during the 1959–60 period.”

(Mouzelis, Nicols. Ibid; New Left Review; 1976).

“Thus in the late fifties more than half the labour force was still employed in agriculture, whereas the contribution of the industrial sector to the GNP was only around 25 per cent.”

(Mouzelis, Nicols. Ibid; New Left Review; 1976).

Correspondingly foreign investors ensured that favourable legislation was passed in 1953, and by the 1960s a large scale influx of foreign capital flowed in. This was concentrated in the heaviest key sectors, and by the mid 60’s the industrial development had qualitatively changed with heavy industry capital making goods predominating:

TABLE 1 Flow of Foreign Capital into Greece (Dollars)

1960 11,683,700
1961 13,509,809
1962 16,764,758
1963 50,026,290
1964 59,716,887
1965 111,596,368
1966 157,606,242
1967 32,265,000
1969 64,000,000
1970 70,000,000

By the end of 1973, foreign capital invested in Greece had risen to a total of approximately $725 million…. not very impressive if one takes into account that in a single year (1969) $2,504 million went to the gross formation of fixed capital in the Greek economy.

Nevertheless, as foreign capital was mainly directed to-wards the key manufacturing sectors, its impact on the economy was much greater than its relatively small size would suggest. In fact, especially during and after the years 1962–3, when the metallurgical, chemical and metal construction industries experienced a great boost due to foreign investments, one can speak of a qualitative break in the growth of Greek industry. Not only did the industrial sector start expanding at a much faster rate, but there was an important shift in investment from light consumer goods to capital goods and durables.

Whereas in the period 1948–50 light industry represented 77·5 per cent of total manufacturing output, its share went down to 60·9 per cent in 1963–70.31 This important shift is clearly reflected in the changing structure of the Greek export trade.”

(Mouzelis, Nicols. Ibid; New Left Review; 1976).

Correspondingly, there was shift away from agriculture in the economy. And by the 1970s the economy had become qualitatively industrialised:

“In 1960 agricultural products constituted 80 per cent of the country’s exports, but this figure went down to 54 per cent in 1966 and to 42 per cent in 1971, as Greece was more able to export industrial goods. … Despite the dramatic decrease of the agricultural population during the fifties and sixties, the agrarian structure does not show any signs of basic change: there is no marked tendency towards land concentration or the emergence of large-scale capitalist enterprises in agriculture.”

(Mouzelis, Nicols. Ibid; New Left Review; 1976).

There was a major qualitative change by the 60s, towards industrial development. But it did not eliminate ‘under-development’:

“Thus the sixties saw a qualitative advance in the industrialization of modern Greece. There can be little doubt that the ability of the Greek economy to reap the benefits from concentrated foreign investment in manufacturing was due to its own pre-existing capitalist development. This was not able to generate a significant industrial sector autonomously, but it could adapt itself to, and consolidate one with exceptional rapidity. Yet this type of capitalist development not only failed to eliminate some fundamental aspects of Greek under-development, but on the contrary accentuated them, creating disruptions and dislocations which are directly relevant to an understanding of developments in the political superstructure.”

(Mouzelis, Nicols. Ibid; New Left Review; 1976).

There ensued an enormous state monopoly centralized economy in the industrial sector:

“The intrusion of foreign capital, in close collaboration with Greek capital and the Greek state, reinforced the already impressive degree of capital concentration in the economy. A first rough intimation of this is conveyed by the enormous size (in terms of assets) of such giants as ESSO-Pappas or Pechiney, or the fact that out of the 200 largest companies in terms of fixed capital, seventeen were fully foreign-owned and in another thirty-nine foreign capital had a degree of participation varying from 10 to 90 per cent. As the share of foreign capital in the GNP steadily increased (from 2·15 per cent in 1962 to 8·15 per cent in 1972), the monopolistic tendencies of the Greek economy were markedly accentuated. If in the fifties monopoly or oligopoly were due mainly to indiscriminate and nepotistic state protectionism, in the sixties they were due rather to the capital intensive nature of the new industries and the small size of the Greek market.”

(Mouzelis, Nicols. Ibid; New Left Review; 1976).

But the working class was still small. This is reflected in the predominance of small artisanal or petit-bourgeois production:

“This impressive concentration of industrial capital did not eliminate the plethora of small industrial units, which for the most part have a family-oriented, artisanal character. Indeed, one of the most striking characteristics of Greek industry is the persistence, especially in the more traditional sectors of the economy (footwear, clothing, leather, wood products), of small, low-productivity units side by side with large firms that exercise a quasi-monopolistic control of the market. The extent to which small firms persisted in the Greek manufacturing sector can be seen by the fact that whereas in 1930 93·2 per cent of manufacturing establishments were employing fewer than five persons, by 1958 this percentage had only gone down to 84·9 per cent. In 1958 the percentage of firms employing more than twenty persons was 2·1 per cent.”

(Mouzelis, Nicols. Ibid; New Left Review; 1976).

The working class and peasantry of Greece became progressively more squeezed:

“Gross per capita in- come, approximately $500 at the beginning of the sixties, had reached the $1,000 level by the end of the decade.38 But the few rough calculations which have been made in the absence of complete data leave us in no doubt as to the inequities which disfigure this spectacular gain. For instance, according to a relatively recent estimate, 40
per cent of the lowest income groups receive 9·5 per cent of the national income (after deduction of taxes and social security benefits), whereas the 17 per cent in the top income brackets receive 58 per cent. From 1954 to 1966, when the national income approximately doubled, profits tripled (banking profits between 1966 and 1971 quadrupled).
Obviously, as the relative share of big capital increases, the relative share of all other income decreases. Those engaged in agriculture are, as usual, the worst off. Thus in 1951 agricultural income amounted to 83·3 per cent of the average national income; the proportion dropped to 60·3 per cent in 1962 and 51·1 per cent in 1971… in 1950 independent cultivators and their working family-members constituted 92·39 per cent of the agricultural labour force.”

(Mouzelis, Nicols. Ibid; New Left Review; 1976).

In summary, there was an unusual dual character to the industrial landscape in Greece. It was one of a state sponsored heavy industry tied into foreign capital, while the petit-bourgeois remained very active:

“the capitalist mode of production, dominant in the Greek social formation, is linked to the mode of simple commodity production (agriculture, artisanal industry) in such a way as to keep growing continuously at the expense of the latter—neither destroying it completely, nor helping it to develop. And it is precisely here that the most crucial difference lies between the western European and the Greek models of industrialization. The former involved either the destruction of simple commodity production in agriculture and industry, or its articulated incorporation into the capitalist mode of production through a specialization which established a positive complementarity with big industry. As a result, the effects of technical progress, which originated in the dynamic sectors, spread fairly quickly to the rest of the economy, with beneficial consequences for income distribution, the expansion of internal markets and so on. In the Greek social formation, by contrast, capital intensive industrial production has taken an ‘enclave’ form. Despite its rapid growth in the sixties, it has not succeeded in expanding or even transferring its dynamism and high productivity to the backward sectors of the economy. Thus simple commodity production looms large within the Greek economy. It gives a lot (directly and indirectly) to the capitalist mode of production, but takes very little in return—just enough to reproduce itself. As a consequence, inequalities in Greece are much greater than those found in the West. For in addition to the usual inequalities between labour and capital in the sectors where the capitalist mode is dominant, Greece has inequalities resulting from the persistence of vast productivity differentials between ‘modern’ and ‘backward’ sectors of the economy.”

(Mouzelis, Nicols. Ibid; New Left Review; 1976).

As the Greek countryside was becoming depopulated, many peasants emigrated. This deprived the Right wing forces in the countryside of support. The on-going immiseration-depression of the living standards of the working people led to a resurgence of left support. After some electoral gains of the left, the RIght wing army faction decided to set aside the triarchy of Army, parliamentary forces and Monarchy – and to become the sole power base.

How Cyprus Became the Focus of Imperialism and Heated Up Greek Battles

During this time, the relations between the Greek and Turkish pro-USA client states became strained with the Cyprus crisis. The Cyprus struggle had initially started as a war of liberation against the Ottoman Empire and Turkish oppression. It now pitched a small weak Cypriot national bourgeoisie against both the pro-Greek compradors and the pro-Turk compradors.

“The movement for liberation began under Turkish rule among the Greek Cypriots, who suffered particular oppression, and its main demand was for “Hellenic unity”, for “enosis” (that is, union with Greece). The movement continued to develop under British rule, and with the development of a weak Cypriot national bourgeoisie this class came to lead the liberation struggle. The effective leader of the movement was the Ethnarch of the Greek Orthodox Church, Mihail Mouskos — Archbishop Makarios — and embraced two organization
1) the National Organisation for Cypriot Struggle (EOKA), a right-wing body sponsored by the Greek government and led for many years by Greek General Georgios Grivas; and by

2) the Progressive Party of the Working People of Cyprus (AKEL) a body representing more directly the interests of the Cypriot national bourgeoisie, and presenting a left-wing image to appeal to the workers, peasants and urban petty bourgeoisie; it was led by Ezekias Papaioannou.”

(Marxist Leninist Organisation of Britain (MLOB) “THE CARVE-UP OF CYPRUS” “Class Against Class”; No.7, 1974. (http://ml-review.ca/aml/MLOB/CYPRUS_Fin.htm)

The fortunes of the Cyprus liberation movement were inextricably tied to the turn of events in Greece. Here the US imperialists held dominant sway:

“By 1966 Greece had become a semi-colony of US imperialism, and this position of dependence was reinforced by the military coup of 1967 which established a military dictatorship in Greece subservient to US imperialism. From now on the demand of the Cypriot national bourgeoisie (represented by the Makarios government) for national independence had the overwhelming 
support of the mass of the Greek Cypriots, while enosis became the demand only of the pro-imperialist Greek Cypriot comprador bourgeoisie.“

(MLOB, “The carve-up of Cyprus” Ibid)

What was the character of the ‘Independent’ state of Cyrus? In reality it was a neo-colony of Britain:

“In December 1959, prior to the granting of “independence”, elections were held for a Provisional President of Cyprus, Makarios stood on a platform of acceptance, with reservations, of the British imperialists’ plan and was elected by a large majority.
Despite the fact that Makarios represented the interests of the Cypriot national bourgeoisie, the British imperialists felt it safe to hand over “power” to a government headed by him by reason of the antagonisms artificially built up between the Greek Cypriot and Turkish Cypriot communities on the island, believing that these antagonisms and other “safeguards” could be effective in preventing the Makarios government from taking any steps to end the neo-colonial status of the island.
The “independent” Republic of Cyprus which came into being on August l6th, 1960 was, in reality a neo-colony of British imperialism.”

(MLOB “The carve-up of Cyprus” Ibid)

While Archbishop Makarios was a representative of the Cypriot national bourgeois, he was unwilling to launch a struggle that unleashed the power of the working class and peasantry. Thus he was left to resort to intrigue and maneuvers aimed at “seeking advantage of the contradictions between various powers” (MLOB). However this was ineffective as the USA blocked shipped arms from the USSR.

3. The Greek Junta – Greece by now fully a client state of the USA

As noted, the 1967 Greek military dictatorship was established by a coup backed by the USA. It was precipitated by the increasing working class struggles against the poor economic situation of the neo-colonial state of Greece, whereby:

“US civil aid came to an end in 1962; Greece was admitted as an Associate to the European Economic Community; and partial settlement was reached of Greece’s long-standing indebtedness to creditors in the USA and to private creditors in Britain. In each case the result was to add to the strain on the balance of payments..…. nearly one third of the budget was still devoted to defence… The stringency of the economic state of the country led to a number of ugly demonstrations. Strikes became increasingly frequent..”

Woodhouse C.M Ibid p. 282-283.

The then King, Constantine II was the Commander-in-chief of the army.
That the right wing forces were loosing support became clear from the 1958 electoral gains by left wing party EDA. The right wing section of the army – IDEA – launched the “Pericles” Plan:

“devised for the purpose of neutralizing the communists in case of war, this was used instead by the Right to achieve victory in the 1961 elections.”

(Mouzelis, Nicols. Ibid; New Left Review; 1976).

This move by the extreme right-wing of the army, prompted George Papandreou
to start “Anendotos” — a “fight against the repressive policies of the Right.” His party was the “Center Union.”

“In the 1964 elections, Papandreou’s Centre Union successfully challenged the electoral dominance of reaction. In the elections of the following year, it further consolidated its position by gaining an unprecedented 53 per cent majority. Meanwhile, a strong left wing emerged within the Centre Union, under the leadership of Papandreou’s son Andreas.”

(Mouzelis, Nicols. Ibid; New Left Review; 1976).

Although George Papandreou tried to move against IDEA. He also tried to improve some aspects of working peoples lives. Together this prompted the Army and the Monarchy to plot against Center Union by slandering his son Andreas, as a traitor who shared state secrets. An interim coalition government of centrists was formed but fell quickly. Panagiotis Kanellopoulos formed a ‘Service Government’, prior to an election. However, the Army remained determined to sweep away any opposition:

“In 1967, the Greek military seized power in a coup d’état, overthrew the centre right government of Panagiotis Kanellopoulos. It established the Greek military junta of 1967-1974 which became known as the Régime of the Colonels.”
https://en.wikipedia.org/wiki/History_of_Greece

The Colonels did not change the economic direction of Greece, they made it simpler – they suppressed both workers, peasants and small petit-bourgeoisie – in support of the capitalists:

“The colonels, by following the logic of the economic model they had inherited, gave their unlimited support to big capital, foreign and indigenous. They made sure through repression that the ensuing growing inequalities would be accepted unconditionally, without protests or strikes to frighten capital away. After a short period of hesitation… private investment rose again and foreign capital continued its penetration of the Greek economy. The rate of growth soon surpassed pre-dictatorial levels and sustained an impressive acceleration. This achievement was a clear indication of the ‘fit’ between rapid capital accumulation and the dictatorship. Moreover… despite growing inequalities, the standard of living grew steadily during the period of the dictatorship. The colonels brought to fruition a process of dependent industrialization that had started before them. They did not initiate it, they merely pursued it with vigour and consistency.”

(Mouzelis, Nicols. Ibid; New Left Review; 1976).

Although Mouzelis is sceptical that the USA supported the coup, it most likely they did. Much later on, USA President Clinton – admitted that the USA had backed the Junta:

“When US President Clinton visited Greece in 1999, he obliquely offered what sounded like an apology when talking about a “painful” aspect of their recent history.
“When the junta took over in 1967 here, the United States allowed its interests in prosecuting the Cold War to prevail over its interests — I should say, its obligation — to support democracy, which was, after all, the cause for which we fought the Cold War.” Clinton said in his conciliatory remark,
“It’s important that we acknowledge that.”

Remarks By President Bill Clinton and Prime Minister Simitis of Greece to the Government of Greece, Business and Community leaders. Inter-Continental Hotel Athens, Greece – November 20, 1999.
Anti-Revisionism in Greece ‘The Rule of the Colonels’
– the military Junta 1967-1974 https://www.marxists.org/history//erol/greece/junta-note.pdf

But there was never any serious threat to the Parliamentary section of the Triarchy. The working class had simply been resisting the economic pressures.

They had not been organised into a meaningful communist resistance.

The Junta soon became led by George Papadopoulos, who instituted a reign of terror against leftists and communists. The King tried in 1967 to establish himself as a sole dictator, but was rebuffed and fled to exile.

As Prime Minister, Papadopoulos continued a brutal dictatorship overseen by the dreaded Military Service Police (ESA) of Ioannides. The crude overthrow of any democratic norms even led the Council of Europe to demand Greece’s resignation. But:

“The Western Alliance as a whole continued to tolerate the dictatorship, on the grounds that Greece formed an essential part of NATO….. The US went still further.. American policy became one of active support. American and Soviet strategists were engaged in a duel in the eastern Mediterranean. It became even more intense after the ‘Six-Day War’ of June 1967 between Israel and the Arab states… In September 1972, an agreement was signed by which the US Sixth Fleet would enjoy home-port facilities at Piraeus.”

(Woodhouse C.M Ibid pp.298-99)

Repressions continued and provoked even a Mutiny in the Navy in 1973. In an infamous incident, the students at Athens Polytechnic were brutally assaulted in November 1973. Using tanks to suppress a sit-in, more than 20 students died. This allowed Brigadier Ioannidis to seize power for himself, behind a puppet General Grivkas (Woodhouse Ibid p. 305). Formal martial law was again installed.

Ioannidis now also moved to oust Archbishop Makarios from Cyprus in a coup d’etat. Moreover this was coordinated with the imperialists in order to ensure the partition of Cyprus into a ‘Greek” area and a “Turkish” area. Events unfolded as follows:

“The pretext for action was a note from Makarios to Greek President Phaedon Gizikis on July 2nd., demanding the recall of the Greek officers of the National Guard on the grounds that they had been collaborating with EOKA-B (the terrorist Organisation formed by Grivas following his return to Cyprus in 1979 and continuing in existence after Grivas’s death in January 1974) in attempts to assassinate him and overthrow the government. The note set the deadline of July 20th. for compliance with the demand.

So, on July 16th, on the orders of their Greek officers, units of the (Greek Cypriot)–National Guard, in full collaboration with EOKA-B and with the Greek troops stationed on the island, staged a military coup and established a military dictatorship over the part of the island outside the enclaves under the control of the Turkish Cypriot comprador bourgeoisie’s “Transitional Administration”. A new puppet “President” was installed, one Nicos Sampson, a curfew imposed and thousands of supporters of the Makarios government arrested.

The Greek government recognised its puppet regime almost immediately. while the Turkish government threatened that unless the situation in Cyprus were reversed it would order its troops to invade Cyprus under the Treaty of Guarantee.

For four days the US imperialists and their allies in London, not only took no action, they deliberately obstructed the calling of the Security Council of the United Nations which could have taken some action. As Lord Caradon put it bluntly in a letter to the press:

“Due to the deliberate delay of the United States and the United Kingdom, it was not until after the invasion (i.e. of Cyprus by Turkish troops — Ed.) that the Security Council passed any resolution at all.”

(Lord Caradon: Letter to “The Guardian” 11 July 31st, 1974; p. 12).

Meanwhile, Makarios had managed to escape from Cyprus. He was received by the British government with formal, but non-committal, protocol, but the United States government talked with him only in his ecclesiastical capacity”:

“The President (i.e., Makarios — Ed.) had been given the chilly US reception of — in Dr. Kissinger’s terms — ‘a loser’, without hope of a comeback”.
(“The Observer”, July 28th.9 1974; p. 9).

On July 20th., therefore, some thousands of Turkish troops invaded northern Cyprus according to plan, occupying the principal area inhabited by Turkish Cypriots from the port of Kyrenia to the outskirts of the capital, Nicosia.

Later the same day, the US and British imperialists brought the Security Council into action, and it passed a resolution calling for an immediate cease-fire on Cyprus. And Greece and Turkey — despite being, according to the world press “on the verge of war” – dutifully obeyed.”

(MLOB; Ibid).

As Woodhouse rightly comments:

“The US was legitimately suspected of having backed Ioannidis”

(Woodhouse Ibid p.305)

4. Capitalist Class of Greece Moves to “democracy” and Europe

The work of the overt and now discredited dictatorship of the generals was done, they had suppressed any internal left opposition. The stage was set for the partition of Cyprus. Now under an international odium, the Colonels “took off their uniforms” – again under pressure again from the USA imperialists. As the MLOB put it:

“The Colonels Take Off Their Uniforms

On July 23rd 1967. The military junta that had exercised a military dictatorship suddenly stepped into the background over the people of Greece since 1967, and announced that they had invited civilian politician Konstantinos Karamanlis to form a civilian Cabinet.

Karamanlis is mainly remembered for his role as Prime Minister in arranging the murder (and its subsequent cover-up) of rival politician Gregori Lambrakis (portrayed in the film “Z“). While in exile in Paris, he was in June 1965 voted into Karamanlis’ party ‘New Democracy’. He was committed for trial by an investigating committee of the Greek Parliament for “bribery, dereliction of duty and maladministration”.

Due to an unfortunate error, the “democratic revolution” in Athens was announced by US Secretary of State Henry Kissinger the day before it actually happened. Even the capitalist press was compelled to treat the “revolution” with some cynicism:

“Dr. Kissinger and his emissary Mr. Joseph Sisco have played a key role in promoting governmental change in Gioecell.”

(“The Guardian”, July 24th., 1974; p. 2).

And in fact, little fundamental in Athens seemed to be changed. True, a considerable number of political prisoners were released (a necessary step in order to obtain enough politicians to form a government). But Brigadier-General Dimtrios Ioannides remained in office as head of the hated military police, martial law continued and in his Message to the Nation Karamanlis was careful not to mention the word “democratisation.”

(Marxist Leninist Organisation of Britain (MLOB) “THE CARVE-UP OF CYPRUS” “Class Against Class”; No.7, 1974. (http://ml-review.ca/aml/MLOB/CYPRUS_Fin.htm)

Nonetheless Karamanlis did restore the Constitution of 1952 (making it again a monarchy) and released all political prisoners and “legalised the CP for the first time since 1947”. (Woodhouse; Ibid; p. 305). In actual fact he had no real choice as the prior alliance that had formed the Triarchy (Army, right-wing parliamentarians, and Monarchy) had been totally discredited.

“When Constantinos Karamanlis, the grand old man of the Greek Right, stepped into the breech and formed the first post-junta government in 1974, it was immediately apparent that there could be no simple reversion to the old model of repressive parliamentarism… (But) his freshly formed New Democracy party retained and expanded the electoral support that had previously gone to the parties of the Right. But the political discrediting of both the army and the throne—which had, in any case, regarded with suspicion Karamanlis’s sixties project of modernizing the monarchy—left him with little choice but to seek the consolidation of right-wing hegemony through a populist inflection of internal and external policy… Within months of coming to power, the National Unity Government headed by Karamanlis had withdrawn from NATO’s military command structures, legalized the Communist Party for the first time since the civil war, organized relatively free general elections, and called a referendum that produced a 69 per cent majority in favour of the republic. Subsequent trials of junta leaders—in some cases leading to sentences of life imprisonment—underlined the subordination of the officer caste in ‘normal’ political activity…”

(Petras, James. “The Contradictions of Greek Socialism“: New Left Review; I/163, May-June 1987)

By November 1974, elections had elected Karamanlis’ ‘New Democracy’ party. A further plebiscite confirmed a popular rejection of the monarchy. Karamanlis tellingly revealed his government’s objective nature:

“Karamanlis once remarked that he was himself the Americans’ only friend in Greece, and he dared not admit it.”

(Woodhouse Ibid p. 308).

Where was the economic development of Greece by now?
The hopes of the Greek capitalists had in fact not been fulfilled:

“In Greece… the early seventies already witnessed a rise in the specific weight of food, clothing and construction industries, and in the latter half of the decade manufacturing as a whole was contributing less than fifteen per cent of the annual increase in GDP, while fully three-quarters of GNP growth came from the inflated services sector. Manufacturing exports, given the small size of the internal market, had originally been conceived as one of the principal keys to success, and at first a number of important openings were found in this area. However, the recessionary tides of the seventies, together with the intense competition of low-wage economies precisely in textiles and other such goods, led to a loss of Greece’s market share everywhere except in the Middle East. By 1980, when PASOK was preparing to take over the reins of government, it was possible to talk of an actual tendency of deindustrialization, as the import/export ratio of manufacturing goods had risen to 3.2:1 from 2.5:1 in 1974.”

(Petras, James. “The Contradictions of Greek Socialism“: New Left Review; I/163, May-June 1987)

While Karamanlis was not anti-American, he was moving Greece towards Europe. Relations with Europe, in order to join the European Economic Community (EEC), became the focus. Karamanlis had spent 15 years as an exile in France, and the French government had sent him back to Greece on a government plane.

On 1 January 1981, Greece joined the EEC becoming its tenth member.
But Karamanlis was struggling to withstand the growing resistance as inflation drove a left shift. The by now openly revisionist Communist party of Greece (KKE) had begun to capture a portion of the electorate:

“At the left end of the spectrum, the Communist Party of Greece (KKE) rapidly consolidated a strong position in industry and a ten-per-cent bloc of the electorate”;

(Petras Ibid New Left Review 1987)

A new façade to divert the masses was urgently needed. The prior ‘centrist’ party of George Papandreou had been the ‘Centre Union’. After the Junta dissolved itself, this won 20% in the first elections, and supported Karamanlis in government. Consequently it soon disintegrated. George’s son, Andreas Papandreou had been trained as an economist in the USA. He had been instrumental in the pre-Junta parliamentary government, in attempting to curb the most right-wing elements of the Army (IDEA). He had fled into exile after the coup, and from there organised a resistance grouping – Pan-Hellenic Liberation Movement (PAK).

After the Karamanlis return to parliamentary rule, Papandreou organised the
Pan-Hellenic Socialist Movement (PASOK). Within 7 years it had won the in the Greek elections of 1981. It was an explicitly social-democratic formation proposing:

“full-scale nationalization and ‘an end to the exploitation of man by man’. …. And an all-round modernization of Greece’s productive system that would bring to the fore hi-tech industries employing local and expatriate skilled labour and producing for internal consumption and export. In foreign policy, Papandreou retained his reputation as an intransigent opponent of NATO and of any Greek involvement in the EEC .. All these themes came together in skillful and insistent propaganda centred on the need for comprehensive change or allaghi.”

(Petras Ibid New Left Review 1987)

By October, Andreas Papandreou was elected into power for the PASOK party.
It is true that early progressive moves were made during its government including early secularisation and improvements in the role of women:

“The more general secularization of Greek society, and the introduction of divorce by consent, civil marriage and equal rights for children born out of wedlock.. the Greek parliament has abolished various repressive laws from the fifties as well as some of the extreme powers given to the police, and although the military has largely remained a world apart, subject to no fundamental restructuring or parliamentary scrutiny, it has been deprived of the means of direct intervention that used to be provided by its own radio station. .. the EAM/ELAS Resistance was officially rehabilitated.”

(Petras Ibid New Left Review 1987)

However PASOK retreated quickly upon attempts to tax urban real estate, and did not try seriously to ever move on this front again. Industry remained at a comparatively low level against other countries of Europe. PASOK did not base itself on the working class, and thus never proposed any resolve to deal with either the Greek capitalists, or the petit-bourgeois small business. Corruption was a real problem and Petras proposes the term ‘kleptocrats’ to describe a stratum of especially corrupt business:

“Most of the ‘industrialists’ continued to accumulate wealth by borrowing huge amounts of capital from the state banks, investing a fraction and diverting the rest to overseas bank accounts. The debt/ capital-investment ratio remained one of the highest in the world because industry was directed not by the usual kind of entrepreneur but by a highly distinctive stratum of kleptocrats. Agriculture too suffered from underinvestment, irrational and costly marketing systems, with a multiplicity of small farms divorced from organized credits or from productive systems capable of providing cheap inputs or processing outputs.”

(Petras Ibid New Left Review 1987)

The preponderance of petit-bourgeois ownership of small businesses had bred its brand of tax evasion and corruption:

“In Greece, …the pervasiveness of petty-bourgeois ideology and the ability of the non-productive classes to evade taxes and acquire multiple sources of income. Until Greek society recognizes the working class as its most valuable asset in the drive for industrialization, it will be doomed to stagnation and crisis.”

(Petras Ibid New Left Review 1987)

PASOK would not move against the capitalist class. Instead it resorted to short term loans to head off worker and petit bourgeois discontent. PASOK rule led to inflation and the start of the debt. At the same time debt increased. Meanwhile
The financial sectors were bolstered whilst manufacturing was neglected:

“PASOK’s early spending spree… increase(d) the consumption of nearly all sections of the population without creating any new industrial capacity to meet that demand. The government raised wage income, partially offsetting the inflationary erosion in Karamanlis’s final two years; private capital responded by slowing investment to the merest trickle. Exports stagnated, while imports mushroomed and invisible earnings (the mainstay of the external sector) began a sharp decline. To secure the populist compromise the regime had turned to foreign loans, fiscal deficits and EEC subsidies; ….

Public sector borrowing soared from 12–1 per cent of GDP in 1983 to 17–1 per cent in 1985, without having any effect on domestic output; and particularly in the run-up to the June 1985 elections it was increasingly used to finance current expenditures, which rose from 39 per cent of GDP in 1984 to 41 percent in 1985. As one study has noted:

‘The fastest-growing category was employment in services, almost exclusively led by continuing substantial increases at around 3 per cent per annum in employment in the public sector and in banks . . . In the three years to 1985 employment in manufacturing declined by around 2–1 per cent.’ Table Two (below) sets out the still sharper fall in output during
the first PASOK term.

Table 2: Greek Industry, 1981–1984: 1970 =100

                                         1981 1982 1983 1984
Consumer goods 195     191      188      192
Capital goods        180     163      167      172
Source: OECD Report on Greece, 1985/86.”

(Petras Ibid New Left Review 1987)

Agriculture also saw falling production:

“Agricultural growth for its first term was as follows:
_1.6, 1981; _2.4, 1982; _6.8, 1983; _6.4, 1984; _0.5, 1985.
The reason for these meagre results was that only a small part of the funds were actually used in agriculture. The remainder were employed to ‘finance consumption, to be redeposited with banks at much higher rates, and to be used for the acquisition of real estate in urban areas.’”

(Petras Ibid New Left Review 1987)

In fact, while the now infamous external Debt of Greece, became a ballooning problem under PASOK. Petras cites figures from the OECD:

“PASOK has also increased Greece’s role as a subordinate debtor nation beyond the worst period of the old Right… (See Table 3 Below.) The foreign debt stands at 45 per cent of GDP and payments account for close to a quarter of export earnings. Given the phasing- out of EEC balance of payments assistance, commercial borrowing will soon have to increase more than twofold, on terms dictated by the foreign banks: namely, the closure of unprofitable public enterprises; greater freedom for employers to hire and fire workers; tough anti- strike legislation, relaxation of price controls, an expansion of public– private ventures, and an open door to foreign investment.

Table 3:

Greece’s External Debt (in billions of $)
                       1981 1982 1983 1984 1985 1986
Total Debt         7.9      9.5      10.6   12.3    14.8    17.0”

(Petras Ibid New Left Review 1987)”

In fact – all this is very similar to today, and the same demands for ‘austerity’ were raised then by the European banks.

This social-democratic party, now more openly objectively played the role of a pro-European comprador:

“Papandreou .. freely engaged in anti-American rhetoric… contending that the American imperialism was the most serious threat to humanity, Papandreou unnecessarily antagonised Washington.”

(Kofas JV; “Under the Eagle’s Claw – Exceptionalism in Postwar US-Greek Relations”; Westport 2003; p.184)

Meanwhile Papandreou was moving Greece firmly into dependency to the EEC:

“Dependency results from the growing EEC domination of the Greek economy. While the EEC has increased the transfer of loans and grants to Greece, this has been more than offset by the takeover of internal markets and the displacement of Greek manufacturers and farmers. To quote again from the OECD report: ‘Whereas Greek manufacturing output has remained broadly stagnant in the three years to 1985, import volume of manufactures may have risen by roughly one fourth in the same period.”

(Petras Ibid New Left Review 1987)”

Neither PASOK nor the party New Democracy (Led by Kostas Karamanlis, the nephew of the former President) – differed substantially in their political orientation towards Europe. Both were realigning from the USA to Europe:

“Greece evolved from a client-patron relationship with the US to being an EU member, subordinating its national sovereignty to the community….
With increased competition of the regional economic blocs.. after the Cold War Greece drifted further from the US, because Europe was drifting as it strengthened and expanded its own sphere economically financially, politically, and militarily…”

(Kofas JV; “Under the Eagle’s Claw – Exceptionalism in Postwar US-Greek Relations”; Westport 2003; p.248)

Greece’s leaders also did not appreciate the USA more overtly favouring Turkey as its vassal state of choice in the Aegean and Mediterranean. But in fact, Papandreou was posturing – and perhaps to the populist base that PASOK had bult, that he was ant-USA. After all, Papanadreous signaled to the USA that were better terms given to Greece, that this re-orientation could be re-visited. Correspondingly during the 1984-1985 year, the total US military aid to Greece actually went up (Kofas, p.200 Ibid). Moreover he renewed Greece’s allegiance to NATO, and enabled the US fleet continued facilities.

This hesitation of Greece’s capitalist leader to completely cut the USA off as their pay-master, reflects that of the European powers themselves (see below). The determination of the EEC to sharply diverge, reject its subordinate status and openly challenge the USA, was still to come.

By 1985, PASOK reversed all its earlier progressive steps for workers wages and trade unions. It increased unemployment to doubled its rate (it was now above 10%). It enabled employers to revert to arbitrary practices of hiring and firing, and empowered them to break strikes.

Greece’s path was set by the refusal to tackle the core problem: Refusing an independent path and adopting a pro-European comprador path – just as before it had been a pro-USA comprador path. What did this mean? Essentially it mean chronic indebtedness with no possible release. Warnings that were later to be echoed in 2014 – began to sound:

“Interest payments on the external debt have been undergoing a geometric progression (up from $466 million in 1980 to $1.1 billion in 1984), while exports have fallen from $4.7 billion in 1981 to $4.4 billion in 1984. … Capital flight has increased significantly in the 1980s, as it has done in other indebted rentier states. ….. a positive $15 million balance of payments in 1980 became a negative $312 million in 1984. For these reasons—together with the overwhelming predominance of speculative over entrepreneurial capital—it is clear that the financing of further growth is virtually excluded. Far from inducing the inflow of new resources for development, Greece’s ‘opening to the outside’ or ‘liberalization of the economy’ will facilitate the outflow of resources, thereby deepening underdevelopment. Nor will the device of lowering wages make Greek capital competitive, so long as industrial capital acts principally as a financial intermediary and fails to innovate and invent.”

(Petras Ibid New Left Review 1987)

The details of individual governmental changes up to the 2010 financial crisis in Greece, are beyond the scope of this article. In fact, they do not substantially alter the analysis. The trajectory of Greece was now set. While the political leaders were acting in the interests of the dependent capitalists (in essence all of Greek capital) – the compact with foreign imperialism would ensure the Greece crisis became a financial chain-reaction.

We must briefly examine the politics of the European coalition at this point.

The Appendix carries a detailed chronology describing the history of Greece from 1981 up to 2010.

5. The USA Moves to Become the World Imperialist Leader – The Character of the European Union – from pro-USA states to anti-USA coalition

Moving to a meaningful trans-national coalition of European capitalist states – took several steps and forms. The coalition morphed from a post-war Europe wish to re-build, through to the European Economic Community (EEC) and then to the European Union (EU):

“The Community’s initial aim was to bring about economic integration, including a common market and customs union, among its six founding members: Belgium, France, Italy, Luxembourg, the Netherlands and West Germany. It gained a common set of institutions along with the European Coal and Steel Community (ECSC) and the European Atomic Energy Community (EURATOM) as one of the European Communities under the 1965 Merger Treaty (Treaty of Brussels). In 1993, a complete single market was achieved allowing for the free movement of goods, capital, services, and people within the EEC…

Upon the entry into force of the Maastricht Treaty in 1993, the EEC was renamed the European Community to reflect that it covered a wider range than economic policy. This was also when the three European Communities, including the EC, were collectively made to constitute the first of the three pillars of the European Union, which the treaty also founded. The EC existed in this form until it was abolished by the 2009 Treaty of Lisbon, which incorporated the EC’s institutions into the EU’s wider framework and provided that the EU would “replace and succeed the European Community.”

(Wikipedia: https://en.wikipedia.org/wiki/European_Economic_Community)

Through these steps, the class alliances of the countries of the European alliance changed in its essential character.

Immediately post-Second World War, the European countries, were formed into a pro-USA formation. However over time they became anxious to attain autonomy from the USA. This fight-back reached a climax after the USA launched its financial attack in launching the Dollar Hegemony in the Plaza Agreement of Richard Nixon in August 1971. This act finally precipitated the formation of the Eurozone. This section traces the course of the changing class character of Europe in the post-Second World War decades.

At the end of the Second World War, the USA planned to rebuild European capitalism through the USA Marshall Plan for its own ends. This was facilitated by the fact that the Second World War had physically devastated Europe, and that many countries were in debt to the USA. Britain, for example was now completely beholden to its major competitor – the USA:

“When sales of foreign investments and of gold and dollars are added in, the net change on capital account between the outbreak of war and the end of 1945 amounted to no less than Pounds Sterling 4,700 million. The United Kingdom ended the war with the largest debt in history.”

(A.Cairncross. Years of Recovery, British Economic Policy. 1945-51. London, 1985. p.7). 

American imperialists recognised that Europe needed to be re-built as a bulwark against further socialist upheavals. Especially as the USSR successful battles, had become an inspiration across the world. The USA imperialists – as personified by James Warburg (part owner of the House of Morgan, a controller of USA international finance and industrial and utility trusts) – remarked:

“Germany was the hub of the weak German economy ‘the largest single compact mass of skilled labour on the Continent’, it should be transformed from ‘the present poor-house and plague-center’.. ‘into a powerhouse for a rapid reconstruction of Europe, without letting the powerhouse acquire too broad a permanent franchise and – above all – without letting the powerhouse ever again become an arsenal’…. ‘The Westward thrusting of communism will not be stopped by an physical frontier. It can be only stopped only a planned, US-Aided reconstruction so liberal and even revolutionary as to meet the challenge on its own grounds, and to strike the meaning from the accusation of American “dollar diplomacy.”

(Van Der Pijl, K. ‘The making of an Atlantic ruling class”; pp. 42-43,146; London 2012).

As time would show, once Europe had been rebuilt as a bulwark, the USA could not restrain European capitalists wanting their own dominance.

In postwar Europe – the Marshall Plan was one of the three trade and economic tactical instruments by which the USA imperialists wished to take advantage of the post-Second World War crippling of the European powers. The other two were the creation of the International Monetary Fund (IMF) and the creation of the General Agreement of Trades and Tariffs (GATT). The military instrument to back these up was of course the North Atlantic Treaty Organization (NATO). The Marshall Plan was conceived as an anti-communist and anti-nationalist weapon and a means to erode European independence:

“The establishment of American hegemony in the North Atlantic area was directed simultaneously against the spread of planned economy and social revolution beyond the Soviet-controlled area in Europe and against the national, self-contained reconstruction programs pursued by most West European states in the immediate post-war period. These programs in which local Communists parties participated, were judged unsuited for maintaining capitalist rule in the long run. ‘Europe would have been Communistic if it had not been for the Marshall Plan, Marshall Aid administrator Paul Hoffman claimed in February 1950.”

(Van Der Pijl, K. Ibid; p.148-9)

Van Pijil summarises that:

“Through the Marshall offensive, the Pax American was imposed on the economic ruins of the defunct Pax Britannica in Europe.”

(van Pijl Ibid p. 167) .

But the formation of the IMF was another key strand of the USA design.

“Bretton Woods.. Shorthand for the system, designed by the US and Britain, that governed international monetary and economic relations in the decades following the Second World War. … (It was) the launch of the post-war phase of super-dominance of the US and the dollar. .. All member countries pledged themselves to play by an internationally agreed set of rules…these rules were quite strict, and enforced by a new world economic policeman, the International Monetary Fund (IMF). Countries had to declare a ‘par value’ – an exchange rate – of their currency in terms of the American dollar and/or gold, and change it only in consultation with the IMF. Various forms of currency manipulation were named … to prevent a return to the competitive devaluations and currency chaos of the 1930s. While countries could keep some controls on movements of capital, they basically undertook gradually to dismantle the wartime systems of exchange and trade controls and to move towards the free convertibility of their currencies… they also pledged themselves to adhere to the rules of the multilateral trades and payments scheme”;

(Dean, Marjorie & Pringle, Robert “The Central Banks”; London 1994 p.75).

In return for this agreement, the USA agreed to take over the position as “lender of last resort” – whereby it would honour those creditors who wished to remove gold in exchange for dollar. It would:

“Submit to discipline by its agreement to convert into gold any dollar balances presented to it by overseas central banks at the fixed price of $35 an ounce. The US was the only country to accept such a gold convertibility obligation and the only one in a position to do so, having ended the war owning about two-fifths of the world’s stock of monetary gold”;

Dean and Pringle; Ibid p. 76.

This in effect took over the dominant position of lender of last resort that the British government had previously held from 1924 to September 1931 (Dean and Pringle Ibid p. 63). The US was anxious to see this agreement effected as it would enable the USA to control international monetary policy:

“In these countries (Ed -ie. those agreeing to join the IMF) national central banks of countries other than the US had little influence on policy decisions. Domestic and economic policy came to be dominated by one objective – the maintenance of the fixed exchange rate against the dollar – and exchange rate policy, was of course entirely a matter for government…. For the most part, a government would respond to an impending payments deficit by tightening fiscal policy (Ed-i.e. dropping the printing of money) or putting up interest rates; and a country with a surplus would ease fiscal policy or lower interest rates. Of the major countries only France resorted regularly to devaluation as way of maintaining its export competitiveness and growth.”

(Dean and Pringle; Ibid p. 76).

This meant that the USA did not need to try to maintain its currency value. All countries had to acquire the dollar; there was no need for the dollar to be defended at any particular rate of exchange. By 1949 the US had acquired 72 % of the world’s gold. The Bretton Woods Proposal had been resisted by Lord Maynard Keynes of Britain, but to no avail. This Agreement eased the post war period for the USA, because all other Central Banks had to have a dollar reserve:

“Making the dollar a reserve currency meant that central bankers round the world had to have dollars. They had to buy dollars in the marketplace which pushed up the price of the dollar up, threatening the parity of the currency with the dollar. Thus they could only buy when the dollar was weak… This suited the US and the US Federal Reserve which could follow a very lax monetary policy to make sure that there were always dollars to go around. It worked wonders for post-war US domestic policy, helping promote the wartime dream of full employment.”

(Bose, Mihir “The Crash” London, 1988. p.135).

The USA was in an unusual position of dominance. It had funded the war for the Western capitalist allies, detonated the Atom bomb thereby showing its military dominance, and had a home base that was unaffected to a large extent by the war. It proceeded to further dictate terms, to ensure its vote in the IMF on decisions, was a veto:

“In order to finance European and other foreign purchases from America, that is to ensure adequate financial resources to sustain US exports, (“world trade”) the US Government had taken the lead in 1944 at Bretton Woods to establish the International Monetary Fund (IMF) and the World Bank. Loans were provided by the U.S. Government and US credit markets via the World Bank to European governments, which used them mainly to pay for goods supplied by American exporters. The source of the original loan funds provided by the IMF came from foreign currency and gold subscriptions by the participating nations. America’s subscription amounted to almost $3 billion and entitled it to nearly 30% of the voting power. The member nations agreed that an 80% majority vote would be required for most rulings, thus conceding unique veto power to the US… Europe was fully aware that it was ceding to America the option of determining its own currency values and tariffs. The US was the only nation with sufficient foreign exchange to finance a program of overseas investments, long term financing and foreign aid…”

(Hudson, Michael. Global Fracture, the new international Economic Order. New York, 1977. p.11-12).

Such a ceding of power to the USA was self-evident as any debts to the USA were only made payable in dollars or gold. The Bretton Woods Agreement had after all made the dollar “as good as gold.” The USA actively hoarded gold. Until 1958 and the Korean war the gold stocks of the USA remained exceedingly high, in correspondence with the USA stipulations on repayment). The USA also ensured that the major European powers joined the Gold Pool. This served:

“To ensure that the gold parity of the dollar would be supported by the central banks, the European ones mainly, who would thus have to sell central bank’s stocks of gold as the occasion demanded. The price of gold was kept artificially low at a time when the price of goods was rising. The dollar thus stayed as good as gold and the US was freed from the threat of having to support the gold parity of the dollar by itself, or of seeing gold overtake the dollar as an international reserve instrument which remained a theoretical possibility in the framework of the Bretton Woods Agreement. The US spared no efforts in its campaign to impose and maintain the Gold Standard.”

(Fiit,Yann, Faire, Alexandre, and Vigier, Jean-Pierre; (“The World Economic Crisis, US imperialism at Bay”; London, 1980; p.76.;p.83).

Britain was being firmly eclipsed by the USA as the foremost imperialist. The pivotal point forcing even the most stubborn British imperialists to recognise this, came in the Suez disaster of 1956 (these events were described in “The Gulf war – the USA Imperialists Bid To Recapture World Supremacy” at
http://ml-review.ca/aml/allianceissues/alliance2-gulfwar.htm)

Meanwhile the other European capitalists searched for ways to move into more independence. This was a slow process. The USA continued to exert major obstruction to real independence for some time. Within each of the major European states, some elements were more inclined towards the USA (i.e. compradors – the so-called pro-‘Atlantic’ bourgeoisie), some were more interested in maintaining an independent sovereignty (the so-called ’Euro-nationalists’). These tensions played out over decades, spanning three “waves” of USA offensives:

“Three successive strategies of Atlantic unity .. corresponded to the different offensives periods of American capitalism. The first was Roosevelt’s concept of Atlantic universalism, which derived its specific Atlantic dimension from the American focus of World War Two and the key position of the British Empire in the world America wanted to expand into. The second version of Atlantic unity was the Atlantic Union idea, which surfaced at the time of the Marshall Plan and combined a status quo approach to control of the periphery with a high-pitched Cold War unity against the Soviet Union. The third Atlantic strategy was the Atlantic partnership scheme promulgated by President Kennedy in an attempt to restore unity of purpose to an Atlantic world in which the establishment of a restrictive EEC demonstrated the degree to which Western European capital had emancipated itself from American tutelage and was intent on carving out a sphere-of-interest of its own.”

(Van Der Pijl, K; Ibid; p.xxxiv; London 2012).

The so-called Atlanticists (the comprador bourgeoisie for the USA – a term usually reserved for countries of colonial or semi-colonial status) were largely representatives of finance capital. These were interested in the freedom of shipping capital reserves freely across international boundaries. They are also termed “liberal internationalists” by van der Pijil.

In contrast the “Euro-nationalists” represented industrial capital – and were interested in ensuring reinvestment in and redeveloping a European heavy industrial base. They supported single ‘sovereign’ or independent, state funding of heavy industry and can be termed state monopolists .

As an internal intra-European battle between these two segments of capital occurred, the USA imperialists initially favoured steps to a pan-European supra-national state. Of course this single supra-national state, has still not been achieved. However between 1945-1998 – there were periods where the European Euronationalist capitalist powers waxed and waned, as USA imperialism counter attacked.

Regardless of whose interests it served, the overall tendency was towards a move for unity of the smaller European countries. Only later was directed against the USA hegemony. The class character of the European coalescing would shift form a pro-USA vassal coalition to an anti-USA coalition. Ultimately this would end up being dominated by the German bourgeoisie.

Through this period, the fading British imperialists continued to rely and favour USA imperialism. In fact it was actually Ernest Bevin, British Foreign Secretary who first proposed the NATO alliance:

“The actual initiative to found a North Atlantic military alliance was taken by Ernest Bevin in 1948 following a series of defence treaties between Western European states… Bevin .. in early 1948, urged … formal Atlantic cohesion of a political nature.. to USA Ambassador Lew Douglas.. the treaty establishing the NATO was concluded in April 1949”

(Van Pijl Ibid p. 157).

Early on French imperialism, as represented by General De Gaulle, wished to utilise USA strength to stand against the USA. The early events were summarised as below:

“The war encouraged a proliferation of new schemes for European regional organisation. De Gaulle for instance repeatedly voiced the idea that European unity might be a bulwark against both the Soviet Union and the United States, and comparable arguments were heard in various segments of the German, Italian, and Dutch bourgeoisie Resistances….

Churchill’s proposal for a Council of Europe provides probably the best example of the (Atlanticist) concept of European unity… coupled to Britain’s desire to maintain its special link with the Commonwealth and the United States.. “

(Van Der Pijl, K. Ibid; p26; London 2012).

In contrast:

“The Euronational concept combined a number of state-monopolisitic attributes like a strong emphasis on a “European” economic policy with a distinct rejection of Atlantic unity” ;

(Van Der Pijl, K. Ibid; p26; London 2012).

The first USA steps to infiltrate Europe were actually before the Second World War. In most accounts, Jean Monnet the post-war Finance Minster of France figures prominently:

“Jean Monnet… was perhaps one of the foremost in the European postwar leaders to see the necessity of a coalition of European countries…. As early as 1921 Monnet had advised Eduard Benes: To address the problem of the weakness of Central European economic by establishing a “federation because of the region formed a “natural economic unit.”

(James Laxer. “Inventing Europe”; Toronto, 1991.p. 27).

Later in the Second World War: 


“Writing on behalf of the French Committee of National Liberation, Monnet for the first time advocated the formation of a federation of European states to be established following the conflict..”

(Laxer, Ibid, p. 27).

But Jean Monnet was in reality, a pro-USA comprador. He had spent many years working in banking in the USA and had married a scion of the US ruling classes. Ultimately he saw not a rivalry between the USA and pan-Europe, but a partnership, which later USA President Kennedy was also to espouse (van Pijl p. 29):

“The most important representative of the Atlantic Partnership, or Euramerican concept in France was Jean Monnet. 1962 was Monnet’s year of triumph, in which he thought the partnership of equals between the US and the EEC, by which the Soviet union could be effectively checked, was actually materializing. In Monnet’s view this would entail European military autonomy as well. ‘Equal partnership must also apply to the responsibilities of common defense, it requires amongst other things, the organisation of a European atomic force including Britain and in partnership with the US.”

(Van der Pijl: Ibid; P. 225).

Monnet’s relationship with the USA ruling class representatives of capital was close at even a personal level:

“There is no doubt.. Monnet’s initiatives .. owed much to American encouragement. His decisive advantage was the closeness of his association with the USA political elite.. the Dulles brothers, Acheson, Harriman, McCloy, Ball and Brice and others.. he was to become widely distrusted in his own country because of it..”

(Anderson, Perry. “The New Old World”; London 2009 p.15)

“Monnet’s strength as an architect of integration (i.e. of Europe – ed) did not lie in any particular leverage with European cabinets… but in his direct line to Washington.”

(Anderson, Perry. Ibid; p. 17)

By May 1949, the first concrete post-war steps for uniting Europe into a pro-Atlantic (i.e. pro-USA) bloc led to the Statute of the Council of Europe.

On 9 May 1950, the French Foreign Minister Robert Schuman proposed to integrate the coal and steel industries of Europe. The Schumann Proposal for the European Iron and Steel Community, was designed to form a competitive market in iron and steel, using substantial public sector capital. Britain refused to join at that stage. By 1958, trade in the ECSC in steel had increased by 157% and steel output by 65% (Laxer, p. 38).

In “Alliance Marxist-Leninist” of October 1992, the Schumann Plan was portrayed as an anti-American move; and Jean Monnet as a Euronationalist. Alliance was incorrect in this analysis. (Alliance Marxist-Leninist ALLIANCE (MARXIST-LENINIST (Number 3, October 1992) “Crisis In Capital And Their Solution – Free Trade And Protectionism In Developed Countries” http://ml-review.ca/aml/AllianceIssues/ALLIANCE3ECONOMICS.html

The reality was far more complex. In fact the USA had argued that the Schumann Plan was of use since:

“Secretary of State Acheson in 1951 estimated that the Schumann Plan was useful.. since it would “pull Germany, certainly Western Germany into economic relationship with Europe. It will tie it in and lay a foundation which will ally fears the Germany might come loose and go off on an independent or pro-Russian policy.”

(van Pijl Ibid p. 157) .

The USA imperialists with their European stooges – and even with the Euro-nationalists – at this stage all continued to agree that Europe needed to unite. The vision of many planners of USA strategy, was akin to that of Paul Hoffman – leading member of the Committee headed by Averell Harriman secretary of Commerce – speaking to the Senate Foreign Relations Committee in 1950:

“We know that there is no possibility of Europe becoming the kind of an economy that will make it a great force of strength in the Atlantic community unless we break down the barriers between those 17 political subdivisions with which we are working… so that you have a single market, or something close to it, in which you will have large-scale manufacturing because you have a large market in which to sell it.”

(Van Pijl Ibid p. 197)

Britain and France after Suez, had to accept that in the immediate future, their only role on the world stage would be as a junior partner to USA imperialism. They threw their lot in with the Americans. The USA used their influence with the British to disrupt attempts at a defence force independent of the US.

But as the USA became ever more hegemonic in Europe, De Gaulle and others turned to resist USA incursion. This was forseen by J.V.Stalin:

“Britain and France .. are imperialist countries.. Can it be assumed that they will endlessly tolerate the present situation in which.. Americans are penetrating into the economies of Britain and France and trying to convert them into adjuncts of the USA economy?

…Would it not be truer to say that capitalist Britain and France will be 
compelled in the end to break from the embrace of the USA and enter into conflict with it in order to secure an independent position and of course high profits?”

(J.V. Stalin, “Economic problems of the Socialism in the USSR”; Moscow, 1952. p. 38).

The loosening of the dependency chains on European nations formed by the credit of the USA Marshall Plan would take several interim steps.

By 1957, the Treaty of Rome was signed which established the European Economic Community (EEC). Consistent with its overall European strategy, the formation of the EEC was supported by the USA. In fact:

Eisenhower (said) .. that the Treaty of Rome would be one of the finest days in the history of the free world, perhaps even more so than winning the war”;

(Anderson; Ibid; p. 18).

There was now a dramatic opening of the European market for financial penetration – to take over European industries, as well as their markets:

“The shift from commercial to financial penetration (ie of Europe – by the USA -ed) was confirmed by the formation of the EEC. The Common Market dramatically changed American prospects for expansion in this respect.“

(Van der Pijil; Ibid, p.193)

In reply to De Gaulle, the USA attempted to weaken the development of the future European Union, by using its stooge the weak British imperialists. Thereupon French General De Gaulle later on vetoed the entry of Great Britain into the EEC for precisely this reason.

By the time of Nixon and Kissinger, the situation had shifted. Now the USA perceived the threat in the now built up European Community:

“(they) started to perceive the potential for a rival great power in Western Europe”;

(Anderson Ibid p. 21).

How had things changed so dramatically? The balance of power between the Euronationalists and the pro-US Atlanticists had changed after the rise of the dollar hegemony. To recap, the Bretton Woods Agreement of 1944 to stay on a gold convertibility was simply put aside by the USA. By the 1960s, under USA President Johnson, inflation was created by printing more dollars. This enabled the USA to fund the Vietnam War and its limited social reforms of the so-called ‘Great Society” (Dean & Pringle Ibid p.80; Palmer Ibid p.61). This had dire consequences:

“The net result in the succeeding decades was a scale of Federal domestic budget deficit and increasingly, balance of payments deficit without precedent in US history. At first the deficits and consequential outflow of dollars into the world economy had been regarded as benign.. The deficits initially helped to finance the mutual economic recovery of Americans’ allied (and client) economies. But as the outflow of dollars turned into a might flood, American control over banks grew by leaps and bounds, Between 1970 and 1975 the assets of overseas branches of US banks grew from $47 billion to $166 billion. The over-valued US dollar came to be seen as the means by which European industry was being acquired cheaply by US interests… fears were expressed that Western Europe was being turned into a fiefdom of US multinationals.. By the late 1960s the gap between the US dollar’s internal purchasing power and its international value had widened alarmingly. The Europeans were faced with the choice of either accepting these depreciating dollars (and thus, in effect, of subsidizing the American economy and worldwide military and political commitments) or exploiting America’s Bretton Woods commitment to swap dollars for gold at the fixed prices.”

(Palmer Ibid p. 62).

De Gaulle remarked early on, that this was a USA attack using dollarization of the world economy, and warned that:

“The Americans only used the atom device twice on Asia. … but they use the dollar on Europe every day”

(Cited Palmer, John: “Europe without America? The crisis in Atlantic Relations”; Oxford; 1988; p.62)

Essentially the USA was pursuing a policy of financial export to drive acquisition of European industrial and financial companies. Simultaneously it unwittingly began the financialization driving world inflation – from ‘hot money’. European nationalist leaders of many countries objected. As well as De Gaulle, French President Giscard d’Estaing objected:

“It is rather remarkable that the war in Vietnam, a localized conflict of a very special nature involving a great power and a small power could have such a far reaching effects on world economic equilibrium.. Any other country that was faced with a balance-of-payment deficit of this magnitude would have been obliged to take steps to restore balance whereas the US was not obliged to do so; the method of financing its deficit exempted it from having to restore equilibrium and it was therefore a system which caused considerable inequality in the interplay of monetary power…”

(Hudson, Michael, Global Fracture, the new international Economic Order. New York, 1977; p.31).

In another more serious threat to USA hegemony, the German state had become more pro-independent. Earlier leaders (Konrad Ardenauer Chancellor [1949-1962] and Ludwig Erhard [Chancellor 1963-1965]) of post-war West Germany had been resolutely pro-USA. The attitude of later German leaders can be gauged from a remark made by Chancellor Helmut Schmidt (Chancellor 1974-1982) when he decried:

“The misuse of the dollar as an instrument of US foreign policy.”

(Cited Palmer John: “Europe without America? The crisis in Atlantic Relations”; Oxford; 1988; p. 10)

This reaction against the USA had its counterpart in Britain in the Westland Helicopter crisis, where Defence Minister Michael Hesletine revolted against Mrs Thatcher. He was soon despatched by the stalwart pro-USA Mrs Thatcher. This was pointed out by the Communist League at the time.

The salient point is that the USA fiscal policies prompted the Euronationalists to move towards the European Monetary System (EMS) and before that the Snake. This then became the European Monetary Union (EMU):

“European Community alarm at the misuse of the dollar’s privileged position in the world currency system encouraged the EEC states to distance themselves in monetary policy from the US in the late 1970’s. President Valery Giscard D’Estaing of France led – despite British opposition – to the creation of … the EMS.. the breakup of the dollar-dominated monetary system also marked the end of the earlier Atlantic consensus enshrined in the Bretton Woods Agreement of 1944”;

(Palmer J ibid p. 11).

In Alliance Marxist-Leninist Number 3, 1992, we traced the rise of the European Union and the emerging hegemonic role of the unified single German State – after the disintegration of the Comecon states including former East Germany.

We concluded Alliance 3 by characterising the then inter-imperial rivalries as follows:

The current crisis of capital forces formation of blocs.

The current epoch is one of a disintegration of the power of the USA imperialists and an increase in power of the German and thereby European imperialists and the Japanese imperialists. Each of these competitors strive to create a super trading bloc; within whose borders free trade (or ‘ freer trade’) occurs. Outside of the bloc, protectionism is the policy.

These policies result from the major crisis of over-production that the world is experiencing. The final rupture of the Comecon capitalist block offers the only untapped market; and so the Blocs are trying to extend themselves into the ex-Comecon markets.

In the case of the USA Free Trade Bloc being set up between Mexico, the USA and Canada; the Block is clearly under the domination of the USA. Here there is no effective balance between opposing international imperialism. The differences between the European imperialists do allow for a certain balance; this is not achievable between the USA and Canada; and less so between USA and Mexico.

….. The European Economic Community is more delicately balanced between the competing imperialists. Of the nations within the fold, only Britain (now a junior partner) has significant allegiance to the USA. The others are far more committed to the EEC; even risking domination by Germany.

In the Far East, it is likely that a massive trading bloc between Japan and China is going to make it impossible for many of the Pacific basin nations not to enter an alliance dominated by the Japanese imperialists.

These maneuvers are the first salvoes of the next World War.”

(Alliance 3: Ibid: http://ml-review.ca/aml/AllianceIssues/ALLIANCE3ECONOMICS.html)

We believe that these assessments – overall – remain correct. They are also, consistent with Stalin’s famous prediction that under capitalism competitive wars for markets were inevitable, and that sooner or later – Europe would chafe under USA domination:

“Inevitability of Wars between Capitalist Countries”; Some comrades think that owing to the development of new international conditions since the Second World War, wars between capitalist countries have ceased to be inevitable. These comrades are mistaken. Outwardly everything would seem to be going well; the USA has put Western Europe, Japan, and other capitalist countries on rations; Germany (Western), Britain, France, Italy & Japan have fallen into the clutches of the USA and are meekly obeying its commands. But it would be mistaken to think that things can continue to “go well” for ” all eternity”, that these countries will tolerate the domination and oppression of the United States endlessly, that they will not endeavor to tear loose from American bondage and take the part of independent development.”

(Stalin; ‘Economic Problems of the USSR”: Peking; p.33).

Now in 2015, as we update the picture in 2015, the basic rhythm of inter-imperialist struggle has not changed dramatically but become even more intense. The final crumbling of the ex-Comecon countries postponed the ‘final reckoning’ of the European and USA rivalries. And yet rivalries have sharpened with the entry of China into the leading echelons of imperialist rivalry. In this period:

i) Germany has benefited the most and now become the leading (if not yet quite hegemonic) partner of the imperialist coalition of the EU.

ii) The EU has expanded enormously to now include the so-called Southern fringe (including Greece, Portugal, Spain, with continuing discussion with Turkey); and the ex-Comecon countries.

iii) There has been a renewed attempt of the Russian bourgeoisie led by Putin to recreate its own imperial zone.

iv) China has dramatically enhanced its imperial might and come to near logger-heads with the neighboring Pacific Oceanic states – in particular those nations most tied to the USA (Japan, Philippines).

v) The most advanced of the former under-developed colonised world (Brazil, India) have been organized by the renewed Chinese imperialists into conglomerates that pose increasing challenges to both the USA and EU hegemony. Namely BRIC (Brazil, Russia, India, China) and the newly created International Bank.

The still unresolved contradiction at the heart of the European Community

Of course the EU has a major problem: Even now, it is not a unitary state with unitary fiscal policies. Although the leaders of the EU wish to concentrate power against the USA, they are unwilling to cede complete national autonomy to a Supra-European force – (namely the European Union based at Brussels). However while EU leaders can attempt to combine the monetary resources, unless there is a complete political unity – there are centrifugal forces they cannot control. For this would require to be overcome, a single unitary Bank.

This is far from a new realisation. The insoluble contradiction was pointed out by astute economists long ago such as Lord Nicholas Kaldor (1908-1986). Kaldor was a Keynesian, who polemicized against both Milton Friedman and Mrs. Thatcher’s worship of monetarism. He cited Keynes to say:

“Keynes (a pamphlet far ahead of the times and ahead of much of his own future writing on the subject), in which he branded monetary policy as ‘simply a campaign against the standard of life of the working classes’, operating through the ‘deliberate intensification of unemployment . . . by using the weapon of economic necessity against individuals and against particular industries — a policy which the country would never permit if it knew what was being done’.

(J. M. Keynes, The Economic Consequences of Mr. Churchill (London, 1925), reprinted in the Collected Writings of John Maynard Keynes Vol. IX (London, 1972), pp. 207-30; Cited Foreword Second edition; Kaldor, N: The Scourge of Monetarism”; Oxford 1986. https://www.questia.com/read/13674203/the-scourge-of-monetarism

In 1971, Kaldor pointed out that in the proposed Eurozone, there would be a tendency for some countries “to acquire increasing (and unwanted surpluses) in their trade with other members, whilst others face increasing deficits”. This could only be overcome he foresaw, by fuller political union:

“The events of the last few years … have demonstrated that the Community is not viable with its present degree of economic integration. The system presupposes full currency convertibility and fixed exchange rates among the members, whilst leaving monetary and fiscal policy to the discretion of the individual member countries. Under this system, as events have shown, some countries will tend to acquire increasing (and unwanted surpluses) in their trade with other members, whist others face increasing deficits. This has two unwelcome effects. It transmits inflationary pressures emanating from some members to other members; and it causes the surplus countries to provide automatic finance on an increasing scale to the deficit countries.

Since exchange-rate adjustments or “floating rates” between members are held to be incompatible with the basic aim of economic integration (and are incompatible also with the present system of common agricultural prices fixed in international units) the governments of the Six, at their Summit meeting in The Hague in December 1969, agreed in principle to the creation of a full economic and monetary union, and appointed a high-level committee (the so-called “Werner Committee”) to work out a concrete programme of action..”

(Nicholas Kaldor On European Political Union Cited by Ramanan, 6 November 2012; in The Case For Concerted Action Post-Keynesian Ideas For A Crisis That Conventional Remedies Cannot Resolve; at http://www.concertedaction.com/2012/11/06/nicholas-kaldor-on-european-political-union/)

Those planning a momentary union explicitly recognised that in the ultimate “third phase” the “individual central beings (being) would be abolished altogether, or reduced to the state of the old colonial “Currency Boards”:

“The realisation of economic and monetary union, as recommended in the Werner Report, involves three kinds of measures, each introduced in stages: monetary union, tax harmonisation, and central community control over national budgets.  It envisages a three-stage programme, with each stage lasting about three years, so that the whole plan is designed to be brought into operation by 1978-80.

In the monetary field in the first stage the interest and credit policy of each central bank is increasingly brought under common Community surveillance and permitted margins of variations between exchange rates are reduced or eliminated. In the second stage exchange rates are made immutable and “autonomous parity adjustments” are totally excluded. In the third stage the individual central banks are abolished altogether, or reduced to the status of the old colonial “Currency Boards” without any credit creating power.”

(Nicholas Kaldor Ibid)

Other political issues would also pose problems including the harmonisation of tax differences and differing budget polices requiring “fiscal standardisation” between countries:

“In the field of tax harmonisation it is envisaged that each country’s system should be increasingly aligned to that of other countries, and that there should be “fiscal standardisation” to permit the complete abolition of fiscal frontiers, which means not only identical forms but also identical rates of taxation, particularly in regard to the value added tax and excise duties.

In the field of budgetary control the Werner Report says “the essential elements of the whole of the public budgets, and in particular variations in their volume, the size of balances and the methods of financing or utilizing them, will be decided at the Community level.”

(Nicholas Kaldor Ibid)

However, ominously for the proponents of a single currency – responsibilities to have individual country Budgets and tax polices set centrally – were not envisaged as necessary. This was according to Kaldor, “the basic contradiction”:

“What is not envisaged is that the main responsibility for public expenditure and taxation should be transferred from the national Governments to the Community. Each member will continue to be responsible for raising the revenue for its own expenditure (apart from the special taxes which are paid to finance the Community’s own budget but which will remain a relatively small proportion of total public expenditure and mainly serve the purposes of the Agriculture Fund and other development aid).

And herein lies the basic contradiction of the whole plan.”

(Nicholas Kaldor Ibid)

Kaldor argued this had to have harsh implications for inequity in the well-being of the peoples of different countries. It was clear that unless “harmonisation” of country provision of benefits paid through by taxation – was ensured, there would be rising inequity:

“For the Community also envisages that the scale of provision of public services (such as the social services) should be “harmonised” – i.e., that each country should provide such benefits on the same scale as the others and be responsible for financing them by taxation raised from its own citizens. This clearly cannot be done with equal rates of taxation unless all Community members are equally prosperous and increase their prosperity at the same rate as the other members. Otherwise the taxation of the less prosperous and/or the slower-growing countries is bound to be higher (or rise faster) than that of the more prosperous (or faster-growing) areas.”

(Nicholas Kaldor Ibid)

In turn, this rising inequity in the poorer countries would likely need to be countered by spiraling taxes, in order to maintain a “fiscal balance” with the remained of “the Community.” But this would then become the source of “vicious circle” as these higher taxes would lead to a further compromise of the less “competitive” countries. Worsening of the inter-country inequity would need for distributing relief funds from the center:

“The Community will control each member country’s fiscal balance – i.e., it will ensure that each country will raise enough in taxation to prevent it from getting into imbalance with other members on account of its fiscal deficit. To ensure this the taxes in the slow growing areas are bound to be increased faster; this in itself will generate a vicious circle, since with rising taxation they become less competitive and fall behind even more, thereby necessitating higher social expenditures (on unemployment benefits, etc.) and more restrictive fiscal policies. A system on these lines would create rapidly growing inequalities between the different countries, and is bound to break down in a relatively short time. …

This is only another way of saying that the objective of a full monetary and economic union is unattainable without a political union; and the latter pre-supposes fiscal integration, and not just fiscal harmonisation. It requires the creation of a Community Government and Parliament which takes over the responsibility for at least the major part of the expenditure now provided by national governments and finances it by taxes raised at uniform rates throughout the Community. With an integrated system of this kind, the prosperous areas automatically subside the poorer areas; and the areas whose exports are declining obtain automatic relief by paying in less, and receiving more, from the central Exchequer. The cumulative tendencies to progress and decline are thus held in check by a “built-in” fiscal stabiliser which makes the “surplus” areas provide automatic fiscal aid to the “deficit” areas.

(Kaldor, Nicholas “On European Political Union Ibid)

Kaldor concluded that the Community’s present plan was like the house which “divided against itself cannot stand” and that “it was “dangerous error: to have a “full economic and monetary union” preceding a political union”:

“The Community’s present plan on the other hand is like the house which “divided against itself cannot stand.” Monetary union and Community control over budgets will prevent a member country from pursuing full employment policies on its own – from taking steps to offset any sharp decline in the level of its production and employment, but without the benefit of a strong Community government which would shield its inhabitants from its worst consequences.

Some day the nations of Europe may be ready to merge their national identities and create a new European Union – the United States of Europe. If and when they do, a European Government will take over all the functions which the Federal government now provides in the U.S., or in Canada or Australia. This will involve the creation of a “full economic and monetary union”. But it is a dangerous error to believe that monetary and economic union can precede a political union or that it will act (in the words of the Werner report) “as a leaven for the evolvement of a political union which in the long run it will in any case be unable to do without”. For if the creation of a monetary union and Community control over national budgets generates pressures which lead to a breakdown of the whole system it will prevent the development of a political union, not promote it.”

(Nicholas Kaldor Ibid)

We believe that the current crisis in Greece, fully confirms these warning. However Kaldor being a representative of the ruling capitalist class in Britain, could hardly envisage a political solution of benefit to the goals of achieving a socialist Europe. It is in this backdrop, that the Greek Crisis plays out.

6. The Greek Economic Crisis 2009-2015 – How did it get to this stage?

Throughout the turn towards Europe, the ruling class of Greece faced the hostility of the Greek working class and the rural small peasants. Nonetheless the ruling class allied itself firmly to the European imperialist bloc of the European Union (Previously the EEC). To recap: the Greek state opened the doors to foreign debt. From the viewpoint of a small capitalist class, who were not about to enter a left policy – there was no alternative. In doing so they also built a bureaucratic state machine, packed with protégés of the states. In addition the overwhelming strength of petit-bourgeois production – combined to allow a nepotistic and corrupt state. In this period, the Greek capitalist economy did not do very well.

In reality profits for the leading elite of the Greek capitalist class were immense. While the international financial capitalists are a giant leech on the back of the people, the main enemy of working people, remains the Greek capitalist class.

A common complaint from European bankers is that the Greek people are lazy and inherently corrupt. This propaganda has found resonance in otherwise progressive and people – who are themselves hard-pressed by capital. It is therefore important to refute the slander on “the lazy Greek people” – and attach the charge of laziness and parasitism to where it belongs – to the ruling capitalist class of Greece. The propaganda often cites the “lax tax laws” and the ‘pampered pension clauses’. Let us examine these aspects first.

i) Tax and Pensions in Greece

The capitalist class structured the tax system to its advantage, and also enabled the petit-bourgeois:

“Greek taxation is a mess (there are six different bands and the wealthiest band of shipping is often referred to as a “tax-free zone”) and over 133 separate pension funds.” Buchanan, Rose T; “Greece debt crisis explained: A history of just how the country landed itself in such a mess”; The Independent 4 July 2015; http://www.independent.co.uk/news/world/europe/greece-debt-crisis-explainer-a-history-of-how-the-country-landed-itself-in-such-a-mess-10365798.html

“Data from one of Greece’s ten largest banks, (allowed) economists Nikolaos Artavanis, Adair Morse and Margarita Tsoutsoura..to (estimate lost tax revenue)…. The economists’ conservatively estimate that in 2009 some €28 billion in income went unreported. Taxed at 40%, that equates to €11.2 billion — nearly a third of Greece’s budget deficit.
Why hasn’t Greece done more to stop tax evasion? The economists were also able to identify the top tax-evading occupations — doctors and engineers ranked highest — and found they were heavily represented in Parliament”.

“Greeks Hide Tens of Billions From Tax Man”; Wall St Journal 9 July 2012.

http://blogs.wsj.com/economics/2012/07/09/greeks-hide-tens-of-billions-from-tax-man/?mod=WSJBlog&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Feconomics%2Ffeed+%28WSJ.com%3A+Real+Time+Economics+Blog%29

The scandal of refusal to take action on the “Lagarde List”, makes the responsibility of the Greek ruling class for the “tax imbroglio” even more clear:

“The Greek government has not completed an investigation of a list of 1,991 persons purported to hold accounts with Swiss bank HSBC that it received in 2010 from former French finance minister Christine Lagarde. Initially, officials claimed at various times to have lost or misplaced the information. On 29 October 2012 the government changed its position saying it would not use stolen information to prosecute suspected offenders. Instead, Greek authorities arrested Kostas Vaxevanis, journalist and editor of the weekly magazine Hot Doc, who published the “Lagarde list.”

The list includes an advisor to former Greek prime minister Antonis Samaras, as well as a former minister and a member of Samaras’ New Democracy political party. The list also contains the names of officials in the finance ministry.
Mr. Vaxevanis said he thought the government had not acted on the list because it included friends of ministers, businessmen and powerful publishers.

(https://en.wikipedia.org/wiki/Tax_evasion_and_corruption_in_Greece)

ii) Pensions

First if examined by unadjusted numbers it does appear that the Greek pension system is the most expensive in the OECD countries. We follow the Wall Street Journal analysis of February 2015 (Dalton, Matthew: “Greece’s Pension System Isn’t That Generous After All”; February 27 2015; http://blogs.wsj.com/brussels/2015/02/27/greeces-pension-system-isnt-that-generous-after-all/):

Graphs 1-3 on Pensions In Greece
“First, how much does Greece spend as percentage of GDP on pensions? The data from Eurostat looks like this as of 2012, with Greece expenditure easily highest in the eurozone as a percentage of GDP:

Greece2

However – the Wall Street Journal goes on to break this down, first as a percent of GDP and then by the proportion of pensioners over the age of 65 years:

“But part of that is due to the collapse in GDP suffered by Greece during the crisis… look at pension expenditure as a percentage of potential GDP, the level of economic output were eurozone economies running at full capacity:

Greece3

“Greece is still near the top, though it’s not so far from the eurozone average. Moreover, Greece’s high spending is largely the result of bad demographics: 20% of Greeks are over age 65, one of the highest percentages in the eurozone. What if instead you attempt to adjust for that by looking at pension spending per person over 65 (graph below). Adjusting for the fact that Greece has a lot of older people, its pension spending is below the eurozone average.”

Greece4

And finally a large proportion of the population are pensioners over 65 and many households depend on the pension:

“First, demographics. About 20.5% of Greeks are over 65 – behind only Italy and Germany in the EU when it comes to an ageing population. And with the country’s youth unemployment rate still above 50%, its young people are not going to be able to pay for their grandparents pensions any time soon.

Second, Greek society has a dependency on pensioners. One in two households rely on pensions to make ends meet and the country has an old-age dependancy ratio above 30%, which means that for every 100 people of working age in Greece there are 30 people aged 65 or over.

Third, Greek pensions aren’t so generous. About 45% of pensioners receive pensions below what is considered the poverty limit of €665 per month.
Looking at the actual expenditure on beneficiaries, Greece’s figures don’t stand out as exceptional and are instead on par with the EU average.”

(Nardelli, Alberto: “ Unsustainable futures? The Greek pensions dilemma explained“; Guardian, 15 June 2015; at http://www.theguardian.com/business/2015/jun/15/unsustainable-futures-greece-pensions-dilemma-explained-financial-crisis-default-eurozone)

There is no doubt a large financial burden form the pension schemes – but they provide at an individual level a very modest income:

“What makes the country’s pension system unsustainable is not the specific size of each individual pension, but the overall cost of a grossly inefficient and badly funded system (yes, mainly due to of decades of endemic tax evasion that means as much tax revenue slips through Athens’ fingers as it collects). According to analysis by Macropolis, the average pension in Greece is roughly €700 per month, while the supplementary one is €169.
The same analysis also shows that nearly 90% (€2.07bn) of the total monthly expenditure (€2.35bn) on pensions in March went towards the main pension.
It also reveals that only 0.6% of supplementary pensions were above €500 a month.
For 60% of pensioners the total gross monthly intake is below €800. In addition, many retirees in Greece have already seen their pensions cut. Some by a third, others by nearly 50%.

(Nardelli,; Guardian, 15 June 2015; Ibid)

Moreover, although cutting them might shave off some debt – not only is this unable to repair the basic financial problem of a dependent economy:

“In 2012, pension funds, which were obliged under a law introduced in 1950 by the then king of Greece, Paul I, to keep a minimum of 77% of their assets in government bonds, took an €8.3bn hit following the restructuring of sovereign debt.
Nearly a third of what pension funds have lost since then is due to a fall in contributions on the back of surging unemployment. The unemployment rate is still painfully high (26.6%, while in 2009 it was 9.5%), and nearly eight out of 10 of the country’s jobless have been out of work for 12 months or more.
Any saving brought about by simply purging early retirees’ benefits, cutting supplementary pensions horizontally across the board, or revenue raised by squeezing a drastically depleted pool of taxpayers, would in the short-term allow Greece to unlock the €7bn tranche of bailout funds it needs to carry on servicing its debt (and not default).
However, it would do little to solve the underlying challenges in the longer term.”

(Nardelli,; Guardian, 15 June 2015; Ibid)

Debt and printing money drive Greek Inflation

As discussed in prior sections, the ruling class used inflationary funding to enable it to fool and quieten the working classes. The scale of this is shown below.

“Greece has had a tricky time with its finances. In the 1990s it consistently ran significant budget deficits while using the Drachma. As a result of this economic mismanagement it joined the Euro in 2001, rather than 1999 like many other EU nations.” (Buchanan, Rose T; “Greece debt crisis explained: A history of just how the country landed itself in such a mess”; The Independent 4 July 2015; http://www.independent.co.uk/news/world/europe/greece-debt-crisis-explainer-a-history-of-how-the-country-landed-itself-in-such-a-mess-10365798.html)

The following Graph 4, from the ‘Michael Roberts Blog,” tracks the inflation to the deflation tipping point, after the debt crisis became evident:

Greece5

(Roberts M; ‘Greece Cannot Escape”; 2nd Nov 2014: https://thenextrecession.wordpress.com/2014/02/11/greece-cannot-escape/)

However, once it was in the Eurozone, Greece’s government could no longer so easily use inflationary economics to easily boost living standards, as it was bound by the Eurozone and the single currency.

The alternative of devaluing its currency to boost its exports was also not possible. This left only loans. Since it was now the era of financial ‘hot money’ and rampant money-speculation had become standard, this was easy at first, and the inflation graph shows that even the loan-injection money fueled a degree of inflation. But the spigot was soon to be turned off with the Wall Street crash:

“Shortly after joining the single currency, Greece enjoyed a period of growth (2001-2007). However, economist and analysts have retrospectively labeled this boom as “unsustainable,” pointing out that Greece (very broadly speaking) profited off the cheap loans available from the EU. This house of cards came tumbling down with the financial crash of 2008. Like many other countries in the EU Greece was seriously affected, but it was unable to climb out of the hole as it had in the past by printing more currency (thus boosting the economy) as the Euro was controlled by the European Central Bank (ECB). Unemployment spiraled to 28 per cent.”

(Buchanan, Rose T; “Greece debt crisis explained: A history of just how the country landed itself in such a mess”; The Independent 4 July 2015; http://www.independent.co.uk/news/world/europe/greece-debt-crisis-explainer-a-history-of-how-the-country-landed-itself-in-such-a-mess-10365798.html)

Greece’s relationship to the EU was as a dependent colony to the leading capitalist countries of the EU. These were of course Germany and also France.
International agencies progressively lent Greek governments large amounts of money. Consequently, Greece progressively developed an external debt of gigantic proportions as seen below in the brown/dark red line (Graph 5):

Greece6

What is the nature of these debt burdens that the Greek government faces?
The German locomotive pushing the EU economy – needed markets. The “under-developed” Southern perimeter of the EU was one of the natural “new” markets:

“Economist Paul Krugman wrote in February 2012:

“What we’re basically looking at…is a balance of payments problem, in which capital flooded south after the creation of the euro, leading to overvaluation in southern Europe.”

He continued in June 2015:

“In truth, this has never been a fiscal crisis at its root; it has always been a balance of payments crisis that manifests itself in part in budget problems, which have then been pushed onto the center of the stage by ideology.”

The translation of trade deficits to budget deficits works through sectoral balances. Greece ran current account (trade) deficits averaging 9.1% GDP from 2000–2011. By definition, a trade deficit requires capital inflow (mainly borrowing) to fund; this is referred to as a capital surplus or foreign financial surplus. This can drive higher levels of government budget deficits, if the private sector maintains relatively even amounts of savings and investment, as the three financial sectors (foreign, government, and private) by definition must balance to zero.
While Greece was running a large foreign financial surplus, it funded this by running a large budget deficit. As the inflow of money stopped during the crisis, reducing the foreign financial surplus, Greece was forced to reduce its budget deficit substantially. Countries facing such a sudden reversal in capital flows typically devalue their currencies to resume the inflow of capital; however, Greece cannot do this, and has suffered significant income (GDP) reduction, another form of devaluation.”

(https://en.wikipedia.org/wiki/Greek_government-debt_crisis#/media/File:HellenicOeconomy(inCurrentEuros).png)

Lord Kaldor’s warnings about this developing were discussed above.

Who owns this debt?

Graph 6: Current account imbalances in the European Union (1997–2014)

The graph below (from Wikipedia at: https://en.wikipedia.org/wiki/File:Current_account_imbalances_EN_(3D).svg)
shows that one of the major owners is Germany. In more detail, the ‘Economist Online” of October 2011 described the major ownership of the Greek debt. The main institutions owning the Greek debt are the IMF, the European Central Bank (ECB) and various European governments:

“Greece has total debts of €346.4bn. About a third of this debt is in public hands (34.8% is attributable to the IMF, ECB and European governments), roughly another third is in Greek hands (28.8%, essentially for banks) with the remainder (36.4%) held by non-Greek private investors.
(http://economistonline.muogao.com/2011/10/who-owns-greek-debt.html)

Greece7

And the New York Times Business news cites similar data:

“Almost two-thirds of Greece’s debt, about 200 billion euros, is owed to the eurozone bailout fund or other eurozone countries. Greece does not have to make any payments on that debt until 2023”. (Editor: Graph 7: below graphically displays the ownership of the debt.)

Greece8

Greece’s debt crisis explained” – International Business; New York Times updated July 27, 2015 http://www.nytimes.com/interactive/2015/business/international/greece-debt-crisis-euro.html?_r=0

During this period, Greece’s finances were monitored by external agencies, largely those who had loaned monies to Greece. These were the International Monetary Fund (IMF), the European Community (EU) and the European Central Bank (ECB). These formed the so-called Troika. The Troika was to become hated by the Greek peoples as they plunged Greece into major social chaos and forced the living standards of the Greek people down.

As the New York Times comments, in many ways the “crisis” can be considered as a manufactured one as only a portion of debt is coming due in the short term:

“The International Monetary Fund has proposed extending the grace period until mid-century. So while Greece’s total debt is big—as much as double the country’s annual economic output—it might not matter much if the government did not need to make payments for decades to come. By the time the money came due, the Greek economy could have grown enough that the sum no longer seemed daunting.
In the short term, though, Greece has a problem making payments due on loans from the International Monetary Fund and on bonds held by the European Central Bank. Those obligations amount to more than 24 billion euros through the middle of 2018, and it is unlikely that either institution would agree to long delays in repayment.”
Greece’s debt crisis explained” – International Business; New York Times updated July 27, 2015 http://www.nytimes.com/interactive/2015/business/international/greece-debt-crisis-euro.html?_r=0

Two additional problems have conspired to make the “original sin” of debt – of even more enormous consequence.
Firstly, quite early on during this crisis, it was clear to the Troika lenders that the Greek government was in trouble in repaying any significant fraction of this debt. However this was ignored. In fact the IMF – despite its own rules and despite the worries about “default” – continued to fuel the fire of debt by giving more loans.

Then secondly, to worsen matters, the Greek government falsified data about the extent of its debt, and was helped by the greed of USA banking capital.

As early as 2004, in its negotiations with the EU, the ruling class of Greece falsified the degree of its debt. Goldman Sachs – the giant stockbroker and trader bank of Wall Street, aided the Greek government in doing this:

“In 2001, Greece was looking for ways to disguise its mounting financial troubles. The Maastricht Treaty required all Eurozone member states to show improvement in their public finances, but Greece was heading in the wrong direction. Then Goldman Sachs came to the rescue, arranging a secret loan of 2.8 billion euros for Greece, disguised as an off-the-books “cross-currency swap”—a complicated transaction in which Greece’s foreign-currency debt was converted into a domestic-currency obligation using a fictitious market exchange rate.

As a result, about 2 percent of Greece’s debt magically disappeared from its national accounts. Christoforos Sardelis, then head of Greece’s Public Debt Management Agency, later described the deal to Bloomberg Business as “a very sexy story between two sinners.” For its services, Goldman received a whopping 600 million euros ($793 million), according to Spyros Papanicolaou, who took over from Sardelis in 2005. That came to about 12 percent of Goldman’s revenue from its giant trading and principal-investments unit in 2001—which posted record sales that year. The unit was run by Blankfein.

Then the deal turned sour. After the 9/11 attacks, bond yields plunged, resulting in a big loss for Greece because of the formula Goldman had used to compute the country’s debt repayments under the swap. By 2005, Greece owed almost double what it had put into the deal, pushing its off-the-books debt from 2.8 billion euros to 5.1 billion. In 2005, the deal was restructured and that 5.1 billion euros in debt locked in. Perhaps not incidentally, Mario Draghi, now head of the European Central Bank and a major player in the current Greek drama, was then managing director of Goldman’s international division.”

(Robert B. Reich ‘How Goldman Sachs Profited From the Greek Debt Crisis”; The Nation16th July 2015; http://www.thenation.com/article/goldmans-greek-gambit/)

Such was the pervasive greed, that of course such ‘creative’ financing’ was standard, as explained by Robert Reich:

“Greece wasn’t the only sinner. Until 2008, European Union accounting rules allowed member nations to manage their debt with so-called off-market rates in swaps, pushed by Goldman and other Wall Street banks. In the late 1990s, J.P.Morgan enabled Italy to hide its debt by swapping currency at a favorable exchange rate, thereby committing Italy to future payments that didn’t appear on its national accounts as future liabilities. But Greece was in the worst shape, and Goldman was the biggest enabler. Undoubtedly, Greece suffers from years of corruption and tax avoidance by its wealthy. But Goldman wasn’t an innocent bystander: It padded its profits by leveraging Greece to the hilt—along with much of the rest of the global economy. Other Wall Street banks did the same. When the bubble burst, all that leveraging pulled the world economy to its knees.”

(Robert B. Reich ‘How Goldman Sachs Profited From the Greek Debt Crisis”; The Nation16th July 2015; http://www.thenation.com/article/goldmans-greek-gambit/)

Of course such greed driven lying enabled the Greek Government to gain more loans. This was of itself a problem since the country was developing intractable recession.

The Crisis heats up and the infamous Troika Memorandum

By 2009, significant fears that Greece would default on its loans prompted alarm. The Troika made moves to yet another loan – this time of $110 billion – but only if there were significant “austerity measures.” Of course this was intended to be an “austerity” for the working classes and not for the ruling classes:

“From late 2009, fears of a sovereign debt crisis developed among investors concerning Greece’s ability to meet its debt obligations due to strong increase in government debt levels. This led to a crisis of confidence, indicated by a widening of bond yield spreads and risk insurance on credit default swaps compared to other countries, most importantly Germany. Downgrading of Greek government debt to junk bonds created alarm in financial markets.

“On 2 May 2010, the Eurozone countries and the International Monetary Fund agreed on a €110 billion loan for Greece, conditional on the implementation of harsh austerity measures. In October 2011, Eurozone leaders also agreed on a proposal to write off 50% of Greek debt owed to private creditors, increasing the EFSF to about €1 trillion and requiring European banks to achieve 9% capitalization to reduce the risk of contagion to other countries. These austerity measures have proved extremely unpopular with the Greek public, precipitating demonstrations and civil unrest.”

(https://en.wikipedia.org/wiki/Greek_government-debt_crisis#/media/File:HellenicOeconomy(inCurrentEuros).png)

It was the collapse of the international financial and banking industries from the USA sub-prime crisis which rapidly became an international financial crisis, that mushroomed the Greek situation into a crisis. Greece had no choice but to reveal a truer picture of its deficit financing to the world’s creditors to seek more credit:

“Greece became the epicenter of Europe’s debt crisis after Wall Street imploded in 2008. With global financial markets still reeling, Greece announced in October 2009 that it had been understating its deficit figures for years, raising alarms about the soundness of Greek finances. Suddenly, Greece was shut out from borrowing in the financial markets. By the spring of 2010, it was veering toward bankruptcy, which threatened to set off a new financial crisis.”

“Greece’s debt crisis explained” – International Business; New York Times updated July 27, 2015 http://www.nytimes.com/interactive/2015/business/international/greece-debt-crisis-euro.html?_r=0

Up to around 2011, the loan monies in Greece continued to drive an inflation.
But then a sharp deflation began, as the Troika turned the screw on Greece. The Troika insisted on marked cuts in the living standards of the Greek people the working lass and peasantry. Not the standard of the ruling class of course who has moved its savings out of reach of the Greek state or the Troika. The Troika’s conditions are noted here:

“The so-called troika — the International Monetary Fund, the European Central Bank and the European Commission — issued the first of two international bailouts for Greece, which would eventually total more than 240 billion euros, or about $264 billion at today’s exchange rates. The bailouts came with conditions. Lenders imposed harsh austerity terms, requiring deep budget cuts and steep tax increases. They also required Greece to overhaul its economy by streamlining the government, ending tax evasion and making Greece an easier place to do business.”

“Greece’s debt crisis explained” – International Business; New York Times updated July 27, 2015 http://www.nytimes.com/interactive/2015/business/international/greece-debt-crisis-euro.html?_r=0

Of course the Greek capitalists complied, and drove down and depressed the wage rates of the Greek people:

“It’s true that the crushing of the living standards and wage earnings of Greek households is making Greek industry more ‘competitive’ – labour costs per unit of (falling) production have dropped 30% since 2010 (See Graph 8 below).

Greece9

((Roberts M; ‘Greece Cannot Escape”; 2nd Nov 2014: https://thenextrecession.wordpress.com/2014/02/11/greece-cannot-escape/)

Again – the burden of ‘austerity’ – was laid only on the working class of Greece:

“When Greece did cut some of its spending, the EU and ECB asked for a reduction in wages rather than a cut in spending. So – for example – while the military budget remains intact, soldiers have seen their wages fall by 40 per cent. Their experience is replicated across other public sector fields – notably in nurses and doctors”. Buchanan, Rose T; “Greece debt crisis explained: A history of just how the country landed itself in such a mess”; The Independent 4 July 2015; http://www.independent.co.uk/news/world/europe/greece-debt-crisis-explainer-a-history-of-how-the-country-landed-itself-in-such-a-mess-10365798.html

An external – German – research agency found that indeed, it was the poor that had suffered disproportionate cuts as compared to the rich:

“The poorest households in the debt-ridden country lost nearly 86% of their income, while the richest lost only 17-20%.  The tax burden on the poor increased by 337% while the burden on upper-income classes increased by only 9% This is the result of a study that has analyzed 260.000 tax and income data from the years 2008 – 2012.
– The nominal gross income of Greek households decreased by almost a quarter in only four years.
– The wages cuts caused nearly half of the decline.
– The net income fell further by almost 9 percent, because the tax burden was significantly increased
–  While all social classes suffered income losses due to cuts, tax increases and the economic crisis, particularly strongly affected were households of low- and middle-income. This was due to sharp increase in unemployment and tax increases, that were partially regressive.
– The total number of employees in the private sector suffered significantly greater loss of income, and they were more likely to be unemployed than those employed in the public sector.
-From 2009 to 2013 wages and salaries in the private sector declined in several stages at around 19 percent. Among other things, because the minimum wage was lowered and collective bargaining structures were weakened. Employees in the public sector lost around a quarter of their income.

Unemployment & Early Retirement
Unemployment surged from 7.3% in the Q2 2008 to 26.6% in the Q2 2014. among youth aged 15-24, unemployment had an average of 44%.
Early retirement in the Private Sector increased by 14%.
Early retirement in the Public Sector* increased by 48%
The researchers see here a clear link to the austerity policy, that’s is the Greek government managed to fulfill the Troika requirements for smaller public sector. However, this trend caused a burden to the social security funds.
* Much to KTG’s knowledge public servants with 25 years in the public administration rushed to early retirement in 2010 out of fear of further cuts in their wages and consequently to their pension rights.

Taxes
Taxes were greatly increased, but they had a regressive effect.
Since beginning of the austerity, direct taxes increased by nearly 53%, while indirect taxes increased by 22 percent.
The taxation policy has indeed contributed significantly to the consolidation of the public budget, but by doing so the social imbalance was magnified.

Little has been done against tax avoidance and tax evasion, however, the tax base was actually extended “downwards” with the effect that households with low-income and assets were strongly burdened.
Particularly poorer households paid disproportionately more in taxes and the tax burden to lower-income rose by 337%. In comparison, the tax burden to upper-income households rose by only 9%.
In absolute euro amounts, the annual tax burden of many poorer households increased “only” by a few hundred euros. However, with regards to the rapidly declining of incomes and rampant unemployment, this social class was over-burdened with taxes.

The Poor suffered more
On average, the annual income of Greek households before taxes fell from €23,100 euros in 2008 to just below €17,900 euros in 2012. This represents a loss of nearly 23 percent.
The losses were significantly different to each income class with the poorest households to have suffered the biggest losses.
Almost one in three Greek household had to make it through 2012 with an annual income below €7,000”.
(Research of the “German Institute for Macroeconomic Research (IMK) affiliated with the Hans Böckler Foundation”; given blog ‘Keep Talking Greece’; by 20 March 2015; at http://www.keeptalkinggreece.com/2015/03/20/shocking-austerity-greeces-poor-lost-86-of-income-but-rich-only-17-20/

Both the Greek ruling class and the Troika saw that this squeeze on the poor and working class, was creating such a social upheaval, as to be potentially pre-revolutionary. Yet they were caught, since the alternatives were dismal for the international capitalist. Even the IMF’s own rules were flouted. In 2010 the situation was as follows in Michael Roberts telling:

“The irony is that while austerity in Greece continues to be applied mercilessly, the IMF recently issued a report that concluded that the Troika’s approach was mistaken in imposing severe fiscal retrenchment back in May 2010 when Greece could no longer finance its spending through borrowing in bond markets (http://www.imf.org/external/pubs/ft/scr/2013/cr13156.pdf).

Back then, the Troika had three options. First, it could have provided a massive fiscal transfer to the Greek government to tide it over without demanding massive cuts in public spending that eventually led to a fall in Greek real GDP of nearly 20%, unemployment of over 25% and government debt to GDP of 170%, with economic depression likely to continue out to the end of the decade.  Or it could have allowed the Greek government to ‘default’ on its debts to the banks, pension funds and hedge funds and negotiate an ‘orderly haircut’ on those debts.  But the Troika did neither and opted instead for a third way.  It insisted that in return for bailout funds the Greek government meet its obligations in full to all its creditors by switching all its available revenues to paying its debts at the expense of jobs, health, education and other public services.

The Troika insisted on this because it reckoned 1) that austerity would be shortlived and economic growth would quickly return and 2) if the banks and others took a huge hit on their balance sheets from a Greek default it would put European banks in danger of going bust (Greek banks first).  There could be ‘contagion’ if other distressed Eurozone governments also opted not to pay their debts, using Greece as the precedent.  Of course, economic growth has not returned and despite huge efforts on the part of Greek governments to meet fiscal targets through unprecedented austerity, government debt has increased rather than fallen and the economy has nosedived.

Eventually, the Troika had to agree that the private sector took a ‘haircut’ after all, massaged as it was with cash sweeteners and new bonds with high yields.  Now the IMF in its report admits that austerity was too severe and debt ‘restructuring’ should have happened from the beginning.  The IMF, now in its semi-Keynesian mode, tries to put the blame for the failure to do this on the EU leaders and the ECB, which has not made the latter too happy, especially as the current IMF chief, Lagarde was strongly in favour of the austerity plan when she was French finance minister in 2010.

“If Greeks had defaulted back in 2010, that could have led to other defaults and Europe’s banks were in no state to absorb such losses.  As a recent study shows http://www.voxeu.org/article/ez-banking-union-sovereign-virus), German banks were heavily overleveraged back in 2010 and they are not much better even now.  There was no way the German government was going to put German banks in jeopardy and allow the ‘profligate’ Greeks to get a huge handout of German taxpayers money to boot.  No, the Greeks had to pay their debts, just as the Germans had to pay their reparations to the French after 1918, even if it meant Germany was plunged into permanent depression.  Ironically, the Germans did not and have not paid promised billions in reparations to the Greeks after 1945 – something the Greeks are pursuing in negotiations!”

(Michael Roberts Blog: “Greece, the IMF and debt default; 16th June 2013;“https://thenextrecession.wordpress.com/2013/06/16/greece-the-imf-and-debt-default/)

As noted before, this fueling of the debt by new loans, was against even the principles of the International Monetary Fund (IMF), and senior strategists in the IMF warned that the polices of the IMF in regards to Greece were seriously in error, from the year 2010.

As stated above, one underlying reason on insisting that the Greek Government paid its debt fully, was simply the usurer’s wish to ensure that debts owed by Greece to both France and Germany would be honoured. German and French banks had become vulnerable by over-leveraging themselves. (i.e they had loaned so much money that their actual capital holdings were unable to support them if there was a “run” on their deposits). The Eurozone banks had become very vulnerable:

“The Table below shows the degree of ‘domestic leverage’ of the systemically important banks in major Eurozone countries .. in most countries the domestic banking system would not survive a Greek-style ‘haircut’ on public debt. (In March 2012, holders of Greek bonds had to accept a nominal haircut of over 50%, and on a mark-to-market basis the haircut was over 80%. It is apparent that no bank that has a sovereign exposure worth over 100% of its capital would survive such a loss).

Table 4: Domestic sovereign debt leverage (sovereign exposure/capital)

Greece Table

Source: CEPS database. (From Roberts 16 June 2013; “Greece, the IMF and debt default ibid) Michael Roberts Blog: “Greece, the IMF and debt default; 16th June 2013; https://thenextrecession.wordpress.com/2013/06/16/greece-the-imf-and-debt-default/)

Amazingly, the IMF policy remained unchanged – new loans were issued to Greece – at least up till May 2015:

“Greece’s onerous obligations to the IMF, the European Central Bank and European governments can be traced back to April 2010, when they made a fateful mistake. Instead of allowing Greece to default on its insurmountable debts to private creditors, they chose to lend it the money to pay in full.
At the time, many called for immediately restructuring privately held debt, thus imposing losses on the banks and investors who had lent money to Greece. Among them were several members of the IMF’s board and Karl Otto Pohl, a former president of the Bundesbank and a key architect of the euro. The IMF and European authorities responded that restructuring would cause global financial mayhem. As Pohl candidly noted, that was merely a cover for bailing out German and French banks, which had been among the largest enablers of Greek profligacy.

Ultimately, the authorities’ approach merely replaced one problem with another: IMF and official European loans were used to repay private creditors. Thus, despite a belated restructuring in 2012, Greece’s obligations remain unbearable — only now they are owed almost entirely to official creditors.

Five years after the crisis started, government debt has jumped from 130 percent of gross domestic product to almost 180 percent. Meanwhile, a deep economic slump and deflation have severely impaired the government’s ability to repay.
Almost everyone now agrees that pushing Greece to pay its private creditors was a bad idea. The required fiscal austerity was simply too great, causing the economy to collapse. The IMF acknowledged the error in a 2013 report on Greece. In a recent staff paper, the fund said that when a crisis threatens to spread, it should seek a collective global solution rather than forcing the distressed economy to bear the entire burden. The IMF’s chief economist, Olivier Blanchard, has warned that more austerity will crush growth.

Oddly, the IMF’s proposed way forward for Greece remains unchanged: Borrow more money (this time from the European authorities) to repay one group of creditors (the IMF) and stay focused on austerity. The fund’s latest projections assume that the government’s budget surplus (other than interest payments) will reach 4.5 percent of GDP, a level of belt-tightening that few governments have ever sustained for any significant period of time.

Following Germany’s lead, IMF officials have placed their faith in so-called structural reforms — changes in labor and other markets that are supposed to improve the Greek economy’s longer-term growth potential. They should know better. The fund’s latest World Economic Outlook throws cold water on the notion that such reforms will address the Greek debt problem in a reliable and timely manner. The most valuable measures encourage research and development and help spur high-technology sectors. All this is to the good, but such gains are irrelevant for the next five years. The priority must be to prevent Greece from sinking deeper into a debt-deflation spiral. Unfortunately, some reforms will actually accelerate the spiral by weakening demand.

On April 9, Greece repaid 450 million euros ($480 million) to the IMF, and must pay another 2 billion in May and June. The IMF’s managing director, Christine Lagarde, has made clear that delays in repayments will not be tolerated.

“I would, certainly for myself, not support it,” she told Bloomberg Television.”

Ashoka Mody; Bloomberg 81 April 21 2015; The IMF’s Big Greek Mistake; http://www.bloombergview.com/articles/2015-04-21/imf-needs-to-correct-its-big-greek-bailout-mistake

Recall – Lagarde was once the Minister of Finance for France:

Graph number 5 (see above) displays that it is not only Greece in
hock” to Germany, but there are several leading Eurozone states in debt to Germany. In especial note the deficits of France and of Italy.

This is the second reason – at least for German imperialism – on insisting that the Greek Government paid its debt fully.
If the Greeks are allowed to default, what happens to the other loans that are outstanding? It has long been recognised that Germany has been running a huge trade surplus, and it has been under pressure to alleviate this for some time:

“For years, Germany has been running a large current account surplus, meaning that it sells a lot more than it buys. The gap has only grown since the start of the crisis, reaching a new record of 215.3 billion euros ($244 billion) in 2014. Such insufficient German demand weakens world growth, which is why the U.S. Treasury and the International Monetary Fund have long prodded the country to buy more. Even the European Commission has concluded that Germany’s current-account imbalance is “excessive.”

(Ashoka Mody, Bloomberg188 July 17, 2015, ‘Germany, Not Greece, Should Exit the Euro’)

Any lifting of the restrictions upon Greece will lead to repercussions as to what happens to the debts of these other leading countries. It is no doubt, for this reason, that both Italy and France have been trying to ease pressures from Germany, arguing that there must be a debt restructuring.

This fits with the later 2015 U-Turn of Cristine Lagarde and the IMF (Discussed in section 9 below) – who are now at the last moment – urging the German government to reduce the obligations of the Greek government of Tsipras. We believe also, that this U-Turn supports the USA wish to attack the German government’s current rising economic strength.

Moreover, the USA government itself – suffers from an astronomical debt.

7. The Marxist View of ‘National Debt’ under capitalism

What do Marxists and other informed economists make of the notion of a national Debt? Falling into debt of a country – or large institutions – has been a historical feature of the growth of capital. Karl Marx pointed this out in ‘Capital’, saying that the “only part of the so-called national wealth that actually enters the possession of modern people is their national debt.” In full:

“The system of public credit, i.e., of national debts, whose origin we discover in Genoa and Venice as early as the Middle Ages, took possession of Europe generally during the manufacturing period. The colonial system with its maritime trade and commercial wars served as a forcing-house for it. … National debts, i.e., the alienation of the state – whether despotic, constitutional or republican – marked with its stamp the capitalistic era. The only part of the so-called national wealth that actually enters into the collective possessions of modern peoples is their national debt. Hence, as a necessary consequence, the modern doctrine that a nation becomes the richer the more deeply it is in debt. Public credit becomes the credo of capital. And with the rise of national debt-making, want of faith in the national debt takes the place of the blasphemy against the Holy Ghost, which may not be forgiven.

The public debt becomes one of the most powerful levers of primitive accumulation. As with the stroke of an enchanter’s wand, it endows barren money with the power of breeding and thus turns it into capital, without the necessity of its exposing itself to the troubles and risks inseparable from its employment in industry or even in usury. The state creditors actually give nothing away, for the sum lent is transformed into public bonds, easily negotiable, which go on functioning in their hands just as so much hard cash would. But further, apart from the class of lazy annuitants thus created, and from the improvised wealth of the financiers, middlemen between the government and the nation – as also apart from the tax-farmers, merchants, private manufacturers, to whom a good part of every national loan renders the service of a capital fallen from heaven – the national debt has given rise to joint-stock companies, to dealings in negotiable effects of all kinds, and to agiotage, in a word to stock-exchange gambling and the modern bankocracy.

At their birth the great banks, decorated with national titles, were only associations of private speculators, who placed themselves by the side of governments, and, thanks to the privileges they received, were in a position to advance money to the State. Hence the accumulation of the national debt has no more infallible measure than the successive rise in the stock of these banks, whose full development dates from the founding of the Bank of England in 1694. The Bank of England began with lending its money to the Government at 8%; at the same time it was empowered by Parliament to coin money out of the same capital, by lending it again to the public in the form of banknotes. It was allowed to use these notes for discounting bills, making advances on commodities, and for buying the precious metals. It was not long ere this credit-money, made by the bank itself, became. The coin in which the Bank of England made its loans to the State, and paid, on account of the State, the interest on the public debt. It was not enough that the bank gave with one hand and took back more with the other; it remained, even whilst receiving, the eternal creditor of the nation down to the last shilling advanced. Gradually it became inevitably the receptacle of the metallic hoard of the country, and the centre of gravity of all commercial credit. What effect was produced on their contemporaries by the sudden uprising of this brood of bankocrats, financiers, rentiers, brokers, stock-jobbers, &c., is proved by the writings of that time, e.g., by Bolingbroke’s”

(Marx, Karl: Capital Volume One Chapter Thirty-One: Genesis of the Industrial Capitalist; at: https://www.marxists.org/archive/marx/works/1867-c1/ch31.htm)

Not only is “National Debt” crucial for the capitalist, but it was coincident with the ‘credit system’, and this in turn was associated with an international trade of capital (i.e. money) and systems of “modern taxation”:

“With the national debt arose an international credit system, which often conceals one of the sources of primitive accumulation in this or that people. Thus the villainies of the Venetian thieving system formed one of the secret bases of the capital-wealth of Holland to whom Venice in her decadence lent large sums of money. So also was it with Holland and England. By the beginning of the 18th century the Dutch manufactures were far outstripped. Holland had ceased to be the nation preponderant in commerce and industry. One of its main lines of business, therefore, from 1701-1776, is the lending out of enormous amounts of capital, especially to its great rival England. The same thing is going on today between England and the United States. A great deal of capital, which appears today in the United States without any certificate of birth, was yesterday, in England, the capitalised blood of children.”

(Marx, Karl: Capital Volume One Chapter Thirty-One: Genesis of the Industrial Capitalist; at: https://www.marxists.org/archive/marx/works/1867-c1/ch31.htm)

Moreover, Marx points out that governments want loans for “extraordinary expenses”. This is because they do not want to tax the people too heavily lest it anger them. But eventually these loans will need an increase in taxes to pay the loan off. Then a vicious circle begins, where even more loans are needed to off-set the higher taxation burden:

“As the national debt finds its support in the public revenue, which must cover the yearly payments for interest, &c., the modern system of taxation was the necessary complement of the system of national loans. The loans enable the government to meet extraordinary expenses, without the tax-payers feeling it immediately, but they necessitate, as a consequence, increased taxes. On the other hand, the raising of taxation caused by the accumulation of debts contracted one after another, compels the government always to have recourse to new loans for new extraordinary expenses. Modern fiscality, whose pivot is formed by taxes on the most necessary means of subsistence (thereby increasing their price), thus contains within itself the germ of automatic progression. Overtaxation is not an incident, but rather a principle. In Holland, therefore, where this system was first inaugurated, the great patriot, DeWitt, has in his “Maxims” extolled it as the best system for making the wage labourer submissive, frugal, industrious, and overburdened with labour. The destructive influence that it exercises on the condition of the wage labourer concerns us less however, here, than the forcible expropriation, resulting from it, of peasants, artisans, and in a word, all elements of the lower middle class. On this there are not two opinions, even among the bourgeois economists. Its expropriating efficacy is still further heightened by the system of protection, which forms one of its integral parts.

(Marx, Karl: Capital Volume One Chapter Thirty-One: Genesis of the Industrial Capitalist; at: https://www.marxists.org/archive/marx/works/1867-c1/ch31.htm)

What were these “extraordinary expenditures” the state wished to fund? Even bourgeois economists recognise that wars were one key such expenditures:

“The Bank of England was created… explicitly,, to finance wars, in its case the Nine Years War with France which started in 1688……The Bank of France .. having been started with that name in 1800 specifically to satisfy Napoleon’s wartime financial needs”. (Dean and Pringle Ibid; ‘Central banks”; pp38; p. 42).

Modern bourgeois economists have of course long supported the principle of national debts. Maynard Keynes recognised the utility of deficit financing for the capitalist control of the state, as he stated:

“’Loan expenditure.. may .. enrich the community on balance”; ref 31: (Cited Van Der Pijl, K. ‘The making of an Atlantic ruling class”; p.17; London 2012).

While we cannot dwell further on the subject in this article, the amount of the USA current debt is astonishingly large. So there is nothing reprehensible about the Greek Debt per se. What is at issue is an international lack of confidence that the Greek state would be able to pay it back. There is no underlying manufacturing or trading base to support the debt, and will not be. Unless – a complete break with the past – is offered. However thus far, a meaningful solution has never been on offer by the Greek or international merchants of capital, to the Greek working people.

8. The Debt Crisis leads to an increasing struggle of the growing Greek working class and gives rise to the United Front of Syriza – the political parties of the left

By the time of the current era in 2000-2015, the Greek social and class structure had changed dramatically. Despite the absence of a major manufacturing sector, unemployment was rising, and the urban-rural divide was widening – even before the austerity moves of the Troika:

“Greece is still low on competitiveness and this undermines self-sustaining growth, with low employment rates, low R&D, high levels of poverty, especially in rural and remote areas. The Greek economy grew by 0.7 per cent in the 1980s, compared with 2.4 per cent in other EU states. Demographically, the number of over 65-year-olds, set to increase by 30 per cent between 2010 and 2050, with fewer people in employment, will create a massive dependency on social security and health care. Greece has the largest agricultural population in the EU, with a low capacity to attract foreign direct investment (FDI). The collapse of the Soviet Union and opening of markets in the Balkans means that many investors have relocated their activities in neighbouring countries.

Since 2004 there has been a drop in most manufacturing output (textiles, leather goods, paper, office equipment, furniture), steadily constant production of food, beverages, oil, with the only growth in tobacco, chemicals and plastic goods. Therefore, long-term stagnation in manufacturing has led the state to adopt ‘rescue’ interventions or public loans. Shipping and tourism contributes 17 per cent to gross domestic product (GDP) and employs 18 per cent of the working population. The uneven rural/urban divide is particularly acute as some areas, notably the islands and the farming communities, benefited more from Euro-funds for tourism or agridevelopment than others. Athens, in particular has had massive infrastructure developed.”

(Liddle, Joyce. “Regeneration and Economic Development in Greece:
De-industrialisation and Uneven Development “p.340; Local Government Studies; Vol. 35, No. 3, 335–354, June 2009)

Nonetheless, the weight of the working class had risen between 1991 and 2011, as had a class polarisation:

“Based on the Greek Statistic Service data for the fourth trimester of 2011 in comparison to those of 1991 consists in
1. an increase of the bourgeois class (3.4% from 1.4%) and of the rich rural strata (0.6% from 0.3%),
2. a huge decline of the traditional petit-bourgeois class (15.2% from 13.2%), and of the middle rural strata (2.2% from 3%),
3. a small increase of the new petit-bourgeois class (15.2% from 13.2%), due to the increasing demand of their abilities for the achievement of capital profitability, in parallel to an effort of their submission to the most direct capital exploitation and domination,
4. An important increase of the working class (62.2% from 47.5%), and
an important decrease of the poor rural strata (6% from 47.5%).
*In any case, what is clear is the tendency of intensification of class polarisation, which leads to the adoption of a social structure akin to that of other European countries (small number of farmers and of the traditional petit-bourgeois class, stable presence of the new petit-bourgeois class as the executive organizer of the productive process, broader bourgeoisie and heterogeneous uneven but
numerous working class”.

(Eirini Gaitanou. An examination of class structure in Greece, its tendencies of transformation amid the crisis, and its impacts on the organisational forms and structures of the social movement. At: http://www.academia.edu/9400998/An_examination_of_class_structure_in_Greece_its_tendencies_of_transformation_amid_the_crisis_and_its_impacts_on_the_organisational_forms_and_structures_of_the_social_movement).

Under these enormous burdens, the now sizeable working classes of Greece mounted serious struggles to resist “austerity.” The ruling classes struggled to implement their commitments to the EU and the IMF. Consequently a series of short lived coalition governments took power.

“Following the May 2012 legislative election where the New Democracy party became the largest party in the Hellenic Parliament, Samaras, leader of ND, was asked by Greek President Karolos Papoulias to try to form a government. However, after a day of hard negotiations with the other parties in Parliament, Samaras officially announced he was giving up the mandate to form a government. The task passed to Alexis Tsipras, leader of the SYRIZA (the second largest party) who was also unable to form a government. After PASOK also failed to negotiate a successful agreement to form a government, emergency talks with the President ended with a new election being called while Panagiotis Pikrammenos was appointed as Prime Minister in a caretaker government.
Voters once again took to the polls in the widely-watched June 2012 election. New Democracy came out on top in a stronger position with 129 seats, compared to 108 in the May election. On 20 June 2012, Samaras successfully formed a coalition with PASOK (now lead by former Finance Minister Evangelos Venizelos) and DIMAR. The new government would have a majority of 58, with SYRIZA, Independent Greeks (ANEL), Golden Dawn (XA) and the Communist Party (KKE) comprising the opposition. PASOK and DIMAR chose to take a limited role in Samaras’ Cabinet, being represented by party officials and independent technocrats instead of MPs.”

(https://en.wikipedia.org/wiki/Antonis_Samaras)

We discuss these parties below. The coalition government led by Samaras, proved to be another short lived and contentious government, as it toed the line of Troika conditions. As such it was unable to disguise its nature from the increasingly militant and impoverished working class of Greece.

By the time of the January 2015 elections, the situation had become even more parlous for Greece’s working people:

“Greece saw official unemployment rising up to 27% – and youth unemployment up to 50% – suffered a cumulative contraction of almost 25%, saw a massive reduction in wages and pensions, and witnessed the passage of massive legislation oriented towards privatizations, labor market liberalization, and neoliberal university reform.”

(Panagiotis Sotiris; https://viewpointmag.com/2015/01/28/a-strategy-of-ruptures-ten-theses-on-the-greek-future/)

A more credible “left” bulwark against the masses was necessary for the Greek ruling class. This coincided with a reformation of the Greek left. At this point we must discuss Syriza in more detail.

As seen, PASOK had fallen into rank opportunism and open betrayal of the working class. After ensuing scandals of corruption implicated the leader, Andreas Papandreou, its appeal to the workers and poor of Greece was falling fast:

“The socialist Prime Minister Andreas Papandreou and his key associates were under accusation of scandal, which involved party funding from illicit sources and revealed the extensive clientelistic linkages between business interests and politics which had been built up under PASOK’s eight-year rule.”

(Tsakatika, Myrto and Eleftheriou, Costas: “The Radical Left’s Turn towards Civil Society in Greece: One Strategy, Two Paths”; South European Society and Politics, 2013; p.3; http://dx.doi.org/10.1080/13608746.2012.757455)

The space on the left had opened up again. Who was there to fill it?
We reprise the main outlines of events, focusing on analyses by Syriza, the revisionist KKE, and the pro-Hoxha Anasintaxi.

After the destruction of many of its cadre after the Battle of Athens in 1949, the KKE slowly reformed, after having adopted some mistaken sectarian paths during the Second World War. The KKE went through several splits, summarized below:

“There have been a series of splits throughout the party’s history, the earliest one being the Trotskyist Organisation of Internationalist Communists of Greece.
In 1956, after the 20th Congress of the Communist Party of the USSR….
a faction created the Group of Marxist-Leninists of Greece (OMLE), which split from party in 1964, becoming the Organisation of Marxists-Leninists of Greece. In 1968, amidst the Greek military junta of 1967–1974 and the Soviet invasion of Czechoslovakia, a relatively big group split from KKE, forming KKE Interior, a Greek Nationalist Communist Party claiming to be directed from within Greece rather than from the Soviet Union.
In 1988 KKE and Greek Left (the former KKE Interior), along with other left parties and organisations, formed the Coalition of the Left and Progress.
Also in 1988, the vast majority of members and officials from Communist Youth of Greece (KNE), the KKE’s youth wing, split to form the New Left Current (NAR), drawing mainly youth in major cities, especially in Thessaloniki.
In the early 2000s, a small group of major party officials such as Mitsos Kostopoulos left the party and formed the Movement for the United in Action Left (KEDA), which in the 2007 legislative election participated in the Coalition of the Radical Left, which was to win the 2015 national elections with a plurality.”

(https://en.wikipedia.org/wiki/Communist_Party_of_Greece) and also see Tsakatika, Myrto and Eleftheriou, Costas: “The Radical Left’s Turn towards Civil Society in Greece: One Strategy, Two Paths”; South European Society and Politics, 2013; p.3; http://dx.doi.org/10.1080/13608746.2012.757455)

The Marxist Leninist party supporting Hoxha in Greece is ‘Αναρτήθηκε από’ or ‘Anasintaxi Organization’ (reorganization). They are also known as “The Movement for the Reorganization of the Communist Party of Greece 1918–55” – or KKE 1918-55. They characterize the KKE disintegration post-war as follows:

“The old revolutionary KKE, under the leadership of the then General Sceretary Nikos Zachariadis, was the only communist party from a capitalist not to have accepted Krushchevian revisionism. For this reason, it was eliminated by the brutal intervention of the soviet Krushchevian revisionists in 1955-1956 and replaced by the Greek Krushchevian revisionist party (“K”KE), a bourgeois, party of social-democratic type. More than 90% of the party members led by Nikos Zachariadis opposed and fiercely resisted Krushchevian revisionism and many tens of cadres were sent to exile in Siberia including Nikos Zachariadis himself who has murdered by the social-fascist clique of Brezhnev (CPSU) – Florakis (“K”KE) in August of 1973, in Sorgut, Siberia after of 17 years of exile. In 1968, “K”KE was split into two parties: the euro-communist part known as “K”KE (interior) and the Krushchevian-Brezhnevite part known as “K”KE. SYRIZA originates from the first part and, consequently, is a social-democratic and reformist party guided by a right opportunist general line and characterized by petty bourgeois class features”

Αναρτήθηκε από Anasintaxi Organization ‘Some questions and answers about the current situation in Greece’; Article to be published in “Unity & Struggle” (Extended version of an interview given to the comrades of Iran); march 30; 2015; at http://anasintaxi-en.blogspot.ca/2015/02/some-questions-and-answers-about.html)

The revisionist KKE’s attitude to the European Union is characterised as follows:

“It is important to clarify that, despite its verbal attacks against EU and the Eurozone, “K”KE does not put forward (not even for the sake of demagogy) the question of Greece’s immediate exit neither from the EU nor the Eurozone. In relation to Euro, the leadership of “K”KE has stated: “A solution outside the euro and return to the drachma in the present circumstances would be catastrophic” (30/5/2011), i.e. a position that is similar to the one expressed by the president of the Union of Greek Industrialists (20/3/2012)…: “Europe or chaos” This is also evident in the party’s program that was approved by its last congress). Since some time now, “K”KE has expressed the view that “the term “national dependence” is not applicable in contemporary conditions” (1/2/2005). After the 19th Congress, it has openly adopted Trotskyite positions that mention “imperialist Greece”, “imperialist Second World War” etc and are evident in the “Program” approved in the last party Congress: “the capitalism in Greece is in the imperialist stage of development” (“K”KE Program, p. 12, Athens 2013). Concerning the character of the Second World War it is claimed that: “the problem was not only with KKE but the overall strategy of the international communist movement before and during the Second World War. In 1941, another negative point was added when the correct assessment of the war as imperialist – with respect to both sides of capitalist states – was replaced by the position that it was only anti-fascist” (“Rizospastis,” 21/12/2104)”

Αναρτήθηκε από Anasintaxi OrganizationSome questions and answers about the current situation in Greece’; Article to be published in “Unity & Struggle” (Extended version of an interview given to the comrades of Iran); march 30; 2015; at http://anasintaxi-en.blogspot.ca/2015/02/some-questions-and-answers-about.html)

As PASOK had been fully exposed, a general disillusion enabled the formation of Synaspismo (Coalition of the Left and Progress) in 1991:

“Synaspismos emerged initially as an electoral coalition at the late 1980s, with the pro-Soviet Communist Party of Greece (KKE) and the Greek Left, one of the successors of the eurocommunist KKE Interior, as its largest constituents. The Party of Democratic Socialism, a splinter from the Union of the Democratic Centre which occupied a similar position to PASOK, was the largest non-Communist member party.”

(https://en.wikipedia.org/wiki/Synaspismos).

The many parties of the left are displayed in the diagram below, which helps to show the umbrella nature of the Syriza United front. Beneath the figure itself (at the site “Lenin’s Tomb”) is a potted history of these factions. (Seymour, R. ‘Map of the Greek Radical Left’ February 9, 2015; http://www.leninology.co.uk/2015/02/map-of-greek-radical-left.html). However the figure does not explain include the currents of the Marxist-Leninist left. The OMLE was a pro-Maoist party. We further discuss at points, the positions of Αναρτήθηκε από Anasintaxi Organization, the pro-Hoxha Marxist-Leninists. Here we continue to trace the currents of Syriza.

The revisionist KKE joined Synaspismo, which contested three national elections (June 1989, November 1989, 1990). For a period they joined in Government alliances with mainstream centre-right New Democracy, ND under the premiership of Tzannis Tzannetakis. This collaboration was not viewed kindly by the increasingly politicised Greek working class and petit-bourgeois:

“The government’s official purpose was to send the former prime minister to trial and impose a clean-up of the corrupt clientelistic politics of the time… (But) leftist voters did not appreciate the decision of the left parties’ leaderships to engage in government cooperation with the centre-right; moreover, the stated aim of the Tzannetakis government was not achieved: after a long judicial process there was ultimately very little ‘cleaning up’.. the KKE pulled out of the coalition and lost 40 per cent of its cadres after a major party split in the party’s 13th Congress (February 1991). The former coalition was re-established as a unified party… In the first part of the 1990s, the Greek left as a whole was thus delegitimised in the eyes of its traditional electorate, bruised by participation in government with the centre-right and experienced internal strife and extensive demobilisation of party members, while the collapse of the Soviet Union (USSR) added an identity crisis to its woes”. (Tsakatika, and Eleftheriou, Ibid; 2013).

Greece10

The United Front of Synapsimos – or Syn as it is known – tried to appeal to a broad front, and one that explicitly crossed class lines:

“SYN.. in 2001… established a political and electoral alliance with a host of smaller parties, groups and networks of the extra-parliamentary left in the context of the Synaspismo Pizospastikh Aristra (Coalition of the Radical Left [SYRIZA])… SYN was and remained (until 2012) the largest party in the SYRIZA coalition, representing at least 80 per cent of its cadres, activists and voters. SYRIZA was one of the core choices of the party’s new leadership after 2000.. ”
(Tsakatika, and Eleftheriou, Ibid; 2013).

“SYN.. defined itself as a pluralist left party of democratic socialism, neither orthodox communist nor social democratic, supporting a mixed economy and placing a fresh emphasis on ‘new issues’, particularly feminism, democratic rights and the environment. SYN’s original core consisted of cadres whose political origins lay in the party of the Ellhnikh Aristra ́ (Greek Left [EAR]) founded in 1987 (in turn established after the KKE-es leadership’s decision to dissolve the party and contribute to the foundation of a non-communist left party) and a large group of dissidents who broke ranks with the KKE in 1991. It also incorporated a number of individuals and small groups coming from left social democracy, ecologism and the extra-parliamentary left, as well as independents.

The party’s founding document appealed to ‘the men and women of work and culture, the young and the excluded’. This was explicitly not a class appeal, since SYN effectively presented itself as a catch-all party throughout the 1990s, one that aimed to be present in ‘every nook and cranny of Greek society’. There was also an explicit trans-class appeal to groups affected by gender inequality and environmental degradation. In practice, most of its vote share, membership and cadres have mainly been from among the ranks of highly educated employees in the public sector, professionals and small employers. However, as a result of changes in internal factional dynamics, with the radical, protest-oriented

moderate (and sympathetic to government cooperation with PASOK) Anan vtikh ryga (Renewal Wing) in the party leadership after 2000, SYN shifted to a broadly defined class appeal aimed at targeting, primarily, younger cohorts and, secondarily, precariously employed workers in the services sector, social categories that were politically under-represented”
(Tsakatika, and Eleftheriou, Ibid; 2013).

The later creation of Syriza, was also a United Front. The word commonly means “coalition of the radical left”; or originally “coming from the roots” (Wikipedia):

“The Coalition of the Radical Left (Greek: Synaspismós Rizospastikís Aristerás), mostly known by its acronym, Syriza which signifies a Greek adjective meaning “from the roots”, is a left-wing political party in Greece, originally founded in 2004 as a coalition of left-wing and radical left parties. It is the largest party in the Hellenic Parliament…
The coalition originally comprised a broad array of groups (thirteen in total) and independent politicians, including social democrats, democratic socialists, left-wing patriots, feminists and green leftist groups, as well as Maoist, Trotskyist, Eurocommunist but also Eurosceptic components. Additionally, despite its secular ideology, many members are Christians who, like their atheistic fellow members, are opposed to the privileges of the state-sponsored Orthodox Church of Greece. From 2013 the coalition became a unitary party, although it retained its name with the addition of “United Social Front.”
http://en.wikipedia.org/wiki/Syriza

Syriza between 2004-8 was led by Alekos Alavanos. They created a vigorous youth movement in the driving force of the Ellhniko ́ Koinvniko ́ Foroym (Greek Social Forum [EKF]) which later organised the 4th European Social Forum (ESF) that took place in Athens in 2006. The Syriza United Front did undergo some splinters:

“In March 2009, some 10 small groups and parties formed another coalition, Antarsya (literally, the Anti-Capitalist Left Cooperation for the Overthrow). Composed primarily of university student activists in various communist organizations of orthodox Marxist, Trotskyist and Maoist backgrounds, as well of members of the relatively new rank-and-file unions outside the established bureaucracies of the official union structure of the country, it proved effective for activism in a broad range of mobilizations, but it never managed to achieve anything more than 1.8 per cent in the regional or general elections.

(Spourdalakis, Michalis; “Left strategy in the Greek cauldron: explaining syriza’s success. Socialist Register 2013; p. 105)

By 2010, Alex Tspiras was leading the Syriza party, after a section (The Renewal Wing’) split to form DIMAR (‘Renewal Wing’):

“The exit of the ‘Renewal Wing’ faction from SYN (which evolved into DIMAR) in the summer of 2010 curtailed political disagreement and factional infighting within SYN and resulted in the effective dominance of Alexis Tsipras’s leadership in both SYN and SYRIZA.”
(Tsakatika, and Eleftheriou, Ibid; 2013).

“The “social democratic” wing of Synaspismos definitely lost control of the party in 2006 when Alekos Alavanos was elected its president. This right wing, led by Fotis Kouvelis, almost exclusively originating in the Eurocommunist right group coming from EAR, ultimately left Synaspismos and set up another party called Democratic Left (Dimar): a formation that claims to be a sort of halfway house between Pasok and the radical left.”

(Stathis Kouvelakis interview with Sebastien Budgen: Greece: Phase One https://www.jacobinmag.com/2015/01/phase-one/)

But the revisionist KKE left Syn early on, and adopted a sectarian approach. Later on the KKE did not join the Greek Social Forum (EKF). Much of the KKE’s broad front work was instead performed through a Trade Union organisation – “Panrgatiko Agvnistiko Mtvpo (All Workers’ Militant Front, PAME) formed in the late 1990s. Insisting on this tactic, the KKE lost ground amongst much of the youth. For example those joining the ‘Indignants’ movement – who rejected all parties.

“Also indicative of the qualitative new dimension of the Greek people’s resistance were the now famous mobilizations of the ‘aganaktismeni’, i.e. the ‘frustrated or indignant in the squares’. These movements, which appeared in almost every major city nationwide, used new means of political mobilization (including the internet) and developed a political language which was clearly hostile to the previously existing patronizing practices of the party system. In fact this hostility was frequently displayed by spontaneous verbal and even physical attacks on politicians of the governmental parties, which at times extended to representatives of the established trade unions and the KKE.”

(Spourdalakis, Michalis;“Left strategy in the Greek cauldron: explaining syriza’s success. Socialist Register 2013; p. 108)

Stathis Kouvelakis, is a member of the central committee of Syriza and a leading member of its Left Platform. Kouvelakis pointed to the post-1968 divisions of the Greek left as “two poles.” Supposedly bridged by Syriza: the first bridge to factions of the KKE:

“Since 1968, the radical Left had been divided into two poles. The first was the Greek Communist Party (KKE), which (after splits)… (had) a rightist wing (that) constituted the Greek Left (EAR) and joined Synaspismos from the outset, and the leftist one reforming as the AKOA. The KKE that remained after these two splits was peculiarly traditionalist… It managed to win a relatively significant activist base among working-class and popular layers, as well as among the youth, particularly in the universities.” (Stathis Kouvelakis interview with Sebastien Budgen: Greece: Phase One https://www.jacobinmag.com/2015/01/phase-one/)

Kouvelakis describes Synaspsimos, as a second ‘pole’, seeding the later Syriza:

“The other pole, Synaspismos, opened out in 2004 with the creation of Syriza, which itself came from the joining together of the two previous splits from the KKE. Synaspismos has changed considerably over time. At the beginning of the 1990s, it was the kind of party that could vote for the Maastricht Treaty, and it was mainly of a moderate left coloration.” (Stathis Kouvelakis interview with Sebastien Budgen; Ibid).

Actually the Marxist-Leninist pro-Hoxha party – (Αναρτήθηκε από Anasintaxi Organization) – is more emphatic. It places Syriza as directly deriving from the revisionist KKE, and as having taken over the KKE “social-democratic and reformist” character. Although Syriza is “socially” anti-fascist, it has “contradictions” – that impede it:

“In 1968, “K”KE was split into two parties: the euro-communist part known as “K”KE (interior) and the Krushchevian-Brezhnevite part known as “K”KE. Syriza originates from the first part and, consequently, is a social-democratic and reformist party guided by a right opportunist general line and characterized by petty bourgeois class features.

Syriza has pledged to implement a kind of neo-Keynesian economic program with the aim, at best, of relieving the burden of the consequences coming from the economic crisis of over-production and extreme neo-liberal economic policy without, however, touching the capitalist system and the imperialist dependence of Greece. Nevertheless, the implementation of this program has met negative reactions from the representatives of the imperialist organizations Commission – ECB – IMF that continue to interfere in the internal affairs of the country provocatively and without any pretext. This attitude amounts to the annulment of the recent (editor: January 2105) elections in our country.

In the sphere of social questions, Syriza is an anti-fascist party suffering from inconsistencies and contradictions as it is evident from the fact that it formed an alliance with the bourgeois nationalist party of ANEL and the nomination of Prokopis Pavlopoulos for President of the Republic, a right-wing politician from Nea Demokratia who was responsible, as Minister of Public Order in the Karamanlis government, for the bloody police violence unleashed on the country’s school youth after the murder of Alexis Grigoropoulos in December of 2008.”

(Αναρτήθηκε από Anasintaxi OrganizationSome questions and answers about the current situation in Greece’; Article to be published in “Unity & Struggle” (Extended version of an interview given to the comrades of Iran); march 30; 2015. At http://anasintaxi-en.blogspot.ca/2015/02/some-questions-and-answers-about.html)

Syriza was always an electoral alliance:

“Syriza was set up by several different organizations in 2004, as an electoral alliance. Its biggest component was Alexis Tsipras’s party Synaspismos — initially the Coalition of the Left and Progress, and eventually renamed the Coalition of the Left and of the Movements …. It emerged from a series of splits in the Communist movement. Some (smaller parties also – Editor) came out of the old Greek far left. In particular, the Communist Organization of Greece (KOE), one of the country’s main Maoist groups. This organization had three members of parliament (MPs) elected in May 2012. That’s also true of the Internationalist Workers’ Left (DEA), which is from a Trotskyist tradition, as well as other groups mostly of a Communist background. For example, the Renewing Communist Ecological Left (AKOA), which came out of the old Communist Party (Interior).” (Stathis Kouvelakis interview with Sebastien Budgen; Ibid).

The United Front of Syriza, had almost electoral immediate success:

“It managed to get into parliament, overcoming the 3 percent minimum threshold.” (Stathis Kouvelakis interview with Sebastien Budgen; Ibid).

Syriza went on to replace PASOK as increasingly, Syriza candidates won in the ballot boxes. By this stage a number of other new parties had emerged, including a fascist party – Golden Dawn:

“After three years of political instability, the system collapsed in the dual elections of May and June 2012. New Democracy’s strength was halved and PASOK’s vote share diminished by 75 per cent. Three new political actors emerged, each winning around seven per cent of the vote, namely the party of the Dhmokratikh Aristra (Democratic Left, DIMAR), a recent split from SYN, Anya rthtoi Ellhn(Independent Greeks), a recent split from ND, and the extreme-right Xrysh Aygh (Golden Dawn). (Tsakatika, and Eleftheriou, Ibid; 2013).

A short lived coalition government in 2012 was formed by ND, PASOK and DIMAR in June 2012

What does Syriza represent? According to its own leaders it is an “anti-capitalist coalition” – as “class-struggle parties – but both emphasising “electoral alliances”:

“Syriza is an anti-capitalist coalition that addresses the question of power by emphasizing the dialectic of electoral alliances and success at the ballot box with struggle and mobilizations from below. That is, Syriza and Synaspismos see themselves as class-struggle parties, as formations that represent specific class interests.” (Stathis Kouvelakis interview with Sebastien Budgen; Ibid).

In another description, it is a “hybrid party”:

“That is, it is a political front, and even within Syriza there is a practical approach allowing the coexistence of different political cultures. I would say that Syriza is a hybrid party, a synthesis party, with one foot in the tradition of the Greek Communist movement and its other foot in the novel forms of radicalism that have emerged in this new period.” (Stathis Kouvelakis interview with Sebastien Budgen; Ibid).

In 2012 there were about 16,000 members in Synaspismos, and the Maoist KOE had about 1-1500 members. But in the ensuring period of a year, Syriza grew rapidly further – to 35,000–36,000. By May 2012, it became the second party in Greece with 16.7 percent of the vote, beating Pasok. It relied largely on a trade union base, and pulled its voters away from the KKE. There were 3 reasons why strategists feel they did so well in the 2012 elections:

“First, The violence of the social and economic crisis in Greece and the way it developed from 2010 onward, with the austere-ian purge .. inflicted under the infamous memorandums of understanding (the agreements the Greek government signed with the troika in order to secure the country’s ability to pay off its debts). The second factor resides in the fact that Greece — and now also Spain — are the only countries where this social and economic crisis has transformed into a political crisis. .. The third factor is popular mobilization.… The real breakthrough came when Tsipras focused his discourse on the theme of constituting an “anti-austerity government of the Left” now, which he presented as an alliance proposal reaching out to the KKE, the far left, the parliamentary left, and the small dissident elements of Pasok. “ (Stathis Kouvelakis interview with Sebastien Budgen; Ibid).

Within the United Front of Syriza itself, there are two main wings (See Diagram above): The Left Platform and the majority. The Left Platform is also a United Front – of the “Left Current” mainly influenced by the KKE and a Trotskyist component:

“The Left Platform has two components, the Left Current, which is a kind of traditional communist current — essentially constituted by trade unionists and controlling most of the trade union sector of Syriza. These people in their vast majority come from the KKE, so they are those who broke with the KKE in the last split of the party in 1991. And then there is the Trotskyist component (DEA and KOKKOINO, recently fused).” (Stathis Kouvelakis interview with Sebastien Budgen; Ibid).

In turn, this Left wing has formed a sub-group – the “Platform of the 53”:

“The left of the majority has coalesced around the “Platform of the Fifty-Three,” signed by fifty-three members of the central committee and some MPs in June 2014, immediately after the European elections. They strongly criticized Tsipras’s attempts to attract establishment politicians, and for leading a campaign that didn’t give a big enough role to social mobilizations and movements”. (Stathis Kouvelakis interview with Sebastien Budgen; Ibid).

From quite early on, Tsipras had been criticised from his Left – on charges along the lines of opportunism. What Programme did Syriza put forth?

9. What was the elected programme of Syriza?

The Thessalonika Conference is accepted as being the progaramme of the United Front of Syriza. (Syriza – The Thessalonika Programme” at http://www.syriza.gr/article/id/59907/SYRIZA—THE-THESSALONIKI-PROGRAMME.html#.VQSgEChOTdl

In broadest terms the Programme calls for cessation of “the Nazi Occupation forced loan from the Bank of Greece” – and lifting of the Greek Public Debt: A slogan “No sacrifice of the Euro” was often heard:

  • “Write-off the greater part of public debt’s nominal value so that it becomes sustainable in the context of a «European Debt Conference». It happened for Germany in 1953. It can also happen for the South of Europe and Greece.
  • Include a «growth clause» in the repayment of the remaining part so that it is growth-financed and not budget-financed.
  • Include a significant grace period («moratorium») in debt servicing to save funds for growth.
  • Exclude public investment from the restrictions of the Stability and Growth Pact.
  • A «European New Deal» of public investment financed by the European Investment Bank.
  • Quantitative easing by the European Central Bank with direct purchases of sovereign bonds.
  • Finally, we declare once again that the issue of the Nazi Occupation forced loan from the Bank of Greece is open for us. Our partners know it. It will become the country’s official position from our first days in power.
    On the basis of this plan, we will fight and secure a socially viable solution to Greece’s debt problem so that our country is able to pay off the remaining debt from the creation of new wealth and not from primary surpluses, which deprive society of income.
    With that plan, we will lead with security the country to recovery and productive reconstruction by:
  • Immediately increasing public investment by at least €4 billion.
  • Gradually reversing all the Memorandum injustices.
  • Gradually restoring salaries and pensions so as to increase consumption and demand.
  • Providing small and medium-sized enterprises with incentives for employment, and subsidizing the energy cost of industry in exchange for an employment and environmental clause.
  • Investing in knowledge, research, and new technology in order to have young scientists, who have been massively emigrating over the last years, back home.
  • Rebuilding the welfare state, restoring the rule of law and creating a meritocratic state.
    We are ready to negotiate and we are working towards building the broadest possible alliances in Europe.”

In this document it further says that “within our first days in power,” after “negotiations end” with the Troika (And on its Memorandum)– they will begin enacting the following “National Reconstruction Plan” What does this embody? There are Four Pillars to this, which we recap briefly.

The 1st Pillar is “Confronting the humanitarian crisis at an estimated Total estimated cost of €1,882 billion

“Our program…. amounts to a comprehensive grid of emergency interventions, so as to raise a shield of protection for the most vulnerable social strata. Free electricity (Total cost: €59,4 million).

  • Programme of meal subsidies to 300.000 families without income. Total cost: €756 million.
  • Programme of housing guarantee. The target is the provision of initially 30.000 apartments (30, 50, and 70 m²), by subsidizing rent at €3 per m². Total cost: €54 million.
  • Restitution of the Christmas bonus, as 13th pension, to 1.262.920 pensioners with a pension up to €700. Total cost: €543,06 million.
  • Free medical and pharmaceutical care for the uninsured unemployed. Total cost: €350 million.
  • Special public transport card for the long-term unemployed and those who are under the poverty line. Total cost: €120 million.
  • Repeal of the leveling of the special consumption tax on heating and automotive diesel. Bringing the starting price of heating fuel for households back to €0,90 per lt, instead of the current €1,20 per lt. Benefit is expected.”

The 2nd Pillar is “Restarting the economy and promoting tax justice” Total estimated cost: €6,5 billion; Total estimated benefit: €3,0 billion

“This second pillar is centered on measures to restart the economy. Priority is given to alleviating tax suppression on the real economy, relieving citizens of financial burdens, injecting liquidity and enhancing demand.

Excessive taxation on the middle class as well as on those who do not tax-evade has entrapped a great part of citizens in a situation which directly threatens their employment status, their private property, no matter how small, and even their physical existence, as proved by the unprecedented number in suicides.

  • Settlement of financial obligations to the state and social security funds in 84 installments. Estimated benefit: €3 billion

The revenue which we expect to collect on an annual basis (between 5% and 15% of the total owed) will be facilitated by the following measures:

  • The immediate cease of prosecution as well as of confiscation of bank accounts, primary residence, salaries, etc, and the issuance of tax clearance certificate to all those included in the settlement process.
  • A twelve-month suspension of prosecution and enforcement measures against debtors with an established zero income, included in the settlement process.
  • Repeal of the anti-constitutional treatment of outstanding financial obligations to the state as offence in the act (in flagrante delicto).
  • Abolition of the mandatory 50% down payment of the outstanding debt as a prerequisite to seek a court hearing. The down payment will be decided by a judge. It will be around 10%-20%, according to the financial circumstances of the debtor.
  • Immediate abolition of the current unified property tax (ENFIA). Introduction of a tax on large property. Immediate downward adjustment of property zone rates per m². Estimated cost: €2 billion.

That tax will be progressive with a high tax-free threshold. With the exception of luxurious homes, it will not apply on primary residence. In addition, it will not concern small and medium property.

  • Restitution of the €12000 annual income tax threshold. Increase in the number of tax brackets to ensure progressive taxation. Estimated cost: €1.5 billion.
  • Personal debt relief by restructuring non-performing loans («red loans») by individuals and enterprises.

This new relief legislation will include: the case-by-case partial write-off of debt incurred by people who now are under the poverty line, as well as the general principle of readjusting outstanding debt so that its total servicing to banks, the state, and the social security funds does not exceed ⅓ of a debtor’s income.

  • Establishment of a public development bank as well as of special-purpose banks: Starting capital at €1 billion.
  • Restoration of the minimum wage to €751. Zero cost.

The 3rd Pillar is “Regaining employment” Estimated cost: €3 billion

A net increase in jobs by 300,000 in all sectors of the economy – private, public, social – is expected to be the effect of our two-year plan to regain employment. …Restitution of the institutional framework to protect employment rights that was demolished by the Memoranda governments…. Restitution of the so-called «after-effect» of collective agreements; of the collective agreements themselves as well as of arbitration….. Abolition of all regulations allowing for massive and unjustifiable layoffs as well as for renting employees.

Zero cost: Employment programme for 300000 new jobs. Estimated first-year cost: €3 billion

The 4th Pillar is: “Transforming the political system to deepen democracy”

Total estimated cost: €0

From the first year of SYRIZA government, we set in motion the process for the institutional and democratic reconstruction of the state. We empower the institutions of representative democracy and we introduce new institutions of direct democracy.

Regional organization of the state. Enhancement of transparency, of the economic autonomy and the effective operation of municipalities and regions. We empower the institutions of direct democracy and introduce new ones.

Empowerment of citizens’ democratic participation. Introduction of new institutions, such as people’s legislative initiative, people’s veto and people’s initiative to call a referendum.

Empowerment of the Parliament, curtailment of parliamentary immunity, and repeal of the peculiar legal regime of MPs’ non-prosecution.

Regulation of the radio/television landscape by observing all legal preconditions and adhering to strict financial, tax, and social-security criteria. Re-establishment of ERT (Public Radio and Television) on a zero basis.”

(Thessalalonkia Programme; Ibid)

This is viewed by significant leaders of the Syriza as a “transitional programme,” as explained in an interview with Efklidis Tsakalotos, a member of Parliament with SYRIZA and responsible for the economic policy of Syriza. (An Interview With Syriza’s Efklidis Tsakalotos Syriza’s Moment; by E. AHMET TONAK” JANUARY 23-25, 2015; http://www.counterpunch.org/2015/01/23/syrizas-moment/) :

“Syriza’s programme is a transitional one. It wants to start the process of not only reversing the policies of austerity but also dismantling some of the central pillars of the neo-liberal order. As with all transitional programmes the goal is to open up fissures for more radical polices. Whether we in Europe can achieve this depends on the extent that social movements are inspired to make use of the opportunities that arise to broaden the agenda in favour of a more participatory, institutionally-diverse, and socially just economy. Left-wing governments can do only so much. Social transformations, especially in the modern era, need the active engagement of millions. Parties and governments of the Left must see their role as catalysts of these wider developments. What is certain is that we are living in interesting times!”

(Interview with Tsakalotos Ibid).

In truth, the programme that was put forward by Syriza entirely stays within the confines of the EU. Instead of breaking that mould, it attempts to lay a negotiating position to lessen the burdens that are being demanded of the Greek peoples. It is correct that Syriza has never claimed to be a Leninist type party. Nonetheless, this perspective put above, is the antithesis of Leninism. As explained by Lenin in ‘State and Revolution” “trasnational forms” are needed. Both Marx and Lenin certainly agreed that a “special stage” – or a stage of transition from capitalism to communism was needed:

“The first fact that has been established most accurately by the whole theory of development, by science as a whole–a fact that was ignored by the utopians, and is ignored by the present-day opportunists, who are afraid of the socialist revolution–is that, historically, there must undoubtedly be a special stage, or a special phase, of transition from capitalism to communism.” https://www.marxists.org/archive/lenin/works/1917/staterev/ch05.htm

However, crucially, this transition needed to be a revolutionary transition:

“Between capitalist and communist society lies the period of the revolutionary transformation of the one into the other. Corresponding to this is also a political transition period in which the state can be nothing but the revolutionary dictatorship of the proletariat.”

Previously the question was put as follows: to achieve its emancipation, the proletariat must overthrow the bourgeoisie, win political power and establish its revolutionary dictatorship.

Now the question is put somewhat differently: the transition from capitalist society–which is developing towards communism–to communist society is impossible without a “political transition period”, and the state in this period can only be the revolutionary dictatorship of the proletariat. What, then, is the relation of this dictatorship to democracy? We have seen that the Communist Manifesto simply places side by side the two concepts: “to raise the proletariat to the position of the ruling class” and “to win the battle of democracy”. On the basis of all that has been said above, it is possible to determine more precisely how democracy changes in the transition from capitalism to communism. In capitalist society, providing it develops under the most favourable conditions, we have a more or less complete democracy in the democratic republic. But this democracy is always hemmed in by the narrow limits set by capitalist exploitation, and consequently always remains, in effect, a democracy for the minority, only for the propertied classes, only for the rich. Freedom in capitalist society always remains about the same as it was in the ancient Greek republics: freedom for the slave-owners. Owing to the conditions of capitalist exploitation, the modern wage slaves are so crushed by want and poverty that “they cannot be bothered with democracy,” “cannot be bothered with politics”; in the ordinary, peaceful course of events, the majority of the population is debarred from participation in public and political life.”

Lenin State & Revolution: Experience of the Paris Commune of 1871. Marx’s Analysis (https://www.marxists.org/archive/lenin/works/1917/staterev/ch03.htm)

Lenin points out that there is a “hemming in by narrow limits” of democracy. How much “narrower” is it when not only the single state “hems it in” – but the imperialists of the EU also “hem it in?” The next period, following the January elections of 2015, would answer this question.

10. Elections of 2015 and Negotiations with the Troika

The short-lived governments could not maintain credibility, as they were always accomodating to the new Troika demands. The mass movement shifted to the left, as shown by the huge demonstrations in the central Square. The elections of January 25 2015, sealed the rise to power of Syriza:

“After the Hellenic Parliament failed to elect a new President of State by 29 December 2014, the parliament was dissolved and a snap 2015 legislative election was scheduled for 25 January 2015. Syriza had a lead in opinion polls, but its anti-austerity position worried investors and eurozone supporters. The party’s chief economic advisor, John Milios, has downplayed fears that Greece under a Syriza government would exit the eurozone, while shadow development minister George Stathakis disclosed the party’s intention to crack down on Greek oligarchs if it wins the election. In the election, Syriza defeated the incumbent New Democracy and went on to become the largest party in the Hellenic Parliament, receiving 36.3% of the vote and 149 out of 300 seats.”

http://en.wikipedia.org/wiki/Syriza

“January 25th marks a historic turning point in recent Greek history. After five years of devastating austerity, a social crisis without precedent in Europe, and a series of struggles that at some points, especially in 2010-2012, took an almost insurrectionary form, there has been a major political break. The parties that were responsible for putting Greek society under the disciplinary supervision of the so-called Troika (EU-ECB-IMF) suffered a humiliating defeat. PASOK, which in 2009 won almost 44% of the vote, now received only 4.68%; and the splinter party of Giorgos Papandreou, the PASOK Prime Minister who initiated the austerity programs, got 2.46%. New Democracy came in at 27.81%, almost 9% below SYRIZA. The electoral rise of the fascists of Golden Dawn has been halted, although they still maintain a worrying 6% of the vote. Another pro-austerity party, the RIVER, representing the neoliberal agenda (although nominally coming from the center-left) took only 6.05%, despite intensive media hype.”

(Panagiotis Sotiris; https://viewpointmag.com/2015/01/28/a-strategy-of-ruptures-ten-theses-on-the-greek-future/)

Rapidly, by 26 January 2015, Tsipras and Independent Greeks (ANEL) leader Panos Kammenos agreed on a coalition government between Syriza and ANEL. Tsipras would be the Prime Minister of Greece, with the academic economist Yanis Varoufakis as his Minister of Finance.

Yet, in a graphic display of its intended response to the rebuke that the Troika and especially the German imperialists had received, the official line was hard:

“German government official Hans-Peter Friedrich however said: “The Greeks have the right to vote for whom they want. We have the right to no longer finance Greek debt.” http://en.wikipedia.org/wiki/Syriza

The Greek pro-Hoxha Marxist-Leninist view is that the Greek people took a stand against both the Troika and the Greek capitalists:

“By voting for SYRIZA, the majority of the Greek people rejected and condemned the cruel economic measures that were imposed, the neoliberal economic policy, in general, and the great-bourgeois parties of ND and PASOK that implemented these measures with the outmost servility. The victory of SYRIZA is also explained by the people’s resentment towards the fascist re-modeling of social life promoted by the government of the fascist scoundrel Samaras”. (January 24, 2015; “BOYCOTT the elections–The elections do not solve the problem of imperialist DEPENDANCE (economic-political-military, NATO bases etc.), nor repel-cancel ongoing EU politics against the people http://anasintaxi-en.blogspot.ca/2015/01/boycott-electionsthe-elections-do-not_24.html)

However Anasintaxi also had called for abstention from the elections of 2015, arguing that:

“In contrary ALL the bourgeois parties are in favor of Greece’s STAY in imperialist European Union, and in EURO-EMU and propagate consciously, serve the interests of the EU imperialists with misleading MYTH-fantasies about “equal participation” (!) of the country in the “pit of lions” of the powerful European monopolies. At the same time they propagate that Greece leaving the Euro-EMU-EU will be a “major disaster” (!).

ALL the reformist social democratic parties (“K” KE-SYRIZA, etc.) and the extra-parliamentary organizations follow the same strategic choice of the EU monopolies and the local capital.

It is not only SYRIZA which supports the country STAY (in) EURO-EMU-EU, but also the “K” KE: “A solution outside the euro and return to the drachma in the present circumstances would be catastrophic” (A. Papariga, “Rizospastis” 31/5/2011, p.6) Moreover: the leaders of the “K” KE definitively renounced the anti-imperialist struggle for the overthrow of dependence”

(January 24, 2015; “BOYCOTT the elections–The elections do not solve the problem of imperialist DEPENDANCE (economic-political-military, NATO bases etc.), nor repel-cancel ongoing EU politics against the people http://anasintaxi-en.blogspot.ca/2015/01/boycott-electionsthe-elections-do-not_24.html)

After the election, Anasintaxi warned that Syriza had entered into coalition with right-wing ANEL. However early on, the government had taken some progressive steps:

“During the first three weeks following the elections, the SYRIZA government has taken a series of actions in order to implement its program that has won the support of wide popular strata, an attitude that is unfortunately accompanied by certain illusions. At the same time, the government’s actions have met a very negative reception from Commission – ECB – IMF whose pressure and constant interference in the country’s internal affairs is condemned by the Greek people. We think that, up to a certain extent, SYRIZA’s victory creates favorable conditions for the strengthening of class struggles. Whether this possibility becomes a reality depends, of course on many factors the most important of which is the organization of the majority of the working masses in independent and united trade unions and the influence exerted on these and, the society in general, by the consistent left-wing, anti-imperialist and revolutionary communists.”

(Αναρτήθηκε από Anasintaxi Organization ‘Some questions and answers about the current situation in Greece’; Article to be published in “Unity & Struggle” (Extended version of an interview given to the comrades of Iran); march 30; 2015. At http://anasintaxi-en.blogspot.ca/2015/02/some-questions-and-answers-about.html)

At this early point, both Tsipras and Varoufakis were apparently determined to negotiate hard, with the threat to leave the EU if the Troika did not back down:

“Greece’s finance minister Yanis Varoufakis has spelled out the negotiating strategy of the Syriza government with crystal clarity.
“Exit from the euro does not even enter into our plans, quite simply because the euro is fragile. It is like a house of cards. If you pull away the Greek card, they all come down,” he said.
“Do we really want Europe to break apart? Anybody who is tempted to think it possible to amputate Greece strategically from Europe should be careful. It is very dangerous. Who would be hit after us? Portugal? What would happen to Italy when it discovers that it is impossible to stay within the austerity straight-jacket?”
“There are Italian officials – I won’t say from which institution – who have approached me to say they support us, but they can’t say the truth because Italy is at risk of bankruptcy and they fear the consequence from Germany. A cloud of fear has been hanging over Europe over recent years. We are becoming worse than the Soviet Union,” he told the Italian TV station RAI.
This earned a stiff rebuke from the Italian finance minister, Pier Carlo Padoan. “These comments are out of place. Italy’s debt is solid and sustainable,” he said.
Yet the point remains. Deflationary conditions are causing interest costs to rise faster than nominal GDP in Italy, Spain, and Portugal, automatically pushing public debt ratios ever higher.
Berkeley economist Barry Eichengreen warns that Grexit would be “Lehman squared”, setting off a calamitous chain reaction with worldwide consequences. Syriza’s gamble is that the EU authorities know this, whatever officials may claim in public.
Premier Alexis Tsipras is pushing this to the wire. Rightly or wrongly, he calculates that Greece holds the trump card – the detonation of mutual assured destruction, to borrow from Cold War parlance – and that all the threats from EMU power centres are mere bluster.
His cool nerve has caught Brussels, Frankfurt, Berlin, and the markets off guard. They assumed that this 40-year neophyte would back away from exorbitant demands in his landmark policy speech to the Greek parliament on Sunday night. Instead they heard a declaration of war.
He vowed to implement every measure in Syriza’s pre-electoral Thessaloniki Programme “in their entirety” with no ifs and buts. This even includes a legal demand for €11bn of war reparations from Germany, a full 71 years after the last Wehrmacht soldier left Greek soil.
There is no possible extension of Greece’s bail-out programme with the EU-IMF Troika, for that would be an “extension of mistakes and disaster”, a perpetuation of the debt-deflation trap. “The People have abolished the Memorandum. We will not negotiate our sovereignty,” he said.
Macropolis said every item was in there: a pension rise for the poorest; no further rises in the retirement age; an increase in the minimum wage to €751 a month by 2016; a return to collective bargaining; an end to privatisation of utilities; cancellation of a new property tax (ENFIA); a rise in tax-free thresholds from €5,000 to €12,000; and a rehiring of 10,000 public workers fired “illegally.”

(Ambrose Evans-Pritchard. “Greece’s leaders stun Europe with escalating defiance”. ‘The Telegraph’; 09 Feb 2015; http://www.telegraph.co.uk/finance/economics/11400778/Greeces-leaders-stun-Europe-with-escalating-defiance.html)

However in a foretaste of the future intransigence of the German imperialists, led by Wolfang Schauble the German Finance Minister – Greece’s first counter-offer was rejected out of hand:

“Schauble continues to insist that Greece sticks to the bailout conditions agreed with previous governments under which financial support will be given only in exchange for substantial structural reforms.
The finance ministry’s position risks deepening splits within Europe over how to deal with Greece as an end of February deadline nears at which the previous bailout agreement with its creditors and the European Central Bank runs out, leaving Greece facing bankruptcy.
In contrast to Berlin, the EU commission president Jean-Claude Juncker welcomed the Greek application, saying in his opinion it could pave the way for a “sensible compromise in the interest of financial stability in the Eurozone as a whole”.
But experts said Greece was merely playing for time, and that its application had indeed contained no new commitments. “The Greeks have simply tried to pass the buck back to the middle,” Matthias Kullas from the Centre for European Politics in Freiburg told The Guardian.
He stressed the German reaction was not a rejection over reaching a compromise with Greece, but did mean that expectations of an agreement on Friday when finance ministers from the eurogroup meet again, were now “slim”.
“If an agreement is reached, it will be at the last minute,” he said. “It’s in the interest of both sides to stick to their guns. The earlier one of them diverts from his course, the weaker his position becomes and the more elbow room he leaves for the other.”

(Kate Connolly. “Germany rejects Greek bailout plan – as it happened”. The Guardian 19 February 2015; http://www.theguardian.com/business/blog/live/2015/feb/19/greece-to-seek-bailout-extension-after-33bn-lifeline)

A furious cycle of media reports and counter reports paralleled a back and forth between the European Union and the Greek negotiating team of Tsipras and Varoufakis. In essence no counter-offer by the Greek team was deemed acceptable. It is true that the initial efforts of the Greek team to counter the demands were insubstantial. However even when substantial retreats had been offered, they were humiliatingly rejected. While the European team was overall untied, strains emerged. It was apparent that the Germans were the most stout in the rejections. However both the French and the Italians were wavering. Nonetheless even the IMF initially firmly supported the German position:

“Last week Greece received a four-month extension of its $277 billion bailout program. The parliaments of Finland, Estonia and, most importantly, Germany, as well as Greece’s other EU partners, approved the bailout program that was agreed to Feb. 20, provided that Greece submit a list of planned reforms. Greece submitted six pages of reforms last Monday, but not all of Greece’s creditors think they are sufficient.

Christine Lagarde, managing director of the International Monetary Fund (IMF), wrote a letter to Dutch Finance Minster Jeroen Dijsselbloem, who is also president of the Eurogroup of eurozone finance ministers, expressing her concern that Greece’s proposed reforms were not specific enough, nor did they contain sufficient assurances on their design and implementation. The letter is the most recent, and public, indication of the IMF’s hesitancy toward Greece and its bailout program.

(Maria Savel. “IMF Stands Firm, Forcing Greece and Syriza to Accept Hard Concessions” Politics Review, March 3, 2015, http://www.worldpoliticsreview.com/trend-lines/15210/imf-stands-firm-forcing-greece-and-syriza-to-accept-hard-concessions)

By March, Tsipras was still assuming the EU would not want to have a member leave:

“SPIEGEL: Many experts now fear a “Graccident” — Greece’s accidental exit from the euro. If the ECB doesn’t agree to your T-Bills, that’s exactly what might happen.
Tspiras: I cannot imagine that. People won’t risk Europe’s disintegration over a T-Bill of almost €1.6 billion. There is a saying for this in Greece: A wet man does not fear the rain.”

(Der Spiegel Interview Conducted By Manfred Ertel, Katrin Kuntz and Mathieu von Rohr: Greek Prime Minister Tsipras: ‘We Don’t Want to Go on Borrowing Forever’; March 7 2015; at http://www.spiegel.de/international/europe/spiegel-interview-with-greek-prime-minister-tsipras-a-1022156.html)

As time went on, the Greek banks were forced to put restrictions on withdrawals. The EU allowed some further liquidity in Greece by allowing Greece to print more T-Bills, but purely for internal use. This was violated by Greece. More and more comments were heard that Greece might have to exit the EU – a so called Grexit or Greccident:

“The current money-go-round is unsustainable. Euro-region taxpayers fund their governments, which in turn bankroll the European Central Bank. Cash from the ECB’s Emergency Liquidity Scheme flows to the Greek banks; they buy treasury bills from their government, which uses the proceeds to … repay its International Monetary Fund debts! …
There’s blame on both sides for the current impasse. Euro-area leaders should be giving Greece breathing space to get its economic act together. But the Greek leadership has been cavalier in its treatment of its creditors. It’s been amateurish in expecting that a vague promise to collect more taxes would win over Germany and its allies. And it’s been unrealistic in expecting the ECB to plug a funding gap in the absence of a political agreement for getting back to solvency. ……Greece’s three-year bond yield is back above 20 percent, double what it was just before Alexis Tsipras was elected prime minister on an anti-austerity platform in January. At that level, there’s no way Greece can end its reliance on its bailout partners anytime soon.
German Finance Minister Wolfgang Schaeuble was scathing yesterday about Greece’s efforts to balance its election promises with its bailout obligations, and about its standing with international investors:
“None of my colleagues, or anyone in the international institutions, can tell me how this is supposed to work. Greece was able to sell those treasury bills only in Greece, with no foreign investor ready to invest. That means that all of the confidence was destroyed again.”
Every day’s delay in cutting a deal pushes Greece a little closer to leaving the common currency. That would be a shame, since it’s an outcome no one — apart from Schaeuble — seems to desire. The mutability of euro membership could also unleash contagion and a domino effect. But it looks increasingly inevitable.”

(Mark Gilbert; “Greece’s Euro Exit Seems Inevitable”: 17 March 2015; http://www.bloombergview.com/articles/2015-03-17/greece-s-euro-exit-seems-inevitable)

By April 2015, reports circulated that secret plans were being drawn up to revive the Drachma and go into default (Evans-Pritchard A, 2 April 2015; Telegraph at http://www.telegraph.co.uk/finance/economics/11513341/Greece-draws-up-drachma-plans-prepares-to-miss-IMF-payment.html).

On May 4th the BBC reported that Greek banks were not allowing pensioners to withdraw more than a small amount, and that public sector workers were nto being paid regularly (http://www.bbc.com/news/world-europe-32580919). However on May 6th however Greece paid back $200 million to the IMF and avoided insolvency. At that time the European Central Bank (ECB) granted further liquidity to Greece. (Phillip Inman and Helena Smith; 6 May, The Guardian; at http://www.theguardian.com/world/2015/may/06/greek-debt-default-avoided-after-200m-payment-to-imf)

By June the situation was still not resolved, and Greece’s peoples were in an even more precarious position. By this time, Syriza had retreated substantially more. Michael Roberts summarises to June:

“The IMF representative in the negotiations, Poul Thomsen, has “pushed the austerity agenda with a curious passion that shocks even officials in the European Commission, pussy cats by comparison” (here are the latest demands of the Troika Greece – Policy Commitments Demanded By EU etc Jun 2015). The IMF is demanding further sweeping measures of austerity at a time when the Greek government debt burden stands at 180% of GDP, when the Greeks have already applied the biggest swing in budget deficit to surplus by any government since the 1930s and when further austerity would only drive the Greek capitalist economy even deeper into its depression. As the Daily Telegraph summed it up: “six years of depression, a deflationary spiral, a 26pc fall GDP, 60pc youth unemployment, mass exodus of the young and the brightest, chronic hysteresis that will blight Greece’s prospects for a decade to come.”

The Syriza government has already made many and significant retreats from its election promises and wishes.  Many ‘red lines’ have been crossed already. It has dropped the demand for the cancellation of all or part of the government debt; it has agreed to carry through most of the privatisations imposed under the agreement reached with the previous conservative New Democracy government; it has agreed to increased taxation in various areas; it is willing to introduce ‘labour reforms’ and it has postponed the implementation of a higher minimum wage and the re-employment of thousands of sacked staff.

But the IMF and Eurogroup wanted even more. The Troika has agreed that the original targets for a budget surplus (before interest payments on debt) could be reduced from 3-4% of GDP a year up to 2020 to 1% this year, rising to 2% next etc. But this is no real concession because government tax revenues have collapsed during the negotiation period. At the end of 2014, the New Democracy government said that it would end the bailout package and take no more money because it could repay its debt obligations from then on as the government was running a primary surplus sufficient to do so. But that surplus has now disappeared as rich Greeks continue to hide their money and avoid tax payments and small businesses and employees hold back on paying in the uncertainty of what is going to happen. The general government primary cash surplus has narrowed by more than 59 percent to 651 million euros in the 4-month period of 2015 from 1.6 billion in the corresponding period last year
The Syriza government has only been able to pay its government employees their wages and meet state pension outgoings by stopping all payments of bills to suppliers in the health service, schools and other public services. The result is that the government has managed to scrape together just enough funds to meet IMF and ECB repayments in the last few months, while hospitals have no medicines and equipment and schools have no books and materials; and doctors and teachers leave the country.

Even Ashoka Mody, former chief of the IMF’s bail-out in Ireland, has criticised the attitude of his successor in the Greek negotiations: “Everything that we have learned over the last five years is that it is stunningly bad economics to enforce austerity on a country when it is in a deflationary cycle. Trauma patients have to heal their wounds before they can train for the 10K.”

The final red lines have been reached. What the Syriza leaders finally balked at was the demand by the IMF and the Eurogroup that the government raise VAT on electricity by 10 percentage points, directly hitting the fuel payments of the poorest; and also that the poorest state pensioners should have their pensions cuts so that the social security system could balance its books. Further down the road, the Troika wants major cuts in the pensions system by raising the retirement ages and increasing contributions. The Syriza leaders were even prepared to agree to some VAT rises and pension ‘reforms’, but the two specific demands of the Troika appear to have been just too much.”

(Roberts, Michael Blog; June 15, 2015;: “Ten minutes past midnight”; https://thenextrecession.wordpress.com/2015/06/06/ten-minutes-past-midnight/)

Increasingly leading economists including Nobel Laureates Joseph Stiglitz and Paul Krugman, Amartya Sen and others – warned about a new “Versailles moment”, and insisted that German stubbornness was actually bad for Europe as a whole, and that a “hair-cut” to the debt was necessary – i.e. a dramatic waiver-cut of the debt (Simon Wren-Lewis. “Why Amartya Sen Is Right About What Is Being Done To Greece”; 12 June 2015; in ‘Social Europe’ at http://www.socialeurope.eu/2015/06/why-amartya-sen-is-right-about-what-is-being-done-to-greece/). President Obama of the USA had already agreed that:

“”You cannot keep on squeezing countries that are in the midst of depression.”
“At some point, there has to be a growth strategy in order for them to pay off their debts to eliminate some of their deficits,” (Aurelia End; Obama joins ally list on Greek austerity relief http://news.yahoo.com/obama-joins-ally-list-greek-austerity-relief-033040983.html )

As the Left inside Syriza resisted Tsipras’s slippery slope of acceptance of new demands, they increasingly pointed to the example of Iceland who had defaulted on international debts in a similar situation. They got substantial agreement from even the ANSEL coalition party members also. (Ambrose Pritchard-Evans. “Syriza Left demands ‘Icelandic’ default as Greek defiance stiffens”.14 June ‘Daily Telegraph’; http://www.telegraph.co.uk/finance/11673989/Syriza-Left-demands-Icelandic-default-as-Greek-defiance-stiffens.html ).

In a twist to the pre-July series of negotiations, as even more demands were made of the package being offered by Tsipras and Varoufakis, Tsipras called a snap referendum, saying he needed to have a further mandate form the Greek people, in order to agree to the latest demands and obtain the new tranche of bail-out funds. Bizarrely however, he then wrote to the Imperialists saying he would accept – only to find that the imperialists had withdrawn their offer. Tsipras had to go on to the snap Referendum:

“Tsipras infuriated eurozone finance ministers by calling a snap referendum on proposals to agree a deal to release the €7.2bn in bailout funds it needed to meet an IMF repayment. His argument was that the concessions still being demanded by creditors, including VAT rises and rapid reform of the unaffordable pension system, and the lack of any serious prospect of debt relief, meant he could not sign up without a fresh public mandate – and, indeed, he and Varoufakis immediately urged their countrymen to vote “No”.

Yet it emerged that while publicly lambasting the troika, the very same Tsipras had dispatched a two-page letter to Brussels that caved into many of the demands he had angrily rejected a few days earlier – and continued to insist on putting to the public vote. It was too late: his exasperated creditors, and Germany in particular, in the person of Berlin’s implacable finance minister, Wolfgang Schäuble, decided enough was enough and the offer was no longer on the table. Amid the storm of political recriminations, the European Central Bank capped financial support to the Greek banking sector, forcing the government to impose capital controls, to stem the relentless slow-motion bank run that has been leaching the life out of the country’s financial system for months. And last Tuesday, as it warned it would, Athens defaulted on its payment to the IMF. To all intents and purposes, the country is bust.

So Greek voters now face trudging to the polls today, either to vote Yes to a set of proposals that are no longer on the table – presumably ushering in a new, more emollient government that would get straight back to the negotiating table – or to send a defiant no to further austerity. Tsipras and Varoufakis insist that “No” would not mean plunging out of the eurozone, let alone the EU. Instead, they say they would re-enter talks as if brandishing a petition. Yet last time they were handed a stock of political capital by the Greek public, in January’s general election, they quickly squandered it. Both Tsipras and Varoufakis have forged their political reputations by rejecting consensus and overturning the received wisdom. But international diplomacy means understanding that everyone at the table, whatever your grievances against them, has their own mandate and their own domestic audience to placate.

Instead of opening up ways for the troika to save face, Tsipras and Varoufakis have used every means available – from provocative tweets to spiky speeches in Syntagma Square – to heighten the divisions between Greece and its eurozone partners, accusing them of trying to blackmail and humiliate the Greek people into submission.”

(Observer Editorial. “The Observer view on Greece’s referendum “5 July 2015; http://www.theguardian.com/commentisfree/2015/jul/05/greece-let-down-by-partners-and-leaders).

In the midst of this circus, before the Referendum – the USA and the IMF (in the person of Christine Lagarde) exerted further pressure on the Germans to bend. Already calls had been made by many economists, that Germany had been granted a waiver on the demands at the end of the First Word war (the Versailles treaty). These had been firmly ignored by the German imperialists. Now the IMF threw a spanner into the erst-while United Front of the imperialists:

“The International Monetary Fund has electrified the referendum debate in Greece after it conceded that the crisis-ridden country needs up to €60bn (£42bn) of extra funds over the next three years and large-scale debt relief to create “a breathing space” and stabilise the economy.
With days to go before Sunday’s knife-edge referendum that the country’s creditors have cast as a vote on whether it wants to keep the euro, the IMF revealed a deep split with Europe as it warned that Greece’s debts were “unsustainable”.
Fund officials said they would not be prepared to put a proposal for a third Greek bailout to the Washington-based organisation’s board unless it included both a commitment to economic reform and debt relief.
According to the IMF, Greece should have a 20-year grace period before making any debt repayments and final payments should not take place until 2055. It would need €10bn to get through the next few months and a further €50bn after that.
The Greek prime minister Alexis Tsipras welcomed the IMF’s intervention saying in a TV interview that what the IMF said was never put to him during negotiations.”

(Philipp Inman, Larry Elliot, Alberto Nardelli; IMF says Greece needs extra €60bn in funds and debt relief”; The Guardian 2 July 2015; at http://www.theguardian.com/business/2015/jul/02/imf-greece-needs-extra-50bn-euro).

The Referendum was held on 5th July 2015. The result was a defiant “NO!” to the European imperialists:

“The final result in the referendum, published by the interior ministry, was 61.3% “No”, against 38.7% who voted “Yes.”
Greece’s governing Syriza party had campaigned for a “No”, saying the bailout terms were humiliating.
Their opponents warned that this could see Greece ejected from the eurozone, and a summit of eurozone heads of state has now been called for Tuesday.
Greek Prime Minister Alexis Tsipras said late on Sunday that Greeks had voted for a “Europe of solidarity and democracy”.
“As of tomorrow, Greece will go back to the negotiating table and our primary priority is to reinstate the financial stability of the country,” he said in a televised address.
“This time, the debt will be on the negotiating table,” he added, saying that an International Monetary Fund assessment published this week “confirms Greek views that restructuring the debt is necessary.”

(Mark Lowen; “Greece debt crisis: Greek voters reject bailout offer”; 6th July; BBC http://www.bbc.com/news/world-europe-33403665).

Strangely – Tsipras appeared not too happy. It became clear that he had been expecting a ‘Yes’ vote, which would enable him to cave in to the EU demands. He had relied on the often remarked on “wish of the Greek peoples to see themselves as European” and thus not to risk leaving the EU. But the Greek people had seen the callous manipulations of the EU leaders.

On the same day the results were announced, Yanis Varoufakis resigned – saying that this would help the negotiations going forward, but that this resignation had been essentially, at the request of Tsipras.

Proponents of the logical outcome of the “No” Vote – such as Yanis Varoufakis – were simply told to drop alternative plans. Varoufakis had been drawing up “Plan B” – whereby if the Troika did not retreat to any key extent – Greece would resurrect the pre-Euro currency of the Drachma.

Astonishingly, given this pledge by the Greek people to stand fast, in the final run of negotiations with the EU, Tsipras – then completely capitulated to Eurozone, primarily German imperialists. Unsurprisingly, in the renewed negotiations – the European leaders and most sections of banking capital – had simply turned their backs on the Greek populations views and demanded even harsher terms:

“The Greek government capitulated on Thursday to demands from its creditors for severe austerity measures in return for a modest debt write-off, raising hopes that a rescue deal could be signed at an emergency meeting of EU leaders on Sunday….Athens has put forward a 13-page document detailing reforms and public spending cuts worth €13bn with the aim of securing a third bailout from creditors that would raise €53.5bn and allow it to stay inside the currency union.
A cabinet meeting signed off the reform package after ministers agreed that the dire state of the economy and the debilitating closure of the country’s banks meant it had no option but to agree to almost all the creditors terms.”

(Phillip Inman, Graeme Wearden and Helena Smith: ”; 9 July 2015 Greece debt crisis: Athens accepts harsh austerity as bailout deal nears “Greek cabinet backs a 13-page package of reforms and spending cuts worth €13bn to secure third bailout and modest debt writeoff http://www.theguardian.com/business/2015/jul/09/greece-debt-crisis-athens-accepts-harsh-austerity-as-bailout-deal-nears)

As even the Guardian concluded: “Generally, Tsipras appears to have finally capitulated in the face of threats that Greece would be ejected from the eurozone:

“Greece and the rest of the eurozone have finally reached an agreement that could lead to a third bailout and keep the country in the eurozone.
Greek PM Alexis Tsipras conceded to a further swathe of austerity measures and economic reforms after more than 16 hours of negotiations in Brussels. He has agreed to immediately pass laws to further reform the tax and pension system, liberalise the labour market, and open up closed professions. Sunday trading laws will be relaxed, and even milk producers and bakers will be deregulated.
The Financial Times has dubbed it:
‘The most intrusive economic supervision programme ever mounted in the EU’.
Greece was forced to accept these measures after Germany piled intense pressure, as a price for a new deal. EU officials told us that Tsipras was subjected to “mental waterboarding” in closed-door meetings with Angela Merkel, Donald Tusk and Francois Hollande.
The plan must now be approved by the Athens parliament by Wednesday, and then voted through various national parliaments. If agreement is reached, talks can then begin towards a a new three-year bailout worth up to €86bn (£61bn), accompanied by further monitoring by Greece’s creditors.
The deal appears to end Greece’s five-month battle with its creditors, which has gripped the eurozone, dominated the political agenda and alarmed the markets.
Emerging from the summit, Tsipras admitted it had been tough – but insisted he had won concessions on debt relief (sometime in the future) as well as the medium-term funding plan.
He also managed to persuade the eurozone that a new investment fund, that will manage and sell off €50bn Greek assets, would be based in Athens not Luxembourg.
But generally, Tsipras appears to have finally capitulated in the face of threats that Greece would be ejected from the eurozone.”

(Graeme Wearden and Helen Davidson. “Greek debt crisis: deal reached after marathon all-night summit – as it happened”. The Guardian 13 July 2015;
http://www.theguardian.com/business/live/2015/jul/12/greek-debt-crisis-eu-leaders-meeting-cancelled-no-deal-live)

Yanis Varoufakis summed the story up to that point as a “coup”:

“The recent Euro Summit is indeed nothing short of the culmination of a coup. In 1967 it was the tanks that foreign powers used to end Greek democracy. In my interview with Philip Adams, on ABC Radio National’s LNL, I claimed that in 2015 another coup was staged by foreign powers using, instead of tanks, Greece’s banks. Perhaps the main economic difference is that, whereas in 1967 Greece’s public property was not targeted, in 2015 the powers behind the coup demanded the handing over of all remaining public assets, so that they would be put into the servicing of our un-payble, unsustainable debt.”

(Varoufakis, Y. “On the Euro Summit’s Statement on Greece: First thoughts”; 14 July 2015. http://yanisvaroufakis.eu/2015/07/14/on-the-euro-summits-statement-on-greece-first-thoughts/)

While the Referendum gave a clear signal that the Greek people had rejected the spirit of compromise being forced by the Western Banks – the questions had been framed deliberately imprecisely. It did not ask the Greek people to consider the option of leaving the Eurozone as such. This allowed the Tsipras government to posture it did “not have a mandate” to reject the harsh terms of the Troika and move Greece to leave the Eurozone.

Inevitably this will lead to a rupture of the Syriza United Front:

“…. Syriza, which is in coalition with the rightwing populist Independent party, is expected to meet huge opposition from within its own ranks and from trade unions and youth groups that viewed the referendum as a vote against any austerity.

Panagiotis Lafazanis, the energy minister and influential hard-leftist, who on Wednesday welcomed a deal for a new €2bn gas pipeline from Russia, has ruled out a new tough austerity package. Lafazanis represents around 70 Syriza MPs who have previously taken a hard line against further austerity measures and could yet wreck any top-level agreement.”

(Phillip Inman, Graeme Wearden and Helena Smith: Guardian Ibid; 9 July 2015)

The concession made by Greece in accepting the further round of “austerity” measures is huge:

“The new proposals include sweeping reforms to VAT to raise 1% of GDP and moving more items to the 23% top rate of tax, including restaurants – a key battleground before. Greece has also dropped its opposition to abolishing the lower VAT rate on its islands, starting with the most popular tourist attractions. Athens also appears to have made significant concessions on pensions, agreeing to phase out solidarity payments for the poorest pensioners by December 2019, a year earlier than planned. It would also raise the retirement age to 67 by 2022. And it has agreed to raise corporation tax to 28%, as the IMF wanted, not 29%, as previously targeted.
Greece is also proposing to cut military spending by €100m in 2015 and by €200m in 2016, and implement changes to reform and improve tax collection and fight tax evasion. It will also press on with privatisation of state assets including regional airports and ports. Some government MPs had vowed to reverse this.
In return, Greece appears to be seeking a three-year loan deal worth €53.5bn…….
Several EU leaders said the troika of creditors – the European commission, the International Monetary Fund and the European Central Bank – must also make concessions to secure Greece’s future inside the eurozone.
Donald Tusk, who chairs the EU summits, said European officials would make an effort to address Greece’s key request for a debt write-off. …
On Thursday, the German finance minister, Wolfgang Schäuble said the possibility of some kind of debt relief would be discussed over coming days, although he cautioned it may not provide much help.
“The room for manoeuvre through debt reprofiling or restructuring is very small,” he said.
Greece has long argued its debt is too high to be paid back and that the country requires some form of debt relief. The IMF agrees, but key European states such as Germany have resisted the idea…..
German ECB governing council member Jens Weidmann argued Greek banks should not get more emergency credit from the central bank unless a bailout deal is struck.
 He said it was up to eurozone governments and Greek leaders themselves to rescue Greece.
The central bank “has no mandate to safeguard the solvency of banks and governments,” he said in a speech.
The ECB capped emergency credit to Greek banks amid doubt over whether the country will win further rescue loans from other countries. The banks closed and limited cash withdrawals because they had no other way to replace deposits.
Weidmann said he welcomed the fact that central bank credit “is no longer being used to finance capital flight caused by the Greek government.”
http://www.theguardian.com/business/2015/jul/09/greece-debt-crisis-athens-accepts-harsh-austerity-as-bailout-deal-nears

11. CONCLUSION

At the time of writing the final scenes in the disintegrating Syriza “United Front’ parliament have yet to be played out.

However the shrewdest elements of the non-Marxist-Leninist left recognize that the time is long due, for Greece to exit the European Union to regain its own measure of independence. Many on the left agree that this will be hard.

The leading proponent of this has been Costas Lapavitas – a MP in the Greek Parliament but not a member of Syriza – and radical economist. His view has been put in several books and articles for example these cited here: ([1], Lapvitas, C. Interview with Sebastien Budgen: ‘Greece: Phase Two”; in Jacobin. At https://www.jacobinmag.com/2015/03/lapavitsas-varoufakis-grexit-syriza/ [2] Costas Lapavitsas: The Syriza strategy has come to an end’. Interview with Press Project and Der Spiegel; http://www.thepressproject.gr/details_en.php?aid=74530. [3[ The crisis of the Eurozone”, July 10, 2010 ; Greek Left Review. At https://greekleftreview.wordpress.com/2010/07/10/the-crisis-of-the-eurozone/)

Although this view has certainly been challenged (Bach, Paula. “Exit the Euro? Polemic with Greek Economist Costas Lapavitsas.” Left Voice News Project, at: http://leftvoice.org/Exit-the-Euro-Polemic-with-Greek-Economist-Costas-Lapavitsas).

Marxist-Leninists argue that leaving the imperialist bloc of the EU – would be the correct policy for the working class, peasantry and poor sections of Greece.

When asked on how the Anasintaxi Organization sees the future events, they replied:

“Both reformist parties (“K”KE and SYRIZA) have accepted the Greek capital’s present strategic choice to maintain the country in the EU and the Eurozone… In order to contribute to the growth of the working class struggles and the rise of the revolutionary movement, the Movement for Reorganization of KKE (1918-1955) is striving, under very unfavorable conditions, to achieve the following:

A) Together with the reorganization, the re-birth of KKE (1918-1955) and the ideological-political-organizational unity of the Greek communists on basis of Marxism-Leninism-Stalinism and the dissemination of the Marxist conception of socialism-communism;
it actively supports and participates in the struggle of the working class and all the toilers against the reduction of salaries and pensions, against the deterioration of their position in general and supports all demands that aim to defend their (economic, trade-union, social and political) class interests in opposition to the foreign and Greek capital and in particular, the EU monopolies which impose directly the current austerity measures.

B) The formation of united, massive and truly independent trade unions whose aim will be the resistance to the extreme neo-liberal policy of austerity and the further development of the workers’ and people’s struggles combined with the struggle against nationalism-racism-fascism-Nazism (all very dangerous enemies of the working class and the people) as well as “anti-Germanism” and “anti-Hellenism” (the two sides of the bourgeois nationalism) incited, during this period, by the nationalist circles of the two countries. At the same time, these new trade unions will put forward the demand for the exit of the country from the imperialist EU not only because of the increasing dependence and the deterioration of the Greece-EU relations at the expense of our country but also because of the fact that the economic policy and the hard, anti-popular measures are directly imposed by Brussels.

C) The cooperation between the consistent left-wing, anti-imperialist and anti-fascist forces that will aim at the formation of a massive, anti-fascist, popular, front that will fight against the dependence on imperialism, in general, and the exit of Greece from the EU, the Eurozone and NATO.”

(Αναρτήθηκε από Anasintaxi Organization ‘Some questions and answers about the current situation in Greece’; Article to be published in “Unity & Struggle” (Extended version of an interview given to the comrades of Iran); march 30; 2015. At http://anasintaxi-en.blogspot.ca/2015/02/some-questions-and-answers-about.html

APPENDIX: Select Chronology 1975 to 2015:
Amended from BBC version at: http://www.bbc.com/news/world-europe-17373216

1975 – New constitution declares Greece a parliamentary republic with some executive powers vested in a president.
1980 – Conservative Constantine Karamanlis elected president.
1981 – Greece joins EU. Andreas Papandreou’s Socialist Party (Pasok) wins elections.
1985 – President Karamanlis resigns in protest at government plans to reduce powers of president. Christos Sartzetakis becomes head of state.
1990 – Centre-right New Democracy party forms government under party leader Constantine Mitsotakis
1993 – Election returns Papandreou to power for PASOK.
2004 March – Conservative New Democracy party led by Costas Karamanlis wins general election, ending over a decade of Pasok government.
2005 April – Parliament ratifies EU constitution.
2005 December – Amid protest strikes by transport workers, parliament approves changes to labour laws, including an end to jobs for life in the public sector. The plans sparked industrial action in June.
2006 March – Public sector workers strike over pay and in protest at government plans to scrap job security laws and intensify privatisation.
2007 September – Minister Karamanlis wins a narrow majority in the poll. He says he now has a mandate for more reforms but also pledges to make national unity a priority.
2008 March – Parliament narrowly passes government’s controversial pension reform bill in face of general public sector strike and mass protests.
2008 December – Students and young people take to city streets in nationwide protests and riots over the police killing of a 15-year-old boy in Athens. Major public-sector strikes coincide to increase pressure on the government over its economic policies.

Economic meltdown
2002 January – Euro replaces drachma.
2004 December – European Commission issues formal warning after Greece found to have falsified budget deficit data in run-up to joining eurozone.
2009 October – Opposition Pasok socialist party wins snap election called by PM Karamanlis. George Papandreou takes over as new prime minister.

Debt crisis
2009 December – Greece’s credit rating is downgraded by one of world’s three leading rating agencies amid fears the government could default on its ballooning debt. PM Papandreou announces programme of tough public spending cuts.
2010 January- March – Government announces two more rounds of tough austerity measures, and faces mass protests and strikes.
2010 April/May – Fears of a possible default on Greece’s debts prompt eurozone countries to approve a $145bn (110bn euros; £91bn) rescue package for the country, in return for a round of even more stringent austerity measures. Trade unions call a general strike.
2011 June – 24-hour general strike. Tens of thousands of protesters march on parliament to oppose government efforts to pass new austerity laws.

Crisis deepens
2011 July – European Union leaders agree a major bailout for Greece over its debt crisis by channelling 109bn euros through the European Financial Stability Facility.
All three main credit ratings agencies cut Greece’s rating to a level associated with a substantial risk of default.
2011 October – Eurozone leaders agree a 50% debt write-off for Greece in return for further austerity measures. PM George Papandreou casts the deal into doubt by announcing a referendum on the rescue package.
2011 November – Faced with a storm of criticism over his referendum plan, Mr Papandreou withdraws it and then announces his resignation.
Lucas Papademos, a former head of the Bank of Greece, becomes interim prime minister of a New Democracy/Pasok coalition with the task of getting the country back on track in time for elections scheduled provisionally for the spring of 2012.

New bailout plan
2012 February – Against a background of violent protests on the streets of Athens, the Greek parliament approves a new package of tough austerity measures agreed with the EU as the price of a 130bn euro bailout.
2012 March – Greece reaches a “debt swap” deal with its private-sector lenders, enabling it to halve its massive debt load.
2012 May – Early parliamentary elections see support for coalition parties New Democracy and Pasok slump, with a increase in support for anti-austerity parties of the far left and right. The three top-ranking parties fail to form a working coalition and President Papoulias calls fresh elections for 17 June. The far-right Golden Dawn party based its 2012 election campaign on hostility towards immigrants
2012 June – Further parliamentary elections boost New Democracy, albeit leaving it without a majority. Leader Antonis Samaras assembles a coalition with third-placed Pasok and smaller groups to pursue the austerity programme.

Anti-austerity protests
2012 September – Trade unions stage 24-hour general strike against government austerity measures. Police fire tear gas to disperse anarchist rally outside parliament.
2012 October – Parliament passes a 13.5bn-euro austerity plan aimed at securing the next round of EU and IMF bailout loans; the package – the fourth in three years – includes tax rises and pension cuts.
2013 January – Unemployment rises to 26.8% – the highest rate in the EU.
2013 April – Youth unemployment climbs to almost 60%.
Public broadcaster closed
2013 June – The government announces without warning that it is suspending the state broadcaster ERT in a bid to save money. The decision gives rise to mass protests and a 24-hour strike.
2013 August – New state broadcaster EDT is launched.
2013 September – Government launches crackdown on far-right Golden Dawn party. Party leader Nikolaos Michaloliakos and five other Golden Dawn MPs are arrested on charges including assault, money laundering and belonging to a criminal organisation.
2013 December – Parliament passes 2014 budget, which is predicated on a return to growth after six years of recession. Prime Minister Samaras hails this as the first decisive step towards exiting the bailout.
2014 February – Greek unemployment reaches a record high of 28%.
2014 March – Parliament narrowly approves a big reform package that will open more retail sectors to competition, part of a deal between Greece and its international lenders.
2014 April – Eurozone finance ministers say they’ll release more than 8bn euros of further bailout funds to Greece.
Greece raises nearly four billion dollars from world financial markets in its first sale of long-term government bonds for four years, in a move seen as an important step in the country’s economic recovery.

Left in power
2014 May – Anti-austerity, radical leftist Syriza coalition wins European election with 26.6% of the vote.
2014 December – Parliament’s failure to elect a new president sparks a political crisis and prompts early elections.
2015 January – Alexis Tsipras of Syriza becomes prime minister after winning parliamentary elections, and forms a coalition with the nationalist Independent Greeks party.
2015 February – The government negotiates a four-month extension to Greece’s bailout in return for dropping key anti-austerity measures and undertaking a eurozone-approved reform programme.
2015 June – European Central Bank ends emergency funding. Greece closes banks, imposes capital controls and schedules referendum on European Union bailout terms for 5 July.Government reinstates former state broadcaster ERT as promised in Syriza manifesto.
2015 July – Greece becomes first developed country to miss a payment to the International Monetary Fund, having already delayed it

ICMLPO (Unity & Struggle): The regional meeting of the Marxist-Leninist parties and organizations of Europe was held in Paris

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In June, our party had the joy and the honor of hosting the regional meeting of the Parties and Organizations of Europe, members of the International Conference of Marxist-Leninist Parties and Organizations.

Intense exchanges and discussion allowed us to draw up and adopt a political resolution on the situation in Europe and on the tasks and mobilizations that our parties intend to develop.

An important part of the discussion focused on the attacks of the liberal and social-liberal governments against the working class and the popular masses and on the development of the resistance. Particular attention was paid to developing solidarity with the working class and the people of Greece in order to break the blackmail of the troika (IMF, EU and ECB) and of the governments of the EU states, which are united against the Greek people.

We also addressed the issue of the criminal policy being carried out by the States and the EU against refugees and immigrants.

We analyzed the tensions, the armed conflicts, the militarization of the economies of several EU States, particularly the imperialist powers, linked to the greater involvement of NATO.

On these different issues, plans were discussed in order to develop joint work among our parties and organizations, with the objective of taking part in existing mobilizations with our analysis and proposals, or of creating them with the aim of winning other forces.

Here are the various texts adopted by the Regional Conference.

Communique

In June 2015, the regional meeting of the Marxist-Leninist parties and organizations, members of the International Conference of Marxist-Leninist Parties and Organizations (ICMLPO), was successfully held in France in a fraternal atmosphere of internationalist solidarity.

At the beginning of the meeting, the participants paid tribute to the memory of recently deceased comrades, Frede Klitgard, of the Workers’ Communist Party of Denmark (APK) and Juan Marte, of the Communist Party of Labor (PCT) of the Dominican Republic. The meeting was dedicated to these two resolute Marxist-Leninists, and pledged to follow their example.

The parties and organizations congratulated the Party of Labor (EMEP) of Turkey for their success in the electoral battle through the alliance with the party HDP [People’s Democratic Party].

The participants exchanged views on the situation and experiences of work developed in their countries. They discussed the capitalist crisis in Europe, the rise of the rejection of neoliberal policies and austerity policies of the EU, the threats of imperialist war and their consequences.

After a long debate, an important political declaration was adopted unanimously, in which we express our solidarity with the struggle of the Greek workers and people against the blackmail of the EU, the IMF and the liberal and social-liberal governments of the EU States. We call on everyone in all countries to take part in the initiatives of solidarity with the workers and people of Greece, and to take part in the demonstrations of June 20.

We also approved a motion of solidarity with the Norwegian dockers.

We call on the workers and peoples of Europe to develop and implement the orientations contained in this political declaration.

The participants established common tasks and political activities for the coming months, to advance in the struggle for the revolutionary transformation of society and the development of proletarian internationalism.

France, June 2015

Workers’ Communist Party of Denmark – APK
Communist Party of the Workers of France – PCOF
Organization for the Construction of the Communist Party of the Workers of Germany
Movement for the Reorganization of the Communist Party of Greece (1918-1955)
Communist Platform for the Communist Party of the Proletariat of Italy
Marxist-Leninist Organization Revolusjon of Norway
Communist Party of Spain (Marxist-Leninist) – PCE (ML)
Party of Labor of Turkey – EMEP

POLITICAL RESOLUTION

Let us mobilize against policies of austerity and war
Long live international solidarity!

For years, the EU and the governments of various countries have imposed austerity policies on the workers and the popular masses. The result of the crisis of the capitalist system, aggravated by these austerity policies, have been more than 25 million unemployed in the EU, a massive unemployment that primarily affects young people, who are condemned to insecurity, but also older workers, who are threatened with sinking into poverty. The poverty extends everywhere, in the cities and the countryside. With these austerity policies, “growth” destroys more and more jobs and further enriches the rich and large shareholders. It means more insecurity, lower wages, drastic cuts in social spending: health care, education, public transport, etc.

These neoliberal policies are being implemented by the governments that are applying the “road map” of big business, of the financial oligarchy, who want to reverse the social and political gains that the working class, toilers and peoples have won through years of struggle and who today are resisting and fighting to maintain them. The various European treaties and directives, particularly since the Maastricht Treaty (and its “convergence criteria” that established the euro), have continued and deepened this anti-worker and anti-people policy, in the name of the dogma of “free and undistorted competition,” which means the organized competition of all against all, social dumping, “liberalization of the labor market,” which means freedom for the bosses to fire, the super-exploitation of the workers and instability. Whether they are called the “mobility law” of Rajoy [Prime Minister of Spain], the “Jobs Act” de Renzi [Prime Minister of Italy], the “Hartz Law” in Germany, the “Macron Law” in France, etc. these counter-reforms are all aimed at lowering the price of labor power, facilitating dismissals, developing even more flexibility and challenging the collective rights of the workers.

In recent years, it is the “debt crisis” that serves to justify the policies of privatization, of drastic cuts in social budgets, the liquidation of measures of social protection, while they are more necessary than ever for the large impoverished masses. These include particularly women of the popular strata, working women, who are the first victims of the elimination of public services.

It is not the popular masses who are responsible for these debts. These debts were contracted the billions in public money were used to bail out the banks and help the big monopolies to become ever bigger, to finance the policies of armaments, “major projects” that are useless for the people but very profitable for the monopolies who build and manage them.

The rejection of these national and European austerity policies is general. This is shown in the workers’ and popular resistance, in the demonstrations, the strikes, etc. that are the results of these policies. It is also shown in the elections, particularly through the very high rate of abstention among the popular strata and the disavowal of the governing parties, whether of the right or of the social-democrats.

The right-wing populist parties, the parties of the extreme right are able to use their electoral capital on a sector of this protest movement to highjack it into “solutions” that avoid attacking the capitalist system and that are promoting nationalism, division and xenophobia. While some do not hide their fascistic and even fascist references, others hide them behind an increasingly “social” discourse.

But this rejection is also expressed in a progressive way, particularly through the support given to the forces that take a stand against the austerity policies, against the payment of the debt for life, against the orders of the IMF, the ECB, the EU and the imperialist powers in Europe.

We are in solidarity with the struggle of the Greek people and denounce the blackmail of the leaders of the EU

This is what happened in Greece, with the victory of Syriza in the January elections.

Simply calling for “renegotiating” the debt, for having announced the end of the policy of mega-austerity imposed by the troika, has unleashed an intense campaign of pressure, blackmail, etc. by the leaders of all the EU countries, the officials of the IMF and the European institutions, in order to impose the continuation of the austerity policy.

The hatred of these leaders is explained by the fact that in no case do they want a people to refuse to continue to suffer the austerity policies that they themselves are imposing on “their” people. They do not want the fight of the people, the workers, the youth of Greece, etc. to serve as an example to other peoples. They want to avoid the “contagious effect” that this resistance can cause. Therefore, they want to make the Greek government capitulate.

It is not possible to resist these pressures without the mobilization of the Greek workers and people. This is what must be developed.

But we also need the solidarity of the workers and peoples, especially in Europe, to develop. That is why we are working with all political, union and social forces that share this goal.

We must denounce and put pressure on the governments of the EU countries, particularly those of the imperialist powers such as Germany and France, to stop this policy of blackmail towards Greece.

We must demand the cancellation of the Greek debts.

We must develop the fight against the same austerity policies in all countries.

Down with “Fortress Europe”

Every day boats of refugee from Africa and the Middle East capsize, causing dozens of deaths. If they manage to enter the EU, which is continuing to build walls, police and military barriers, etc., they find themselves chased and harassed by the police of all the EU countries. They are forced to hide and to live in inhuman conditions. They are also the target of parties and organizations of the far-right and fascists who are carrying out racist and xenophobic campaigns on the theme of the dangers of the “invasion” of refugees.

These refugees, men, women and children, are fleeing poverty and wars. They come from Syria, from the Horn of Africa, from the countries of the Sahel, etc., in short, from countries where the great imperialist powers are waging wars. Under the pretext of the “fight against terrorism,” there is the war for control of mineral and oil resources, the control of strategic zones, the rivalries among the great powers and their local allies.

In other words, the warmongers are the main ones responsible for this immigration.

While the peoples are showing their solidarity, as in Italy, in welcoming the refugees, the governments are putting in place increasingly reactionary policies aimed at “preventing immigration” and criminalizing the migrants and all those in solidarity with them.

No to the policy of tension and war

Several EU States are taking part in imperialist wars in Africa and the Middle East.

The decision of the leaders of the European imperialist powers to integrate Ukraine into the economic and political sphere of influence of the EU, the direct interference of US imperialism through the growth in power of NATO at the borders of Russia and the support given to the reactionary government of Kiev and to the reactionary and fascist forces in Ukraine, have resulted in a situation of great tension at the very frontiers of the EU.

We are currently witnessing a “re-engagement” of NATO in Europe, strongly supported by the leaders of several countries of Eastern Europe, particularly Poland and the Baltic countries. This is accompanied by an increase in their military budgets.

For several years US imperialism has put pressure on its allies to “share the burden of defense.”

The danger of war in Europe is real.

We demand the cancellation of the treaty linking Ukraine to the EU, a treaty that subjects the workers and the peoples of Ukraine to the economic and political orders of the EU.

We denounce the policy of confrontation with Russia and we demand the withdrawal of the arms deployed by NATO in this region.

We call for mobilization for the withdrawal from NATO, the armed wing of US imperialism and its allies, as an important step towards its dissolution.

We call on all people to develop the mobilization against the rising war budgets.

We denounce the increasing establishment of police States

The involvement of several European imperialist powers in the “war against terrorism” in the Middle East and the Sahel is accompanied by the establishment of mechanisms of surveillance and mass control and the closer coordination between the police, civil and military intelligence services, linked with the US intelligence services, particularly through NATO.

In all countries, one can see the strengthening of the criminalization of “social protest,” the questioning of democratic freedoms, particularly in the area of the right to strike, the right to organize and demonstrate. These attacks are concentrated against the militant organizations and unionists who denounce the class collaboration of the leaders who are “negotiating” with the employers and the government the implementation of austerity policies.

We call on the people to denounce and combat the rise of fascism in the States that is currently developing.

The myth of a Europe of peace and shared prosperity is collapsing

The crisis in Europe is sharpening the contradictions within it, among the States, and within each country and, more generally, between the social classes. Inequality is deepening and tensions are becoming exacerbated.

The economic mechanisms put in place by the EU and the euro zone are increasing the unequal development and are posing the question, repeatedly and publicly, of maintaining the euro zone as it exists.

In the countries where the people have spoken out against joining the euro zone or against joining the EU, this opposition is continuing to grow.

Certain countries applied to join the EU, and then withdrew their application, such as Iceland.

Everywhere opposition to the EU, to its policies, its anti-democratic way of functioning is growing and, in the increasingly important sectors, this challenge also affects its decision to establish itself as an imperialist bloc in ever stronger competition with the other great powers, and its even greater aggressiveness on the economic and political level towards the dominated countries of Africa, Asia, Latin America, etc.

Everywhere the consciousness is also growing that it is not possible to change the EU from within into a supposedly progressive institution at the service of peoples.

Therefore, we unconditionally defend the right of the peoples to break with the EU, the euro and all its political and economic mechanisms.

Paris, June 2015

Workers’ Communist Party of Denmark – APK
Communist Party of the Workers of France – PCOF
Organization for the Construction of the Communist Party of the Workers of Germany
Movement for the Reorganization of the Communist Party of Greece (1918-1955)
Communist Platform – for the Communist Party of the Proletariat of Italy
Marxist-Leninist Organization Revolusjon of Norway
Communist Party of Spain (Marxist-Leninist) – PCE (ML)
Party of Labor of Turkey – EMEP

Members of the International Conference of Marxist-Leninist Parties and Organizations

MOTION OF SOLIDARITY WITH THE DOCKERS OF NORWAY

Call for support for the Norwegian dockers

The dockers are known worldwide for their internationalism and their solidarity with the workers and seamen who are fighting for their rights. Now the dockers themselves are in urgent need of international support and solidarity.

The dockers of Norway have been in conflict since November 2013, that is, for almost 12 months. They have been repressed and arrested by the police. Their only demand is that the employers ratify the collective agreement and abide by the Convention 137 of the ILO which grants the unionized dockers the prerogative to load and unload the cargo ships. But this right is being denied them, including in the port of Oslo.

In the port of Oslo, this fight has another international aspect, because the Turkish company Yilport obtained the “exclusive right” to operate in the port for the next twenty years. But Yilport not only refuses to negotiate a collective agreement, but even refuses any discussion with the dockers’ union. Yilport is also hiring unskilled workers from temporary employment agencies, which results in dismissing the dockers from their work. This attempt to eliminate the dockers’ union and to undermine the collective agreements is totally unacceptable. In reality this is an attack against the workers in all countries and in all sectors.

The Marxist-Leninist parties and organizations of Europe call on the workers, unions and democratic forces to show their solidarity and boycott Yilport until it rehires the union dockers in the port of Oslo and signs a collective agreement with them.

Workers of the world, unite!

Resolution adopted by the regional conference of Marxist-Leninist parties and organizations, held in France in June 2015

Source

A Few Comments on ‘Critical Notes on Political Economy’ by Che Guevara

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Rafael Martinez

On the 40th Anniversary of the Assassination of Che Guevara by US Imperialism

Here we present a brief review of the book ‘Apuntes criticos a la Economia Politica’ (Critical Notes on Political Economy), consisting of various materials written by Ernesto Che Guevara, published by Ocean Press, Melbourne, Australia 2006 (in Spanish). This was published in conjunction with the ‘Centro de Estudios Che Guevara’ in Cuba, where the original documents are located. This book presents a collection of materials, most of which were unpublished and, therefore, represent a very important reference point for further scrutiny of Guevara’s economic thought.

It is convenient to warn the reader about our point of view with regard to the completeness of the materials selected by the editors. It is our firm belief that the published materials offer an incomplete reference point to Guevara’s overall view of political economy and that, if taken in isolation, these texts can help obliterate the essence of his economic thought and his contribution to the early stages of the economic reforms in Cuba. We hold the opinion that this publication does not contain all the available unpublished materials/notes on economic and philosophic topics that Guevara left us before taking off to Bolivia. Last, but not least, we call on the reader to see Guevara’s bare and sketchy language in the concrete historical context and circumstances in which Guevara was forced to scribble his thoughts. We find that a number of statements, especially those written by Guevara as comments to his readings, are not necessarily as clear as one would have hoped, leaving room for misinterpretation and misrepresentation of Guevara’s true intentions.

The book offers the following unpublished materials, which constitute, according to the editors, all the written materials left by Guevara with regard to his unfinished work for the publication of a manual of political economy. This manual of political economy would have been a response to the Soviet textbook of political economy with which he had already polemicised in public discussions:

  • Tentative plan
  • Prologue: the need of this book
  • Biographical sketch of Marx and Engels
  • 10 questions on the teachings of a famous book (referring to the Soviet textbook of Political Economy, Academy of Sciences of the USSR, Spanish edition 1963)

These are followed by a lengthy appendix, some materials of which were also unpublished. The appendix starts with a selection of critical notes (unpublished) on economic-philosophic Marxist works, which we believe is a rather incomplete set of notes, given the fact that Guevara presented himself as a rather methodical and critical person who, as we see in the book, loved to scribble his thoughts as he read. We are eager to see the rest of Guevara’s annotations, particularly those related to Lenin’s works on the New Economic Policy, Stalin’s work, ‘Economic Problems…’ and Mao’s ‘On the Correct Handling of Contradiction’ among others. We believe that these materials would be crucial to reconstruct a more cohesive picture of the later stage of Guevara’s economic thought.

In our view, in these unpublished works Guevara does not contradict any of the principles of his economic thoughts formulated earlier in his published articles that have been available to the public for over 40 years. While consistent with the most relevant tenets of ‘Guevarism’ in political economy, this text is a most valuable document that reveals some remaining obscure aspects of Guevara’s economic thought and evolution. This document is particularly revealing and assists us in gaining further insight into the heart of Guevarism and its distinct idiosyncrasy. It most definitely assists us in further refuting the theses of neo-Trotskyism with regard to Guevara’s economic thinking and philosophy, which try to reconcile his criticism of the post-Stalin Soviet economic model with their anti-Stalinism. On the other hand, this new document further corroborates and sheds additional light on the negative aspects of Guevara’s economic thought. As a matter of fact, as will be seen below, these documents help us gain additional insight on Guevara’s interpretation of the dialectical method and how this leads him to commit serious mistakes of principle. In conclusion, this new set of documents sheds very important light on crucial aspects of Guevara’s writings and it will be instrumental in building a more comprehensive picture of the revolutionary’s economic thought, both in its glory and its misery, in its apogee and its defeat. This document is a mandatory source for those who wish to comprehend the intricacies of Guevara’s thought and its implications on questions of political economy of the transitional society in the conditions of Latin America.

In the foreword written as an introduction to the political economy textbook he planned to write he synthesises his point of view with regard to the progress made in the political economy of the transitional society. The essential points put forward in the foreword are consistent with the spirit behind his critical notes, indicating that he had already arrived at the basic tenets of this economic thinking. This paragraph bears witness to Guevara’s overall viewpoint on the state of Marxism-Leninism:

‘The immense amount of writings that he [Lenin – our note] would leave after his death constituted an indispensable complement to the works of the founders [Marx and Engels – our note]. Then the source became weaker and only some isolated works of Stalin and some writings from Mao Tse Tung managed to stand out as a witness to the immense creative power of Marxism. In his last years Stalin sensed the results of this backwardness in theory and ordered the publication of a manual accessible to the masses that would deal with issues of political economy up to our days’ (in ‘The need for this book’, p. 30).

Guevara worked on the manual of political economy in the period 1965-1966 during his stays in Tanzania and Prague, after stepping down from office in Cuba. These materials bear excellent testimony to one of the most complex periods of the thinker in which he finally rejected the model of economic development pursued by the socialist camp at the time and had reached the stage at which he formulated his own interpretation of the theoretical sources of that economic practice. Guevara had reached a point at which he felt ready to formulate a list of theoretical and practical problems that he believed had not been addressed by Marxists at the time, as he had the firm belief that the state of theoretical development was not appropriate to the objective conditions imposed by the revolutionary process. To understand his state of mind it is most relevant to emphasise Guevara’s disillusionment with the economic reforms in Eastern Europe (and the Soviet Union for that matter), which he criticised most of all:

‘The solution that people want to give in Poland is the free development of the law of value, i.e. the return to capitalism. This solution had already been applied in the Polish countryside, where agriculture was de-collectivised; this year, due to drought and other natural adversities, Polish agriculture is in worse shape than before, has had more serious problems, in other words, the place where the economic calculus leads to … is solving the problems using the same system, by enhancing the material stimulus, the dedication of people to their material interest, leading, in a way, to the resurrection of categories that are strictly capitalist. This is something that has been happening for a while, which Poland is now trying and I think it is also being tried in other socialist countries’ (in ‘Annexes’, pp. 321-322).

In addition, Guevara was of the opinion that the reforms in Eastern Europe were of similar quality to those implemented in Yugoslavia, which Guevara refers to as aberrations due to mistakes of principles:

‘Poland is going along the Yugoslav path, of course; collectivisation is reverted, private property inland is reinstated, a new system of exchange is established and contacts are maintained with the United States. In Czechoslovakia and Germany the Yugoslav system is under study in order to apply it’ (in ‘Annexes’, pp. 404-405).

On the other hand, we are inclined to believe that Guevara would have disagreed with the assertion that there was capitalist restoration in the Soviet Union and the former People’s Democracies in the sense implied by Marxist-Leninists. On pages 380-381 of the present volume he seems to agree with Sweezy’s rebuttal of the Chinese thesis about the capitalist character of Yugoslavia, indicating that he would rather agree with the statement that ‘Yugoslavia is moving towards capitalism’.

By openly objecting to the essence of the economic reform in Eastern Europe and the Soviet Union, Guevara alienates himself from the mainstream economic thought at the time. In doing so he becomes critical not only of the present but also of the past and as it becomes clearer to us now, he arrived at the belief that at the source of these economic deviations stands Lenin’s attitude towards the economics of the transitional society and the first steps of the construction of socialism:

‘In the course of our practical and theoretical investigation we have a clear suspect, with name and surnames: Vladimir Ilyich Lenin’ (in the ‘Prologue’, p. 31).

Guevara is most likely a victim of the ideological confusion of the time in Cuba, which, in conjunction with the lack of materials in Spanish translation, may have created the pre-conditions for arriving at some dreadful conclusions. One of the most shocking pieces revealed by this document is Guevara’s rebuttal of some of Lenin’s theses on the construction of socialism in the Soviet Union. In particular, Guevara does not understand Lenin’s call for the New Economic Policy and its role in the prospective of socialist transformations in a predominantly petty-bourgeois country. To blame Lenin for the restoration, or to be more exact according to Guevara’s reasoning, for the process of restoration of capitalism at the time in the Soviet Union and the former People’s Democracies in Eastern Europe is a reflection, among other things, of Guevara’s failure to grasp Lenin’s dialectical approach to the solution of contradictions in the transitional society:

‘It is a real fact that all the juridical superstructure of the current Soviet society comes from the New Economic Policy; in this the old capitalist relations are preserved, the old categories of capitalism, i.e., commodities exist, to a certain extent, profit and the interest that the banks appropriate exist and, of course, there exists the direct material interest of the workers’ (ibid., in ‘Some thoughts about the socialist transition’, p. 11).

To blame the New Economic Policy for the right-wing character of the economic reforms of the post-Stalin period shows how little Guevara understood of the essence of the transformation of the economic categories inherited from capitalism that occurred in the Soviet Union during the periods of transition to socialism and communism. This major mistake in Guevara’s economic thought is due to a number of circumstances. We believe that his idealist mistakes are to blame for this blunder. We should also take into account the fact that he was not acquainted with the Soviet materials on political economy and philosophy of the Stalin period. We emphasise this fact also because he was certainly not the only one affected by this shortcoming. As a matter of fact it affects many of those who take Stalin’s Economic Problems in isolation from the economic practice of socialist construction that this crucial work is a generalisation of. Without access to this documentation it is extremely hard to make a case in favour of the qualitative change of the character of the economic categories in the practice of the Soviet Union in the Stalin period. Unfortunately, so far the wealth of economic and philosophical materials published in major Soviet journals of the revolutionary period still remains in Russian only. At the time when the economic discussions under Guevara’s leadership had reached their apogee, a number of various ideological trends were tolerated and even published in the official Cuban press. Needless to say, these trends had institutionalised the fact that their analysis of the economic history of the Soviet Union was based on pseudo-bourgeois if not utterly bourgeois sources and that for them questions of dialectics and the Marxist method are as much abstract notions as they are alien to a bourgeois thinker. With this we do not mean to exonerate or excuse Guevara’s fundamental mistakes; however, we believe that this circumstance, together with preconceptions and ideological prejudices that became overwhelming and ubiquitous in ideological discussions at the time in Cuba, may have played a role in the formation of Guevara’s views on political economy.

What seemed at the time to be a relative obvious statement to many in Cuba, including Guevara himself, that the existence of commodity-money relations in the Soviet Union was inherited from the period of the New Economic Policy, is no more than a reflection of sheer ignorance of the complexity of the economic reality of the transitional society.

Guevara went further when he stated that the New Economic Policy was a requirement particular to the social and economic reality of post-revolutionary Russia and that Cuba, or any other country facing the tasks of revolutionary transformations, does not necessarily need to implement these policies. This statement is in principle correct. However, we think that Guevara may have wanted to make the issue of the disappearance of commodity-money relations a question of socialist education, rather than a question of the maturity of the relations of production and the development of the productive forces. We have certain evidence that Guevara does not necessarily agree with the fundamental principle of the objective character of the economic laws of the transitional society. Guevara’s seemingly correct statement against the absolutisation of the New Economic Policy as an intermediate and necessary step to the transition to socialism, as advocated by modern revisionism, seems to be considered by him from idealist positions. Here lies the core of Guevara’s deviation from the principles of Marxist-Leninist political economy. This does not necessarily deny the value of his fight against the tenets of modern revisionism, but it places severe restrictions on the value of his economic thinking.

It is extremely interesting to note that Guevara is aware of the evolution of the Soviet manual after the death of Stalin. He recognised that the manual changed both in its structure and its orientation as the Soviet economic structure evolved.

‘This manual has been translated into many languages and several editions have been published, undergoing pronounced changes in its structure and orientation as changes took place in the Soviet Union’ (in ‘The need for this book’, p. 30).

Unfortunately, we lack further detail on this reasoning, which would be crucial in evaluating Guevara’s understanding of the history of the political economy of the Soviet Union. We believe we have a fair idea of Guevara’s point of view with regard to the change of orientation (at least along general lines, i.e. Stalin’s line for the suppression of commodity-money relations as opposed to their expansion under the revisionist economic model). But we are not particularly clear about what particular aspects of the economic policies in the 1950s he would refer to as a change in orientation, since the economic reforms of September 1953 onwards affected many aspects of the Soviet economic structure. As discussed above, we believe that Guevara does not necessarily understand the qualitative changes of the economic relations in Stalin’s period and the economic discussions that led to the first draft of the political economy textbook.

Nevertheless, to acknowledge an evolution in Soviet economic thinking at the time is very important in analysing the intricacies of Guevara’s own evolution and for the significance of his economic thought. It certainly reinforces the progressive aspect of his economic thinking with respect to what was widely accepted as a dogma by Trotskyite and neo-Trotskyite ideologists. Guevara does not subscribe to the dogma advocated by those who attacked and still attack the Soviet Union from ‘left’-wing revisionist positions, that allegedly Khrushchevism-Brezhnevism represents a continuation of what is usually referred to as Stalinism. According to this reasoning a rift is established between Leninism and ‘Stalinism’ and the latter is understood as a deviation or even its antithesis, and was perpetuated after Stalin’s death. They do not recognise a qualitative change in the economic policies in the 1960s compared to the political economy embodied in the policies of Stalin’s period. On the contrary, they view the economic evils of Soviet modern revisionism as a result of ‘Stalinist’ thinking. Nothing can be more absurd from the point of view of Marxism-Leninism, and Guevara is not afraid to polemicise with those who imply a rift between Lenin and Stalin, whether explicitly or implicitly, by rebutting the Soviet revisionists’ claims of Stalin’s mistakes:

‘In the alleged mistakes of Stalin lies the difference between a revolutionary attitude and a revisionist one. He sees the danger enclosed in market relations and tries to break with it, while the new leadership is curved by the pressure of the superstructure and promotes the action of market relations by theorising that the use of these economic mechanisms may lead to communism’ (in ‘10 questions on the teachings of a famous book’, p. 214).

It is well known that Guevara had an overall supportive attitude towards Stalin’s Economic Problems. However, the present text bears witness to the fact that he disagrees with some of the points raised by Stalin in this work. We will not elaborate more on this point since we would not be adding much of substance to what has already been said about the idiosyncrasy of Guevara’s economic thought. Nevertheless, it would probably be helpful to give a quote in which Guevara clearly states his position with regard to Trotsky and Trotskyism:

‘I think that the fundamental stuff that Trotsky was based upon was erroneous and that his ulterior behaviour was wrong and his last years were even dark. The Trotskyites have not contributed anything whatsoever to the revolutionary movement; where they did most was in Peru, but they finally failed there because their methods are bad’ (in ‘Annexes’, p. 402).

We do not want to mislead the reader into believing that ‘Guevarism’ is a form of vindication of ‘Stalinism’. While appreciating the revolutionary character of Stalin’s contribution to political economy and demonising the tenets of modern revisionism, he also appears quite critical of Stalin’s deeds. Guevara concludes the above paragraph by bluntly making a terrible accusation:

‘Few voices oppose him publicly, showing this way the huge historical crime of Stalin: to have despised communist education and to have established a stiff cult of personality’ (in ‘10 questions on the teachings of a famous book’, p. 214). 

Here Guevara manifests a lack of erudition and originality in perpetuating one of the most common criticisms of Stalin’s legacy. To talk about Stalin’s alleged contempt for communist education reflects a profound lack of knowledge of the history of the Soviet Union. It is factually incorrect and most likely reflects again the lack of translated materials and a general ignorance of everyday life in the Soviet Union. In essence Guevara echoes a rather superficial interpretation of the history of the Soviet Union, which is essentially divorced from the point of view and methodology of historical materialism. Revisionist ideologists, just like bourgeois historians, try to explain the essence of historical periods based on the personality of leaders and ascribe whatever prominent aspect of social life to them. Unfortunately, Guevara mechanically propagates subjective thinking into his economic analysis and discredits his image unnecessarily. It is unlikely that Guevara made a conscious effort to seriously evaluate the essence of such statements and to make a more objective analysis of Stalin’s period. Here, Guevara propagates anti-Marxist reasoning to substantiate one of the central tenets of his economic theory: the inclusion of consciousness into economic relations and therefore to consider consciousness as part of the object of political economy.

This aspect of Guevara’s economic thinking is well known and is repeated in these new materials on numerous occasions. In a letter to Fidel Castro, Guevara explicitly states something that we already expected as a result of the analysis of his published works. We were aware of strong similarities between Guevara’s striving for communist education and the Maoist interpretation of the role of consciousness in the relations of production:

‘Communism is a phenomenon of consciousness, one does not reach it by jumping into the vacuum, by a change in the quality of production, or by the simple clash between the productive forces and the relations of production. Communism is a phenomenon of consciousness and the consciousness of man has to be developed…’ (in ‘Some thoughts about the socialist transition’, p. 11).

It is worth noting that Guevara’s denunciation of Stalin’s alleged contempt for education is quite similar to Mao’s argument in his critique of Stalin’s Economic Problems:

‘Stalin’s book from first to last says nothing about the superstructure. It is not concerned with people; it considers things, not people. Does the kind of supply system for consumer goods help spur economic development or not? He should have touched on this at the least. Is it better to have commodity production or is it better not to? Everyone has to study this. Stalin’s point of view in his last letter [Reply to comrades A. V. Sanina and V. G. Venzher – editor’s note] is almost altogether wrong. The basic error is mistrust of the peasants’ (Mao Tse Tung, A Critique of Soviet Economics, Monthly Review Press, New York and London, 1977, p. 135).

This strongly suggests that this aspect of Guevara’s economic thinking is not original, as some experts of his work insistently argue. It is evident that this aspect of his thinking is the result of the influence of various ideological trends that circulated in Cuba at the time. It is clear to us that Guevara made a serious effort in the course of his investigation to disentangle complex questions of political economy. In doing so the spectrum of literature he was exposed to could not have been as broad as one would have hoped. Unfortunately, Guevara is driven by the prejudice propagated by many different revisionist trends outside the Soviet Union, and within it after Stalin’s death, that allegedly the economic thought at the time was characterised by dogmatism (on the other hand, we are unclear as to what exactly Guevara meant by dogmatism). While being progressive in the main, Guevara uncritically takes for granted what the Bettelheims and Sweezys propagated in Cuba without proof (speaking of dogmatic thinking…).

‘After a long lethargy, characterised by the most outright apologetic, the XXth Congress of the CPSU made a leap, but not forward; constrained by the dead end that the hybrid system led to and pressed by the superstructure, the Soviet leadership took steps backwards that were complemented by the new organisation of industry. The lethargy is followed by repression; both have the same dogmatic character’ (in ‘10 questions on the teachings of a famous book’, p. 213).

Guevara on Collectivisation

This topic is probably the one in which this document gives us the most additional insight into Guevara’s economic thought. Guevara’s views on collectivisation are not really covered in the published materials available to us. One could only guess that for the sake of internal consistency Guevara would have advocated for a progressive stand with regard to the role of the state and the main relations of production in the countryside and his attitude with regard to modern revisionism on this question. It is fascinating to see confirmed this initial view that Guevara opposed the selling of the machine tractor stations to the collective farms. This policy had become default at the time of the Cuban revolution and was one of the most important aspects of the agrarian program of the revisionists around the world and was very much supported and even imposed by the Soviet revisionists.

It seems probable that Guevara was unaware of the fact that the Chinese leadership also advocated these policies at the time. According to various biographers of Guevara, at some point the contradiction between his economic policies and those instigated by the Soviet revisionists became so acute that the latter started to accuse Guevara of deviationism (Trotskyism, in particular) and that he in turn allegedly rebutted those accusations by arguing that if anything, he was closer to the Chinese with regard to the controversy. We do not want to debate the accuracy of the eyewitness’ accounts on which these authors based their assumptions about Guevara’s Maoism. What is clear to us, however, is that Guevara fundamentally deviates from mainstream Maoism on this question, probably without really knowing it.

Guevara raises one point correctly. It is a well-known fact that the relative weight of strictly private agricultural production of peasants was dropping with respect to the overall output of the collective farms, as reported by the Soviets at that time. This was due to the natural evolution created by the growing disparity of labour productivity between mechanised and manual labour and the fact that capital investment in general favoured the former for obvious reasons. Guevara is right in pointing to the fact that, at some point in the development of the collective system of production, the contradiction between the people’s property and the kolkhoz is not determined by the fraction of the means of production made up of private property of individual peasants.

‘Private property is being eliminated within the kolkhoz and, moreover the relative weight of collective property becomes overwhelming, but even if it was 100% the main issue still remains, the contradiction between the people’s property and the collective property’ (in ‘10 questions on the teachings of a famous book’, p. 185).

Here Guevara addresses the general problem of the contradiction between collective property and socialised property as a problem per se, which always remains as long as collective property has not merged into the property of the whole people. If put into historical perspective, Guevara’s attitude represents a great step forward with respect to the character of the agrarian reforms fostered by modern revisionism. Here Guevara is aware of a basic element in the Marxist-Leninist approach to the resolution of contradictions between the city and the countryside, contradictions that modern revisionism tried to obliterate and reduce to a question of the different level of development of the forces of production and productivity. Guevara correctly disagrees with such a postulate, thus reinforcing the overall progressive character of his economic thought. This is further strengthened by Guevara’s open rebuttal of one of the biggest attacks on socialism by the Soviet revisionists, namely, the selling of the machine tractor stations from the state to the collective farms in the late 1950s. After a section of the revisionist manual of political economy devoted to substantiating the selling of the machine tractor stations, Guevara writes:

‘This is a concrete example of the contradictions that become antagonistic between the social property and the individual collectivity. The MTS [Machine Tractor Stations – editor’s note] may have had bureaucratic deviations, but the superstructure imposed its solution: more autonomy, more wealth of their own’ (in ‘10 questions on the teachings of a famous book’, p. 187).

Nevertheless, one must always be careful with Guevara’s formulations. In fact, even though Guevara’s attitude to the revisionist plans for agriculture is overall progressive, one can never be cautious enough when dealing with this writings. Below we find a paragraph that may indicate that Guevara probably made his criticism for the wrong reasons:

‘Before, the need for commodity forms was explained by the existence of different forms of property. In practice the kolkhoz property acts as antagonist to the directly social property and therefore, the double character of labour is similar to that in capitalism. The double character of labour would disappear if this antagonism ceased to exist’ (in ‘10 questions on the teachings of a famous book’, p. 159).

The first sentence is not controversial. Guevara simple states that under Stalin the persistence of commodity categories in socialism was understood as a result of the presence of two forms of property under socialism: socialised or state property and collective property or the kolkhoz. Unfortunately, Guevara addresses the relationship between the collective property and socialised property as antagonistic. We cannot agree with this as a general statement. In the conditions of the restoration of capitalism the relationship between the state (no more socialised) and collective property is antagonistic and it definitely becomes similar to that in the countries of classical capitalism. However, as long as the state property is socialised, i.e., loosely speaking, the means of production is in the hands of the state of the dictatorship of the proletariat (regardless of the level of the development of the productive forces and the effective level of socialisation of the process of production), the relationship between the former and the kolkhoz system is not antagonistic. This type of statement is equivalent to saying that the relationship between the working class and the peasantry is a relationship of antagonism, which is definitely not true in the conditions of the dictatorship of the proletariat. Therefore, the double character of labour in the socialist system or in the transitional society is not driven by a relationship of antagonism.

Here one could argue that Guevara was implying that capitalist relations had been restored in the Soviet Union. He probably would have agreed to some extent with that statement. As a matter of fact, in the text of ‘10 questions on the teachings of a famous book’ he bluntly objects to the concept of the state of the whole people, a concept that was officially supported in the Soviet Union at the time, which clearly implies that he believed the dictatorship of the proletariat had been disbanded for good. Given the extent of Guevara’s criticism of the reforms in Eastern Europe and the fact that he openly talked about these as a regression with respect to earlier practices, one might be inclined to believe that perhaps Guevara was implying that capitalist relations had been restored to some extent in the countries of the former People’s Democracies and the Soviet Union. This might be the case, however, and very unfortunately, Guevara made the statement above in a general sense, as opposed to the case of the revisionist system alone. We are able to disentangle this by means of a short paragraph in the ‘Annexes’ written following a famous quote from Lenin’s On Cooperation that we insert here for the reader’s benefit:

‘By adopting NEP we made a concession to the peasant as a trader, to the principle of private trade; it is precisely for this reason (contrary to what some people think) that the co-operative movement is of such immense importance. All we actually need under NEP is to organise the population of Russia in co-operative societies on a sufficiently large scale, for we have now found that degree of combination of private interest, of private commercial interest, with state supervision and control of this interest, that degree of its subordination to the common interests which was formerly the stumbling-block for very many socialists. Indeed, the power of the state over all large-scale means of production, political power in the hands of the proletariat, the alliance of this proletariat with the many millions of small and very small peasants, the assured proletarian leadership of the peasantry, etc. – is this not all that is necessary to build a complete socialist society out of co-operatives, out of co-operatives alone, which we formerly ridiculed as huckstering and which from a certain aspect we have the right to treat as such now, under NEP? Is this not all that is necessary to build a complete socialist society? It is still not the building of socialist society, but it is all that is necessary and sufficient for it.” (V.I. Lenin, On Cooperation Collected Works, 4th English Edition, Progress Publishers, Moscow, 1966, Vol. 33, pp. 467-468.)

To which Guevara, to our despair, bluntly objects:

‘I think this is a wrong conception. The fundamental mistake is to think that the collective character is above its private character, something that practice has ruled out. The cooperative is the result of an economic need; there is a class force behind it and its consolidation and to acknowledge it is to strengthen the class that Lenin so feared’ (in ‘Annexes’, p. 241).

Unfortunately, this reasoning is far from Marxist and reflects once again Guevara’s shallow understanding of dialectical materialism, without which a consistently Marxist treatment of political economy is simply not possible. Guevara is basically telling us, consciously or unconsciously, that the political union between the working class and the peasantry is not viable, even under the conditions of the dictatorship of the proletariat, by asserting that the collective sector acts as a private producer with respect to the socialised system. And if one reads his words literally one would have to conclude that Guevara does not see the progressive character of cooperation, however complex or simple, in the process of construction of the socialist economy. We are not even sure if Guevara thought carefully enough about the implications of such a statement.

Guevara on Mao

The present document sheds some light on the question of Guevara’s attitude towards Mao in a very revealing but brief passage, which touches upon a very important question in dialectical materialism. In particular, and possibly unconsciously, Guevara deals with one of the most distinct characteristics of Mao’s understanding of the interrelation of opposites in dialectical materialism. A more detailed analysis of this question has revealed a lot about the true essence of Mao’s understanding of the role of contradiction and equilibrium. Due to the lack of material the conclusions drawn here with regard to Guevara’s attitude towards Mao in general, and with respect to this aspect in particular, need to be taken with a grain of salt.

The revisionist conception of the role of commodity-money relations is ultimately related to questions of dialectical materialism, such as the role of contradiction and equilibrium. It is no coincidence to see both aspects linked one way or the other in the analysis of the political economy of modern revisionism. Conversely, we would expect that Guevara would have a well-defined attitude toward the question of contradiction and equilibrium in dialectics for consistency sake, due to the progressive character of Guevara’s conception of the political economy of the transitional society. As a matter of fact the analysis of Guevara’s economic thought indicates a well-defined system of thought, not always correct, but at least self-consistent. One excellent example of self-consistency is Guevara’s negative attitude toward selling the machine tractor stations to the collective farms, as discussed in the previous section.

Before moving to the citation per se, it is relevant to emphasise our lack of understanding of Guevara’s attitude towards the Chinese CP at the time of the controversy with the Soviets. The present document confirms accounts by various biographers of Guevara’s positive attitude towards Mao. And rightly so, as already mentioned above:

‘…Then the source became weaker and only … some writings from Mao Tse Tung managed to stand out as a witness to the immense creative power of Marxism’ (in ‘The need for this book’, p. 30).

As pointed out in the section on Guevara’s stand toward collectivisation, he fundamentally departs from the mainstream stand on this question advocated by the Chinese at the time. It is clear that he opposed the selling of the main means of production to the communes and, if he had a chance, he would have probably rejected the policies of self-reliance that Chinese agrarian policies were based upon. We have no evidence at this point whether Guevara had a chance to analyse the Chinese policies in the countryside and whether he had the opportunity to develop a debate with Chinese officials on this matter. We do have accounts of intense discussion with Soviet and Eastern European economists, especially Czechoslovaks, but we do not seem to have accounts of similar contacts with the Chinese. We are also aware of Guevara’s criticism directed at the Polish leadership. We believe that Guevara would have favoured the Chinese in the Sino-Soviet controversy given his critical attitude toward the Soviets in general and the new economic reforms in particular, which he calls revisionist. But it is not clear to what extent Guevara would have supported the economic policies of the Chinese leadership during the post-Stalin period. We simply lack any evidence. In this respect, it is also relevant to bear in mind that the ideological confusion reigning in the international communist movement at the time (the true nature of modern revisionism was not yet fully understood) had a strong impact on Guevara’s reasoning. The analysis of Guevara’s economic thought shows that he was also a victim of this ideological confusion.

The citation under study in this section belongs to a comment of Guevara allegedly written next to a number of paragraphs of Mao’s On Contradiction. This complicated section of the document needs to be understood within a historical context and, of course, within the context of the pamphlet in its entirety, as Mao’s paragraph quoted by the editors is not even necessarily relevant to Guevara’s footnote. The implications of Guevara’s citation go far beyond the particular topic discussed in the paragraphs of On Contradiction that the editors of the book have chosen to publish, for understandable reasons, as will be discussed below. Guevara writes:

‘… For the Chinese the fundamental contradiction lies between imperialism and the oppressed world, because the latter are the basis for the existence of imperialism. Imperialism can exist without socialism but not without the exploitation of the peoples where the main struggle is for the people’s liberation. On the other hand, there can be no equilibrium between antagonistic opposites [our emphasis]; the socialist countries are antagonistic opposites of the imperialist countries; although they represent a solution of an earlier contradiction (exploited and exploiters) on a national scale, they do not solve the contradiction on an international scale’ (in ‘Annexes’, p. 243).

Guevara’s citation is open to all sorts of speculation. Needless to say, our analysis is for obvious reasons not necessarily unbiased. There are two relevant aspects that we deem necessary to comment on here. Firstly, Guevara points out the position of the Chinese with regard to what they believe are the main contradiction in the class struggle. Guevara voices one of the points that Mao insisted on in his work On Contradiction, that of the existence of a principal aspects of the contradiction, which determines the character of the contradiction and its most important manifestations:

‘Of the two contradictory aspects, one must be the principal and the other the secondary. The principal aspect is the one that plays the leading role on the contradiction. The quality of the thing is mainly determined by the principal aspect of the contradiction that has taken the dominant position’ (Mao Tse-Tung, On Contradiction, International Publishers, New York, 1953, p. 36).

While Mao’s analysis of the role of imperialism in China in On Contradiction is overall correct, the exaggeration of the contradiction between imperialism and the oppressed nations, between rich and poor, eventually assisted the Chinese leadership in supporting and further developing the anti-Marxist theory of the three worlds (which by the way was not an invention of the Chinese leadership). To argue that the main contradiction is the antagonistic contradiction between imperialism and the oppressed nations, in the historical conditions of China at the time when the pamphlet was written, is correct. However, to exaggerate the dominant role of this contradiction by idealising and absolutising that relationship unavoidably leads revisionism to disregard the antagonistic class relations between the national bourgeoisie and the oppressed people, to disregard the internal contradictions, as secondary and therefore not relevant, following Mao’s stiff attitude toward secondary contradictions. This idealisation leads to the schematic representation of the division of the world into three types of countries, regardless of social formation, which is anti-Marxist in its core. By idealising the relationship between imperialism and the oppressed nations, between rich and poor nations, such relationships are ripped off their class character and turned into classless concepts, as classless as the mechanical division of the world of exploited and exploiters into the three worlds.

It is not clear to us what Guevara is actually implying by his remark. We do not even know if this conclusion is biased by discussions with Chinese comrades at the time or if it is just an overall comment on the pamphlet, written for his own benefit. Most likely Guevara agrees with the statement. Nevertheless and secondly, what is of particular relevant in our analysis is Guevara’s statement that ‘there can be no equilibrium between antagonistic oppositess, which we find truly remarkable, for the lack of a better word.

In order to appreciate the relevance of Guevara’s statement it is necessary to recall the specifics of Mao’s understanding of the role of contradiction and the dynamics that determine the interaction between the opposites in that contradiction. In contrast to the classical Marxist-Leninist understanding of the concept of qualitative and quantitative change, Mao introduces two forms of movement in On Contradiction:

‘The movement of all things assumes two forms: the form of relative rest and the form of conspicuous change. Both forms of movement are caused by the mutual struggle of the two contradictory factors contained in a thing itself. When the movement of a thing assumes the first form, it undergoes only a quantitative but not a qualitative change, and consequently appears in a state of seeming rest… Such unity, solidarity, amalgamation, harmony, balance, stalemate, deadlock, rest, stability, equilibrium, coagulation, attraction, as we see in daily life, are all the appearance of things in the state of quantitative change’ (On Contradiction, p. 48).

According to Mao, there exist two types of motions, through which qualitative and quantitative changes manifest themselves. Qualitative changes take place through more or less violent motions and quantitative changes take place through relatively slow motions. From the point of view of a purely mechanical approach with regard to, for example, the transition of matter from one state into another and vice-versa, this reasoning would not necessarily provoke strong objections. However, Mao’s reasoning does have serious implications generally speaking, and in particular turns the Marxist-Leninist understanding of the dynamics of the opposites of contradictions into a theory of mechanical equilibrium between them, which is broken when antagonistic contradictions are resolved through qualitative changes or upheavals. According to this reasoning, the accumulation of quantitative changes is viewed from the point of view of harmony among the opposites of the contradiction. Harmony is broken when qualitative changes occur; harmony, however, is the form through which the interrelation of the opposites of the contradiction manifests itself between periods of upheavals. This mechanical interpretation of the understanding of the interrelation between quantitative and qualitative changes is not an innovation of Mao. As a matter of fact, this type of thinking had been extensively developed and applied to the theory of class struggle and political economy by Bogdanov and Bukharin in the Soviet Union.

To understand Bogdanovism and how his theory of equilibrium was adapted by Bukharin to questions of the political economy of the transitional society is crucial to comprehend the theories of market socialism advocated by modern revisionism. Bogdanov was one of the objects of criticism by Lenin in Materialism and Empirio-Criticism and Stalin fought all this life against remnants of Bukharinism in political economy. In essence, the basic philosophical and theoretical tenets of modern revisionism are inspired by Bogdanov’s postulates formulated in his work Universal Science of Organisation – Tektology (1913-1922). Tektology has been highly praised by bourgeois scholars as a precursor of a whole trend of bourgeois ‘natural philosophy of organisation in complex systems’. As Bogdanov put it, ‘the aim of Tektology is the systematisation of organised complexes’ through the identification of universal organisational principles: ‘all things are organisational, all complexes could only be understood through their organisational character’. The starting point of Bogdanov’s Tektology was that nature has a general, organised character, with one set of laws of organisation for all objects. Two aspects of Bogdanov’s contributions were central in the development of the first theories of right-wing revisionist political economy in the 1920s: first, Bogdanov’s metaphysical concept of the law of organisation of a complex system (i.e. the economy of the transitional society) through the identification of universal organisational principles; secondly, the need for equilibrium of the complex system and the environment. Bogdanov believed he had developed a more complex conception of equilibrium, different from the purely mechanical conception, which considered that any complex system should correspond to its environment and adapt to it. But in practice Bogdanov’s postulates were implemented by a trend of Soviet economists in the 1920s, including Bukharin as the leading member of the future right-wing opposition to the plans for massive collectivisation and the gradual liquidation of commodity-money relations in the Soviet economy. In the 1920s the concept of ‘law of labour expenses’ circulated among wide circles of Soviet economists. This concept was exposed at the time as no more and no less than the law of value, dressed up in the form of the Bogdanovite law of organisation of a complex system. The law of labour expenses, according to Bukharin, would be a general law (applicable to all historical epochs and modes of production) that establishes the proportions of labour. In the modes of production based on commodity-money relations, the law of value would be the manifestation of this general law. Under socialism, according to Bukharin, the law of labour expenses would act ‘naked’ without using the form of the law of value. In the end, the regulator of labour exchange under socialism would be the principle of exchange of equal labour (values in the commodity economy). In essence, Bukharin propagated the use of the law of value as the regulator of the proportions of labour in the socialist economy, which is a mercantilist approach to the questions of political economy of the transitional society. The observation of the ‘law of labour expenses’ provides proportionality and, therefore, the necessary equilibrium of the complex system. Bukharin’s energetic opposition to the policies of collectivisation and massive industrialisation was based on the belief that the economic disproportions created by the systematic violation of the ‘law of labour expenses’ (i.e. the law of value) would disturb this abstract concept of economic equilibrium. The theories of market socialism that emerged after the Great Patriotic War and became the official theoretical foundation of the new regime after Stalin’s death is just a sophisticated version of Bogdanov/Bukharin’s ‘law of labour expenses’.

It is not within the scope of the present article to deal with this question in detail. This topic will be covered in more depth in the near future. Nevertheless what is relevant to the present discussion is to point out that Mao’s On Contradiction opens the way to conceiving the concept of harmony of opposites. These features of Mao’s philosophical thinking blossom further and adopt openly revisionist manifestations in a later work, On the Correct Handling of Contradictions Among the People in 1957, in which the harmony of the proletariat and the national bourgeoisie is considered feasible. It is very possible that Guevara was also acquainted with this later work of Mao, as it had become one of Mao’s most publicised works, especially at the time when Maoism was emerging as an ideological trend independent of mainstream revisionist ideology. The fact that Guevara explicitly denies the possibility of harmony of opposites strongly indicates that he was acquainted with this work.

By this we do not want to imply that Guevara had reached a point in his theoretical investigations at which he was in a position to systematically expose the tenets of what’s known today as the theory of Maoism. On the contrary, Guevara agrees with Mao on the role of ideology in the political economy of socialism. Their conceptions of the object of political economy in the transitional society do not differ significantly in their essence. It is in this aspect where Guevara’s economic theory stumbles into serious problems. This central shortcoming of Guevara’s economic thought prevents him from fully and consistently grasping the theory of political economy developed by Lenin and Stalin.

Within the context of the quotation under scrutiny, Guevara is obviously protesting against the theory of peaceful coexistence between what he refers to as socialist countries and imperialism. While internal antagonistic contradictions were in the main resolved by the socialist revolutions, the class contradictions between the proletariat and the bourgeoisie continue mainly under the form of the antagonistic relationship between socialism and imperialism. As a matter of fact, internal contradictions are intimately connected to the antagonistic relations with the imperialist world.

The citation presented above is followed by a hopelessly wrong and rather absurd sentence, to say the very least:

‘Finally, the law of uneven development is a law of nature, not of the dominant social system; therefore, the socialist countries also develop unevenly, which transforms itself through commerce into unequal exchange, or in other words, into the exploitation of some socialist countries by others.’

This sentence is not necessarily relevant to the above discussion. However, we bring this quotation up to make more evident the fact that our investigation on the heart of Guevara’s thought is far from understood and is plagued with pitfalls and inconsistencies. This statement is a blemish on the reputation of Guevara’s thought. To state that the uneven development of socialist countries is a necessary economic law is consistent with stating that the development of socialism spontaneously engenders exploitation of man by man, and therefore, the construction of communism is a hopeless illusion and lacks scientific substantiation both philosophically and from the point of view of political economy. Let us hope for the best, that Guevara was just being sarcastic. Unfortunately, whether this was the case or whether he was trying to make a point will probably remain a mystery to us.

Source

Helen Yaffe – Ernesto ‘Che’ Guevara: A Rebel against Soviet Political Economy

Che_SClara

Helen Yaffe is author of Che Guevara: The Economics of Revolution 

In January 1962 Guevara told colleagues in Cuba’s Ministry of Industries (MININD): ‘In no way am I saying that financial autonomy of the enterprise with moral incentives, as it is established in the socialist countries, is a formula which will impede progress to socialism’.[1] He was referring to the economic management system applied in the Soviet bloc, known in Cuba as the Auto-Financing System (AFS). By 1966, in his critique of the Soviet Manual of Political Economy, he concluded that the USSR: ‘is returning to capitalism.'[2] This paper will demonstrate that Guevara’s analysis developed in the period between these two statements as a result of three lines of enquiry: the study of Marx’s analysis of the capitalist system, engagement in socialist political economy debates and recourse to the technological advances of capitalist corporations.[3] At the same time Guevara was engaged in the practical experience of developing the Budgetary Finance System (BFS); an alternative apparatus for economic management in MININD.

Guevara was head of the Department of Industrialisation and President of the National Bank in 1960 when all financial institutions and 84% of industry in Cuba were nationalised. His BFS emerged as a practical solution to problems thrown up by the transition from private to state ownership of industrial production. Cuba had an unbalanced, trade dependent economy dominated by foreign interests, principally from the United States. The production units which passed under the Department’s jurisdiction ranged from artisan workshops to sophisticated energy plants. Many faced bankruptcy while others were highly profitable. Guevara’s solution was twofold: first, to group entities of similar lines of production into centralised administrative bodies called Consolidated Enterprises. This allowed the Department to control the allocation of scarce administrative and technical personnel following the exodus of 65-75% of managers, technicians and engineers after 1959; and second, to centralise the finances of all production units into one bank account for the payment of salaries, to control investment and sustain production in essential industries which lacked financial resources. With the establishment of MININD in February 1961, the BFS evolved into a comprehensive apparatus which embedded these organisational structures in a Marxist theoretical framework, to foster Cuba’s industrialisation, increase productivity and institutionalise collective management.

Advanced technology

Guevara set up the BFS with compañeros who understood the internal accounting practices, administrative centralisation and productive concentration of US corporations and their subsidiaries in Cuba. Guevara examined the documentation from these companies as they fell into state hands. He was impressed with their management structures, the use of centralised bank accounts and budgets, determinate levels of responsibility and decision-making, and departments for organisation and inspection.[4] He told colleagues that the BFS had an accounting system similar to the pre-1959 monopolies operating in Cuba, with their efficient control systems: ‘it’s not important who invented the system. The accounting system that they apply in the Soviet Union was also invented under capitalism.'[5]  

Guevara first travelled to the USSR in 1960. His deputy Orlando Borrego recalled that they visited an electronics factory which did accounts by abacus. Having studied the US-owned Cuban Electricity Company, Shell, Texaco and other corporations which used the latest IBM accounting machines, Guevara was struck by the backwardness of Soviet techniques. He believed that advances achieved by humanity should be adopted without fear of ideological contamination.

With the imposition of the US blockade, Cuba was forced to buy factories from the socialist countries, especially the USSR. This assistance was essential, but the relative backwardness of the equipment clashed with Guevara’s desire for advanced technology transfers. He did not criticise the Soviets for this backwardness per se. Rather, he complained about the contradiction between the high level of research and development in military technology and low investment applied to civilian production. He objected to their ideological resistance to appropriating advances made in the capitalist world. This was a costly mistake in terms of development and international competitiveness.[6] For example: ‘For a long time cybernetics was considered a reactionary science or pseudo-science… [but] it is a branch of science that exists and should be used’.[7] He added that in the US the application of cybernetics in industry had resulted in automation – an important productive development.

Basing a management system for socialist transition on capitalist technology was consistent with Marx’s stages theory of history, which predicted that communism would emerge from the fully developed capitalist mode of production. Marx showed how the tendency to concentration of capital, that is, to monopoly, was inherent in the system. Therefore, the monopoly form of capitalism was more advanced than ‘perfect competition’. The Soviet system originated from predominantly underdeveloped, pre-monopoly capitalism. A socialist economic management system emerging from monopoly capitalism could be more advanced, efficient and productive. The origin of the BFS was the multinational corporations of pre-1959 Cuba and it was therefore more progressive than the AFS which was adapted from pre-monopoly Russian capitalism.

Marx’s analysis of the law of value

While Guevara argued for the adoption of advanced technology he opposed the use of capitalist mechanisms to determine production and consumption. He challenged the Soviet’s reliance on capitalist categories to organise the socialist economy, particularly the operation of the law of value. The dispute about the law of value in transition economies is central to the question about the feasibility of constructing socialism in a country without a fully developed capitalist mode of production. It is integral to problems of accumulation, production, distribution and social relations. Communism implies a highly productive society in which conditions exist for distribution of the social product based on need, not surplus-generating labour time. However, the countries which have experimented with socialism have been underdeveloped, lacking the productive base for the material abundance implied by communism. The Soviet solution was to rely on the operation of the law of value to hasten the development of the productive forces, applying the profit motive, interest, credit, individual material incentives and elements of competition to promote efficiency and innovations. Guevara argued that these were not the only levers for fostering development. The BFS was the expression of his search for an apparatus to increase productive capacity and labour productivity without relying on capitalist mechanisms which undermine the formation of new consciousness and social relations integral to communism.

Between 1963 and 1965 these questions were examined in Cuba during the Great Debate on socialist transition. To the extent that commodity production and exchange through a market mechanism continued to exist after the Revolution in Cuba, it was clear to all participants in the Great Debate that the law of value continued to operate. The social product continued to be distributed on the basis of work done. However, the disagreements were about the conditions explaining the law’s survival, its sphere of operation, the extent to which it regulated production, how it related to the ‘plan’ and whether the law of value should be utilised or undermined, and if so, how. This discussion was linked to practical questions such as how enterprises should be organised, how workers should be paid and whether goods should be exchanged between state enterprises as commodities.

Guevara agreed that the law of value remained under socialism but argued that measures taken by the Revolution to undermine the capitalist market meant that the law could not serve as the dynamic catalyst to productivity and efficiency in the same way as it did under capitalism.[8] Socialisation of the means of production and distribution had ‘blunted’ the tools of capitalism.[9] Marx described a commodity as a good which changes ownership, from the producer to the consumer. Consistent with this definition, Guevara insisted that products transferred between state-owned enterprises did not constitute commodities because when they were transferred from one state factory to another there was no change in ownership. The state itself should be considered as one big enterprise.[10] For Guevara commodity-exchange relations between factories threatened transition, via ‘market socialism’, to capitalism. He stressed central planning and state regulation as substitutes to such mechanisms.

The Soviet’s argued that commodity production, the law of value, and money would disappear only when communism was achieved, but that to reach that stage it was necessary to use and develop the law of value as well as monetary and mercantile relationships. Guevara disagreed:

‘Why develop? We understand that the capitalist categories are retained for a time and that the length of this period cannot be predetermined, but the characteristics of the period of transition are those of a society that is throwing off its old bonds in order to move quickly into the new stage. The tendency should be, in our opinion, to eliminate as fast as possible the old categories, including the market, money, and, therefore, material interest – or, better, to eliminate the conditions for their existence.'[11]

For Guevara the task was not to use the law of value nor even hold it in check, but to define its sphere of operation and make inroads to undermine it – to work towards its abolition, not limitation. He developed many policies within the BFS to attempt just that.[12] In February 1964, Guevara concluded: ‘We deny the possibility of consciously using the law of value, basing our argument on the absence of a free market that automatically expresses the contradiction between producers and consumers… The law of value and planning are two terms linked by a contradiction and its resolution.'[13] For Guevara, centralised planning was the fundamental characteristic of socialist society. He conceded only: ‘the possibility of using elements of this law [of value] for comparative purposes (cost, “profit” expressed in monetary terms)’.[14]

The protagonists in Cuba were well-informed about the broader debate on incentives and financial autonomy contemporaneously underway in the eastern European socialist countries – a response to the problems of economic stagnation, low productivity and efficiency, particularly in comparison with economic growth in the developed capitalist world.  In July 1964 Guevara told colleagues that he had been reading analyses from the socialist bloc, including the resolutions of the 14th Congress of the Polish Communist Party: ‘The solution that they are proposing for these problems in Poland is the complete freedom of the law of value; that is to say, a return to capitalism.'[15] Commenting on the push to ‘liberalise’ the socialist economies Guevara said: ‘The theory is failing because they have forgotten Marx’.[16] Instead of Capital, the Soviet Manual of Political Economy had been turned into a bible.

Marx characterised the psychological or philosophical manifestation of capitalist social-relations as alienation and antagonism; the result of the commodification of labour and the operation of the law of value. For Guevara, the challenge was to replace the individuals’ alienation from the productive process, and the antagonism generated by class relations, with integration and solidarity, developing a collective attitude to production and the concept of work as a social duty. Capitalist competition created the drive to increase productivity through technological innovations and increasing exploitation. Alienation and antagonism increase with productivity. Under socialism, the development of the productive forces could be less accelerated, but it should be accompanied by a growth of consciousness. For Guevara, efforts to change consciousness must be incorporated into socialist transition at the earliest stage.

Critique on the Soviet Manual of Political Economy

In April 1965, Guevara left Cuba to lead a Cuban military mission in the Congo. The guerrillas were defeated and Guevara stayed in Tanzania and the Czech Republic between 1965 and 1966 where he began work on a comprehensive analysis of the political economy of socialist transition. In preparation for this work, Guevara took notes on the Soviet Manual, applying his theoretical arguments expounded in the Great Debate to that text. The notes were not written for publication, nor brought together as text. They were comments responding to specific paragraphs of the Manual; notes to himself, including indications of areas for further study.[17]  

Guevara criticised the Manual’s mechanistic adaptation of classical Marxist conceptions of class relations between the bourgeoisie and the working class, without considering the effects of imperialism which created a privileged working class in the advanced capitalist countries as well as beneficiary sectors in the exploited nations. He denounced as opportunism the Manual’s attempts to air-brush the inherent violence of class struggle integral to the transition from capitalism to socialism.

Turning to the period of transition, Guevara argued that the USSR’s Kolkhoz collective farm system was not a characteristic of socialism and that cooperatives were not a socialist form of ownership – they generated a capitalistic superstructure which clashed with state ownership and socialist social relations imposing their own logic over society. Guevara systematically refuted the so-called laws of socialism cited by the Manual, particularly the law of constant rising worker productivity – which he called an outrage: ‘It is the tendency that has driven capitalism for centuries.'[18]  He condemned as ‘dangerous’ the Soviet’s policy of peaceful co-existence and economic emulation with the advanced capitalist countries and pointed to serious disagreements between the socialist countries, blaming them on unequal exchange and the imposition of capitalist categories in trade relations.[19]

While declaring his daring, respect, admiration and revolutionary motives, Guevara announced that Lenin was the ultimate culprit because the New Economic Policy (NEP) which he had been forced to introduce in 1921 imposed a capitalist superstructure on the USSR. The NEP was not installed against small commodity production, Guevara stated, but at the demand of it. Small commodity production holds the seeds of capitalist development. He was certain that Lenin would have reversed the NEP had he lived longer. However, Lenin’s followers: ‘did not see the danger and it remained as the great Trojan horse of socialism, direct material interest as an economic lever.'[20] This capitalist superstructure became entrenched, influencing the relations of production and creating a hybrid system of socialism with capitalist elements that inevitably provoked conflicts and contradictions which were increasingly resolved in favour of the superstructure – capitalism was returning to the Soviet bloc.[21]

Guevara’s notes offer a profound criticism of Soviet political economy. He himself warned that some would misinterpret his proposed work as rabid anti-communism disguised as theoretical argument, but asserted that the inability of bourgeois economics to criticise itself, pointed out by Marx at the beginning of Capital, was seen in contemporary Marxism. He dedicated his work to Cuban students who go through the painful process of learning ‘eternal truths’ in eastern European manuals. He concluded that: Humanity faces many shocks before final liberation, but we cannot arrive there without a radical change in the strategy of the first most important socialist powers.[22]

Conclusion

This paper has summarised the analysis which led Guevara to forewarn the collapse of socialism in the socialist bloc. He made an important contribution to both the theory and practice of constructing socialism. He hoped to persuade socialist countries to gradually replace capitalist mechanisms during transition and offered alternative policies to serve this function. His warnings were not heeded and, for the reasons which Guevara predicted, among others, capitalism returned to all those countries. In Cuba, his analysis was revisited in the mid-1980s in the period known as Rectification which pulled the island away from the Soviet model before it collapsed, arguably contributing to the survival of Cuban socialism.

Notes

[1] Ernesto ‘Che’ Guevara, ‘Reunion Bimestrales’, 20 January 1962, in El Che en la Revolución Cubana: Ministerio de Industrias, tomo VI. La Habana: Ministerio de Azúcar, 1966, 147.

[2] Guevara, Apuntes Críticos a la Economía Política. La Habana: Ciencias Sociales, 2006, 27 & cited by Orlando Borrego in El Camino del Fuego, la Habana: Imagen Contemporánea, 382.

[3] This paper assumes knowledge of the laws governing the operation of the capitalist system expounded by Marx in Capital.

[4] Miguel Figueras, interview, 27 January 2006, Enrique Oltuski, interview, 15 February 2006 & Alfredo Menéndez, interview, 17 February 2005.

[5] Guevara, Bimestrales, 21 December 1963, 420.

[6] Guevara, Bimestrales, 14 July 1962, 289.

[7] Guevara, Bimestrales, 28 September 1962, 318-9.

[8] Guevara, ‘On the Concept of Value’ in Bertram Silverman (ed) Man and Socialism in Cuba: The Great Debate, New York: Atheneum, 234.

[9] Guevara, ‘Socialism and Man in Cuba’ in Silverman (ed) Socialism, 342.  

[10] Guevara, ‘On the Budgetary Finance System’, in Socialism, 143.

[11] Guevara, Budgetary, 42. Guevara’s italics.

[12] My book, Che Guevara: The Economics of Revolution, details these policies.

[13] Guevara, Budgetary, 143.

[14] Guevara, ‘The Meaning of Socialist Planning’ in Socialism, 109.

[15] Guevara, Bimestrales, 11 July 1964, 505.

[16] Guevara, Bimestrales, December 1964, 566-9.

[17] First published in Havana, February 2006 as Apuntes, cited above.

[18] Guevara, Apuntes, 52.

[19] Guevara, Apuntes, 91-2, 185-6, 192-3.

[20] Guevara, Apuntes, 112.

[21] Guevara, Apuntes, 27.

[22] Guevara, Apuntes, 25-28 & Borrego, Camino, 381-383.

Source

Che Guevara and the Political Economy of Socialism

Ernesto Che Guevara visiting the tractor factory in Brno, Czechoslovakia, October 27, 1960.

Rafael Martinez

Che Guevara is widely known to the world as the romantic-idealist revolutionary. The economic thought of Che Guevara has not really been widely publicised as the Argentinean born revolutionary is commonly known for his works on the guerrilla warfare, whose underlying idealist and voluntarist approaches to the struggle of the oppressed masses against capitalism and imperialism have been exposed and rejected altogether by the Marxist-Leninists. It is most appropriate, however, to pay special attention to Guevara’s economic works, as his contribution to the economic transformation of Cuba during the early stages of the revolutionary process was central and was highly criticised by the ideologists of modern revisionism, both within and outside the country.

Che participated in making up the agrarian reform law in 1959. In October 1959 he was appointed director of the Department of Industrialisation, which was created by INRA (Instituto Nacional de la Reforma Agraria or National Institute of the Agrarian Reform). At that time most of the industry was still in the hands of private owners. Guevara undertook the task of studying the economy of the island and establishing the guidelines of building up Cuban industry. According to Orlando Borrego, author of ‘Che el camino del fuego’ (Imagen Contemporanea, Havana 2001), the department started off without a single industry under its jurisdiction nor a ‘budget of its own to finance supplies, investments and other expenses’ to manage the few companies that passed to its jurisdiction later in the year. In November 1959 Guevara was appointed head of the National Bank, although he never stopped overseeing the work of the department of industrialisation to where he returned within the next year.

It is not till October 1960, when the Cuban Government decrees the immediate nationalisation of commercial and industrial enterprises including the sugar cane industry, that the Department of Industrialisation becomes a full-fledged body for the organisation of industrial production on a massive scale. His leadership in the Department of Industrialisation led Guevara to become the Cuban minister of industry in February 1961, which had the task to organise state industry following massive nationalisation.

At this point Guevara faces the challenging task to organise most of the country’s industrial production on the basis of an ill-defined (from the point of view of socialist construction) revolutionary process. Despite the success of the anti-imperialist struggle undertaken by the Cuban Revolution, its leadership lacked knowledge of the political economy of Marxism-Leninism. Che Guevara, without any doubt, is the member of the Cuban leadership who takes most seriously the study of political economy, which he did in parallel to all the administrative and organisational tasks that he was assigned by the Cuban Revolution. The study of Marxist political economy and the economic discussions that were triggered during the process of organisation of the Cuban industry become the central topic in Guevara’s life during the first half of the ‘60s. This period of exploration and creativity comes for the most part to an end when, in 1965 Che renounces his responsibilities as the Minister of Industry, following a heated economic debate, referred to by many as the ‘Great Debate’, which reached its climax in 1963-1964.

Strong divergences between the pro-Soviet economic line and Guevara’s plan of industrialisation brought to an end the participation of the Argentinean revolutionary in the internal affairs of the Cuban revolution. Guevara embarks on a ‘quixotic’ military campaign to aid and create revolutionary processes in Africa and Latin America, which concludes with his assassination in Bolivia, in 1967.

Castro remembers Che in a well-known speech given in 1987, in the midst of the so-called process of rectification, by denouncing a number of gross deformations in the economic life of the island and corruption of moral standards. Castro calls upon the population with an appeal of the highest moral standards embodied by the life of the great revolutionary, and admits to the negative consequences of departing from Che’s economic thought:

‘Che was radically opposed to using and developing capitalist economic laws and categories in building socialism. He advocated something that I have often insisted on: Building socialism and communism is not just a matter of producing and distributing wealth but is also a matter of education and consciousness’ (Fidel Castro in ‘Che Guevara, Economics and politics in the transition to socialism’, Pathfinder, New York, 2003, p. 39).

In the midst of open appeals to revive what many in Cuba call the ‘Che’s dream’ a lot of confusion is fostered about the interpretation and originality of Guevara’s economic thought. Twenty years after his assassination, Cuban scholars Fernando Martinez Heredia, and specially, Carlos Tablada, revived the discussions concerning Guevara’s contribution to the practice of socialist construction in Cuba and to the economic theory of the transitional epoch in general. Unfortunately, most scholars in Cuba consider Guevara’s economic thought in isolation from the theory of political economy of socialism developed before the revisionist political economy became widely accepted in the Soviet Union and the former People’s Democracies of Eastern Europe in the 1960s.

Outside the country, efforts have been made to reconcile Guevara’s economic thought with Trotskyism and neo-Trotskyite tendencies. Neo-Trotskyite elements around the world, not without encouragement from within Cuba, try to portray Guevara’s economic thought as a reaction to the economic line imposed by the bureaucratic castes in the Soviet Union, by completely ignoring, more correctly suppressing, Guevara’s open support to Stalin in questions of the construction of socialism. It is silenced that Guevara quoted Stalin on multiple occasions in his economic works published in Cuba and the fact that the core of his economic theory, the budgetary finance system, bears strong similarities to the economic ‘model’ of development, which had become ‘standard’ in the former People’s Democracies of Eastern Europe during the post-war period up until Stalin’s death. Trotskyism, neo-Trotskyism and many in Cuba exacerbate Guevara’s idealist mistakes present in both his political and economic thoughts and turn Che into some sort of humanist socialist, who de facto suppressed the weight of the objective character of the economic laws of socialism in favour of a leading role of socialist education and consciousness (which, unfortunately, is true to a considerable degree).

Discussions about the controversial role of Che Guevara in the Cuban revolution during the early stages of the construction of the new economy have been revived in recent years. More and more unpublished documents are slowly coming to light. One of the most significant efforts developed in this direction is led by the Centro de Estudios Che Guevara, based in Havana and located in the house where Guevara and his family used to reside during the first half of the sixties. This association possesses direct access to Guevara’s personal library, which contains numerous volumes in which he used to make annotations. Ambitious plans have been revealed to publish nine volumes with materials covering numerous aspects of the political life of Che Guevara, which hopefully will throw important light on the evolution of Guevara’s thought as a Marxist.

One of the most enlightening documents published in recent years corresponds to a letter sent by Che, while based in Tanzania, to Armando Hart Dávalos on the need to publish in Cuba works on philosophy. The authenticity of this letter does not seem to be controversial as it was published in a Cuban journal and made available to the public. In this letter Guevara outlines a basic plan for the publication of texts in philosophy, subdivided into 8 groups:

In Cuba there is nothing published, if one excludes the Soviet bricks, which bring the inconvenience that they do not let you think; the party did it for you and you should digest it.

It would be necessary to publish the complete works of Marx, Engels, Lenin, Stalin [underlined by Che in the original] and other great Marxists.

Here would come to the great revisionists (if you want you can add here Khrushchev), well analyzed, more profoundly than any others and also your friend Trotsky, who existed and apparently wrote something (Che Guevara, Letter to Armando Hart Dávalos published in Contracorriente, Havana, September 1997, No. 9).

In the present article we will try to briefly cover the main elements of Guevara’s economic thought by means of establishing analogies with the Marxist-Leninist economic theory of the transitional society. Further, we will discuss the absurd allegations of Trotskyism that the Soviet revisionist leadership inflicted on Guevara. We will conclude with a brief exposition of what are, in our opinion the two major mistakes committed by Guevara in his economic works: idealism and mechanicism.

Budgetary System versus Financial Self-Management

At the centre of Guevara’s economic thought stands the budgetary system, which Che implemented in the enterprises organised by the ministry of industry between 1961 and 1964. The budgetary system is formulated by Guevara as a reaction against what had been established in the Soviet Union and the former People’s Democracies of Eastern Europe under the system of economic accounting (usually referred by us as market-like economic accounting, in order to distinguish it from the more generic concept of economic accounting), which the followers of post-Stalin Soviet revisionism posed as a model of development in Cuba. It is within the context of the revision of the Marxist-Leninist principles of the political economy of socialism by the Soviet revisionist leadership that the study of Guevara’s budgetary system needs to be analysed and appreciated.

Despite strong elements of mechanicism and schematism inherent to Guevara’s presentation for a case in favour of the centralisation of industrial production and the establishment of forms of management and interrelations between individual producing subjects and the state, the budgetary system embodies the means, however primitive, which served the purpose for the application and success of the centralised planned principle of the economic development in a backward country. This is the rationale behind Guevara’s formulations, which represents in the main the basic prerequisite for a more or less rapid industrialisation of the island, which he considered to be the highest priority within the process of socialist construction.

Many in Cuba portray Guevara’s budgetary system elaborated for the specific conditions of Cuba, which in a sense Che ‘invents’ a particular model that suits his more or less utopian view of the transition to the socialist society. Thus Guevara’s thinking is studied in isolation from the historical epoch, which corresponds to the epoch of the restoration of capitalism in the Soviet Union and the former People’s Democracies. At most, Guevara’s economic thinking is viewed as an alternative to the ‘neo-Stalinist’ command-administrative system undertaken by the Soviet leadership. This view was revitalised in Cuba towards the end of the 1980s when the Soviet economy and the whole so-called ‘socialist’ system showed clear signs of decomposition. It is enlightening, however, to see that some leading economists in the island do admit that Guevara’s economic thought did not come out of the blue:

‘In retrospective, the budgetary system is a contribution of great value. We would not say – and you know it well – that Che invented the budgetary system. It already came from the socialist countries; in the Soviet Union for a period of time the budgetary system ruled many aspects of the economy’. (Carlos Rafael Rodriguez in ‘Che Guevara, Cuba and the Road to Socialism’, New York, 1991, pp. 39-30. Translated from Spanish.)

Needless to say Rodriguez refers to the socialist economic model developed under Stalin. Rodriguez, however, wrongly attributes to Guevara the view that in the transition to higher forms of socialism, or full socialism, the budgetary system could be applied to the entire economy; the entire economy could allegedly function as one big enterprise, with one social fund to meet the needs of production and distribution. Much to the contrary, Guevara formulates the budgetary system as a means to meet the immediate needs posed by the organisation of the State industry and, as will be seen in the next section, admits to the existence of commodity-money relations between the state and other production objects, hence he admits the existence of forms of production other than state owned.

The budgetary system is conceived by Che as an opposite of the model established in the Soviet Union and the former People’s Democracies of Eastern Europe after Stalin’s death. Guevara exposes the basic differences between the budgetary system and the market-type of economic accounting or so-called financial self-management, as early as in 1961, i.e. the very early stages of the socialisation of industry in the country. Guevara’s thinking in favour of the centralisation of the State industry predates the ‘Great Economic debate’, and it is clear to us that Che had conceived the budgetary system long before he sees himself engulfed in a heated discussion with the numerous supporters of financial self-management in the island. We have every reason to believe that he was in some more or less systematic way acquainted with the history of the Soviet economy and the general elements of the socialist economy during Stalin’s times.

Guevara rejects from the very beginning the concept of free enterprise within the socialist sector, which is embodied by the ability of the individual economic subject to act as a more or less independent producer, since

‘…in the socialist countries, the enterprise possesses a bank credit, acquires money, produces with the money that it receives, sells its production, and then grants to the State part of the profit and part of this profit is preserved for internal needs. The difference is that our company does not sell, but delivers products and workers are awarded through the State’ (Che Guevara, Conference ‘Economy and Plan’ of the People’s University, 1961. Translated from Spanish.)

In Guevara’s system the enterprise does not sell, as the commodity-money becomes effective both in form and content only when the product is alienated by an independent producer or the individual consumer. Guevara understands the retribution of the worker in the socialist enterprise as an operation, in which in essence the socialist toiler establishes an employer-employee relationship with the socialist state, bypassing the enterprise. We believe he considers this relationship from the point of view of the essence of the labour relationship, as in reality this relationship has unavoidably to take the form of employment via the individual enterprise.

As opposed to the revisionist system of financial self-management, labour circulates among the individual enterprises of the state sector and between the enterprises and the State via the form of allocation or assignments according to contracts stipulated by the socialist plan:

‘To elaborate a budget through which the enterprise will be assigned necessary funds by the state to make effective contracts…; and also to transfer to public accounts the revenue from sales.’ (Che Guevara, op. cit. in ‘Collective Discussion: Unique Decision and Responsibility’, p. 3. Translated from Spanish.)

In Guevara’s system the enterprise functions as an aggregate of a larger enterprise, which does not possess financial resources with which to make its own decisions in terms of production and reproduction. Since the socialist enterprise:

‘The company does not have resources of its own; therefore its income is transferred to the national budget’ (Che Guevara, op. cit. in ‘Considerations on Expenses’, p. 46. Translated from Spanish.)

Guevara is adamantly opposed to any form of exchange among socialist enterprises in the socialist sector other than allocation of resources. The circulation of labour within the socialised sector is viewed by Guevara as an aggregation of labour in a complex productive chain. In this system the enterprises are not able to establish labour exchange independently from the plan, since the entire productive activity of the enterprise is dictated by it. The state, in the form of the State Bank is the beginning and the end of labour flow concerning the productive activity of the socialist enterprise: it acquires the necessary financial means to acquire the means of production and it deposits the revenue in the Central Bank. These resources are then utilised by the socialist planning system to provide for extended reproduction of the individual productive unit, for capital investment or non-productive social needs. In this sense the enterprise does not extract profit per se; it transfers a positive balance between the production cost and the income and it is the socialist state which makes the final decision according to the plan as to the fate of this positive balance.

The concept of socialist planning in Guevara’s system is closely linked to the concept of profitability of the whole productive system. The effectiveness of the socialist economy is not the results of the mechanical summation of individual enterprises. A positive balance in the arithmetic sum of individual profits is possible in the capitalist system during times of expansion, although it becomes negative in times of recession. Regardless of the fact that the socialist productive system does not know recession or crises, the socialist productive system displays the greatest rates of growth not just because the arithmetic aggregation of individual profitability amounts to a positive balance. The advantage of the socialist mode of production over capitalism lies in the planned character of the economy, that the socialist state is in a position to decide at the scale of the whole productive system, not the coordination of individual producers but the regulation of labour flow among socialist enterprises. While it is of paramount importance that the productive unit be most profitable by means of maximum reduction of production costs, the efficiency of the economy needs to be assessed as a whole.

‘Since this system is based on the central control of the economy, the relative efficiency of an enterprise would become just an index; what really matters is the total profitability of the entire productive system’ (Che Guevara, op. cit. in ‘Considerations on Expenses’, p. 48. Translated from Spanish.)

This concept, which is a more complex concept with respect to the profitability of the individual enterprise, had been stated explicitly by Stalin in Economic Problems. In arguing against the right-wing deviationists, the only way to understand that certain sectors of the economy may function without profit or even producing losses over a certain period of time is to introduce a more complex concept of profitability of the whole socialist economy:

‘If profitableness is considered not from the standpoint of individual plants or industries, and not over a period of one year, but from the standpoint of the entire national economy and over a period of, say, ten or fifteen years,… then the temporary and unstable profitableness of some plants and industries is beneath all comparisons with that higher form of stable and permanent profitableness which we get from the operation of the law of balanced development of the national economy and from economic planning…’ (J.V. Stalin, Economic Problems of Socialism in the USSR,Foreign Language Publishing House, Moscow 1952, pp. 28-29.)

Many have been led to believe that the establishment of socialised planning in certain areas of the State-owned sector during the transitional economy is a dangerous utopia. The transition to NEP is commonly used as a historical example, which allegedly illustrates that socialised forms of organisation do not correspond to the economic conditions given in a backward, agricultural country. Much to the contrary, not only the implementation of market-like economic accounting in the State industry is a relatively short-lived phenomenon in the economic history of the Soviet Union, it was soon realised that the NEP-style approach could lead to catastrophic consequences if the market-like economic accounting were to be imposed on all the areas of the State sector. Since the first stages of the transition from the economy of War Communism to the liberalisation of the Soviet economy, the Soviet leadership expressed worries that Lenin’s plans for the industrialisation of the country would be jeopardised if market relations were to be made effective in all the State-owned sectors. Already in 1923, the XII Congress of the Russian Communist Party (Bolshevik) expressed ample concerns:

‘On the other hand, heavy industry, which has barely entered in contact with the market and which depends completely on State contracts, needs for its reconstruction large and well-calculated financial resources from the State. This also applies to a great degree to railway and sea transport.’ (Decisions of the Soviet Government on Economic Questions, Moscow 1957, Volume 1, p. 380. Translated from Russian.)

Despite what right-wing revisionism led many to believe, the Soviet government since the early stages of the NEP established a line of demarcation within the sectors I and II of the economy. While light industry displayed significant growth during the early stages of the liberalisation of the economy, mostly due to the revival of market relations, heavy industry showed little or no signs of flourishing under the conditions of market-style economic accounting. If the market-type economic accounting were to be imposed on heavy industry, if the Soviet plan, regardless of the level of development of the forces of production and the correlation of forces within the various sectors of the economy and the weight of non-socialist forms of production, were to deny heavy industry large long-term financial assistance for a sustained process of re-production, this sector would be forced into recession. The plans for the speedy industrialisation of a vast and backward (both technically and culturally) country would be doomed and with it collectivisation and socialist construction.

‘The interrelations between light and heavy industries cannot be resolved by means of the market, as this would threaten to liquidate heavy industry in the next few years; heavy industry could recover, but this time as a result of the anarchic development of the market and on the basis of private property. (Ibid. p. 382. Translated from Russian.)

The socialist law of development, according to which the industry of means of production should develop faster than light industry and agriculture, necessarily leads a more or less significant fraction of the forces of production owned by the socialist state to operate according to laws of labour distribution and organisation different from those inherited from the capitalist form of production. While market relations to a considerable degree were temporarily allowed by the NEP to regulate production and labour distribution among more or less disseminated and independent economic units in the State industry, the Soviet State was forced since the beginning to define the concretisation of this law of socialist production, in a sense breaking with NEP itself. The establishment of socialist planning on the basis of the socialised mode of production in certain sectors of the economy holds absolute character. This principle holds regardless of the level of development of the forces of production in the economy of the country in transition to socialism as a whole. The level of socialisation of the State sector does strongly depend upon the concrete-historical conditions of the country in transition. However, the State is bound since the very beginning to establish a socialist planned principle to operate in a direct, socialised way (not by means of the market) on certain sectors of the economy, primarily on the sector I. This is the basic principle of the transitional economy that Guevara tried his best to uphold by advocating the budgetary system, as a system opposed to the system of market-type economic accounting proposed by the followers of Soviet revisionism in the island.

As will be touched upon in more detail, Guevara’s economic thought, the budgetary system that he advocated is completely opposed to Trotsky’s concealed right-wing economic theories. Trotsky opposed since the early stages of NEP, all the way till the end of his political career the establishment of a genuine planned principle in certain sectors of the State sector, by advocating the absolute and universal character of NEP:

But the New Economic Policy does not flow solely from the interrelations between the city and the village. This policy is a necessary stage in the growth of state-owned industry. Between capitalism, under which the means of production are owned by private individuals and all economic relations are regulated by the market –I say, between capitalism and complete socialism, with its socially planned economy, there are a number of transitional stages; and the NEP is essentially one of these stages.

Let us analyze this question, taking the railways as a case in point. It is precisely railway transportation that provides a field which is prepared in the maximum degree for socialist economy… The railway lines, not only those privately owned, but also the state-owned lines, settled their accounts with all the other economic enterprises through the medium of the market. Under the particular system this was economically unavoidable and necessary because the equipment and development of a particular line depends upon how far it justifies itself economically. Whether a particular railway is beneficial to the economy can be ascertained only through the medium of the market.’ (L.D. Trotsky, ‘The First Five Years of the Communist International’, Volume 2, New Park Publications, London, 1953, pp. 233-4.)

Guevara’s budgetary system is the means for the industrialisation of Cuba. One of the fundamental principles of the socialist economy is based on the development of industrial production, mainly heavy industry, as the basis and engine of the development of the socialist economy. Imperialist domination is based upon the concentration of industry and technology in the hands of imperialist corporations. Exploited countries are deprived of the means and necessary knowledge to secure the development of labour productivity, a key element to sustained development of the forces of production.

In order to overcome economic backwardness and the relations of dependence on the imperialist countries, i.e. the ultimate goal of a genuine process of national-liberation, it is imperative to turn around the character of economic relations with the outside world. This implies a deep re-structuring of the economies, which for long years have been geared towards fitting the economic needs of the imperialist countries, and to turn these countries into self-sufficient and prosperous socialist industrial ones. Genuine independence, true anti-imperialism is no more than rhetorical statements without massive policies of socialist industrialisation, which is the material basis for long-term and sustained independence.

Over a hundred years of national liberation movements have taught us that the socialisation of the means of production, as opposed to half-measures disguised by pseudo-socialist phraseology, is the only way towards national independence. Here lies the essence of the internationalist policies of the Soviet State during the post-war period.

The economies of dependent countries, such as Cuba back in the 1950s, are based upon the extraction and the early stages of manufacturing of raw materials. The main source of revenue of Batista’s Cuba was the export of sugar, whose price in the international market was out of the control of the country and, as repeatedly pointed out by the leaders of the Cuban revolution, undershot the actual value.

The only possible way that economically and culturally backward countries can attain economic and sustained political independence, lies in the development of heavy industry, which is the only possible way to lay the foundations for sustained economic growth. This fundamental point of the socialist construction lies at the centre of attention of Guevara’s economic thought and to it he devoted most of his practical and theoretical efforts while remaining in office.

Commodity-Money Relations and the Law of Value

In this section we will briefly cover Guevara’s understanding of the role of commodity-money relations and the law of value in the socialist industry. At this point we lack written materials to throw light on his attitude towards the agrarian reform performed during the early stages of the Cuban revolution. His understanding of the collectivisation of the large mass of petty producers is also unknown to us, although we hope that in the near future archival materials may be made available to the public in Cuba.

As illustrated in the previous section, at the centre of Guevara’s economic thought stands the model of budgetary system. This system is intimately related to Guevara’s understanding of the role of plan, which, as discussed, fundamentally differs from that envisioned by right-wing revisionism in the Soviet Union and the former People’s Democracies in Eastern Europe. Much to the contrary, it bears close resemblance to the conception of economic planning, which prevailed in the Soviet Union before Stalin’s death and stands in line with the economic policies that had become ‘standard’ in the former People’s Democracies in Eastern Europe in the period of 1948-1953.

Guevara’s attitude to the role of market categories and relations are consistent with his understanding of plan and are very close to Stalin’s formulations in Economic Problems. Guevara explicitly denies the need for commodity exchange between socialist enterprises and categorically denies the commodity character of the means of production. He supports the correct view that commodity exchange involves change of ownership. Commodity exchange between state enterprises is viewed by the Argentinean as a contradiction per se, since in the budgetary system the socialist enterprise is an organic element of a bigger enterprise, the State. Within this system the labour among enterprises does not adopt the form of commodity exchange. Means of production, financial resources are not owned by the socialist enterprise, as the latter lacks its own account and revenue is automatically deposited in a socialised account. In this system, the means of production are allocated to a given production unit according to the needs and future perspective of economic development and dictated by a centralised plan.

Guevara does not deny the existence of commodity production and the coexistence of different modes of production. He supports Stalin’s views that commodity relations are not inherent to the socialist sector but that their existence is due to the presence of different forms of property within the Cuban economy. As opposed to the Soviet Economy in Stalin’s time, the Cuban countryside had not undergone the process of collectivisation of the petty producer. In the concrete-historical situation of Cuba, the incipient socialist industrial sector had to coexist with a large mass of independent producers. However, this concrete-historical circumstance does not prevent the socialist sector, however small and poorly organized, to operate under a different regulator of production than that operating in the countryside. Guevara writes:

‘We believe that the partial existence of the law of value is due to the remnants of the market economy, which also manifests itself in the type of exchange between the State and the private consumer’ (Che Guevara, op. cit. in ‘On the Budgetary System’, p. 95. Translated from Spanish).

This statement is very close to Stalin’s well-known statement given in Economic Problems:

‘But the collective farms are unwilling to alienate their products except in the form of commodities, in exchange for which they desire to receive the commodities they need… Because of this, commodity production and trade are as much a necessity with us today as they were thirty years ago…’(J.V. Stalin, Economic Problems of Socialism in the USSR, Foreign Languages Publishing House, Moscow 1952, p. 19-20.)

In addition, as pointed out by Guevara, there remains the need for commodity-money bonds between the State and the private producer, as the worker in socialism still receives a significant fraction of the social fund for the satisfaction of individual needs in money terms. The exchange between the state and the individual producer is performed under the form of a commodity exchange, as

‘…this transfer occurs when the product leaves the state sector and it becomes property of an individual consumer’ (Che Guevara, op. cit. in ‘Considerations on Expenses’, p. 46. Translated from Spanish.)

With the socialisation of all the means of production and the liquidation of individual and collective forms of production, there would be no need for commodity-money exchange in socialism. As a matter of fact, the realisation of the socialist principle of distribution does not necessarily imply the existence of commodity-money relations, as a category of production. These views were ‘exposed’ and refuted by Soviet economists, who after a series of discussions re-wrote chapters in the Manual of Political Economy regarding the political economy of socialism.

Naturally, these views were also not shared by many economists in Cuba, as manifested in a more or less full-fledged controversial discussion during 1963-1964. For instance, Alberto Mora (Minister of Foreign Trade during that time) in 1963 openly attacked Guevara’s views, by comparing them with Stalin’s, which were published in Economic Problems. He rejected Guevara’s theses on the grounds that the most serious ‘scientific’ discussions held in the Soviet Union during the second half of the 1950s and early sixties indicated that Stalin’s views were wrong, that the law of value operates in socialism as a regulator of production, as the products in the socialist economy remain and will remain commodities all the way till communism:

‘When some comrades deny that the law of value operates in the relations among enterprises within the State sector, they argue that the entire State sector is under single ownership, that the enterprises are the property of the society. This, of course, is true. But as an economic criterion it is inaccurate. State property is not yet fully developed social property that will be achieved only under communism.’ (A. Mora, in ‘On the operation of the law of value in the Cuban Economy’, published in Man and Socialism in Cuba, Atheneum, New York, 1973, p. 227).

The well-known Trotskyite economist, Ernest Mandel, who was very active during what he called the ‘Great Debate’ in Cuba, enters into a long-standing controversy with Charles Bettelheim, a French right-wing revisionist scholar. The latter also became active during the economic debate, this time as a fervent supporter of the ‘socialist-market’ conception advocated by the pro-Soviet economists in the island. Despite Mandel’s views that means of production in the socialist economy do not circulate as commodities, he is very keen on exposing Stalin’s views advocated by Guevara with regard to the causes of the law of value in the socialist sector. In the section of the ‘Historical conditions leading to the extinction of mercantile categories’ of a well-publicised article in Cuba, he states:

‘Although we have criticized several of comrade Bettelheim’s positions, we agree with him completely in rejecting Stalin’s theory that the basic reason for the mercantile categories in the Soviet economy is the existence of two forms of socialist property: ownership by the people (that is, the State) and ownership by more limited social groups (essentially the Kolkhozy)’. (E. Mandel, in ‘On the operation of the law of value in the Cuban Economy’, published in Man and Socialism in Cuba, Atheneum, New York, 1973, p. 70.)

Mandel has an opinion of his own and does not need to refer to the Soviet pseudo-science to ‘expose’ Guevara’s ‘primitivism’. The author advocates that only the abundance of consumer goods, which are closely linked to the development of forces of production, will create the objective conditions for the abolition of commodity-money relations in the sphere of private consumption. Moreover, he seems to be proud that

‘The new program of the CPSU, approved by the XXII congress, incorporated this idea as set forth in our Traite d’Economie Marxiste’ (E. Mandel, in ‘On the operation of the law of value in the Cuban Economy’, published in Man and Socialism in Cuba, Atheneum, New York, 1973, p. 71).

Guevara advocated the correct view that the law of value does not operate within the socialist sector as a regulator of production. He is able to grasp, unlike his detractors, a crucial element in the political economy of socialism:

‘We insist on the analysis of the cost, since part of our conception refers to the fact that it is not strictly necessary that cost of production and price coincide in the socialist sector’. (Che Guevara, op. cit. in ‘Considerations on Expenses’, p. 47. Translated from Spanish.)

Guevara understood that the price setting in the socialist sector, as a quantifier of the flow of labour circulating among different subjects of the state industry, does not necessarily have to coincide with the cost of production. If the labour exchange between different sectors of the socialist economy were to be governed by the exchange according to equal value, less profitable or even not profitable enterprises would not be able to survive and the process of extended reproduction of the socialist economy would be brought to its knees. If the law of value is forced to operate as a regulator of the proportions of labour exchanged between enterprises in the socialist sector it would not be possible to overcome the disproportions between sectors of the economy, which are inherited from capitalism, let alone colonialism and neo-colonialism. This consequently leads to a more complex concept of profitability of the socialist economy, which was touched upon in the previous section, which Stalin formulated in Economic Problems and which Guevara embraces wholeheartedly.

It is true that the abstract formulation that prices in the socialist sector do not necessarily correspond to the cost of production contains within itself a strong potential and it represents a serious step forward in the evolution of the understanding of political economy of socialism. This statement represents a tremendous step forward with respect to the theories of right-wing revisionism, which does not conceive labour exchange outside the boundaries of commodity-money relations. However, this statement does solve right away the most intricate problem of the political economy of socialism, which is to concretise what are the actual proportions of labour that correspond to the historical-concrete situation and the development of the forces of production and forms of management of a given country. This is a titanic task that needs to be resolved by the revolutionaries of a given country, which Guevara genuinely and with the best of his abilities tried to solve for the concrete conditions of Cuba.

Guevara is an advocate of the strictest economic accounting, for the same reasons that Stalin criticised many Soviet managers and plan making for neglecting the operation of the law of value as a strong instrument for economic accounting in socialism. Indeed, accounting in value terms proves a powerful tool to evaluate the effectiveness of the socialist enterprise, and this is most appreciated by Guevara:

‘The cost would yield an index of the management of the enterprise; it is irrelevant that these prices are higher or lower than the prices in the socialist sector, or even, in some isolated cases, than those prices used to sell the product to the people; what matters is the sustained analysis of the management of the enterprise…, which is determined by its success or failure to reduce costs’ (Che Guevara, op. cit. in ‘Considerations on Expenses’, p. 49. Translated from Spanish.)

At the end of the day, one of the fundamental goals of the enterprise in socialism as well as in communism

‘…reduces to a common denominator…: the increase of labour productivity as the fundamental basis for the construction of socialism and indispensable premise for communism.’ (Che Guevara, op. cit. in ‘Considerations on Expenses’, p. 51. Translated from Spanish.)

In Guevara’s budgetary finance system, money within the socialist enterprise is used primarily as means of calculation, as a strong algebraic tool for determining the effectiveness of the enterprise, the correctness of the use of the resources granted by the State to the enterprise, a means to determine if the enterprise is doing enough to reduce costs, etc… In his very important article, ‘About the Budgetary System’ he exposes one of the most prominent differences between his conception and the role given to money by the pro-Soviet economists in Cuba within the so called ‘Economic Accounting’ system:

‘Another difference is the way money is used; in our system money operates as arithmetic money, as a reflection, in prices, of the management of the enterprise, which the central organs will analyze in order to control the functioning of the latter.’ (Che Guevara, op. cit. in ‘About the Budgetary System’, p. 80 Translated from Spanish.)

Guevara’s views are consistent with the well-known exposure of Notkin’s ‘marketist’ views by Stalin:

Why, in that case, do we speak of the value of means of production, their cost of production, their price, etc.?

Firstly, this is needed for purposes of calculation and settlement, for determining that the enterprises are paying or running at a loss, for checking and controlling the enterprises. …’ (J.V. Stalin, op. cit, p. 58-59.)

As the economic discussion in Cuba progresses and the contradictions between Guevara’s line and the pro-Soviet economists (including Charles Bettelheim) on the one hand, and the Trotskyite elements in Cuba (Cuban nationals as well as foreigners) on the other, Che has unavoidably to clash with the economic conception advocated by the Soviet revisionists. Towards the end of this discussion, in 1964 Guevara expresses himself in a more and more explicit and eloquent way regarding the differences between his model and the ‘market-socialist’ type of development advocated by the revisionists. The exposition of the differences, which at first, in 1961 Guevara had put in rather mild, almost academic terms, turns controversial and bitter in 1964, leaving no doubt that the contradictions had become irreconcilable and that the Cuban leadership would have to take a stand sooner rather than later. Whether the Soviet revisionist leadership demanded Guevara’s removal from his posts in the economy of the island, as a pre-requisite to sustained economic aid, or whether his detractors in Cuba played a leading role in the events that followed the economic discussions, remains a matter of speculation. Regardless, it is clear to us that Guevara engages in an important theoretical debate till the very end and was never curbed by the overwhelming wave of criticism triggered by his writings, which he faced almost alone. In addition, we can only imagine how upsetting to pro-Soviet and Trotskyite elements in the island it would be to accept that the leading economist, a holder of a key command position in the Cuban economy, dares, not once, not twice, but at least three times that we are aware of, to cite and defend Stalin’s works as an authoritative reference against his opponents.

Che openly and in print criticises the revisionist manual of political economy published in the Soviet Union in the early sixties, with regards to the insistence of the Soviet revisionists on developing commodity-money relations in socialism, let alone the transition to socialism. After a series of gradual changes operated in the economic literature of the 1950s followed by crucial economic discussions held towards the end of that decade, the Soviet economists published a new manual of political economy under the editorship of a leading economist, Ostrovitianov. In this important document all the products in socialism are proclaimed to be commodities, including the means of production (with the utterly inconsistent exemption of labour force), and the law of value, which is used in a conscious way by the socialist plan, operates as the regulator of proportions of labour among enterprises, whether state owned or cooperatives.

As opposed to Stalin’s plans for the gradual shrinkage of the sphere of operation of the commodity-money relations and categories, the Soviet revisionists envisioned a plan to further enhance the role of these in the economy and to provide the enterprises with more independence. The operation of the law of value will disappear only when the highest stage of communism is accomplished in a more or less distant future. Guevara rebels against the new theses advocated by the Soviet revisionist economists by rejecting altogether the plans for developing commodity-money relations in socialism, which are treated by us as a departure from the political economy of socialism developed by Lenin and Stalin:

‘Why develop? We understand that the capitalist categories are retained for a time and that the length of this period cannot be predetermined, but the characteristics of the period of transition are those of a society that is throwing off its old bonds in order to move quickly into the new stage.

The tendency should be, in our opinion, to eliminate as fast as possible the old categories, including the market, and, therefore, material interest – or better, to eliminate the conditions of their existence’ (Che Guevara, in Man and Socialism in Cuba, Atheneum, New York, 1973, p. 142).

It is unfortunate, however, that Che’s reasoning is plagued with idealist assertions, according to which commodity-money relations allegedly embody within themselves the ideological burden of the capitalist society. As will be touched upon the next section, Guevara equates to a great extent commodity-money relations and categories with the concept of material incentive, which he understands as a mechanism aimed at motivating and enhancing labour productivity by the same means as used in capitalism. Material incentive and consciousness appear in Guevara’s thought as two poles of one of the main (if not the most relevant) contradiction in the process of socialist construction.

Guevara should not be accused of a left-wing attitude with regard to the role of commodity-money relations in socialism. Nowhere in Che’s writings can one find appeals to implement the policies of war communism in the Cuban economy. Much to the contrary, he is aware of the need to retain commodity-money relations for an undetermined period, as a result of the presence of a large mass of individual producers. Despite glaring idealist elements in Guevara’s thought we need to give him credit for identifying correctly the sphere of application of commodity-money relations and the fundamental reasons leading to the inevitability of the latter in the socialist transition in general and in the Cuban revolutionary process, in particular. In summarising the increasing contradictions between the line of thought and the economic reforms accomplished under his office, and the push for market relations advocated by the ‘marketists’ in Cuba Guevara states:

‘We deny the possibility of consciously using the law of value, in the conditions that a free market does not exist, which expresses directly the contradiction between producers and consumers; we deny the existence of the commodity category in the relation among state enterprises and we regard them as part of one big enterprise, the State (although in practice it does not happen yet in our country).’ (Che Guevara, op. cit. in ‘On the Budgetary System’, p. 96. Translated from Spanish.)

When Guevara admits to the fact that the state sector in Cuba does not function as a ‘one big enterprise’ he is most likely referring to the coexistence of the Ministry of Industry, the INRA and the Ministry of Foreign Trade, the latter two lead by Carlos Rafael Rodriguez and Alberto Mora, respectively, both rabid ‘market-socialists’. The latter had expressed their disagreement with Guevara’s plans for industrialisation of the island based on the argumentation that Cuba was not prepared for forms of economic relations consistent with developed stages of socialisation of the labour process. Rodriguez states as late as in 1988:

‘The budgetary system is closer to the future society… this system requires conditions that we will not be able to achieve in a long time’ (Carlos Rafael Rodriguez in Che Guevara, Cuba y el camino al socialismo, New International, New York, 2000, p. 42. Translated from Spanish.)

By arguing that Cuba was never (not even after 30 years of revolution) ready for higher forms of exchange between state enterprises, Rodriguez openly polemicises in 1988, as he used to do 25 years before, with Che’s assertion that products exchanged between state enterprises do not adopt the form of commodities.

Guevara to the very end sticks to his conception that the commodity-money relations are not inherent to the socialist economy, and especially to the socialised sector, which he tried so hard to build up since the very early stages of the Cuban revolution. Market relations come about as a result of the presence of important remnants of private producers and they are bound to disappear with them (both in form and content). Even though, Guevara refrains (to the best of our rather sketchy and fragmental knowledge of the evolution of Guevara’s thinking) from referring openly to his opinion with regards to the plans of collectivising the private producer, we believe that he would have advocated for a ‘Soviet-style’ type of bond between the socialised sector and the collective farms. As an advocate of retaining the main means of production outside the operation of commodity-money relations (i.e. means of production are not treated as commodities in content, regardless of the need to use value categories to assess the amount of labour involved in them), it seems natural that Guevara would have envisioned a concept pretty much like the machine tractor stations, as a main factor for the increase of labour productivity. We believe this statement is substantiated since the rational core of Guevara’s economic thought, despite strong elements of idealism and mechanicism, remains very close to the economic forms adopted in the Soviet Union under Stalin, which had become standard and were successfully applied with whatever modifications in the countries of People’s Democracies in Eastern Europe between the end of the 1940s and Stalin’s death. We have every reason to believe that Guevara was to a certain extent acquainted with Stalin’s Economic Problems and the basic differences of principle between the so-called Stalin model and the model of ‘market-socialism’ advocated by Rodriguez, Mora et al. in Cuba.

In probably his last article ‘Man and Socialism in Cuba’ a letter addressed to Carlos Quijano, editor-publisher of the Uruguayan weekly Marcha, written in early 1965, Guevara reiterates his position once more, leaving us no doubt that he stood for his principles till the very end.

‘Pursuing the chimera of achieving socialism with the aid of blunted weapons left to us by capitalism (the commodity as the economic cell, profitability, and individual material interests as levers, etc.) it is possible to come to a blind alley’ (Che Guevara, in Man and Socialism in Cuba,Atheneum, New York, 1973, p. 342).

Unfortunately, Guevara does not give up certain elements of idealism that make his economic thought so distinct as well as vulnerable and inconsistent. This side of Guevara’s economic thought has been publicised the most both in Cuba by his detractors and outside Cuba by Trotskyism and neo-Trotskyism. The clear connection between a significant number of Guevara’s statements on political economy and the so-called ‘Stalinist’ model of socialist construction is very much silenced. Che’s writing are twisted by picturing his economic thought as a continuation of his idealist and voluntarist stand in questions regarding the interrelation between the masses, the party and the guerrilla warfare, for which he is most commonly known.

On Guevara’s Alleged Trotskyism

Guevara soon entered into conflict with the Soviet revisionist leadership. As we have seen above, Che acknowledges differences of principle, as early as 1961, between the economic model established in what he used to call socialist countries, and the plans for industrialisation he was advocating. Guevara’s economic reforms were bound to clash with the character of the agrarian reform and the plans suggested by the Soviet Union that Cuba was to remain primarily a sugar cane producer for longer than anticipated by Che. As the character of the Cuban revolution consolidated and the Cuban leadership accommodated to the economic relations between the island and the Soviet Union, it was necessary that Cuban economists align with the new political economy created by the revisionists.

Guevara’s plans soon met glaring resistance within Cuba. Due to the worsening of Guevara’s relations with the Soviet leadership, many in Cuba felt a great deal of embarrassment. According to several of Guevara’s biographers, the Soviets accused Che’s economic views of Trotskyism. It was just a matter of time before Che is to leave his post of Minister of Industry and that his plans for industrialisation of the island are to be revised in favour development based on the sugar cane industry.

Trotsky is usually portrayed as a ‘radical left-wing’, as an advocate of extreme measures with regard to resolution of contradictions both in politics and economics. Trotsky’s alleged push for the militarisation of the economy has led many to believe that Trotskyite economic theories are opposed to the politics of the New Economic Policy (NEP) with regard not only to the relations between the individual producer and the state sector but also with regard to the liberalisation of the state sector. In this section we will try to substantiate the fact, that Trotsky’s economic theory cannot be classified as left-wing; much to the contrary, it does not deviate significantly from the right-wing revisionism in questions of socialist construction and the role of commodity-money relations during that period.

The myth about Trotsky’s alleged leftist stand in resolving contradictions in the transitional period, conceals the true essence of Trotskyism in economic questions. Guevara’s economic thought has nothing to with Trotsky’s attitude to commodity-money relations and categories in the transitional period; their views are completely opposed to each other. Such allegations with regards to Guevara’s economic thought are unfounded and preposterous, to say the very least. As covered above, Guevara’s economic thought does suffer from serious elements of mechanicism, which does not make him a Trotskyite, as such mistakes were common to many economists in the Soviet Union during the Stalin period.

It is very interesting to observe how the Russian bourgeoisie is willing to appreciate in Trotsky the ‘virtues’ of a ‘market-socialist’, which many in the left movement do not seem to be able to grasp. To commemorate the 125th anniversary of Trotsky’s birth, a leading economic journal, Voprosi ekonomiki (‘Questions of Economy’) published an article under the title ‘Economic views of L.D. Trotsky’. In this article the authors attribute Trotsky’s heavy-handedness during the revolution and the civil war to the historical circumstances of that time, that in fact Trotsky had become one of the first to push for the liquidation of the policies of war communism and the liberalisation of the economy by allowing several forms of property to coexist for an indefinite period of time. The authors draw the bourgeois reader’s attention to Trotsky’s true and poorly publicised merit as being one of the first to advocate a mixed economic model for the transition to socialism:

‘The transition to NEP significantly changed Trotsky’s economic views. In a number of his works during that time he agitates in favour of the development of market relations, material stimulation, the understanding of the plan, as rigorous management in the sense of foreseeing and synchronising various sectors of social production. During the period of NEP Trotsky formulated a number of very important, even original ideas, namely: about the incompatibility of the methods of war communism in the conditions of NEP, about the need for each enterprise to have its own accounting balance, about the objective limitations to transferring resources from the agrarian sector to industry…’ (M. Voeikov and S. Dzarasov, ‘Economic Views of L.D. Trotsky’ in Voprosi Ekonomiki No. 11, 2004, p. 152).

Trotskyite economic doctrine seriously overlaps with Bogdanovism/Bukharinism in the understanding of the essence of the plan. Trotsky, in his renowned work ‘The Soviet Economy in Danger’, written in late 1932, starts off by equating one of the economic laws of the socialist economy and the transition to socialism, the planning principle with preconceived harmony of economic proportions:

‘However, light-minded assertions to the effect that the USSR has already entered into socialism are criminal. The achievements are great. But there still remains a very long and arduous road to actual victory over economic anarchy, to the surmounting of disproportions, to the guarantee of the harmonious character of economic life.’ (The Soviet Economy in Danger, in ’Writings of Leon Trotsky 1932’, Pathfinder Press, New York, 1973, p. 260. Our emphasis.)

The famous and infamous principle of equilibrium and harmony of the proportions of labour in the socialist economy is advocated by Trotsky in a rather unambiguous way. Within the eclectic framework of Trotskyism, centralisation of the economic policy alters the abstract principle of harmony of the economic processes. Trotsky, in his attempt to oppose the transition of the Soviet economy towards higher forms of economic organisation, comes around as a full-fledged right-wing revisionist, adding no more substance to the right wing opposition led by Bukharin/Rykov.

‘It is impossible to create a priori a complete system of economic harmony. The planning hypothesis could not but include old disproportions and the inevitability of the development of new ones. Centralized management implies not only great advantages but also the danger of centralizing mistakes, that is, of elevating them to an excessively high degree. Only continuous regulation of the plan in the process of its fulfillment, its reconstruction in part and as a whole, can guarantee its economic effectiveness’ (loc. cit.).

Trotsky’s ‘continuous regulation’ is the back door to substantiating his rebuff of the party’s line to shrink the operation of the commodity-money relations in the economy, which leads to the liquidation of capitalist exploitation in the country and the consolidation of the socialist economic laws. Once opponents, Bukharin and Trotsky converged into Bogdanovism as the construction of socialism progressed in the Soviet Union.

When Trotsky appeals to the impossibility ‘to create a priori a complete system of economic harmony’ it is implied that the central economic organs, are not in a position to undertake the tasks of centralised economic management, regardless of the development of the forces of production and the socialisation of the means of production. Deformations of the socialist economy inevitably take place as centralised decision-making overpowers workers’ democracy and a caste of administrators takes over as a ‘communist bureaucracy’. Once more, the objective character of the economic laws in general and the economic laws of socialism in particular, is overruled and loses its raison d’etre in the economic thinking of right-wing revisionism. Instead, Trotsky, as a poorly concealed right-wing revisionist, appeals on and on to the need for establishing harmony between the different branches of the socialist economy, which lies at the basis of his political economy.

Trotsky’s Bogdanovism is not a phenomenon of the 1930s; much to the contrary, it is inherent to his economic thinking from the very early stages of economic reforms in Soviet Russia. In summarising the developments in Soviet Russia since the victory of the October revolution, Trotsky states that the period of war communism had to end in order to restore equilibrium in labour exchange between the peasantry and the working class and between branches of the state sector, as:

‘Every economy can exist and grow only provided certain proportionality exists between its various sectors. Different branches of industry enter into specific quantitative and qualitative relations with one another. There must be a certain proportion between those branches which produce consumer goods and those which produce the means of production. Proper proportions must likewise be preserved within each of these branches. In other words, the material means and living labor power of a nation and of all mankind must be apportioned in accordance with a certain correlation of agriculture and industry and of the various branches of industry so as to enable mankind to exist and progress.’ (L.D. Trotsky, ‘The First Five Years of the Communist International’, Volume 2, New Park Publications, London, 1953, pp. 228.)

The postulate about proportionality of portions of labour among branches of the economy was conceived as a general, non-historic law that would apply to all economic systems. Marx’s considerations about the need for the establishment of certain proportions in which labour is exchanged in every economic system, and revised in a mechanical fashion by Bogdanov/Bukharin had a simple consequence in practice: the application of the law of value as a regulator of production was to be perpetuated in the socialist economy under the abstract consideration about the need for proportionality. This abstract concept is shared by Bukharin and Trotsky:

‘The problem of the proportionality of the elements of production and the branches of the economy constitutes the very heart of socialist economy’. (The Soviet Economy in Danger, p. 265.)

The ultimate goal of right-wing revisionism in questions concerning the transition to socialism is to provide every possible ideological means to perpetuate the economic relations of capitalism and to undermine the process of socialisation of the relations of production. In doing so, right-wing revisionism creates eclectic forms, Trojan horses in political economy. The postulate about the need of proportionality proved a euphemistic attack against the party line to curtail the operation of the law of value in the socialist sector and capitalist exploitation in the Soviet economy. By appealing to an abstract concept of proportionality without, leaving its concretisation as a loose end in the economic thinking, naturally leads to the perpetuation of relations of production existing hitherto. Abstract formulations in general, and in political economy in particular, without a concretisation within the concrete-historical framework inevitably render hollow abstractions, double-edged swords in the hands of revisionism.

Certainly, Trotsky casts out his disguise of a left-wing revisionist by bluntly stating:

‘The innumerable living participants in the economy, state and private, collective and individual, must serve notice of their needs and of their relative strength not only through the statistical determinations of plan commissions but by the direct pressure of supply and demand. The plan is checked and, to a considerable degree, realized through the market.’ (The Soviet Economy in Danger, p. 275. Our emphasis.)

Here, Trotsky makes an open appeal to the implementation of market relations as the ‘judge’ of the correctness or effectiveness of the economic policies developed by the plan makers. In other words, in the transitional economy the market is the beginning and the end of the economic system, the medium in which the struggle between the planned and market principles evolves into higher forms of development. It is within the market and according to the rules of the market that the superiority of the socialisation of the means of production is supposed to be put to the test. At some point in time the capitalist and petty bourgeois forms of productions will collapse under the inevitable overwhelming economic pressure of the socialised sector, at the time when it is able to develop higher forms of labour productivity. Trotsky, as a vulgar right-wing economist, therefore stands against what had been usually referred to by them as extra-economic measures to suppress the market principle in the economy, advocating instead a gradualist approach to the resolution of the contradictions between the socialist and other economic forms.

Trotsky’s economic thought is plagued with metaphysics; the metaphysical division of the economic system of the transitional society into the planned system and the market system holds a prominent place in the economic works of Trotskyism. This anti-dialectical approach to the economic processes had been already exposed in the mid 1920s in the Soviet Union by the majority of the party, including Bukharin/Rykov. But despite these differences, the left-wing and right-wing opposition agreed on the main proposition: let the market be the regulator of the labour exchange not only between industry and the countryside, but within the economic subjects of the socialist sector.

The idealist, metaphysical and non-historic postulate of proportionality of the elements of production is at the basis of the right-wing theories of Trotsky/Bukharin and gives them a certain semblance of self-consistency. The market represents the realm where the law of value, which is the concretisation of the postulate of proportionality, regulates the flow of labour among economic subjects, whether socialised or not. Needless to say, Trotsky is not the first to concretise the postulate of proportionality, which he had recently embraced, nor he was the first to establish such a line of thought. The appeal to preserve the commodity-money relations in the form that existed during NEP clearly predates Trotsky’s assertions about the need for proportionality. While we have to give credit to Bogdanov/Bukharin for their pioneering work in the descending line of modern revisionism, Trotsky does not deserve such an honour, as his contribution does not go beyond popularising the vulgar political economy of right-wing revisionism.

Apart from the metaphysical as well as mechanical idiosyncrasy of Trotskyite thought, which does not deserve to be the main topic of the present discussion, it is useful to bring out quotations like the following:

‘In this connection three systems must be subjected to a brief analysis: (1) special state departments, that is, the hierarchical system of plan commissions, in the center and locally; (2) trade, as a system of market regulation; (3) Soviet democracy, as a system for the living regulation by the masses of the structure of the economy.(The Soviet Economy in Danger, p. 273. Our emphasis.)

Far from sticking to left-wing orthodoxy, Trotsky sounds more like a Yugoslav Titoite, more like a pro-Western market liberal than anything else.

Trotsky takes a right-wing stand with regard to the role of NEP in the transition to socialism. Despite earlier attacks on the party to strengthen and develop further the economic and political link between the working class and the peasantry, Trotsky turns into a fervent advocate of the early forms of the transition to socialism adopted by the party. Moreover, he accuses the latter of liquidating the union between the working class and the peasantry. As a vulgar ‘market-socialist’, Trotsky considers the NEP as an inevitable step due to the significant weight of petty private production in the countryside, regardless of the concrete-historical conditions of revolutionary Russia:

‘The need to introduce the NEP, to restore market relationships, was determined first of all by the existence of 25 million independent peasant proprietors. This does not mean, however, that collectivization even in its first stage leads to the liquidation of the market.’ (The Soviet Economy in Danger, p. 275.)

The need for a transition to market relations between industry and the peasantry holds absolute character. According to Trotsky, due to the backwardness of the Russian peasantry and the level of mechanisation of labour in the countryside, the only possible form of peasant production with other producers is inevitably commodity-money relations. Trotsky’s mechanical and metaphysical thinking does not conceive of the socialist state and the individual peasant engaging in other forms of exchange, as well. Trotsky views the process of collectivisation as a forced administrative measure to unnaturally suppress the commodity-money bond between the city and the countryside. It is only through the evolution of the market, that certain conditions are created that the peasant feels it is more profitable to produce as a member of a larger production unit rather than remaining an individual producer. Hence it is believed that collectivisation should be performed by the forces of the market, that the market will suppress itself in a natural way.

Trotsky’s inevitability of market relations as the dominating bond between production agents during the transition to socialism does not reduce only to the interrelations between industry and the peasantry, much to the contrary:

‘This policy [NEP, our note] is a necessary stage in the growth of state-owned industry. Between capitalism, under which the means of production are owned by private individuals and all economic relations are regulated by the market – I say, between capitalism and complete socialism, with its socially planned economy, there are a number of transitional stages; and the NEP is essentially one of these stages’ (L.D. Trotsky, ‘The First Five Years of the Communist International’, Volume 2, New Park Publications, London, 1953, pp. 233).

NEP involved far more than the realisation of peasant production in a free market and the establishment of economic ties between the countryside and industry based on supply-demand. Never mind the cohabitation of the socialist sector with state capitalism and petty capitalist exploitation in both the countryside and the city; NEP introduced broad pro-market reforms within the socialist sector based on commercial accounting. It is true, however, that the expansion of commodity-money relations was seriously curtailed in the socialist sector in the second half of the twenties, which Trotsky viewed as a bureaucratic-administrative attack on the principles upon which Lenin allegedly conceived the path to socialist construction. It is here, where Guevara rebels against right-wing revisionism by advocating the right of the socialist state to determine the character of the relations of production and to regulate the proportions of labour exchange between branches of the state sector according to the global needs of the socialist state rather than the profitability of individual enterprises.

Much against Guevara’s views, Trotsky during the very early stages of NEP, during the transition from ‘war communism’ advocated the de-centralisation of the state sector:

‘The policy of a centralized bureaucratic management of industry excluded the possibility of a genuine centralized management, of fully utilizing technical equipment along with the available labor force.’ (L.D. Trotsky, ‘The First Five Years of the Communist International’, Volume 2, New Park Publications, London, 1953, pp. 230.)

As a result of the efforts to de-centralise state industry in 1921, especially light industry, as advocated by Trotsky, negative effects were felt soon, such as:

‘…violation of plan discipline, separatism; some state officials tried to replace the state plan organisation – VSNKh – by some ‘social organization of industry’’ (P.I. Lyashchenko, History of the People’s Economy of the USSR, Moscow 1956, Volume III, p. 153. Translated from Russian.)

Guevara supported the correct view that economic calculation does not necessarily imply market relations as factors determining production in the state sector, that economic accounting is not necessarily tied to commodity-money relations, as advocated by the supporters of the Soviet-style model in Cuba. Trotsky takes sides with Soviet revisionism:

After the administrative suppression of the NEP, the celebrated ‘six conditions of Stalin’ – economic accounting, piecework wages, etc. – became transformed into an empty collection of words. Economic accounting is unthinkable without market relations.” (The Soviet Economy in Danger,p. 276. Our emphasis.)

The history of the political economy of socialism has exposed the intimate link between the postulate of proportionality in the exchange of labour among different branches of the economy and the mechanical transportation of market relations to socialism. Metaphysics and mechanicism, common to the economic thought of right-wing revisionism, are closely interrelated with vulgar and superficial understanding of economic categories, which impels the ideologists of right-wing revisionism to equate exchange to commodity exchange and economic equilibrium to the operation of the law of value. The vulgar economic thought advocated by Trotsky and the right-wing opposition does not conceive another form of economic exchange other than commodity-money relations. It is not conceivable that the socialist state could establish a different content in the economic ties among objects of the socialist economy, which may violate the rigid principle of profitability of the individual enterprise. The ability of the planning bodies to establish labour exchange among socialist enterprises, which violates that principle, is viewed as a deformation, as a disproportion. Right-wing revisionism is unable to grasp and appreciate the great power in the hands of socialist planning to establish certain proportions of labour exchange that fit the needs and growth perspectives of the socialist economy, regardless of the overall level of socialisation of economy. In this sense, right-wing economists conceive the plan as a corollary of subjective (aprioristic, according to Trotsky) measures to organise, rationalise the labour exchange among profit-making individual enterprises. Guevara wholeheartedly rejects such a vulgar view of the plan, by advocating the right of the socialist planning to establish a different character of economic relations among the state enterprises, which does not necessarily follow the principle of profitability of the individual enterprise as the leading criterion for economic effectiveness.

Guevara openly exposed the view advocated by Trotsky and the ideologists of modern revisionism that economic accounting ‘is unthinkable’ without commodity money relations. Much to the contrary, Che advocated strict accounting, based on centralised responsibility and accountability of the management of the socialist enterprise, as a key element of the budgetary finance system, which lies at the centre of this economic thought. In his economic system economic accounting in the socialist sector is dissociated from the essence carried by commodity-money relations. Even though Guevara does not seem to grasp the dialectical evolution of market categories in socialism, his thought contains the basic elements to arrive at this understanding. Guevara’s accepts the correct view that the price, despite being a category inherited from the market economy, may be used within the socialist sector for calculation purposes. Hence, he does not reject the use of the form of market categories, which brings him closer to the Marxist-Leninist understanding developed by Lenin-Stalin. On the other hand, it is not clear to us that Guevara understood the evolution of the principle of economic accounting, which was introduced in 1921, through the NEP all the way to the massive collectivisation and the consolidation of the economic basis of socialism in the 1930s, all the way to the publication of Stalin’s Economic Problems. An analysis of the category of economic accounting shows that a deep change in the content had taken place which, despite the fact that the term was in use in the 1930-50s, reflected a different type of management to which Guevara’s budgetary system bears strong resemblance.

According to Tablada and Borrego, Che Guevara paid special attention to the analysis of the causes which led to the abolition of the war economy and the establishment of NEP. This issue is covered on multiple occasions in their books and has been the topic of a great deal of speculation, including allegations that Guevara accused Lenin of going too far in the development of market relations during the early stages of the NEP. Regardless of speculations, Che makes a strong case out of Lenin’s statements, in which NEP is considered as a retreat in the practice of the revolutionary process like the peace of Brest-Litovsk. It is evident, despite the wealth of confusion fostered by Guevara’s bourgeois, Trotskyite and neo-Trotskyite biographers, that Guevara does not consider NEP as an inevitable step in the transition to socialism, as a general and universal statement, but rather, a product of the historical-concrete conditions of revolutionary Russia. After quoting Marx, Lenin and Stalin (this article was written in 1964, when anti-Stalinism was already solidly established in the Soviet Union and the former People’s Democracies in Eastern Europe, with the exception of Albania), Guevara concludes:

‘As we see, the retreat that Lenin mentioned was due to the economic and political situation of the Soviet Union. These policies may be characterised as a practice, which is closely linked to the historical situation of the country, and, therefore, they do not hold universal character.’ (Che Guevara, ‘Che y la Economia’, Editorial de Ciencias Sociales, Habana, Cuba 1993, p. 74. Translated from Spanish.)

The argumentation in favour of NEP-type of economic reforms as an unavoidable step in the transition process between capitalism and socialism is a fundamental element of the economic theory of right-wing revisionism, including Trotskyism, which Guevara rejected altogether. A historical example, which refutes NEP as a compulsory stage for new revolutionary states, is served by the first steps adopted by the People’s Democracies in Eastern Europe between 1948 and 1953. The governments of the People’s Democracies set an economic course based on the priority of heavy industry over other sectors of the economy. The policies of what bourgeois ideologists called the Stalinist economic model resulted in a spectacular growth of the socialist industry, a conditio sine qua non for a massive process of socialisation of means of production both in the city and the countryside. Even a vicious anti-communist publicist, such as F. Fejto, a Hungarian-born journalist based for a long time in France, admits:

‘Between 1949 and 1953, the industrial production of the six Comecon countries rose by 114 per cent, and in certain countries, like Hungary, where the ambitious planners knew no limits the results had been even more spectacular. Heavy industrial production increased fivefold; the engineering industry was seven times more productive in 1953 than in 1938. (F. Fejto, A History of the People’s Democracies, Penguin Books, 1977, p. 362.)

Further, Fejto elaborates on the very interesting case of the transition to socialism in Hungary, especially the events that followed the abrupt change of ‘gears’ imposed by the Soviet leadership weeks after the death of Stalin. In 1949 Hungary’s party, led by Matyas Rakosi, one of the most fervent supporters of Stalin’s policies, launched a campaign of collectivisation, which, although far from finalised, was well underway towards 1953. With Stalin’s death a swift change in the character of the Soviet leadership took place. The new Soviet leadership, at first initiated most likely by Beria, imposed on the leaders of the fraternal parties in Eastern Europe a line of forcible de-Stalinisation. The revisionist leadership ordered Eastern European leaders to slow down the tempo of industrialisation and to basically liquidate the process of ‘forcible’ collectivisation. In a number of countries, peasants were allowed to desert the collective farms (‘de-collectivisation’) if they wished to; private exploitation of land together with the restoration of the artisan class and private business. It was argued that the ‘Stalinist’ economic reforms had gone too far, that allegedly broad masses of the peasantry and the working class in those countries were frustrated at seeing that the unquestionable economic growth did not result in meaningful enhancement of the standards of living of the population, including that of the working class. There is no question that the ideological and organisational chaos induced by the policies of forcible ‘de-Stalinisation’ encouraged anti-communist elements within the middle classes, petty bourgeoisie and workers aristocracy to demonstrate compulsively, while entire party organisations proved hopeless, in disarray.

The Hungarian leader, Matyas Rakosi, did his best to stand up against Soviet revisionism and its supporters in the country; he succeeded in remaining in office till July 1956, when he was basically forced into exile by the Soviet leadership. Following orders from the Soviet revisionist leadership, in July 1953 Rakosi was forced to give up the post of Prime Minister, which passed to Imre Nagy, who even in the words of Fejto:

‘…revived Bukharinist ideas that had gone underground in Stalin’s lifetime’ (F. Fejto, A History of the People’s Democracies, Penguin Books, 1977, p. 363).

Certainly, Nagy was a fervent advocate of NEP-style treatment of the economic contradictions between the socialist sector, the peasantry and other petty producers. Soon after he gains office in July 1953, he launches a set of ‘liberalising’ measures, which became known as the ‘New Course’. In his last work, written in 1955, he states:

‘In a socialist society, when determining the tempo of economic development and the ratio between the various economic branches, the proportion between production and consumption and between consumption and stockpiling must be in harmony with the requirements of the basic economic law of socialism, guaranteeing a gradual advance of society’ (I. Nagy, ‘On Communism’, Frederick A. Praeger Publishers, New York, 1957, p. 98).

Nagy advocated ad nauseam the need for harmonic balance between the resources spent on sector A and sector B of the economy. The well-known concept of certain harmonic proportions invented by Bogdanov/Bukharin and plagiarised by Trotsky comes out again and again, as the back door to the development of commodity-money relations both in the socialist and non-socialist sectors, as a regulator of production. It is interesting, that unlike Bukharin/Trotsky, he uses Stalin’s citations of the mid twenties to substantiate the need to have NEP-style relations in the transitional economic system. In fact, by ‘basic economic law of socialism’ Nagy implies the well-known formulation given by Stalin in Economic Problems. This, however, does not prevent Nagy from remaining a vulgar right-wing economist, which Guevara’s economic thought has nothing to do with.

According to Nagy, the only bond that the socialist sector and the private producer can have in the early stages of the transition from capitalism to socialism is the market. It is only through the market that the process of socialisation of production can prove its advantages over capitalist forms of management and production. Nagy is explicit:

‘‘The NEP policy must be carried out unconditionally, as it means the establishment of increasingly closer relations in the exchange of goods between the city and the village, between the socialist industry and the system of small holdings producing for the market, facilitating the switch to a socialist system of agricultural farms on a large scale.’ (I. Nagy, op. cit., p. 82. Our emphasis.)

Nagy on and on bitterly complains about the staggering disproportions and ‘distortions’ inflicted on the Hungarian economy by Rakosi’s ‘clique’, referring to the fast development of heavy industry with respect to light industry, and especially the countryside. Nagy’s attack on Rakosi’s ‘clique’ becomes even more acute when touching upon the treatment of individual peasants and the collectivisation. He initially refers to Rakosi’s ‘clique’ as adventurous, later on as open left-wing ‘fanatics’ and deviationists. Finally, while quoting Lenin and Stalin’s works in the 1920s, taking their writings out of context, Nagy establishes a parallel between Rakosi’s struggle to uphold the principles of Marxism-Leninism, regardless of whatever mistakes in its implementation, and the Trotskyite left-wing opposition in the Soviet Union in the 1920s by appealing to:

‘The resolutions of the Bolshevik Party in the Fifteenth Congress, which were forged in the battle against the extreme ‘left-wing’ Trotskyist opposition…’ (I. Nagy, op. cit., p. 82.)

It is not the first time that right-wing opportunism portrays the struggle for the basic principle of centralisation of means of production in the construction of socialism as a left-wing, Trotskyite deviation. These allegations of Trotskyism that were thrown at Guevara are to be understood in the historical context, which corresponds to the time when right-wing revisionism, led by the revisionist leadership of in the Soviet Union, disbanded the ‘Stalinist’ plans for the socialisation of the means of production in industry and the countryside. Modern revisionism turned the state sector in the People’s Democracies into an aggregation of independently producing enterprises, which engage in labour exchange with other enterprises and the state via commodity-money relations; in the countryside the process of collectivisation was halted and reversed, and in some countries farm cooperatives were turned into independently producing enterprises, following the model imposed by the revisionists in the Soviet Union. It is in this context, that Guevara’s fight against followers of the Soviet economic model in Cuba, despite his mechanical and idealist mistakes, renders a substantiated critique against right-wing revisionist theories for the construction of socialism.

Guevara’s plans for the industrialisation of the Caribbean island need to be understood within the historical-concrete situation corresponding to the restoration of capitalism in the Soviet Union and the People’s Democracies in Eastern Europe. Despite elements of idealism and mechanicism, Guevara’s model of budgetary finance system and his refusal to implement commodity-money relations and the law of value as the regulator of proportions among state enterprises bears strong resemblances with the economic system existent in the Soviet Union during the 1930-50s. Hence, it was natural that Guevara’s plans for industrialisation faced fierce resistance by Soviet revisionism and its followers in the island. It is evident to us, that allegations of Trotskyism or left-wing deviationism thrown by right-wing revisionists are utterly unfounded. Nevertheless, more investigation is needed to throw light on Guevara’s ideological evolution in the 1950s and early 1960s and on how he came to propose the budgetary finance system, as the fundamental pillar for the industrialisation in Cuba.

Idealism and Mechanicism in Che’s Economic Thought

Despite the progressive character of Guevara’s economic thought, and its invaluable positive impact on the economic discussion held in Cuba during the first half of the 1960s, which represents a courageous and more or less consistent and substantiated struggle against modern revisionism, Che’s thinking needs to be considered critically. Notwithstanding the substantiated struggle against the right-wing theories of socialist construction, which makes Guevara’s works most relevant materials for the study of questions related to socialist transformation, he is plagued with serious mistakes. Guevara’s eclecticism is inherent to his thought in general, and cannot be neglected when evaluating Guevara’s role in the Cuban revolution and the theory of socialist transformation.

Guevara’s mistakes in political economy can be classified into two groups: idealism and mechanicism. Idealist mistakes were committed by Guevara when evaluating the role of consciousness in political economy. When we refer to mechanicism in Guevara’s economic thought we mainly imply his failure to grasp the dialectical evolution of economic categories involved in commodity-money relations during the transitional epoch. Needless to say, Guevara’s mistakes have been extensively used by the bourgeoisie and the representatives of revisionist tendencies, such as Trotskyism and neo-Trotskyism to mystify the revolutionary and rip his contribution to the political science and political economy from its Marxist logical core and divorce it from a number of Marxist-Leninist principles, which Guevara tried to uphold in a more or less consistent manner.

Guevara’s mistakes in political economy have been used inside and outside the island to consider Guevara’s contribution to the economic transformations in the early stages of the Cuban revolution in isolation from the principles of socialist transformation adopted by the People’s Democracies during the post-war period, so demonised by modern revisionism. Guevara’s thought is portrayed by many as a specific phenomenon of the Cuban revolution, thus completely ignoring its strong links with the so called ‘Stalinist’ economic theories and modus operandi during the transitional period. Although we do not wish to portray Guevara’s economic thought as a faithful concretisation of the principles of Marxism-Leninism in the conditions of revolutionary Cuba in the 1960s, we feel it would be a serious mistake not to evaluate Guevara’s thought within the concrete-historical epoch corresponding to systematic violation of the principles of Marxism-Leninism, which led to the restoration of capitalism in the Soviet Union and the liquidation of socialist construction in Eastern Europe. While evaluating critically Guevara’s economic thought and identifying areas of inconsistency, we feel compelled to appreciate and value the positive and progressive that Che upheld under very difficult conditions of struggle against imperialism and revisionism.

Idealism is present throughout Guevara’s works all the way till his last published work, ‘Man and Socialism in Cuba’. It leads Guevara to proclaim consciousness and education as primary with respect to the study of relations of production in the transitional economy, including the construction of communism. Impressed by the early philosophical works of young Marx, Guevara states:

‘The word conscious is emphasized because Marx considered it basic in stating the problem. He thought about man’s liberation and saw communism as the solution to the contradictions that brought alienation – but as a conscious act. That is to say, communism cannot be seen merely as the result of class contradictions in a highly developed society, contradiction that would be resolved during a transitional stage before reaching the crest. Man is a conscious actor in history. Without this consciousness, which embraces its awareness as a social being, there can be no communism.’ (Che Guevara, in ‘On the budgetary finance system’, published in Man and Socialism in Cuba, Atheneum, New York, 1973, p. 124. Our emphasis.)

The role of consciousness and education is ubiquitously stressed by Guevara in his economic works as the leading factor in the transition to higher forms of economic organisation. In Guevara’s system political economy ceases to be an independent discipline, the objective character of the economic laws of the transitional society is secondary to the cultural formation of the new man. The economic laws of socialism, like those of capitalism, exist and evolve with the development of the forces of production and the historical conditions at times independently from the level of consciousness of the masses. In fact, in certain historical situations, the masses as a whole remain unaware of the economic essence of both revolution and counter-revolution.

The role of consciousness and education undoubtedly play a fundamental role in the construction of the new society. However, political economy remains an independent discipline and the study of the objective laws that govern it remains a titanic effort. Only scientific analysis and synthesis of the relations of production can make possible the sustained economic development necessary for the construction of the socialist and communist societies. As opposed to capitalism, during the course of the transition to socialism, objective and subjective conditions are given for the masses to participate consciously in the construction and scientific analysis and synthesis of the socialist construction. It is clear that the more conscious and active participation of the working class in the socialist construction, the more solid are the foundations of the socialist formation. It is clear too, that the more conscious the working class is about the essence of the economic transformation, the more robust is the economic development and the less influential are the forces of counter-revolution.

Economic development under socialism and the development of consciousness and socialist culture – two phenomena which go hand in hand. Generalisation on the basis of the history of the Soviet Union indicates that consciousness and socialist culture require a material basis, without which further economic development and further development of consciousness. However, according to Guevara consciousness and socialist education are supposed to be the primary engines of economic development in socialism:

‘The hopes in our system [budgetary finance system – our note] point to the future, towards a more rapid development of consciousness, and through consciousness, to the development of the productive forces’. (Che Guevara, op. cit. in ‘Socialist plan: its meaning’, p. 147. Translated from Spanish.)

In Guevara’s system, socialist economic development is not really the engine of consciousness, but the other way around, consciousness is the source of socialist economic development. Guevara’s idealism turns voluntarist. In this respect, Che’s idealism may be compared to Mao’s idealist views in political economy, despite the fact that Guevara displays a significantly more progressive stand with respect to commodity-money relations than the latter. Mao, in his critique of Stalin’s Economic Problems, bitterly complains about the fact that the latter does not include the study of the superstructure in the analysis of the socialist economy:

Stalin’s book from first to last says nothing about the superstructure. It is not concerned with people; it considers things not people…

They speak only of the production relations, not the superstructure nor politics, nor the role of the people. Communism cannot be reached unless there is a communist movement’. (Mao Tsetung, A Critique of Soviet Economics, Monthly Review Press, New York and London, 1977, pp. 135-136.)

Guevara supports the wrong idealistic view that commodity-money relations per se and in general are a manifestation of the alienation of the human being in the process of production. Guevara interprets mechanistically and metaphysically the role and place of economic forms inherited from capitalism in the socialist economy:

‘The alienated human individual is bound to society as a whole by an invisible umbilical cord: the law of value. It acts upon all facets of his life, shaping his road and his destiny. (Che Guevara in ‘Man and Socialism in Cuba’, Atheneum, New York, 1973, p. 340.)

One of the major and profound mistakes displayed by Guevara’s economic thought, a mistake common to many others who have genuinely claimed allegiance to Marxism-Leninism, is his failing to grasp Lenin’s and Stalin’s teachings with regards to the dying off of economic categories inherited from capitalism. These teachings may be succinctly expressed in Stalin’s well-known assertion in Economic Problems. In his answer to A. Notkin, Stalin stresses:

‘The fact of the matter is that in our socialist conditions economic development proceeds not by way of upheavals, but by way of gradual changes, the old not simply being abolished out of hand, but changing its nature in adaptation to the new, and retaining only its form; while the new does not simply destroy the old, but infiltrates into it, changes its nature and its functions, without smashing its form, but utilizing it for the development of the new. This, in our economic circulation, is true not only of commodities, but also of money, as well as of banks, which, while they lose their old functions and acquire new ones, preserve their old form, which is utilized by the socialist system.’ (J.V. Stalin ‘Economic Problems of Socialism in the USSR’, Foreign Languages Publishing House, Moscow, 1952, p. 59.)

Guevara commits the colossal mistake, which has been more or less successfully exploited by neo-Trotskyism and other bourgeois ideologies, of mechanically and metaphysically extrapolating the character of the economic categories implemented during the NEP to later stages of the socialist construction in the Soviet Union. Guevara, de facto blames the adoption of such economic forms as economic accounting, profit, credit, etc. implemented in the 1920s for the right-wing deviationist economic theories that he was fighting in the 1960s, without appreciating the profound changes that operated in the content of those categories during the 1930-50s:

In the Soviet Union, the first country to build socialism, and those who followed its example, determined to develop a planning process that could measure broad economic results by financial means. Relations among enterprises were left in a state of more or less free play. This is the origin of what is now called economic calculus (a poor translation of the Russian term, that might better be expressed as auto-financing, or, more precisely, financial self-management).

Roughly speaking, then, financial self-management is based on establishing broad financial control over the enterprise activities, banks being the principal agencies of control. Suitably designed and regimented material incentives are used to promote independent initiative toward maximum utilization of productive capacity, which translates into greater benefits for the individual worker or the factory collective. Under this system, loans granted to socialist enterprises are repaid with interests in order to accelerate product turnover’. (Che Guevara, in ‘On Production Costs and the Budgetary System’, published in Man and Socialism in Cuba, Atheneum, New York, 1973, p. 114.)

It is clear that, the transition to socialism in the Soviet Union, which followed the implementation of market-type economic relations in most of the economy, had to carry within itself certain economic forms, which are inevitably inherited from capitalism. However, Guevara apparently fails to grasp the fact that the concept of economic accounting evolved dramatically over the years, as the character of the economic relations evolved. The concept of economic accounting never disappeared from the Soviet economic literature; however, its content evolved in time in order to accommodate the planned principle of the economy on the basis of socialised property and the liquidation of bourgeois and petty-bourgeois forms of production. The economic accounting of the more or less disseminated production subjects confined to the Soviet artels in the 1920s bears little resemblance with the economic accounting of highly concentrated Soviet industry in the 1930-50s. The character of the labour exchange among the different production subjects during the 1930-50s bear close resemblance to that of the budgetary finance system advocated by Guevara in the 1960s.

It is not clear to us, to what extent Guevara is able to appreciate the qualitative changes that operated in the interpretation of the content of economic categories over the history of the political economy of the Soviet Union. It is unclear whether Guevara sees the preservation in the Soviet Union of economic forms such us, economic accounting, profit, credit, banks, etc… as a sign of economic backwardness, or rather as a sign of the concrete historical conditions under which the transition to socialism took place in the Soviet Union. For instance, Guevara advocated the liquidation of the concept of credit in socialism, even though the form of credit was never liquidated in the Soviet Union:

‘In our system [the budgetary system – our note.] the Bank supplies a certain amount of resources to the enterprises according to the budget; here the interest rate is not present’. (Che Guevara, op. cit. in ‘Considerations on Expenses’, pp. 45-46. Translated from Spanish.)

The same applies to the economic category of profit, which was never liquidated in the Soviet Union but was categorically denied by Guevara within the context of the budgetary finance system in Cuba. Guevara seems to understand mechanically the economic relation of the State with socialised production subjects:

‘…because the State Enterprise in the conditions of Cuba, is just a centre for production. It has a budget, a budget for production; it should meet the goals of production and deliver its product to the Ministry of Domestic Commerce, or to other state industries. Thus, the enterprise does not have profit, does not have money; all the profit, all the difference between what was sold and the cost belongs to the Cuban state. The enterprise is reduced to production.’ (Che Guevara, Conference ‘Economy and Plan’ of the People’s University, 1961. Translated from Spanish.)

As a matter of fact, the history of the political economy of the Soviet Union has demonstrated that the principle of socialist planning on the basis of socialised forms of production does not contradict the implementation of such economic forms as profit, as long as the latter do not express the relationship between independent producers, but on the contrary is used as one of the indexes of economic effectiveness, etc… To state that profit is not the leading economic criterion in socialist industry is generally speaking correct. However to interpret the sole presence of the concept of profit, regardless of its relative weight in the definition of economic effectiveness, as a sign of economic backwardness is strictly speaking incorrect.

In his article ‘Bank, Credit and Socialism’ Guevara brilliantly exposes the vulgar and fetishist economic views of those in Cuba who did not understand the need to re-define the role of banks in a socialist economy and that the economic functions of the banks in capitalism cannot be mechanically transported to socialism. His conclusions are generally speaking correct, correct in the sense of abstract formulations. So are his conclusions with regard to commodity-money relations and the role of the law of value in the transitional economy. However, they are correct in the abstract and may turn dangerous if applied mechanically to concrete-historical conditions.

Unfortunately, the evaluation of Guevara’s economic thought is confusing and inconclusive since the budgetary finance system is conceived as a result of the struggle with right-wing economic theories, which absolutise the role of commodity-money relations. The budgetary finance system is without a doubt a reaction against right-wing economic theories and needs to be appreciated as such. Further investigations, possibly on the basis of archival materials, will hopefully throw valuable light on the role of mechanicism and metaphysics in Guevara’s economic thought.

Source

Three Tactics of the Nationalists in the Middle East

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This article was published by Alliance (Marxist-Leninist) as part of the publication Alliance, issue #51, “Pan-Arabic or Pan-Islamic ‘Socialism.’”

Originally written 1992

Since the end of World War II (WW II), the contradiction between the working classes and the developing capitalist class of the Middle Eastern nations was linked to a second contradiction – that between the different imperialists and the indigenous developing capitalists.  On top of these, there were contradictions between the imperialists themselves, reflecting the decline of British imperialism, and the rise of USA imperialism. After World War II explicit deals took place between the British and US, regarding future developments in the Middle East:

“In response to Winston Churchill’s questions about America’s interests in Iranian oil, Franklin Roosevelt wrote in March 1943 that:

‘I am having the oil studied by the Department of State and my oil experts, but please do accept my assurances that I am not making sheeps’ eyes at your oil fields in Iraq or Iran.’

Churchill responded:

‘Thank you very much for your assurances about no sheeps’ eyes at our oil fields in Iran and Iraq. Let me reciprocate by giving you the fullest assurances that we have not thought of trying to horn in upon your interests or property in Saudi Arabia.'”

James A. Bill “The Eagle and the Lion-The Tragedy of Iranian-American Relations”; New York , 1988. p.29

Unfortunately, with a small working class, the national bourgeoisies largely had no opposition to its leadership over a struggling peasantry. But the national bourgeoisie was also weak, because as the power of imperialism grew, the objective role for the national bourgeoisie was steadily getting smaller. Furthermore the previous history of Oriental Despotism of the Ottomans, had ensured a very weak development of the industrial forces necessary for nation development. Finally the many divisions between factions in the area were skilfully exploited by the imperialists to effectively divide and rule.

ANTI-COLONIAL STRUGGLES IN COLONIAL COUNTRIES

Imperialism used local indigenous rulers and leading individuals as their surrogates. These indigenous agents were usually buyers and traders whose livelihood depended upon the Imperialists. Often landed feudal gentry were also allied to imperialism. They were termed COMPRADOR BOURGEOISIE.

Inevitably some indigenous capitalists wished to displace imperialism, so that they can then retain all the colony’s profits for itself. They were termed NATIONAL BOURGEOISIE. Because they were usually very weak, they tried to enlist the masses ie. working classes and peasantry. The weak and nascent national bourgeoisie of the Middle East struggled at first, in the main against British and French; then in the main against USA imperialism.

The line of Communists in the National Liberation movement dervies from the positions of Lenin at the Second Congress of the Comintern in 1921. Lenin thought that in the first stage of the revolution, the bourgeois democrats had a useful role to play:

“All the Communist parties must assist the bourgeois democratic liberation movement in these (ie colonial type countries-ed).. The Communist International (CI) must enter into a temporary alliance with bourgeois democracy in colonial and backward countries.”

V.I.Lenin: Preliminary Draft of Theses on National and Colonial Questions, 2nd Congress CI  in “Selected Works”, Volume 10, London, 1946; p. 236-7.

But Lenin and Stalin pointed out, that these national bourgeoisie, flinch from the final steps, as the unleashing of mass movements arouses socialist movements. Therefore, class coalitions of national bourgeoisie with working class organizations can only be temporary. They are also prone to sabotage by the national bourgeoisie. The working class organisations must remain independent, even in a United Front. It is imperative to find and ally only with and for long as, the sections of the bourgeoisie are genuinely in struggle with imperialism:

“I would like to particularly emphasise the question of the bourgeois democratic movements in backward countries. It was this question that gave rise to some disagreement. We argued about whether it would be correct, in principle and in theory, to declare that the CI and the CP’s should support the bourgeois-democratic movement in backward countries. As a result of this discussion we unanimously decided to speak of the nationalist-revolutionary movements instead of the ‘bourgeois-democratic’ movement. There is not the slightest doubt that every nationalist movement can only be a bourgeois-democratic movement.. But it was agreed that if we speak about the bourgeois-democratic movement all distinction between reformist and revolutionary movements will be obliterated; whereas in recent times this distinction has been fully and clearly revealed in the backward and colonial countries, of the imperialist bourgeois is trying with all its might to implant the reformist movement also among the oppressed nations.. In the Commission this was proved irrefutably, and we came to the conclusion that the only correct thing to do was to take this distinction into consideration and nearly everywhere to substitute the term “nationalist-revolutionary” for the term “bourgeois-democratic”. The meaning of this change is that we communists should, and will, support bourgeois liberation movements only when these movement do not hinder us in training and organising the peasants and the broad masses of the exploited in a revolutionary spirit.. The above mentioned distinction has now been drawn in all the theses, and I think that, thanks to this, our point of view has been formulated much more precisely.”

Lenin. Report Of Commission on the National and Colonial Questions, Ibid, p 241.

This Leninist line was further developed by Stalin, who in 1925, distinguished “at least three categories of colonial and dependent countries”:

Firstly countries like Morocco who have little or no proletariat, and are industrially quite undeveloped. Secondly countries like China and Egypt which are under-developed industries and have a relatively small proletariat. Thirdly countries like India.. capitalistically more or less developed and have a more or less numerous national proletariat. Clearly all these countries cannot possibly be put on a par with one another.”

J.V.Stalin; “Works” Volume 7: “Political Tasks of the University of the People’s of the East.  Speech Delivered at a meeting of Students of the Communist University of the Toilers of the East”, May 18th, 1925. pp. 148.

In each country the conditions were different and had to be concretely studied before deciding the exact tactic:

“In countries like Egypt and China, where the national bourgeoisie has already split up into a revolutionary party and a compromising party, but where the compromising section of the bourgeoises is not yet able to join up with imperialism, the Communists can no longer set themselves the aim of forming a united national front against imperialism. In such countries the Communists must pass from the policy of a united national front to the policy of a revolutionary bloc of the workers and the petty bourgeoisie. In such countries that bloc can assume the form of a single party, a workers and peasants’ party, provided, however, that this distinctive party actually represents a bloc of two forces – the Communist Party and the party of the revolutionary petty bourgeois. The tasks of this bloc are to expose the half-heartedness and inconsistency of the national bourgeoisie and to wage a determined struggle against imperialism. Such a dual party is necessary and expedient provided it does not bind the Communist Party hand and foot, provided it does not restrict the freedom of the Communist Party to conduct agitation and propaganda work, provided it does not hinder the rallying of the proletarians around and provided it facilitates the actual leadership of the revolutionary movement by the Communist party. Such a dual party is unnecessary and inexpedient if to does not conform to all these conditions for it can only lead to the Communist elements becoming dissolved in the ranks of the bourgeoisie to the Communist Party losing the proletarian army.”

J.V.Stalin Works Vol 7; “Tasks of University of People’s of East”, Ibid; pp. 149-150

If a large working class presence was felt, this strengthened the revolutionary prospects. When this happened, the most uncertain and vacillating elements of the bourgeoisie tended to desert the revolution, and form a bloc with imperialism:

“The situation is somewhat different in countries like India. The fundamental and new feature of the conditions of life in countries like India is not only that the national bourgeoisie has split up into a revolutionary part and a compromising part, but primarily that the compromising section of the bourgeoisie has already managed, in the main, to strike a deal with imperialism, Fearing revolution more than it fears imperialism, and concerned with more about its money bags than about the interests of its own country, this section of the bourgeoisie is going over entirely to the camp of the irreconcilable enemies of the revolution, it is forming a bloc with imperialism against the workers and peasants of its own country.”

J.V.Stalin Works Vol 7; “Tasks of University of People’s of East”, Ibid; pp. 150.

Such blocs between vacillating “national bourgeoise” and imperialisms, should be smashed:

“The victory of the revolution cannot be achieved unless this bloc is smashed, but in order to smash this bloc, fire must be concentrated on the compromising national bourgeoisie, its treachery exposed, the toiling masses freed from its influence, and the conditions necessary for the hegemony of the proletariat systematically prepared. In other words, in colonies like India it is a matter of preparing the proletariat for the role of leader of the liberation movement, step by step dislodging the bourgeoisie and its mouthpieces from this honourable post. The task is to create an anti-imperialist bloc and to ensure the hegemony of the proletariat in this bloc. This bloc can assume although it need not always necessarily do so, the form of a single Workers and Peasants Party, formally bound by a single platform. In such centuries the independence of the Communist Party must be, the chief slogan of the advanced communist elements, for the hegemony of the proletariat can be prepared and brought about by the Communist party. But the communist party can and must enter into an open bloc with the revolutionary part of the bourgeoisie in order, after isolating the compromising national bourgeoisie, to lead the vast masses of the urban and rural petty bourgeoisie in the struggle against imperialism.”

J.V.Stalin Works Vol 7; “Tasks of University of People’s of East”, Ibid; pp. 150-151.

But despite these warnings, organisations took part in un-principled coalitions, and led the working classes into massacres. The failure of the working class to organise along correct lines ensured that the many anti-imperialist struggles in the Middle East, never achieved the socialist – or even to the national democratic revolution.

After World War II imperialism was even stronger, and even more rapacious. This was as its markets were threatened by the Socialist USSR leading some European countries towards socialist development. Responding to imperialisms’ demands, the weak national bourgeoisie of the Middle East attempted to overcome their weaknesses by several tactics that would avoid harnessing the revolutionary masses. All these tactics would prove unsuccessful. These are detailed below; and culminated in a movement of cartelisation for oil selling – Organisation for Petroleum Exporting Countries (OPEC).

THE WEAK NATIONAL BOURGEOISIE OF THE MIDDLE EAST TO SEEK TACTICS TO FIGHT IMPERIALISM

Tactic Number One: Wahda and Nasserism, Pan-Arabism; A Political Combination of Weak National Bourgeoisie

Given the bourgeois fear of rousing the working class movement too far, only a vacillating movement against imperialism was possible. Ultimately the national bourgeoisie always capitulated in the face of social revolution. This allowed the imperialist powers to retard the development of the states concerned. Coupled with this was the power of monopoly interests, of the imperialist companies. So that even in favourable situations, where these states led by national bourgeoisie could nationalise the major resource in the area (oil) the imperialist consortiums were able to dictate their demands.

Despite these failures, the nascent bourgeoisie of the area continued to harbour resentment against imperialism. To compensate for their unwillingness to fully enrol the working classes, they attempted to unite across “national” borders. This entailed a mystical PAN-ARABISM which preceded NASSERISM. For example the formation of the BA’TH PARTY in Syria took place in 1947, led by Michel ‘Aflaq, Salh al-Din Bitar and also Wahib al-Ghanim.

BA’TH means “re-birth” and took the notion as central, to mean the renaissance of the Arab movement. But it was Gamel Abdul Nasser who most effectively utilised this idea of pan-Arabism. Starting in the context of a nationalist movement in Egypt alone, Nasser struck a renewed hope for liberation from imperialism throughout large sections of the Middle East, using instead of Ba’th – the notion of Wahda, to mean ultimately the same.

The Nasserite movement aimed at WAHDA (Arabic for union). It was to be a renewal of Arabic “culture,” under a twentieth century guise of nationalism.

As a strategy of the national bourgeoisie in the Middle East, it aimed to contain the mass movement, it emphasised notions of an Arab peoples, denying any class content.

Revisionism in the parties of the area had effectively deprived the working class of capable leadership. Nasserism was only able to consolidate itself because the Egyptian Workers Party, the Communist Party, was itself under the influence of the now Soviet-revisionist leaders.

Wahda called for unity of several different struggling national bourgeoisie against imperialism. It hoped to be able to avoid the social revolution, by using nationalistic demagogic slogans. Effectively a class coalition was to be created, of all the national bourgeoisies, and the working classes of the different countries, led by the national bourgeoisie.

That way it was to be hoped apparently, that the singly weak national bourgeoisie, together, would be strong enough to fight imperialism, and yet still be able to contain the social revolution.

But ultimately Pan-Arabism failed, as there was a single dominant national bourgeoisie, which itself tried to create “comprador” relations with the other weaker national bourgeoisie. This dominant national bourgeoisie was Egyptian and it was led by Nasser. It was successful for a time, as evidenced by the short lived creation of the UNITED ARAB REPUBLIC– consisting of Egypt and Syria. However the dominant Egyptian bourgeoisie, could not suppress the Syrian national bourgeoisie of the coalition. The experiment thus failed.

Tactic Number Two: Playing on Contradictions Between Imperialists

The imperialists had long squabbled amongst themselves as to how to divide up the Middle East. French and British supremacy in the Middle East was surreptiously attacked by USA imperialism. After the death of Stalin the hegemony of revisionism in the USSR was rapidly completed. With the overthrow of socialism in the Soviet Union, the relations between the Soviet Union and dependent nations became imperialist. This was exemplified by the relations within the Warsaw Pact nations. In the semi-colonial and colonial nations, the USSR attempted to act as a brake on Western imperialism. This resulted in a struggle between US and Soviet social imperialism for control of these areas, including the Middle East.

In this context, the various timorous struggling national bourgeoisie would frequently switch “temporary masters.” Being interested in control of “their own” profit, the national bourgeoisie were  viewed as unreliable by the imperial super-powers. But they were used as pawns by the super powers to control the area. This allowed the national bourgeoisie some limited bargaining power. Ultimately, his strategy also failed to effect the national revolution.

American policy recognised the strength of the anti-colonial movements. Their plan was to disrupt the movement by using the compradors. To further blunt the movement they used the veneer of neutrality offered by the UNITED NATIONS. John Foster Dulles, US Secretary of State, said just prior to the Suez War :

“The USA cannot be expected to identify itself 100% either with the Colonial powers or the powers uniquely concerned with the problem of getting independence as rapidly and as fully as possible.. any areas encroaching in some form or another on the problem of so called colonialism find the US playing a somewhat independent role (Ed – of UK and France). The shift from colonialism to independence will be going on for another 50 years, and I believe that the task of the United Nations is to try to see that this process moves forward in a constructive, evolutionary way, and does not come to a halt or go forward through violent revolutionary processes which would be destructive of much good.”

Cited Carlton. “Antony Eden”. London 1981. p.426

After the SUEZ WAR, the USA and the USSR all contended in the area. Each super power developed its’ primary sphere of influence. But since neither power was able to totally control the area, they were for long periods content for an armed stalemate.

The major states in the area that were spheres of influence for the Soviet Union were Iraq, Syria, Egypt (until Nasser’s death), Yemen and Libya.

These countries often adopted a mask of “socialism”.

The main countries that supported the USA were Israel, Saudi Arabia, Jordan, and under Sadat – Egypt.

Examples of a national bourgeoisie that attempted the game of playing one imperialist off against another include Egypt under Nasser, Iraq under Hussein and Syria under Assad.

Due to the serious demise of the fortunes of the Soviet imperialists in the late 1980’s, the USA was able to exert a far more dominant role than previously, and for the first time saw an opportunity to be unopposed. It tested the waters for an exertion of its’ direct military presence in the Arab world by bombing Libya.

EGYPT, AND THE “FREE OFFICERS MOVEMENT”

The case of Egypt illustrates how a balancing act, was able to win a short term gain, for the nationalist bourgeoisie. But ultimately the short term gains could not be maintained. In Egypt the nationalist faction was represented by the Free Officer Movement, to which Nasser belonged. This movement, was supported initially by the USA, as a weapon to be used against the British superpower.

“The Free Officer movement originated within the regular army; its leaders were then preparing to oust the appointed military chiefs, seize all the command posts and present their program for national renovation to the entire army. They also tried to make sure that should they be successful, the US ambassador would not be hostile and would exert pressure on the British ambassador.”

Mahmoud Hussein . “Class Conflict in Egypt 1945-1970”. London , 1977. p.85-6 .

“The US hoped to capitalize on the situation to become the new protector of Egypt and force it to accept a military alliance which would officially recognize the need for national sovereignty.”

M.Hussein , Ibid. p.96.

“According to Miles Copeland, an American CIA official posted in the Middle East in the 1950’s – the CIA knew as early as March 1952 that a ‘secret military society’ was plotting a coup. ‘ Before the coup the CIA’s Cairo station, headed by Kermit Roosevelt, had three meetings with some of the officers of the group. ” the large area of agreement reached by Roosevelt and this (Egyptian ) officer, speaking for Nasser himself, is noteworthy,” writes Copeland.”

Dilip Hiro “Inside the Middle East” London. 1982. p. 297.

The aims of the Free Officer movement were to modernise and develop, and to get rid of the British military occupation of Egypt. Of course, even the first goal was unacceptable to either the British, or to those who immediately took their place, the USA imperialists. But for their own short term goals – to get rid of the British – the USA did help the Free Officers, by forcing the British to evacuate their 70,000 strong troops. However, in partial appeasement of the British, Eisenhower ensured a clause in the Anglo-Egyptian Agreement that entitled Britain to reoccupy the Suez zone with “Egypt’s agreement” in the case of an attack on Egypt by any outside power.”   (Hiro Ibid p.298.)

Nasser tried to exploit the tensions between the British and the Americans, and at the same time get maximal financial aid. Nasser from then on used both the US and UK imperialists for financing. But to retain his independence and to get the “best deal”, Nasser then also asked for financing from the revisionist USSR. Even the provision of USSR made arms via Czechoslovakia, did not however deter the West:

“Not wishing to alienate the charismatic leader of Egypt, a most strategic country in the region, Washington and London continued discussions with Cairo on financing the Aswan Dam- with the International Bank for Reconstruction and Development (known as the World Bank) offering credits for $ 200 million and America and Britain together another $70 million in hard currencies- matching $900 million to be provided by Egypt in local services and goods. An agreement was signed in February.”

Hiro Ibid p.298.

However, the Western imperialists certainly feared that Egypt was becoming drawn into the USSR sphere of influence. This was a more urgent fear for the weaker British, than it was for the USA. So the British exerted a considerable pressure on the USA, to tangibly support an anti-Russian policy. This pressure came from Antony Eden, then the Conservative Prime Minister of Britain. Winston Aldrich, the US ambassador to London said:

“Eden.. asked me to see him on a matter of the greatest importance and urgency. Eden told me that the emergency has arisen in connection with the Egyptian proposal, namely that the Russians had offered to finance the dam. Eden feared that this would give the Egyptians a dangerous foothold in an area vital to the interests of Great Britain. He asked me to take up at once with Washington the question of whether the US would underwrite the obligations which Great Britain would assume in making such a guarantee (of financing the dam).”

Cited David Carlton “Antony Eden” London 1981 p.391.

Eisenhower was more shrewd, and being the more dominant of the imperialists, was in less need of hasty action. His diary showed that he had already recognised that this was a doomed policy. He had concluded that Egypt was moving away from the likely control of the USA, and that the Saudis should be firmly lassoed into the USA sphere:

“We have reached the point where it looks as if Egypt, under Nasser is going to make no move.. the Arabs (ie Egypt – Ed) absorbing major consignments of arms from the Soviets are daily growing more arrogant and disregarding the interests of Western Europe and the US.. It would appear that our efforts should be directed towards separating the Saudi Arabians from the Egyptians and concentrating, for the moment..in making the former see that their best interests lie with us, and not with the Egyptians and with the Russians..”

D. Eisenhower , Diary , Cited by David Carlton Ibid p. 404.

Of course each of the imperialists were fully aware that they were being “two-timed.”

Nasser was forced to keep trying to find yet another “imperialist” or social-imperialist dancer, to help him fend off the last ardent suitor.

Nasser finally overstepped the lines, by recognising the People’s Republic of China in May. By the 20 th July, both the USA and the British rescinded their offers of financial aid. This prompted Nasser to attempt a retaliation, by nationalising the Suez Canal (Hiro Ibid. p.64). Naturally this provoked a loud uproar from the French owners (Universal Suez Maritime Canal Company), and at the same time, the British and Israelis.

These powers had already been planning an attack upon Gaza aiming at taking the Suez Canal. But for their own interests, these moves were not supported by the USA, who according to Eden himself were verbally offering him merely:

“Moral support and sympathy”, and “did not want to know the details of the Anglo-French plans.”

Cited Carlton , Ibid . p. 412.

However, attempting to assert Britain’s “rights” or self-interest, Eden  deliberately misled the USA about Britain’s aggressive intentions. Eisenhower had expressly warned Eden against war, writing to Eden that:

“The use of military force against Egypt under present circumstances might have consequences even more serious than causing the Arabs to support Nasser. It might cause a serious misunderstanding between our two countries.. the most significant public opinion is that..the United Nations was formed to prevent this very thing.. I assure you that we are not blind to the fact that eventually there may be no escape for the use of force.”

Carlton Ibid. p.419-20.

But in spite of this warning from the USA, the war was launched. But the revisionist USSR, correctly strongly condemned the war of aggression launched by Britain, France and Israel. In order to finally seize the Middle East away from British imperialism, the USA at the United Nations, also strongly condemned the invasion and called for a cease fire. Behind closed doors, the USA prompted a currency speculation against sterling, by the U.S. Federal Reserve Bank selling, and also refused to give either IMF or direct USA financial aid, to the United Kingdom. Further, and finally, the USSR threatened to enter the war:

“We are fully determined to use force to crush the aggressors and to restore peace in the Middle East.”

V.Trukhanovsky. ” Antony Eden ”  Moscow, 1974; p.332.

These moves combined to ensure the withdrawal of the 3 nation intervention. This fiasco for British and French imperialism, signalled their final retreat from the Middle East, as imperialist forces independent of the USA. America then was able to fill what Eisenhower described as a “vacuum” in the Middle East.

Eisenhower’s Doctrine promised to aid any Middle Eastern state seeking protection against:

“Overt armed aggression from any nation controlled by international communism.”

Cited Hiro p.299

This blocked any moves to a regional Wahda, or Unity attempts. Yet, it was sufficiently elastic to interpretation to be acceptable, whilst still detering Egypt in particular. The Eisenhower Doctrine:

“Was applied 3 times: to solve the internal crisis of Jordan in April 1957, to pressure the nationalists – leftist regime of Syria.. and to provide troops to Lebanon in July 1958..In the case of Jordan and Lebanon, the American move was made to check the rise of the Nasserite forces there.”

Hiro, Ibid  p. 299.

Therefore, despite the early hopes of the Nasser forces in Egypt, they were checked. Egypt now became compradors for the USSR. The USA imperialists, who having just expelled the USA and France, did not have the necessary energy at that moment to expel Russia also. The economic relations between Egypt and Russia, were thereafter classic imperialist relations, raw goods given by Egypt, cotton – in return for finished goods, for military and economic aid. This dictated a colonial type relationship with the USSR (Hussein. Ibid. p.286).

But to counter the threat of “excess” USSR influence, the USA unleashed war. The USA moved vigorously, through their client states in the area, wishing also to check those various national bourgeoisie. As part of this policy, the USA heavily endorsed the Israelis, as their lynch pin in the area. The revisionist USSR, sought to maximise its own “area of influence”, and acted as a countervail in the cases of Syria and Egypt. But Israel was heavily armed by the USA and Britain.

In response, Egypt and Syria, signed a joint defence treaty fearing Israeli attack.

They were quite right to fear this.

When King Hussein of Jordan joined the Egyptian-Syrian Defence Pact on 30 May, Dean Rusk then American Secretary of State clearly signalled war:

“I don’t think it’s our business to restrain anybody.”

(Cited Hiro p.301).

The USA knew what was to be the likely outcome of such a war.

As President Johnson put it to an aide:

“Israel is going to hit them (the Arabs)..” Whilst (he was ) publicly responding positively to a Soviet appeal the next day for restraint.”

Cited by Hiro p.300.

The Israelis following the USA plan, launched a pre-emptive strike on the eve of a peace mission by the Egyptian Vice-President Zakaria Mohieddin. Nasser’s forces were effectively crushed.

This sealed the future role as to who would be the key agent of the USA in the area – Israel.

TACTIC NUMBER THREE: ECONOMIC COMBINATION. OPEC- A WEAK BOURGEOISIE ATTEMPTS TO FIGHT BACK

The creation of OPEC in 1960 was another attempt by the weak indecisive national bourgeois to find a “Third Way”. One that did not rely on the active involvement of the masses, nor one of total capitulation to the imperialists. OPEC attempted to bargain, or to horse trade; by forming a combination, or a cartel.

This was designed to deal with the cartel of the major Oil companies- the Seven Sisters. These had simply to refuse to buy oil from any producer country that challenged the price offered. The price “posted” was agreed to by the Seven Sisters. Even nationalisation could not help if the producer country could not market the oil. This tactic was used viciously against Iran.

The oil producing nations varied in the intensity with which they fought the Seven Sisters and the imperialist nations. In 1960 one of the weakest was Iran, ruled by the Shah Pahvlavi whose compliance to the USA was assured following CIA intervention in 1951. This had been necessary to prevent the nationalist Muhammed Mussadiq effecting nationalisation of Anglo-Iranian Oil Company (AICO) later the Anglo-Persian Oil Company. Musaddiq believed that:

“The Iranian must administer his own house.”

Cited J.A.Bill ” The Eagle and the Lion”; Ibid; New York 1988 p.56.

But in fact, Mussadiq clearly was not a fully committed nationalist. The mass movement was compelling him to go further than he perhaps would have otherwise. As John Foster Dulles said in February 1953:

“Musaddiq could not afford to reach any agreement with the British lest it cost him his political life.”

J.A.Bill, Ibid p. 78

When he became Prime Minister of the Majlis (the Iranian Parliament) in April 1951, he inherited a Bill that nationalised AICO. Refusing to rescind it, he was held to ransom by AICO which refused to allow Iran to sell its oil on the international market:

“This boycott was effective. Iran’s oil export income dropped from more than $400 million in 1950 to less than $2 million in the 2 year period from July 1951 to August 1953..Musaddiq faced a deteriorating economic and political situation in 1953..and was forced to rely on the radical left and the communist ( revisionist -ed) Tudeh party.. On May 28th Musaddiq wrote to President Eisenhower requesting economic aid..the answer was negative.”

J.A.Bill Ibid; p.66-7.

The British then persuaded the USA to participate in a putsch, termed Operation Boot by the British and Ajax by the US. The Chief British operative, Major C.M.Woodhouse was conscious of difficulties in getting the US to take part:

“Not wishing to be accused of trying to use the Americans to pull British chestnuts out of the fire, I decided to emphasis the Communist threat to Iran rather than to need to recover control of the oil industry. I argued that even if a settlement of the oil dispute could be negotiated with Musaddiq, which was doubtful, he was still incapable of resisting a coup by the Tudeh party, if it were backed by Soviet support. Therefore he must be removed.”

J.A.Bill, Cited, Ibid. p.86

Fully involved in the putsch was General Norman Schwarzkopf, former US adviser to the Iranian Gendarmerie (J.A.Bill. Ibid, p.90). He was the father of the US General – “Storming Norman” – in the 1991 USA Gulf War of aggression (See Alliance 2).

The coup resulted in the Shah of Iran being bought back to Iran. He understood who had placed him on the Peacock Throne, and remained indebted to US imperialism. Musaddiq was treated with relative leniency – he was not killed, but after 3 years in jail, was allowed to return to his home village Ahmadabad under house arrest (J.A.Bill Ibid p.101).

This episode influenced tactics in the Middle East for some years. The national bourgeoisie had been warned that nationalisation was not adequate to ensure marketing of the oil from the producer nations without the cooperation of the Seven Sisters. An alternative strategy was needed.

The CARTEL STRATEGY was first proposed by the national bourgeoisie of VENEZUELA, after the successful military led coup of 1948. This coup was precipitated 12 days following an act which imposed 50-50 split of the profits from oil, between Venezuela and the oil companies. After the coup, the new dictatorship, naturally, favoured the interests of the US imperialists, and it now dispensed new major oil concessions to the Oil companies.

Despite this failure, the 50-50 rule became a standard, in any dealings with oil-exporting nations. For instance Aramco (Arabian American Oil Company ) used this formula in Saudi Arabia in 1950  (J.A.Bill, op cit, p. 61). However even this partial retreat, still left considerable super-profits for the Seven Sisters.

The national bourgeoisie of Venezuela recognised, that a key factor in their defeat during prolonged negotiations with the companies, had been the erosion of Venezuela’s selling power by Middle East countries that could produce oil. Oil companies, when they were faced with demands for a fairer distribution of profit, simply expanded production from the Middle East. The leader of the “horse trading” strategy, Perez Alfonzo had:

“Only envisaged an ‘extent ‘ an ‘arrangement’ between a few producing countries to establish, links of solidarity between them, reduce the oil companies capacity for manoeuvring and prevent them from playing one country off against another.”

Statement in Petroleum Weekly, New York May 1 1959 p.19. Cited by Pierre Terzian; “OPEC : the inside story.” London 1985.

The national bourgeoisie of Venezuela returned to power in 1959 and again took up the cause of combination. Now they had significant support in the Middle East, from the Director of the Permanent Oil Bureau, Mohammed Salman of Iraq. The Permanent Oil Bureau had been set up by the Arab League in 1953. A secret agreement known as the Maadi Pact was concluded at the first Oil Arab Congress in Cairo on 16th April 1959. The reaction to the open Congress session, was frankly sceptical by the oil business:

“Venezuelan delegates arrived with high hopes of lining up Middle East producing states in a front to limit production and prevent further decline in prices, but were finally resigned to the fact that Arabs were more interested in other problems now and that all Venezuelans were supposed to do was to observe.”

Platts Oilgram News, New York; Cited by P.Terzian, Ibid, p.25.

However the secret Maadi Agreement between the UAR, Iraq, Venezuela, Kuwait and Saudi Arabia included the following:

“Agreement was reached … on:

1. Improvement of the oil producing countries participation on a reasonable and equitable basis. The consensus of opinion was that said government should tend to at least a 60-40 formula to be on a par with the recent Venezuelan attitude..and with other countries ..the price structure should be..maintained..any change in prices should be discussed with precedent in time and be approved by all parties concerned.

2. Convenience of arriving at an integration of the oil industry..to ensure stable markets to the producer countries avoiding transfers of gains from one phase of the operations to another, affecting the oil revenue of the governments.

4. Establishment of National Oil Companies that would operate side by side with the existing private companies.”

P.Teerzian. Ibid , p.27-8.

The most energetic of the group, Perez Alfonso, also arranged that the USSR would support the OPEC move. This was important because the Oil companies were constantly citing:

“The USSR’s tariff policy as a pretext to justify their own decision to cut prices.”

P.Terzian, Ibid, p.34.

After initial disbelief, the major oil companies, led by Shell, tested the OPEC resistance, by announcing cuts in the posted prices of oil that they were prepared to pay. The vigorous resistance they met, along with announcements of a meeting of producer nations at Baghdad in September, 1960, induced them to withdraw their price cuts. The Financial Times concluded:

“In effect Shell is.. paying a premium to the Governments of the producing states. What the countries particularly objected to was the fact that they were not consulted.”

Cited, Terzian. Ibid. p.53.

However efforts to involve the Middle East nations in effective combative combination were doomed to failure. This was evident, since combination had to involve both:

Countries that were ruled by comprador bourgeoisie ( eg Saudi Arabia and Iran );

as well as the countries that were ruled by national bourgeoisie (eg Iraq).

The Baghdad Meeting in September 10th 1960 started off very tensely. The Venezuelan nationalists were in the midst of fending off a coup at home. Even more dramatic was the fact that the Iraqi nationalists President Kassem was also besieged by a coup. He arrived for an honourary dinner wearing two revolvers in his belt! But tension rose even further, as it was clear that Iran was going to block any agreements, that would go further than the agreement already reached at Maadi. The Iranian representative Fuad Ruhani said he had been given:

“Very precise instructions from my Government.”

Terzani , Ibid. p.41.

Suddenly on 14th September the Shah sent new instructions to the Iranian team. This agreed to the creation of a permanent organisation. Moreover, the Shah even had a name for it – The Organisation of the Petroleum Exporting Countries (OPEC ).

But this about face indicated a new tack on the part of the Oil Companies.

They now accepted the inevitability of the cartel, but they emasculated it from within.

OPEC was therefore hijacked.

As Perez Alfonso found when he met the directors of the Seven Sisters :

“My impression is that the main companies recognise that the Baghdad Agreement was necessary, or at least inevitable.”

Ibid p.44.

Theoretically the OPEC countries were in a very strong position controlling 82 % of world crude exports. But The Times could accurately see the situation :

“The strength of these producing countries is not as great as might appear.. (There are) two reasons.. the surplus of supply over demand in the world oil market and the divergent interests of the 5 countries concerned, some of who wanted to increase production whilst other sought a reduction.”

The Times 15 September, 1960. Cited by Terzian p.44.

  • Of course, in addition the oil imperialist companies and their nations had the marketing and distribution monopoly.
  • Also they began to exploit other sources of oil.
  • The comprador states were key to the strategy of the oil companies.
  • Saudi Arabia was and is a reactionary state with strong elements of Muslim feudalism.
  • It is a key state representing USA interests in the Middle East.
  • As the US Senate Committee on Energy and Natural resources commented:

“The US, by virtue of its commercial oil interests ‘ long standing monopoly over the disposition of Saudi crude, now reinforced by the 1974 conclusion of a “special relationship” embracing economic and military agreements, is very widely regarded amongst its allies and by Arab and Iranians as having secured preferential and near- exclusive access to Saudi oil. Given the extraordinary importance of Saudi oil production to the world generally, the US relationship is considered key to supply security.”

US Senate : ” Access to oil – the USA relationships with Saudi Arabia and Iran.” Washington DC US Government Printing office , Publication No. 95-70. 1977 (p.xi). Cited by Petter Nore and Terisa Turner in : Oil and the class struggle “. London 1980

At critical times the Saudis have refused to allow the OPEC to raise prices in accordance with the demands of the more nationalistic of the OPEC countries such as Iraq and Libya. Saudi Crown Prince Fadh has pretentiously revealed his unwillingness to be an effective member of the cartel:

“My country which possesses the largest oil reserves in the world will not be the cause of a weakening in the capacity of humanity to live in stability and prosperity. In view of this lofty aim, commercial considerations cease to exist and consequently the methods which are used to increase or lower prices will likewise disappear.”

Frankfurter Rundschau. 1 April 1975. Cited by Mohssen Massarrat. The Energy Crisis p.67. in ” Oil and the class struggle” Ed. P.Nore and T.Turner. London, 1981

It is not surprising that:

“Saudi foreign policy consists largely of support for Washington in the Middle East.”

Sunday Times, 5th August 1990. p.12.

Nor is it surprising that given the membership of nations like Saudi Arabia in OPEC, that OPEC would not reflect the interests of the oil producing national bourgeoisie.

As Henry Kissinger commented:

“OPEC was not perceived as a serious cartel.”

Jack Anderson and James Boyd. ” Fiasco. The real story behind the disastrous worldwide energy crisis- Richard Nixon’s “Oilgate”;1983; Toronto;  p.163.

In fact as, the manufactured oil crisis of the 1970’s shows, OPEC was transformed into an agency that performed objectively in the interests of the USA imperialists.

THE PSEUDO OIL “CRISIS” OF THE 1970’s

It is widely believed that it was the pressure of the OPEC countries that led to a dramatic price rise and so called ” oil crisis ‘in the 1970’s. Certainly determined nationalist countries like Libya and Algeria increased the pressure inside OPEC for a price rise.

Though the oil exporting countries had their interest in a price rise, their effectiveness as a cartel has already been shown to be limited, due to the inclusion of “weak” member state such a Saudi Arabia. In reality, the manipulation of oil prices has followed the various requirements of the Seven Sisters, the minor oil companies and the USA monopoly capitalists.

“For the oil companies an increase in the general price of oil was also of great importance, not least because they had seen their distributional share steadily diminish over time..as a result of higher level of taxation by the oil-exporting countries..which was difficult to pass on to the consumer in a situation characterised by a global excess supply.”

Petter Nore and Terisa Turner, Editors;.”Oil and the class struggle”; London 1980, p.72.

The problems of the Major Seven Sisters, were compounded by the competition they now faced:

“Due to a three fold challenge.. the rise of the independents following the US import quota system in 1958; the emergence of important state oil companies in Europe like Italy’s E.N.I. which tried to outbid the concessions offered by the majors; and the increase in Soviet oil exports to the West.. resulting in a drop in the profit per barrel for the Majors. The reduction was only partly overcome by a sharp increase in total production. Profit rates for US direct foreign investment in the petroleum industry dropped from a 30 % return in 1955 to 14.7 % in 1963 and an all time low of 11.1 % in 1969.”

Nore; p.72 Ibid.

Added to this was the high cost of extraction from areas such as Alaska and the North Sea. This posed a problem for the major Oil companies. The oil crisis was “manufactured”, to raise the available oil profits, up to a point where it would become economically viable to begin extraction from the oil shales of the USA. This entailed the profit interests of both the major oil companies and their smaller rivals who were not in the cartel known as the Seven Sisters.

At this time despite the apparent oil shortage, the oil companies had stocked up supplies, in many tankers that lay outside New Jersey in the midst of the so called shortage as prices were driven up by the companies.

This tactic was portrayed as the work of the OPEC cartel.

But the general line was clearly supported by the oil companies :

“Though the oil companies created the appearances of fighting OPEC tooth and nail..they recognised that their best hopes of future profitability..depended upon successful cooperation..thus OPEC/oil companies cooperation became a fact of life..with the positive encouragement of the USA.”

P.R.Odell. “Oil and World power” London , 1980. p. 215.

But the USA Government representing the combined monopoly capital had its’ own reasons for seeing a price rise:

“From 1970 onwards the US clearly pressed for an increase in the general price of crude oil.”

Nore, Ibid, p.73.

THE USA INTERESTS IN THE RAISING THE PRICE OF OIL REVOLVED AROUND THREE MAIN ISSUES

Firstly, both the leading sections of American capital had major profit interests tied up in raising the price of oil. The big Northern Yankee financiers were involved with the oil Major Seven Sisters companies. The Cowboys who represented newer capital reliant on oil and arms, formed the smaller independent oil companies.

Secondly, the USA wanted to ensure a renewed attempt at peace – on their terms of an acceptable status quo to them – in the Middle East:

“The USA.. sought to provide stability..as basis for a renewed effort to find a political solution to the Middle East conflict, and argued that higher revenues and a greater degree of economic certainty for the Arab oil-producing nations would, make it easier for them, to accept a compromise in the their dispute with Israel.”

Odell , Ibid , p. 215.

But Thirdly this manoeuvre was also aimed at the competitors of American imperialism as recognised by the Economist:

“The Economist 7th July, 1973; under the title ” The Phoney oil crisis “voiced the suspicion that the US had capitulated only to readily to the OPEC demands for an increase in oil prices because such an increase would slow down the Japanese economy. Japanese exports were out-competing American demands at the time and its economy was more vulnerable to rises in the price of oil than any other nation.”

Cited by Petter Nore p.86; ” Oil and the Class struggle .” London, 1980.

As Odell points out:

“The USA was fed up with a situation in which the rest of the industrialised world had access to cheap energy. It deliberately initiated a foreign policy which aimed at getting oil – producing nations’ revenues moving strongly up by talking incessantly to the producers about their low oil prices and by showing them the favourable impact of much higher prices. It was of course assured..that these cost increases, plus further increases designed to ensure higher profit levels for the companies, were passed on to the European and Japanese energy consumers, so eliminating their energy cost advantage over their competitors in the USA..the actual timing..coincided with unusual circumstances..namely a strong demand for most oil products in most markets in a period of general economic advance, a shortage of oil refinery capacity in Europe and Japan and a temporary scarcity of tankers.”

Odell p. 215-216.

GERMAN INDUSTRY HAD ALREADY CAUSED PROBLEMS FOR THE MAJOR COMPANIES BY FLIRTING WITH THE RUSSIANS. USA GOVERNMENT PRESSURE HAD BEEN REQUIRED TO PREVENT FURTHER EROSION OF THE EUROPEAN MARKETS:

“In 1969 only the intervention of the Federal West German Government under severe pressure from the USA, thwarted an agreement between the Soviet Union and the Bavarian state government. Had this agreement gone through, the Soviet Union would have been in a very strong position to put in branch pipelines to the other countries..of Western Europe.. Soviet oil exports to Western Europe.. steadily increased form only 3 million ton in 1955 to over 40 million ton in 1969.. Under 1978 conditions the amount of oil in Western Europe is supply rather than demand constrained.”

Odell, Ibid; p.58-60.

In this context, in 1991, it was of significant aid to the USA imperialists that the USSR was then, unable to exploit its’ oil reserves, owing to the enormous dislocation in the state:

“Production from Siberian oil fields is dropping so rapidly that the Soviet Union, the world’s largest petroleum producer may begin to import expensive world price crude within 2 years Kremlin officials say..”We are talking catastrophic failure here ” one Western diplomatic observer said.. oil exports have been the Soviet Unions’ primary source of hard currency income, and the only bright spot..in trade,..the troubles appear to be related to a decaying infrastructure, including an inefficient distribution system vulnerable to sabotage. Production from the giant Tyumen oil filed of Western Siberia, which supplies about half of the country’s oil for export has dropped 10% since 1988, Pravda said ..former allies in Central and Eastern Europe are being hit the hardest with cuts of 30-50 %. The cuts, coupled with the significantly higher prices Moscow began charging Poland, Hungary and Czechoslovakia on January 1st are hobbling economic reforms in these countries.”

Jeff Sallot; In “Globe and Mail”; Toronto; Business Report; Feb 12th 1991.

The USA Senate recognised the oil demand in Europe and Japan as a vital issue for the general policy to be followed by the USA in the Middle East:

“One can argue that while the oil benefit is nowhere near so great to the US as it is to the European and Japanese importers, for which it is vital, the US relationship with Iran and Saudi Arabia serves the collective security interests of its allies in helping assure a continuous and adequate flow of oil.. But.. will the US government come to affect the destination of these 7 million barrels per day, exercising its influence through the Americans oil companies? Or will the companies be able to continue to supply, unhampered by considerations other than the meeting of their contractual commitments?”

US Senate Cited by P.Noore and T. Turner, Ibid p. 9.

THIS OIL SAGA WILL BE BROUGHT UP TO DATE SHORTLY

Communist Platform: The European People’s Democracies of the 20th Century: A Specific Form of the Dictatorship of the Proletariat

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From Unity & Struggle No. 25, Spring/Summer 2013

Italy

1. Between August 1944 and May 1945 the Red Army, in its unbeatable advance toward Berlin, freed Poland, Hungary, Rumania, Czechoslovakia and eastern Germany from Nazi rule, also aiding the liberation of Yugoslavia and Albania.

In those countries anti-fascist fronts were set up against the Nazi occupiers (for example, the Patriotic Front in Bulgaria, the Independence Front in Hungary, the National Democratic Front in Romania, the National Anti-Fascist Front in Czechoslovakia, the Anti-Fascist Front of National Liberation in Albania, and so on).

With the exception of Albania, where the Communist Party (later the Party of Labour) undertook by itself the leadership of the new people’s democratic State that arose from the war of liberation, in other countries coalition governments were formed with the participation of various political  parties, the expression of  different social classes.

In the beginning, the communists who took part in those coalition governments had the task of assuring the democratic development of those countries against the reactionary and fascist remnants, building inside the Front a bloc of left-wing forces, and preventing the right-wing forces from strengthening their traditional ties with the middle strata of the city and countryside. Profound agrarian reforms were carried out and some nationalisations were introduced; new organs of people’s power were established, such as the People’s Councils in Albania, the Committees of the Patriotic Front in Bulgaria, the Committees of the National Front in Czechoslovakia, and so on.

But from the theoretical and political point of view, for the communists this presented the problem of perspective. What was the class nature of these new systems of people’s democracy? And what “road” would they have to follow in their development towards socialism?

In this article we intend to examine – through the declarations of some leaders of the communist parties of those countries – the positions assumed by their parties in the first years of existence of the people’s democratic States, and how those positions were later modified through a process of profound Bolshevik criticism and self-criticism. (From here on the bold face is ours.)

2. “The struggle for socialism is different today from the struggle of 1917 and 1918 in tsarist Russia, at the time of the October Revolution. At that time it was essential to overthrow Russian tsarism, the dictatorship of the proletariat was essential in order to pass over to socialism. Since then, more than thirty years have elapsed, and the Soviet Union, as a socialist State, has become a great world power. […] There is no doubt that all counties, big and small, are destined to pass over to socialism, because that is historically inevitable for both big and small peoples. The crucial point of the question, and we Marxist-Leninists should know this well, is this: every nation will carry out the passage to socialism not through a road already drawn, not exactly as occurred in the Soviet Union, but proceeding along its own road, in accordance with its historic, national, social and cultural peculiarities” (G. Dimitrov, Report to the Congress of the Bulgarian Workers’ Party, February 1946).

Our people are for a parliamentary republic, which should not be a plutocratic republic. They are for a people’s republican system and not for a bourgeois republican system. What does this means? It means: 1) that Bulgaria will not be a Soviet republic, but a people’s republic in which the leading function will be performed by the great majority of the people – by the workers, peasants, artisans and intellectuals linked to the people. In this Republic there will not be any dictatorship, but the fundamental and decisive factor will be the labouring majority of the population” (G. Dimitrov, Speech of September 16, 1946).

Experience and the Marxist-Leninist teachings show that the dictatorship of the proletariat and the building of a Soviet system are not the only road leading to socialism. Under certain conditions, socialism can be achieved by other roads. The defeat of fascism and the suffering of the peoples in many countries have revealed the true face of the ruling class and have also increased the confidence of the people in themselves. In similar historical moments new roads and new possibilities appear. […] We are marching on our own road toward socialism” (K. Gottwald,Speech to the Central Committee of the Czechoslovak Communist Party, October 1946).

We must show what the relation is between the building of Hungarian people’s democracy and the road leading to socialism. The communist parties have learned, in this last quarter century, that there is no single road to socialism, but that the only road effectively leading to socialism is the road that takes into account the situation of each country. […] Only people’s democracy allows our country to march toward socialism through social evolution, without civil war (M. Rakosi, Speech to the 2nd Congress of the Hungarian Communist Party).

3. In this analysis and in these theoretical and political positions, the existence of indefiniteness, confusion and errors are evident, whether owing to an initial and not very mature experience of the “new roads”, or to a not clear relation between the immediate task (the consolidation of the new democratic systems emerging from the anti-Nazi and anti-fascist victory) and the long-term tasks of building socialism. There is also an excessive and one-sided emphasis on the national element, which is “isolated” and unlinked from its connections with proletarian internationalism.

These declarations correctly acknowledge and affirm that each nation will carry out the passage to socialism not “through a path already drawn”, but “according its own road, in conformity with its own historical, national, social and cultural peculiarities.

There were some important particularities in that historical situation: for example, the exclusion from power of the old ruling classes not as the result of a civil war, but on account of the armed presence of the Red Army on the territory; the survival of the parliamentary institution (an inheritance from the pre-war period) that coexisted with the new organs of people’s power. But these particularities were confused with the fundamental question of the class nature of the new power. The question of political leadership was not made clear. The leading role of the working class and its party – the communist party – in the power system of people’s democracy (a role that is decisive and irreplaceable in the dictatorship of the proletariat) is not asserted, or it is overshadowed.

In the following years those errors of analysis and perspective could be corrected self-critically, as we mentioned above. But we must not forget that, inside some of the communist parties, there were also right-opportunist tendencies, which led to the open theoretical revision of the foundations of Marxism-Leninism.

The most crude revisionist position was the one expressed in the Polish United Workers’ Party [PUWP] by the right-wing tendency represented in those years by its general secretary Wladislaw Gomulka. In his speech on November 30, 1946, to the assembly of Warsaw activists of the Polish Workers’ Party and the Polish Socialist Party [which later merged into the PUWP], Gomulka expressed his views in this way:

“The Polish Workers’ Party has based its conception of a Polish road to socialism that does not imply the necessity of violent revolutionary shocks in the evolution of Poland and eliminates the need of a dictatorship of the proletariat as the form of power in the most difficult moment of transition. On the basis of real elements, we have realized the possibility of an evolution toward socialism through a people’s democratic system, in which power is exercised by the bloc of democratic parties.”

He then explained “the three principal differences between the road of the evolution of the Soviet Union and our road”:

“The first difference is this: the social and political changes were accomplished through bloody revolutions, whereas in our country they are accomplished in a peaceful manner. The second difference consists in the fact that, whereas the Soviet Union had to pass through a period of dictatorship of the proletariat, in our country this period has not existed and can be avoided. The third difference that characterizes the roads of evolution between the two countries is that, whereas in the Soviet Union power is in the hands of the Council of Deputies, or Soviet, that unites in itself both legislative and executive functions, and that represents the form of socialist government, in our country the legislative functions and the executive ones are separate, and a parliamentary democracy is at the base of the national power.”

[…] “In Russia the dictatorship of the proletariat continues to be the form of government necessary after bringing down the counter-revolution. […] Today the dictatorship of the proletariat has changed its form and it can be said that it has died out with the disappearance of the class of exploiters and their ideology; its place has been occupied by Soviet democracy as the form of government of the country. The enemies of the Soviet Union, those who do not understand what the dictatorship of the proletariat means, continue to assert that this dictatorship still exists in Russia. This naturally does not make political sense.”

[…] “Thus we have chosen a Polish road of evolution, which we have called the line of people’s democracy. On this road and in these conditions, a dictatorship of the working class, let alone the dictatorship of one of the parties, is not necessary and is not our aim. We think that power should be exercised by the coalition of all the democratic parties. […] Polish democracy exercises power through a parliamentary system of different parties, whereas Soviet democracy realises the power of the people through the Councils. […] The Polish road to socialism is not the road that leads to the dictatorship of the working class, and the form of exercise of power by the working masses does not necessarily have to be represented by a system of Councils.”

Gomulka – who went so far as to even deny the existence of the dictatorship of the proletariat in the Soviet Union – synthesized the essentials characteristics of Polish people’s democracy in this way:

“The elimination of reaction from power in a peaceful manner, and the accomplishment of great social reforms by democracy without bloodshed, without revolution and without civil war.”

These anti-Leninist positions (that, one should remember, never had any legitimacy in the Party of Labour of Albania under the firm political and ideological leadership of Enver Hoxha) were later defeated in Poland in consequence of the sharp class struggle developed inside the party. But they re-emerged with Khrushchev at the 20th Congress of the CPSU, giving rise to the principal trend of modern revisionism.

Just as full of errors, and particularly significant, is this definition of the countries of people’s democracy adopted in Hungary by Eugene Varga in the first years after the Second World War:

It is neither the dictatorship of the bourgeoisie, nor the dictatorship of the proletariat. The old state apparatus was not destroyed, as in the Soviet Union, but it has been renewed through the continuous assimilation of the supporters of the new system. They are not capitalist States in the usual sense of the word, but they are also not socialist States. Their evolution toward socialism is based on the nationalisation of the principal means of production and on the actual character of these States. Even while the state power is maintained as it now exists, they can pass progressively to socialism by pushing forward the development of the socialist sector that already exists together with the simple-commodity sector (peasants and artisans), and the capitalist sector that is losing its dominant position.”

4. In the second half of 1947 the international situation went through profound changes, due to the passage of U.S. imperialism to an aggressive and expansionist policy (creation of military bases in the eastern part of the Mediterranean, military loans and aid to the reactionary regimes in Greece and Turkey, rearmament and support to all reactionary international forces), a policy that had its maximum expression in the “Truman Doctrine,” the “Marshall Plan” and the violent anti-communist ideological campaign unleashed by Yankee imperialism all over the world.

In his Report to the Information Conference of the representatives of nine communist parties (Soviet Union, Yugoslavia, Czechoslovakia, Poland, Romania, Bulgaria, Hungary, France and Italy), held in Poland in September 1947, Andrei Zhdanov denounced the tendency of the United States of America to world domination, emphasised the formation at the international level of two camps – the imperialist anti-democratic camp and the anti-imperialist democratic camp – and criticized the tendency, present in some communist parties, to interpret the dissolution of the Communist International as if it “meant the liquidation of any ties, of any contact between the fraternal communist parties.

As the conclusion of that Conference, the “Information Bureau of Communist and Workers’ Parties” (Cominform) was set up, and inside the parties some important questions of a theoretical and political nature were re-examined, including those relating to the class content of the States of people’s democracy.

5. On December 19 1948, in his Report to the 5th Congress of the Bulgarian Workers’ Party (at that time again the Communist Party of Bulgaria), G. Dimitrov stated:

“In order to proceed with determination and firmness on the road toward socialism, it is necessary to completely clarify the ideas about the character, function and perspectives of people’s democracy and the people’s democratic State. In this respect, we must define more precisely some of the positions we have held until now, and rectify other positions, starting from the experience accumulated up to now, and from the more recent data on this new complex question. Briefly, in what does the question consist?

“First. The people’s democratic State is the State of a period of transition and has the task of assuring the development of the country toward socialism. This means that, although the power of the capitalists and large landowners has been demolished and the property of these classes has become property of the people, the economic roots of capitalism have not yet been extirpated, the capitalist elements aiming to restore capitalist slavery remain and are still developing. Therefore the march toward socialism is possible only by leading an implacable class struggle against the capitalist elements in order to completely liquidate them.

Second. In the conditions created by the military defeat of the fascist aggressor States, in the conditions of the rapid worsening of the general crisis of capitalism and of the huge increase in strength of the Soviet Union, our country, like the other countries of people’s democracy, once assured of the close collaboration with the USSR and the other people’s democracies, is seeing the possibility of accomplishing the passage to socialism without creating a Soviet system, through the system of people’s democracy, provided that this system is strengthened and developed with the aid of the Soviet Union and the countries of people’s democracy.

Third. The system of people’s democracy, representing in these particular historical conditions the power of the labouring people under the guidance of the working class, can and must – as experience has already shown – successfully exercise the functions of the dictatorship of the proletariat through the liquidation of the overthrown capitalist elements and landowners, in order to crush and liquidate their attempts to restore the power of capital.”

No less important and rich in lessons is the analysis in the Report to the First Congress of the Polish United Workers’ Party (December 1948), by the new secretary of the Party, Boleslaw Bierut, who denounced the positions of Gomulka as the result of a “nationalist limitation” and a “petty-bourgeois mentality”, as “a return to social-democratic opportunist conceptions that have not been completely defeated and are continually reborn; against them our party has conducted and must ceaselessly conduct  a fight to the finish.”

In that Report, Bierut pointed out the role and character of the State of people’s democracy in this manner:

“The Polish road to socialism, despite of its particular characters, is not something essentially different, but only a variant of the general road of development toward socialism, a variant which can exist only thanks to the earlier victory of socialism in the USSR, a variant based on the experiences of socialist construction in the USSR, with regard to the specific nature of the new historical period which determines the conditions of the historical development of Poland.

“What is a State of people’s democracy according to Marxist-Leninist theory? How can one define the essence, the class content and character of people’s democracy? Some people began to think that people’s democracy was a system qualitatively and fundamentally different from a system based on the dictatorship of the proletariat. Defining the system of people’s democracy in Poland as a specific Polish road toward the new system, its particularity was often understood in the sense that it was considered a special process of development whose point of arrival was impossible to establish previously, as was said.

“Some people imagined the result as a synthesis of its own kind of capitalism and socialism, as a particular socio-political system in which the socialist and capitalist elements coexisted on two parallel tracks and on the basis of a reciprocal recognition,. Other people, believing that the system of people’s democracy was a temporary effect of the specific situation determined by the post-war conditions, strived to temporarily stabilize this situation, in the hope that would be possible to return again to the situation existing before September [alluding to the Nazi invasion of Poland on September 1, 1939 – Editor’s note].

[…] “People’s democracy is not a type of synthesis or stable coexistence of two social systems of different natures, but the form through which the capitalist elements are undermined and progressively liquidated, and at the same time the form that allows the development and strengthening of the bases of the future socialist economy.

“People’s democracy is the particular form of revolutionary power that emerged in the new historical conditions of our epoch, it is the expression of the new array of class forces on the international level.

[…] “The development of our march toward socialism takes place through carrying out the basic principles of Marxism-Leninism in new conditions and in a new international situation.

“The principles are as follows:

  1. “The need for the working class, at the head of the popular masses, to seize political power;
  2. “The pre-eminent position of the working class in the worker-peasant alliance and in the national democratic front;
  3. “The leadership entrusted to the revolutionary party;
  4. “The merciless class struggle, the liquidation of big capital and the large landowners, the offensive against the capitalist elements.”

6. The historical experience of the international workers and communist movement is an extraordinary heritage of victories, elaborations and events, thanks to which fundamental pages on the road leading to communism have been written. The ability to verify the political theories and positions in practice, to admit and correct errors, to arrive at new formulations and conclusions, is a distinctive feature of Marxism-Leninism.

In the last century, the revolutionary creativity of the working class and peoples has produced different forms of the dictatorship of the proletariat, from the Soviets to the systems of people’s democracy, under specific historical conditions, which we communists must transform into the treasury for the development of our revolutionary theory and practice, as powerful tools for the transformation of the world.

The emergence of the people’s democracies as new State forms of the proletarian dictatorship, socialist states in the first phase of their development, that have run through various stages and applied different measures in order to destroy the bourgeois relations of production, has a great historical and present importance.

The study of the forms in which are embodied the historical necessity and inevitability of the political rule of proletariat, in alliance with and at the head of the labouring masses for the transition to classless society is essential for today’s communists. Our task is to win over the vanguard of the proletariat and to lead the masses to the seizure of power, applying the principles of Marxism-Leninism and finding the specific forms of approach to the proletarian revolution and socialism, in accordance with the historical conditions and characteristics of each country.

The idea of people’s democracy is still alive in the consciousness of the working class and the labouring masses, and it maintains its great force.

Will the Italy of the future be a people’s democracy? What is certain is that in the new century that has begun, in which we communists are continuing our battle, new proletarian revolutions will shake the world and new States will emerge from them: but each State will be a particular form of the dictatorship of the proletariat.

 “That all nations will arrive at socialism is absolutely certain, but all will arrive with some particularities, each nation will bring something particular to this or that form of democracy, to this or that variant of the dictatorship of the proletariat” (Lenin).

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Marxist-Leninist Communist Party of Ecuador (PCMLE): Stalin

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Excerpts from a talk held in the Dominican Republic on the 50th anniversary of the death of Comrade Stalin, at the invitation of the Communist Party of Labour.

During his lifetime Comrade Stalin won the admiration and affection of the working class and all the peoples of the vast Soviet Union, as well as the respect and friendship of the workers of the five continents, the fervour and enthusiasm of the communists of all countries. Of course, he elicited the hatred of the reactionaries, imperialists and bourgeois who felt deeply hurt by the colossal achievements of the Soviet Union, by the great economic, cultural, technological and scientific feats of the workers and socialist intelligentsia, by the great and resounding triumphs of the revolution and socialism, of the communists.

In this plot against Stalin by which they fought communism, the Nazi propaganda stood out for its slander and persistence, which did not let one day pass without launching its dire diatribes.

Of course, this counter-revolutionary and anti-communist hatred also characterized Trotsky and his followers.

Shortly after Stalin’s death, the voices of the “communists” who had assumed the leadership of the Soviet Party and the State were added to the chorus of the reactionaries and anti-communists of all countries who had always reviled Stalin.

From then until our day, anti-Stalinism has been the recurring voice of all the reactionaries, of the ideologues of the bourgeoisie, of the Trotskyists, revisionists and opportunists of all shades.

By attacking Stalin, they are trying to tear down the extraordinary achievements of socialism in the Soviet Union and in what had been the socialist camp; they want to minimize and even ignore the great contributions of the Red Army and the Soviet peoples in the decisive struggle against Nazism, to denigrate the Communist Party and the socialist system as totalitarian, as the negation of freedom and democracy. By attacking Stalin they are aiming at Lenin, Marx and socialism. To denigrate Stalin as bloodthirsty and a bureaucrat means to attack the dictatorship of the proletariat and thereby deny the freedom of the workers and peoples, socialist democracy. To slander Stalin as being ignorant and mediocre is to refuse to recognize his great contributions to revolutionary theory, to Marxism-Leninism. To attack Stalin means to deny the necessity of the existence and struggle of the communist party, to transform it into a movement of free thinkers and anarcho-syndicalists, to remove its Leninist essence, democratic centralism.

The height of anti-Stalinism is to call Stalinists those who betrayed the revolution and socialism in the name of doing away with the “crimes of Stalin” and of making the Soviet Union a “democratic country”. The folly of the reactionaries and opportunists does not allow them to recognize that the confessed anti-Stalinists, Khrushchev, Brezhnev, Gorbachev and Yeltsin, destroyed brick by brick the great work of the Soviet working class and peoples, of the communists, of Lenin and Stalin.

The attacks on Stalin are of such magnitude that even a significant number of social fighters, leftists and revolutionaries have fallen victim to these slanders. Basically, they are sincere people, interested in social and national liberation, who do not know the personality and work of Stalin and therefore join the chorus of these distortions. There are also some petty-bourgeois revolutionaries who attack Stalin from supposedly “humanist” positions.

It is up to us communists to defend the revolutionary truth about Stalin, and it is our responsibility because we are his comrades, the ones who are continuing his work.

The Great October Socialist Revolution was one of the great events of humanity. The workers and peoples of the world’s largest country stood up, undertook a long revolutionary process, led by the Bolshevik Party, which led them to victory in October of 1917. This great feat of the workers and peasants, the soldiers and the intelligentsia was a complex process, full of twists and turns and advances and retreats.

The proletarian revolution that smashed the tsarist empire to pieces was inconceivable without the guidance of Marxism, which established itself as the emancipatory doctrine of the working class; without the efforts of Russian communists, mainly of Lenin by his creative application in the social, economic, cultural, historical and political conditions of old Russia; without the building, existence and struggle of the Bolshevik Party; without the decisive participation of the working class and the millions of poor peasants; without the social and political mobilization of the broad masses; without the existence and fighting of the Red Army; and without the important contribution of the international working class.

Several decades of strikes and street battles; the utilization of parliamentary struggle and the participation of the communists in the Duma; the ideological and political struggle against the bourgeoisie and the tsarist autocracy; the organization of the Soviets of workers, peasants and soldiers; the great theoretical and political debate against opportunism within the party that led to the isolation of the Menshevik theses and proposals and to the formation of the Bolshevik Party governed by democratic centralism; the fierce battles against social chauvinism and social pacifism on an international scale; the profuse and fruitful propaganda activity of the communists; the fight to win ideological and political hegemony within the Soviets; the Revolution of 1905 and its lessons; the February Revolution of 1917, its results and consequences; the great armed insurrection of October; the Brest-Litovsk peace agreements; the revolutionary civil war; the establishment of the dictatorship of the proletariat, these constitute the most salient features and characteristics of the struggle for power of the Russian communists, organized in the Bolshevik Party.

Stalin was born in Gori, a small town close to Tbilisi, in Georgia, on December 21, 1879. His father was a shoemaker, the son of serfs, and his mother, a servant, was also the daughter of serfs.

He joined into the ranks of the party in 1898, when he was 19 years old, and since that time his life, thoughts, dreams and his intellectual and physical effort were devoted to the cause of communism, to the fight for the revolution and socialism.

Until March of 1917 when he moved to Petrograd and joined the editorship of Pravda, Stalin had been and was a tireless organizer of trade unions and the party, of demonstrations and strikes, of newspapers and magazines, a student of Marxism and the author of various documents and proposals. He had been in prison and exile, at Party congresses and conferences. He was a fighter and leader of the revolution.

The revolutionary period that began with the February Revolution was the scene of great ideological and political confrontations against the bourgeoisie and the imperialists, but also against the Mensheviks and the Socialist Revolutionaries, and also within the Party. The whole process of winning the majority of the Soviets for the policy of the Bolsheviks had in Stalin a great leader and architect. The preparation of the insurrection, the technical and military contacts and preparations and also the debate within the leadership of the Bolshevik Party found in Stalin a protagonist of the highest order; he was a great comrade of Lenin in all aspects of political work.

Stalin was part of the first Soviet government as a People’s Commissar of Nationalities; he participated actively in the revolutionary civil war as a Commissar and Commander on various fronts and showed his military and political ability in forging and consolidating the young Soviet power and strengthening the Red Army. He was one of the most outstanding leaders of the party, the government and the army.

In 1921, by decision of the party and together with Lenin he participated actively in the foundation of the Third or Communist International, which would play a great role in the organization and leadership of the revolution on the international level.

A great task that the proletarian revolution took up was the formation of the Union of Soviet Socialist Republics (USSR), which meant concretely the application of the line of the Party with regard to the nationalities and peoples. The “prison-house of nations” that was the tsarist empire became a community of nations, nationalities and peoples, governed by socialism, which put forward the defence and development of the national cultures and their inclusion in the building of the new society.

Having taken up these responsibilities, his dedication and selflessness in their fulfilment and his theoretical ability made Stalin the General Secretary of the Party in 1922. When Lenin died in 1924, the Political Bureau of the Party designated Stalin as the main leader of the party.

The Communist Party (Bolshevik), under the leadership of Stalin, faithful to the Leninist legacy, pushed through the New Economic Policy (NEP) during the 1920s. Amidst great difficulties, relying on the mobilization of the working class and peasantry, defeating the blockade, sabotage and resistance of the defeated reactionary classes and the force of individual capitalism that emerged in the peasant economy, it succeeded in overcoming the disastrous material, economic and social situation that Russia had been in after the Civil War, with production reduced to 14% of the pre-war period, and which was seen in widespread famine and the profusion of diseases.

In this period a bitter ideological and political battle was being waged within the party between the Bolsheviks and the so-called “‘Left’ communists,” who wanted to “export the revolution” and place the weight of the economy on the peasantry, liquidating it as an ally of the proletariat.

In 1929, the NEP was concluded and the accelerated collectivization of the countryside was begun, the great battle against the kulaks who wanted to reverse the revolutionary process in the countryside.

In 1930, the process of large-scale industrialization was pushed forward with great material efforts and supported by the mobilization of the working class. It was a great feat that required large investments and therefore limited the possibilities for the well-being of the great masses of workers and peasants. Despite this, the revolutionary fervour and enthusiasm allowed for the fulfilment and even over-fulfilment of its goals.

In the West, this was the time of the Great Depression; in the country of the Soviets it was the time of the victorious construction of socialism. The Soviet Union became the second greatest economic and commercial power in the world, after the United States. For eleven years, between 1930 and 1940, the USSR had an average growth of industrial production of 16.5%.

A good part of socialist accumulation had to be invested in the defence and security of the Soviet Union, which had to deal with the arms race to which all the capitalist countries of Europe, the USA and Japan were committed.

For 1938-39, the danger of imperialist war hung over Europe and the world. The German Nazis, the Italian fascists and the Japanese reactionaries were moving quickly to form the Axis. The Western powers headed by the Anglo-French alliance worked feverishly to conclude a pact with Germany in order to encourage it to direct its attacks against the Soviet Union, in order to liquidate the communists, wear down the Germans and enter the war under better conditions. It was a devious and cunning diplomatic game that handed over the Sudetenland and the rest of Czechoslovakia to the Germans.

The Soviet Union was a developing economic and military power, but its military capability was much weaker than that of Germany, France, England or the USA. It was surrounded by powerful enemies and needed material resources and time to prepare itself for the eventual war which was announced with cannons and aircraft.

The Soviet Union needed to combine international diplomacy and politics with its industrial development and military power. This circumstance forced the communists to devote a large quantity of material resources in this direction, but also to seek diplomatic alternatives that enabled its defence.

Several international meetings, endless proposals and projects were addressed to the chancelleries. The Soviet Union could not establish an alliance against Nazism since the main interest of the Western powers made the Soviet Union their target. In these circumstances and for its defence, in August 1939, the Molotov-Von Ribbentrop Pact of “non-aggression between Germany and the Soviet Union” was signed.

This international treaty gave the Soviet Union precious time to push forward its military industry. Utilizing large material resources and the will of the peoples, in a short time it was able to build planes, tanks, cannons, weapons and ammunition in large quantities and simultaneously it could relocate its key industries located in European Russia to the East, behind the Urals.

World War II broke out in 1939. The Germans invaded Poland, Czechoslovakia, Austria, the Balkans, France, Belgium and Netherlands and utilizing “blitzkrieg” tactics, the lightening war, in few weeks they destroyed the armies of those countries and imposed puppet governments.

When it came to the invasion of the Soviet Union in 1941, the Germans did not have the military capacity to carry out and win with the blitzkrieg; they ran into the resistance of the Red Army, the guerrillas and the great masses of workers and peasants who defended the socialist fatherland. The Red Army put up a fierce resistance and gave way to the Nazi troops, forcing them to penetrate into a vast territory, teeming with guerrillas who persistently harassed them. They could not take Leningrad much less Moscow. In Stalingrad a major battle was waged, street by street, house by house, man by man. The reds resisted and then took the initiative and defeated the German army. That was the beginning of the end of the fascist beast.

The Red Army launched the re-conquest of its territories occupied by the Nazis and advanced victoriously across the mountains and plains of Europe, contributing to the liberation of several of the countries of Eastern Europe, up to Berlin, which was taken on May 9, 1945.

This great victory of the Soviet Union was the fruit of the fortress of socialism, of the unity and will to action of the working class and peoples, of the valour of the Red Army, but it was also a consequence of the diplomatic, political and military genius of the General Staff and the leadership of the Soviet Party and Government, led by Stalin.

At the end of the war, the victory of the revolution took place in several countries of Europe, which established people’s democratic governments, and the victory of the revolution in other Asian countries. The Soviet Union emerged as a great economic and military power that won the affection and respect of workers and peoples of the world, of the patriots and democrats, of the revolutionaries and especially the communists. The Soviet Union, Stalin and the Communist Party were the great protagonists in the defeat of fascism.

The Great Patriotic War meant great human and material sacrifices for the Proletarian State. The victory achieved was built upon the great spiritual heritage of socialism that protected the workers and peoples of the USSR; it was made possible by the great patriotic sentiments with which the Communist Party was able to inspire the bodies and minds of the Soviet peoples, by the deep affection of the workers for Soviet power, by the brave and courageous contribution of the communists who put all their abilities and energy into the defence of socialism. The contribution of the Soviet Union in the Second World War was more than 20 million human beings, of which slightly more than 3 million were brave members of the Bolshevik Party. The Party gave over its best men to the war, it lost invaluable political and military cadres, but it also further tempered the Bolshevik steel, and at the end of the war it had gained more than 5 million new members.

At Yalta and Tehran, at the peace negotiations, the workers and peoples of the world had a great representative, Comrade Stalin, who knew, with wisdom, prudence and composure, how to restore the rights of the peoples and countries that had been victims of the war and fascism, how to contribute to the establishment of agreements and open the way to new levels of democracy and freedom in the world.

World War II was the prelude to the national liberation of dozens of countries on the five continents, who won their independence by breaking with the old colonial order. The Soviet Union led by Stalin was always the safe and reliable rear of this great liberation movement.

In the field of the revolution, the victories achieved in Albania and other countries of Eastern Europe, in China, Korea and Vietnam, gave rise to the formation of the powerful socialist camp. A quarter of the population living on a third of the Earth’s surface were building socialism and had in the Soviet Union, led by Stalin, an enlightening example and unreserved support. In the rest of the world, the working class, the peasantry, the youth and the progressive intelligentsia saw the socialist future of humanity with certainty and confidence.

On the other hand, the end of the Second World War established a new order within the capitalist sphere. The United States became the main world power and had hegemony over the capitalist countries.

There arose a new contradiction in the international sphere: one that opposed the old world of capital to the new world of socialism. The bourgeois ideologues and politicians called this the “cold war”, alluding to the antagonism of the dispute.

Once more the superiority of socialism became evident. In the Soviet Union, but also in the other countries of the socialist camp, the culture and well-being of the masses, science and technology, the social and material progress of the workers and peoples flourished. In 1949 the USSR was able to build the atomic bomb and in 1957 it launched the space race, taking the lead.

Neo-colonialism, a form of imperialist domination that emerged after the independence of the dependent nations and countries, always had a counterweight in the Soviet Union led by Stalin. The peoples of the former colonies always had a loyal friend.

Within a few years, from 1917 to the early years of the 1950s, the proletarians, led by the communists organized in the Bolshevik Party of Lenin and Stalin, built the dreams of a new world, the world of socialism. They built the essentials, many things were lacking, some failed, but humanity never knew a broader and truer democracy, never before were men in their multitudes able to have material and social well-being, equality among their peers. This was proletarian democracy.

It was an epic of the workers and peoples, the realization in life of the scientific theory of Marxism-Leninism, the gigantic effort of the communists, the serene and bold work of the leaders, Lenin and Stalin.

When we speak of Stalin we are referring to the leader, the organizer, the head, the comrade and friend, who was really one of the great builders of the new man, of the new humanity.

This understanding of Stalin cannot be conceived without discovering and learning about his extraordinary theoretical work.

From the beginning of his communist activity he correctly evaluated the role of theory in the process of organizing and making the revolution. He studied the Marxist materials that he had at hand, the Manifesto of the Communist Party, the works of Plekhanov, and soon he began to familiarize himself with Lenin, by his writings and directives, his valour as organizer and head of the communists, until he saw him in person at party events. From that time on they had a great friendship affirmed in militancy and the great commonality of opinions and concerns. Stalin was also a great reader of Russian literature. He was a man of vast culture, which grew daily throughout his life.

How can one not keep in mind in the training of communists in all countries his most outstanding works: Anarchism or Socialism?, Marxism and the National Question, On the Problem of Nationalities, The October Revolution and the Tactics of the Russian Communists, The Foundations of Leninism, Concerning Questions of Leninism, Trotskyism or Leninism?, Dialectical and Historical Materialism, Marxism and Linguistics, Economic Problems of Socialism in the USSR, the Reports to the Congresses of the Communist Party.

Stalin was a theoretician of the revolution, a Marxist who recreated and developed revolutionary theory in order to provide answers to the problems put forward by the revolution. He was not a theoretician who speculated with knowledge to try to generate ideas and proposals. No, his theoretical work addressed burning issues that had to do with the development of the class struggle, with the problems that the party, the trade unions, the state and the revolution were facing on an international scale.

The depth of his writings is not at odds with the simple form of making them understood. Stalin is rigorous in his theoretical analysis, his positions are valid; they provide a real guide to action, as he himself pointed out referring to Marxism, but also they are simple and easy to understand.

Stalin’s detractors insist on some issues that we should analyze. All of them: the confessed reactionaries of anti-communism, the Trotskyists, the revisionists and opportunists of all shades agree principally on the following charges: intellectual mediocrity, Lenin’s testament that supposedly condemned him, the building of socialism in a single country, forced collectivization, the bureaucratization of the party and state, the liquidation of the Bolshevik old guard, the great purges, his tyrannical and bloodthirsty character, forced industrialization, his incompetence in the war, the cult of personality.

With regard to Stalin’s intellectual mediocrity, the facts, history and its vicissitudes speak emphatically. The October Revolution, the building of socialism in a large country and for the first time in the history of mankind, his skill in leading the party, the working class and the peoples of the USSR in the great feat of building a new world would not have been possible with a mediocre leader who was poor intellectually. These diatribes fall under their own weight. Trotsky, who claimed to be a great theoretician and man of culture and was one of his detractors in this area, was defeated precisely, in theory and practice, by one who, according to him, was a mediocrity.

In regard to the so-called “Lenin Testament,” a lot of nonsense has been written, such as that Trotsky was the one anointed by Lenin to replace him as head of the Party, as if those notes of Lenin had been hidden by the Central Committee. We say that Lenin’s health was very shaky in those days in which he is supposed to have written the famous “testament”, his sensitivity was weakened by the complaints of his companion. However, Lenin had the revolutionary culture, the Bolshevik training to understand that he could not have written a testament, a last will; he also knew that one leader, whatever his rank, can only give his opinions, not orders, in the collective. For these reasons one must understand these notes of Lenin as opinions; moreover, they were out of the context of the everyday life of the leadership of the Party and State and in no way were they orders to be complied with without question. On the other hand, it is completely false that these notes were hidden from the Central Committee; the latter knew about and discussed them. The results were known; Stalin was chosen the Main Leader of the Bolshevik Party and that was a correct and wise decision. History has shown these facts irrefutably. The one supposedly anointed by Lenin as leader of the Party, Trotsky, was placed by life and the revolutionary struggle in the dustbin of the counter-revolution.

The Leninist thesis of the building of socialism in one country takes into account the uneven development of capitalism and as a consequence the various stages of the class struggle. That situation made it possible to break the chain of imperialism at its weakest link, old Russia. Stalin was the one who continued this line. Relying on the workers and peasants, on the great spiritual and materials reserves of the Soviet peoples he carried out the great feat, defended the revolution and defeated the detractors of this thesis. Those who raised the impossibility of building socialism in the Soviet Union as long as the revolution did not succeed in the capitalist countries of Europe and labelled the peasants as reactionaries and counter-revolutionaries were proven to be wrong. The USSR developed and so far there has been no revolution in any of the capitalist countries in Europe.

On the forced collectivization of the countryside, Stalin’s detractors claim that “he violated the will of the peasants, destroyed the agrarian economy and eliminated the social base of the revolution made up by the medium and rich peasants, the kulaks”. The facts are diametrically opposite. The necessary carrying out of the NEP in the countryside developed the rural bourgeoisie in a natural way and stripped millions of poor farmers of the land, depriving the population of cereals. Basing itself on Marxism-Leninism and taking social reality into account, the Party proposed to bring socialism to the countryside. Relying on the millions of poor peasants, it pushed forward a great social and political movement for the formation of cooperatives, the kolkhozes; this meant the expropriation of the kulaks, in some cases people’s tribunals and drastic sanctions. International reaction spoke of repression and massacres. In reality there was a socialist revolution in the countryside, the work of millions of poor peasants who assumed their role as the protagonists in the life of the country of the Soviets. And, as we know, a revolution unleashes the initiative and achievements of the masses, but also the anger of its enemies. As a result, agriculture and livestock flourished, the Soviet Union became the largest producer of wheat, the mechanization and the modernization of agriculture reached unprecedented levels, at the forefront on the international scale.

Stalin is continually blamed for the bureaucratization that was in reality growing in the party and State. Stalin was never in his life a bureaucrat. Quite the contrary, his dynamism was always expressed in direct contact with the base of the party and with the masses; he was one of the leaders of the Soviets before the revolution. His whole life was in action.

Bureaucracy is a social phenomenon, a degeneration that arises in the bourgeois administration (remember that a good part of the Bolshevik administration had to resort to old tsarist functionaries) that penetrated into the revolutionary ranks, into the party and State. Bureaucracy was really present in the life of the Socialist State; it affected many activists and leaders. In some cases the responsibilities of power were transformed into small or large privileges that were creating a caste of bureaucrats who undermined the functioning of the party and the state administration, which separated the party from the masses.

Stalin did not promote the bureaucracy, but in reality he did not have either the ability or the experience to eliminate it. Several offensives of an ideological character aimed at eliminating it took place, precisely under Stalin’s initiative. The political education, ideological struggle, the validity of democracy in the party, the party elections were expressions of the struggle of the communists against bureaucracy. They cannot be dismissed having been useless. They achieved results; among other things they allowed for the continuation of the social and material achievements of the dictatorship of the proletariat, the ideological, political and organizational cleansing of the party and State, the isolation and expulsion of several groups of opportunists and traitors. However, in fact, they were not able to eradicate the bureaucracy and opportunism. Various opportunists and traitors evaded the ideological struggle and hid. They would return later, after the death of Stalin.

It is clear that bureaucracy is an ideological illness which is persistently reborn and which must be fought relentlessly to the end. Stalin did not promote bureaucracy; rather he was one of its victims.

The accusation made against Stalin that he was a bloody dictator and despot and refers to the ideological cleansing, to the revolutionary repression of the counter-revolutionary outbreaks in the city and countryside, to the alleged liquidation of the Bolshevik old guard.

It is necessary to understand that the dictatorship of the proletariat is not a wedding party in which everything is rosy. No, quite the contrary. A whole armed, economic campaign, a trade boycott, an ideological and political penetration by imperialism and the international bourgeoisie was orchestrated against the dictatorship of the proletariat. In opposition to the new power of the workers, from within society, the old ruling classes, overthrown by the revolution but not physically eliminated, repeatedly carried out acts of sabotage; they tried many times to organize rebellions and uprisings, using mercenaries and men and women of the people who were deceived; they based themselves on religion and the priests, on feudal traditions, on liberal elements in the administration and on some occasions they infiltrated their agents into the party and the Soviet State. Within the party itself, in the new State and in the Red Army, there appeared over and over again degenerate elements who made attacks on the dictatorship of the proletariat in theory and practice, who tried to divert the party, to assume its leadership, to organize coups d’état. Some of these elements had been, in the past, outstanding members and leaders of the party and the revolution and they tried, therefore, to take advantage of their positions to change the course of socialism.

The fight to preserve and defend the line of the Party, its ideological, political and organizational unity was bitter and persistent, because again and again, the counter-revolution grew stronger in its attacks and, during Stalin’s life, it was again and again defeated by the force of reason, by the firmness of the Bolsheviks, by the support of the base of the party and the army, by the support of the masses of workers and peasants.

In reality the Bolshevik old guard, those comrades who dreamt of and organized the Great October Revolution, were falling behind. Some fell in combat for the revolution, others were assassinated by the counterrevolution. Others paid the physical tribute of their lives. Some survived Stalin.

The old Bolsheviks, the veteran communists knew how to face their responsibilities, they learned how to solve problems and unknown issues as they arose, they were put at the head of the great feat of building socialism, and were called “old Bolsheviks” not because they were old, but because of their qualities, for their militant and permanent adherence to the principles of Marxism-Leninism, for their quality as communist cadres and fighters.

The fight against the opportunist factions within the Party and State were real battles that mobilized the party, all its members, they were a demonstration of the proletarian firmness of Stalin and his comrades in arms; they constituted one victory after another, that guaranteed the life of the Soviet State, the building of socialism and the continuation of the revolution.

Trotsky, Zinoviev, Kamenev and Bukharin were the main chieftains of the counter-revolution, who were confronted and defeated, in theory and practice, with the material and political achievements by the political correctness of the party leadership, headed by Stalin.

The dark legend of the work camps, of the confinement, of psychiatric hospitals, of prisons overcrowded with workers and communists, of the mass executions and mass graves are nothing more than the infamous slander of the reactionaries and imperialism, of the Nazis and social democracy, of the Trotskyists and revisionists, of the opportunists. They cannot be proved by any records much less by the existence of concentration camps and mass graves. They fall under their own weight.

Much has been said about Stalin’s incompetence in leading the war. Nothing could be further from the truth. In reality Stalin was not a soldier by training, he did not study in any academy nor could he claim mastery of the military arts, a thorough knowledge of weapons and military strategy and tactics. But it is clear that he was a proletarian revolutionary soldier who learned this art in the very course of the revolutionary civil war in the first years of Soviet power, that he was steeled as such in the difficult years of the building of socialism and that he played an outstanding role in the leadership of the Great Patriotic War, in the resistance against the Nazi invading hordes and in the great political and military offensive that drove the Red Army to take Berlin. No one has claimed that Stalin was a great Military Leader, all the revolutionaries recognize him as the leader of the Soviet proletariat and the peoples, as the political leader of the international proletariat, as a proletarian revolutionary, as a communist.

The accusations that Stalin promoted and used the whole gamut of praise and exaggerations that have been called the “cult of personality” for his prestige continue to be a part of the anti-communist arsenal.

In fact, Stalin daily received praise and recognition from his comrades and friends, from the workers and peasants who expressed them from their heart to express gratitude and recognition. There was also the praise of the opportunists who sought favours from him. The former demonstrations were sincere, a product of the generous spirit of the workers and people, the latter had a dual intention, based on facts; they tried to elevate Stalin above others, above the events and in this way to personally take advantage of this situation.

The cult of personality was in fact a defect of the first experience in the building of socialism. It began with good intentions, but finally it degenerated, it hurt Soviet power and Stalin himself. This is an incontestable fact. But to argue from there that Stalin himself encouraged these campaigns, that he became an egomaniac, a narcissist is a big lie.

Many pages and books can be written about Stalin. In fact there are thousands of publications about his life and work. There are those of his comrades and friends, but also those of his enemies and detractors. In fact the life of Stalin is the life of the first proletarian revolution itself. Stalin did not make the revolution to his measure; the revolution projected Stalin as one of its best sons and leaders.

Pablo Miranda
Ecuador, 2012

Source

Grover Furr: Anatomy of a Fraudulent Scholarly Work: Ronald Radosh’s “Spain Betrayed”

9780300089813

Grover Furr

Spain Betrayed: The Soviet Union in the Spanish Civil War by Ronald Radosh (Editor), Mary Radosh Habeck (Editor), Grigory Sevostianov (Editor). Annals of Communism series. Yale University Press, June 2001.

1. Long awaited and published to rave reviews — albeit predictably by Cold War conservatives (Arnold Beichman) and anti-communist liberals (Christopher Hitchens) — Radosh’s commentary on the 81 documents from the Comintern archives in Moscow concerning its involvement in the Spanish Civil War turns out to be notable for quite another reason: it is an utterly fraudulent work. [1]

2. In the course of this review-essay I’ll present a lot of evidence to substantiate this serious charge. I’ll also discuss, though briefly, the major positive reviews of the book. They are full of the same stuff. In several instances, an innocent reader might think that the reviewers had not actually read the documents themselves, but only Radosh’s commentary. For how could anyone compare what the Comintern documents state with what Radosh says about them, without noticing the enormous discrepancies between the two?

3. I won’t say much in this report about the documents themselves. Many of them are fascinating and valuable, though Radosh, in his zeal to arraign the communists, basically neglects them.

4. But one conclusion is so striking that it cannot be left unstated. Far from showing Soviet “betrayal,” these 81 documents make the Comintern, the International Brigades, and the massive Soviet aid to Spain appear in an extremely positive light. Reading the documents alone, and ignoring Radosh’s “commentary,” any objective person will come away with tremendous respect for the communist effort in the Spanish Civil War, not only by the Comintern and the justly famed International Brigades, but of the Soviet Union — or, as Radosh says it, in his crude demonizing synecdoche, of “Moscow” and “Stalin.”

5. Despite itself, Radosh’s book represents something valuable: an object lesson in the rhetorical strategies of anti-communism. Perhaps the biggest question of all — “Why lie, if the truth is on your side?” — will require a few remarks about the uses of anti-Stalinism in foreclosing any objective understanding of the successes and failures of the communist movement.

6. Radosh’s book contains so many errors and distortions that even a much longer review could not discuss them all. Therefore, I examine the documents in which the major “revelations” are supposedly to be found. To identify those, I’ve used (a) the four-page publicity handout from Yale University Press that accompanies the book, and (b) a number of the major reviews favorable to this volume, from leading publications (all are listed at the end). A few other documents were chosen because they seem to me particularly interesting. This close examination constitutes the bulk of the review.

7. I’ll also point out some examples of simple editorial incompetence. Radosh could have provided useful summaries of long and significant documents, or helpful and specific references to other scholarly work — surely the duty of a competent commentator — but scarcely ever does.

8. At the end of the review I’ve included some remarks of a more general nature about the issues raised both by these documents themselves and by Radosh’s commentary. There’s a good deal that can be said by Marxists in criticism of the Bolsheviks and the Comintern during the Stalin period — or of any political group, communist or not, at any period — and in conclusion I’ll allude to one or two things with special reference to Spain. But any and all criticism should be based on what actually happened as that can be deduced from the best evidence available, rather than on fabrications or demonization, as with Radosh and many other Cold-War writers, either from the Right or, not infrequently, the so-called Left.

9. What follows is a short outline of the main ideological frameworks for interpreting the Spanish Civil War. Some knowledge of them is essential to an appreciation of Radosh’s interpretation, the documents themselves, and the present review. Considerations of space preclude any more detailed discussion of the foundational texts of these frameworks. (I am planning a critique of Orwell’s influential book at a future time.)

10. The Spanish Civil War has always posed a special problem for the kind of anti-communist who is determined to argue that the leadership of the international Communist movement never acted out of any idealistic motives. Such people are convinced — at any rate, they are determined to convince others — that all communist struggles, no matter how noble in appearance, were in reality aimed at manipulative, cynical, authoritarian goals, ultimately far worse than those of the capitalist exploiters they professed to oppose. Khrushchev’s portrayal of a malevolent, virtually demonic Stalin after 1956, while it differed little from Trotsky’s, was far more influential, and except in China and Albania quickly became widely accepted within the Communist movement itself. It was essential in smoothing the path for Trotskyist and, in terms of Spain, Anarchist narratives, hitherto current only among tiny, marginalized groups.

11. George Orwell’s Homage to Catalonia is basically such an account, though Orwell’s superior literary ability, British patriotism during World War II, and subsequent endorsement of mainstream Cold War ideology, gave his work the status of a somewhat independent authority. Orwell’s book remains the main representative of these anti-communist paradigms, the only book about the Spanish Civil War that most people ever encounter.

12. According to this interpretation, further popularized in British director Ken Loach’s film Land and Freedom (1995), Trotskyists and, especially, Anarchists are the true revolutionaries, collectivizing the land, ceding control of factories to the workers, and promoting egalitarian relations generally. The Communists are portrayed as counter-revolutionaries, whose rank-and-file think they are fighting to defeat the fascists in order that, in the victorious bourgeois-democratic Spanish Republic, they can then initiate a struggle for working-class revolution, but whose leadership — Stalin — aims in reality at a bleak authoritarian dictatorship of the kind Trotskyists, Anarchists, conventional capitalist anti-communists and even fascists, claimed was the state of affairs in the USSR itself. This creates a certain tension within the otherwise “united front” of anti-communist versions of the Spanish Civil War, since capitalist anti-communism is normally aimed at the radical, not the putatively conservative, nature of the communist movement.

13. The Communist version, on the other hand — the version by far the best supported by the evidence — is that the “United Front Against Fascism” and for a liberal, bourgeois-democratic (and therefore capitalist) society was the only way to unite as many social forces as possible, including nationalists, urban capitalists, and wealthier peasants, to defeat the fascists. According to this view, upon victory a Spanish Republic would have a strong, organized working class which would continue the fight for progressive social reforms and, ultimately, socialist revolution. The Communists held that to begin a revolutionary struggle in the midst of the war against the fascist armies would guarantee the defeat of the Republic — a defeat which, in fact, happened.

14. A critique of the Communist view from the Left is certainly warranted — indeed, essential. But what passes for a “left” critique, the Anarchist-Trotskyist version outlined above, accepts the basic premises of the reactionary Cold War critique, to the point that it can be cited in service to the latter, as Radosh does here. To clear the ground for a real Left critique, it is first necessary to recover the historical truth of what did, in fact, happen, both in the Spanish Civil War and in the Soviet Union itself. A real Left critique of the Comintern’s politics which both fully and correctly appreciates its successes and goes beyond it to identify the main roots of its failures, is yet to be made, despite a few promising starts which have long been available, albeit little known (see below, and note 6).

15. Radosh’s own view, as represented in his commentary in Spain Betrayed, is contradictory. In places Radosh argues, according to the fashion of conservative capitalist anti-communists, that the Comintern was hiding its truly revolutionary intentions. In other passages, however, he endorses the Orwell-Trotskyist-Anarchist view that the Communists were a conservative force that “betrayed” the revolutionary potential in Spain. Radosh seems untroubled by, indeed unaware of, this basic contradiction, as in the case of the many passages in which he — in the most generous description of his practice — makes flagrant and egregious errors in reading the very texts upon which he is “commenting.”

Document 5

16. Document 5, a report by Georgi Dimitrov, head of the Comintern, to the Secretariat of the ECCI (Executive Committee, Communist International) of July 23, 1936, contains the following lines:

We should not, at the present stage, assign the task of creating soviets and try to establish a dictatorship of the proletariat in Spain. That would be a fatal mistake.

Radosh claims that this statement (a statement repeated in the press release)

. . . supports the contention of some scholars that the Communists purposely disguised their true objective, social revolution. (5-6)

But it does not. It clearly states that there are “stages,” the present one being the stage of “maintaining unity with the petty bourgeoisie and the peasants and the radical intelligentsia . . .” (11). Radosh’s claim could only be true if he gave evidence that the Communists were denying what everyone would have expected of them — to wish to move to another “stage,” once the fascists were defeated. Radosh gives no evidence that the Communists were making any such claims to have abandoned the ultimate goal of a Soviet-style revolution in Spain. So there can be no question of “disguising their true objective.”

17. It ought also to be noted that Radosh also wants it “both ways.” Sometimes he criticizes the Communists for opposing social revolution, which the Anarchists supposedly stood for. This is Ken Loach’s main contention in Land and Freedom. But other times, as here, Radosh criticizes the Communists for wanting social revolution but supposedly “disguising” their intentions.

18. Document 5 also offers an obvious mistranslation from the Russian. Immediately after the lines quoted above, Radosh et al. allege that Dimitrov wrote the following:

Therefore we must say: act in the guise of defending the Republic. . . . (p.11; emphasis added)

In his commentary Radosh states:

The very careful use of these terms, as well as the injunction to “act under the semblance of defending the republic,” supports the contention of some scholars that the Communists purposely disguised their true objective, social revolution. (pp. 5-6; emphasis added)

19. Evidently Radosh is referring to a different translation of the document than that which finally ended up in the volume, although arguably “in the guise of” and “under the semblance of” convey much the same thing: duplicity, dishonesty. However, there is an interesting footnote in the text of Document 5 attached to the phrase “in the guise.” That note, number 11 on page 515, reads thus: “Literally, ‘under the banner.'” In other words, what Dimitrov actually said is this:

Therefore we must say: act under the banner of defense of the Republic. . . .

20. The question is: What does “under the banner” — in Russian, “pod znamenem” — mean in Russian? The answer is: it means the opposite of what Radosh says it means. Rather than “under the semblance” or “in the guise,” it means “in service to” or “in defense of.” At exactly this time, one of the foremost Soviet philosophical journals was titled “Pod Znamenem Marksisma“: literally, “Under the Banner of Marxism,” often translated as “In Defense of Marxism.” No one would even think of translating that title as “In the Guise of,” or “Under the Semblance of,” Marxism! “Under the banner of” is a military metaphor, meaning “In the ranks of.”

21. In other words, what Dimitrov actually said was:

. . . act in defense of the Republic. . . .

There must be an interesting story behind that footnote. Whoever translated Document 5 — Radosh tells us (p. xxxi) that there were two translators for the Russian documents — that person evidently knew that “in the guise” was not the correct translation, and wanted to tell the world, even if by a footnote, that he or she was not responsible for this particular mistranslation.

22. This is the only mistranslation from the Russian that can be discerned in this collection, because Radosh et al. don’t give us the documents in the original languages (mostly Russian, but a few in Spanish, German and French). This would have been easy to do — on a book-related web page, for example. But the way this mistranslation is treated makes one wonder whether there may be more.

Document 42

23. Radosh spends a lot of words on Documents 42 through 44 because one of the central points of his book is that in these documents, especially Document 42, is to be found the proof that the Communists instigated the Barcelona uprising of May, 1937 as a pretext for violently suppressing their Anarchist opposition.

24. Briefly, the context for Radosh’s comments is as follows, in the words of Helen Graham, who has written authoritatively and most recently on this event (Graham 1999, p. 485):

On the afternoon of Monday 3 May 1937 a detachment of police attempted to seize control of Barcelona’s central telephone exchange (Telefónica) in order to remove the anarchist militia forces present therein. . . . Those days of social protest and rebellion have been represented in many accounts, of which the single best known is still George Orwell’s contemporary diary account, Homage to Catalonia, recently given cinematic form in Ken Loach’s Land and Freedom. It is paradoxical, then, that the May events remain among the least understood in the history of the civil war.

25. Radosh takes Document 42 to be directly related to this event:

. . . we have the proof that the view held by the Communists’ opponents was essentially correct. The Spanish Communist Party, with the support and knowledge of the Comintern and Moscow, had decided to provoke a clash, in the full understanding that the outcome would give them precisely the opportunity they had long been seeking. (174)

Radosh does not bother to tell us what would have been wrong with the communists’ seizing the telephone exchange from the anarchists. After all, the government, not one of the various parties, should have been in control of the exchange. And the assault was led by the Police Chief of Barcelona who, though a communist, was also a government official.

26. The anarchists had clearly been prepared for such an attack for a long time — after all, they had a machine-gun nest in the first floor which prevented the police from seizing the building at once. What justification did the anarchists — not the government, but one of the political parties in Barcelona — have controlling the telephone exchange in the first place?

27. The words that Radosh takes as “proof” that “the view held by the Communists’ opponents was essentially correct” — I emphasize “essentially” because even Radosh feels he has to qualify this statement, evidently realizing he is on weak grounds here — are as follows:

. . . the author of the report noted that the Communists had decided not to wait for a crisis, but to “hasten it and, if necessary, to provoke it” (emphasis added).

But Document 42 says nothing whatsoever about the attack on the telephone exchange, or about any plan for confrontation with the anarchists. The sentence quoted in part by Radosh in his commentary reads this way in full:

In a word, to go decisively and consciously to battle against Caballero and his entire circle, consisting of some leaders of the UGT. This means not to wait passively for a “natural” unleashing of the hidden government crisis, but to hasten it and, if necessary, provoke it, in order to obtain a solution for these problems.  . . . The leadership of the party is more and more coming to the conviction that with Caballero and his circle the Republic will be defeated, despite all the conditions guaranteeing victory. (194)

These lines do not refer at all to the attempt by the Communist Chief of Police to take possession for the Republican government of the telephone exchange that had been unlawfully seized and held by the anarchists, the event that precipitated the “May Days” in Barcelona and to which Radosh tries to tie this statement, or to any plan to incite any actions against the anarchists. Instead, the paragraph quoted just above refers to the previous points 8 through 14 of Document 42, in which the unnamed communist author says that the PCE has decided to take action against the Caballero government. There is nothing whatsoever in this document that connects it with the attempt to retake the telephone exchange.

28. Radosh’s allegation — one of the “bombshell” findings Radosh claims to have found — is a lie. This whole “discovery” is a complete swindle on the unsuspecting reader. I stress this point because Radosh’s supposed “discovery” here has been so widely touted as one of the major “revelations” of these Soviet documents. For example, the Press Release from Yale University Press that accompanied the books publication lists seven documents and summarizes what Radosh says they contain. The blurb on Document 42 reads:

Barcelona — the civil war within the Civil War. The five-day street battle in Barcelona was portrayed by Orwell in Homage to Catalonia and by Ken Loach in the film Land and Freedom. The historical dispute has always been: Was the anarchist reaction deliberately provoked? Document 42 shows that the view held by the Communists’ opponents was essentially correct. The Spanish Communist Party, with the support and knowledge of the Comintern, decided to provoke the clash. (emphasis added)

We should also note, in passing, the esteem in which Loach and Orwell are held by establishment anti-Communist ideologues like Radosh, and the way in which the echo-chamber of the “big lie” functions in the blurb above by pairing these supposed “authorities” with the specious “facts” that Radosh is creating here.

29. Richard Bernstein, whose very positive review of Radosh’s book appeared in the New York Times, tacitly recognizes that Document 42 did not prove what Radosh says it proves:

Two weeks later, the Communists, in the view of this book’s editors, did provoke the desired crisis, unleashing the Barcelona street battles that essentially eliminated the anarchist leadership and led to the replacement of Largo Caballero by a more malleable premier. [emphasis added]

(Bernstein makes it sound like Caballero was the leader of the anarchists; in fact, he was head of the government and a Socialist.)

30. In the interest of good sense, I would like to make a few additional remarks at this point.

1. The assumption, in Radosh’s Commentary and in other anti-communist accounts Radosh quotes, is that, by taking the Telephone exchange away from the anarchists and returning it to government control, the Communists were “provoking” the anarchists.

2. The anarchists had no business whatsoever holding the telephone exchange. The Police Chief, besides being a communist, was also a government officer. If removing an armed group of occupiers who have taken control of the telephone exchange is not a legitimate matter for the police, what is?

3. Imagine if the Communists had occupied the telephone exchange, fortified it with a machine-gun nest, interrupted government phone calls whenever they wanted to, and then a non-Communist police chief had tried to oust them? Would Radosh not take that as evidence that the Communists wanted to take over?

Document 43

31. One of Radosh’s statements about Document 43 has been cited in several favorable reviews of his book:

As the Comintern document cited earlier revealed, Stalin had in mind a Spanish version of the Moscow purge trials most likely to be held in Barcelona. (209) [2] 

The document in question, No. 43, is a report from an anonymous source, presumably to the Comintern. In it the informant states:

The immediate political consequences of the putsch [the anarchist attempt to seize power — this is the way this writer interprets the “May Days” in Barcelona] are very great. Above all, the following one: the Trotskyist-POUMists revealed themselves to the nation as people who belong totally to Franco’s fifth column. The people are nourishing unbelievable animosity toward the Trotskyists. The masses are demanding energetic and merciless repression. This is what is demanded by the masses of people of all of Spain, Catalonia, and Barcelona. They demand complete disarmament, arrest of the leaders, the creation of a special military tribunal for the Trotskyists! This is what the masses demand. (196-197)

In his discussion of this document on p. 176, Radosh wrote:

In other words, the call was out for the creation in Spain of the equivalent of the Moscow purge trials. . .

“In other words” (why not use the same words?) “the call was out for” can only mean one thing: Radosh assumes that our unnamed informant, writing to the Comintern in Moscow, is speaking for someone other than himself. But this assumption is invalid. This document does not mean that any “call is out.” So far as we know, it’s the opinion of the writer alone. After all, he’s reporting to the Comintern. If the PCE, or Soviet advisers, had “put out the call” for a Moscow-style purge trial, he would have said so, for why hide it to the Comintern? And if Stalin had expressed interest in a Spanish “purge trial,” surely this writer would have said so as well.

Document 44

32. Document 44 is a report to the Comintern sent to Marshal Voroshilov, Commissar (Minister) of Defense of the USSR and the man whose office oversaw military equipment and material aid for the Spanish Republic, by a certain “Goratsy,” whom Radosh, in another failure of his editorial responsibility, does not further identify. Radosh accuses the Comintern of lying to itself, in that it states the communist belief

that the “uprising” carried out by “the extremist wing [of the anarchists] in the block with the POUM” was prepared in advance over a “long period of time.” (177) [This refers to the “May Days” in Barcelona — GF].

33. A few considerations are in order:

1. How does Radosh know that this is false? He has not proven it.

Furthermore, Radosh has already claimed that, in Document 42, he has evidence that the Comintern itself planned the Barcelona uprising, whereas here the Comintern reporter blames the uprising on the Anarchists. Why would the Comintern lie to itself? If the Comintern had successfully provoked this confrontation, as Radosh claims, why wouldn’t they be gloating over their success? Instead, they blame it on the anarchists, even in private communications within the Comintern. (206)

2. The document itself claims that the uprising was unexpected by the Communists. Once again: if it had been not only expected, but in fact “provoked,” as Radosh would have it, why would this not be noted, with pride, as a successful operation?

Document 1

34. Here a Spanish Communist in Moscow is writing to the Communist Party in Spain.

Radosh: “. . . the imperative tone taken by Moscow made it clear that there was little room for argument or maneuver by the small and relatively powerless PCE . . . (1-2).

Doc. 1: “After considering the alarming situation in connection with the Fascist conspiracy in SPAIN, we advise you: — . . . Please let us know your opinions on our proposals.” (7,9; emphasis added)

Conclusion: This document is not “imperative” in tone. Radosh is simply trying to make “Moscow” appear dictatorial and high-handed. The text will not support that interpretation, so he simply puts it into his commentary.

35. I put “Moscow” in quotation marks because this message, while certainly sent from the city of Moscow, was sent by a Spanish Communist, “Dios Major,” who signed the document. Why doesn’t Radosh mention this, saying only that “Moscow” sent it? Perhaps because to say that one Spanish Communist is “advising” other Spanish Communists does not support the impression — which Radosh evidently wants to give — that the Bolsheviks, Stalin, the Politburo, or whatever “Moscow” usually conveys, was trying to say anything to anybody. It appears that through metonymy, a linguistic trope in which “Moscow” represents any Communist leader, anywhere, allows Radosh to reduce all Communist leaders to “Moscow,” and “Moscow” to “Stalin.” Demonize Stalin, then, and all Communist leadership is automatically demonized as well.

36. Radosh gives other invidious readings of Document 1, but is rather vague about it. I’ll mention only one more example.

37. Document 1 reads, in part:

4. It is necessary to take preventative measures with the greatest urgency against the putchist attempts of the anarchists, behind which the hand of the Fascists is hidden.

The worst one could say about this piece of analysis — given, we recall, by one Spanish Communist to others, all of whom had extensive experience with the Spanish anarchists and hated them just as the anarchists, in turn, hated the communists — is that it was rhetorical over-statement to say that “the hand of the Fascists is hidden behind” the anarchists’ attempts at seizing power.

38. But here is what Radosh himself says about the anarchists:

Throughout the conflict, Soviet and Comintern advisers would decry the ‘subversive’ activities of the anarchists, and particularly their refusal to curtail revolutionary activities or to allow the formation of a regular, disciplined army. (3, emphasis added)

Radosh admits that the anarchists took this attitude towards the army. Yet how could the Fascists — who certainly had “a regular, disciplined army” — ever be defeated unless the Republic had one too? Guerrilla warfare — what Mao Tse-tung and Vo Nguyen Giap later refined into the doctrine of “People’s War” — is very important. But no theoretician of guerrilla or people’s war ever suggested that a war could be won without “a regular, disciplined army.”

39. In refusing to form such an army the anarchists played directly into the hands of the Fascists. Yet even while admitting this, Radosh attacks the Communists for stating the obvious: that this played into the Fascists’ hands. Elsewhere, in passages Radosh does not comment on, the Communists expressed the view that Fascist agents chose to infiltrate the Anarchists precisely for this reason.

40. Radosh’s Commentary continues:

The demand to establish a single union also stemmed from a new understanding of how to construct a socialist state: not through open revolution, but through the absorption of independent unions or parties into a single entity controlled by the Communists.

Radosh gives no evidence to support this statement at all. He certainly can’t cite Document 1, the document he is supposedly elucidating, because in it Dios Mayor proposes that

the C.G.T. (U.) [the Communist-led union movement] ought to propose to C.N.T. [the Socialist-led union movement] the immediately construction in the center and locally of joint committees to fight against the Fascist insurgents and to prepare the unification of the syndicates.

. . . At the same time you must establish broad social legislation, with extensive rights reserved in the unified C.G.T. . . .

41. Dios Mayor is proposing that the Communists call for unified action and a unified trade union organization. Radosh suggests that there is something underhanded about calling for unification: the Communists want to “absorb independent unions into a single entity controlled by the Communists.” But there is no suggestion of this in the document itself. I would note also Radosh’s concept of “absorption” here is standard anticommunist rhetoric. Other parties might “win a political struggle” for leadership of an organization, but communists only “control” — never “lead” — and “absorb,” with connotations of “suffocation,” “snuffing out independence.” [3] 

42. One might say, “Well, Radosh hates Communism, so for Radosh the communists can never do anything right.” But it’s more than that. For Radosh, if a non-communist makes a good proposal — say, trade union unity — that is good; whereas when Communists do the same thing, it’s bad. That’s because, for Radosh, communists never do anything honestly; their “dishonesty” is a given.

43. The interesting thing is that Radosh, using the documents his collaborators have selected, cannot demonstrate “dishonesty” on the part of the communists. An honest researcher would consider the possibility that, if the evidence at hand did not suggest the communists were “dishonest,” it just may possibly be because the communists were not dishonest.

Document 79

44. Radosh confesses that the previous document, no. 78, “suggests that he [Negrín] enjoyed a degree of autonomy from Communist control” (497). Radosh further acknowledges that even some anti-communist scholars of the SCW believe Negrín was “a more independent figure.” Radosh stresses that Document 79, a report by Marchenko, a Soviet and a Comintern representative, to Litvinov (Soviet Foreign Minister) and Voroshilov,

. . . makes it clear that the Spaniard’s views of politics closely coincided with the Soviets’, while the similarities between his vision for postwar Spain and that of the Soviet Union are striking This document suggests that if the Republicans had won the Civil War, Spain would have been very different from the nation that existed before 18 July 1936 and very close to the post-World War II “people’s democracies” of Europe.

This is false. Document 79 itself reveals that Marchenko was not supportive at all of Negrín’s outline of what a post-war Spanish Republic might look like:

I reacted in a very reserved way to Negrín’s idea and drew his attention to the difficulties and complications that the organization of a new party would cause. . . . If there are military successes, he can begin the formation of “his” united-Spanish political party, with the participation of the Communists if they will allow it, and without the Communists (and that means against them) if they refuse. (499; emphasis added).

The post-WWII “people’s democracies” of Eastern Europe were (a) propped up by the presence of the Red Army; (b) directly on the borders of the USSR; and (c) governed by Communist Parties (or communist-socialist united parties) run frankly by pro-Soviet communists. Negrín’s conception of a post-war Spanish Republic is very different from the post-war pro-Soviet regimes of Eastern Europe, sharing no essential similarity with them at all. Yet the allegation that a post-war Republic would have been forced into the mould of the post-WWII Eastern European regimes is, supposedly, one of the major “discoveries” of this collection of documents. This document alone shows that this claim of Radosh’s is without foundation.

Document 62

45. This is an important report by Palmiro Togliatti, head Comintern representative in Spain, to Dimitrov in Moscow. It is of great interest, and Radosh can find nothing to say about it that is at all negative. He makes false statements about its contents, however.

46. For example, Radosh writes:

Togliatti’s reports of are special importance. It is clear that, unlike other apparatchiks, Togliatti was extremely candid and forthright in his observations. (370, emphasis added)

But Radosh gives not a single example of these “other apparatchiks,” supposedly not-candid and not-forthright. Since Togliatti was later the head of the Italian Communist Party and a major leader of the Comintern, it does not seem to have hurt his reputation to have been “extremely candid and forthright.”

47. Note, too, Radosh’s use of a Russian term for an official of the Italian Communist Party. Radosh would never refer to an official of the Spanish Socialist party as an “apparatchik.” The point here is to give the impression, by whatever means possible, that “Moscow” controls everything.

48. Radosh’s discussion of this report contains several outright lies, including one that is very blatant — always provided that one actually reads the document itself. Radosh states:

At the same time, in Catalonia, Togliatti called for a policy of reinforcing the moderation of the Popular Front, rather than demagogic appeals to a revolution-minded populace. If the anarchists tried to move toward open revolt and stage a coup, he advised one solution only: “We will finally do away with them.” (emphasis added)

Here is the passage (390):

As for the anarchists, on this question, in my opinion, we have not merely hesitated, but made absolutely real mistakes in our tactics [Togliatti is referring to methods of political struggle — GF.] On the role from Barcelona to Valencia, I posed the question to the comrades accompanying me. Their opinion was very simple: the anarchists have lost all influence, in Barcelona (!) there is not even one anarchist worker, we are waiting until they organize a second putsch, and we will finally do away with them [emphasis added].

So this attitude is not that of Togliatti, but of some “comrades.” Here is what Togliatti wrote about this attitude; this passage begins immediately after that above:

This opinion is very widespread in the party, in particular in Catalonia, and when we stick to such an idea, it is impossible to carry out a policy of rapprochement with the anarchist masses and differentiation of their leaders. (390; emphasis added)

Radosh attributed to Togliatti the very views that Togliatti cites in order to strongly oppose them!

49. Again, Radosh writes:

While publicly advocating attempts at cooperation with opposition anarchists, Togliatti noted that their leaders were “scum, closely tied to Caballero,” and had to be fought via “large-scale action from below.” (371)

It is clear from the context of p. 390 — see the emphasis in the quotation above — that the “large-scale action from below” that Togliatti hoped for was action by the “anarchist masses,” as he stated in the passage quoted above, which alone can lead to “differentiation of their leaders.” In other words, Togliatti proposed relying on a democratic plan — winning over the anarchist masses to replace or repudiate their own leadership. Communist authors show appreciation for the political instincts of the anarchist rank-and-file many times in these documents; it is the anarchist leadership they see as the stumbling blocks to effective unity against Franco.

50. In addition to Togliatti, another Soviet adviser, Antonov-Ovseenko comes across very well in these documents. Radosh seriously distorts Document 22. Antonov-Ovseenko wrote:

The PSUC repeatedly proposed to the government that weapons at the rear [i.e. in areas not involved in battle] be seized and put at the disposal of the government. (p. 80)

Radosh calls this “Communist attempts to seize all the weapons at the rear (and thus to disarm the anarchists)” (p. 71). In reality, the PSUC (the Unified Socialist Party) — not just the communists, who were only a part of the PSUC — was proposing that armed men should be at the front fighting the war, and that arms were needed at the front, not in the rear. Orwell himself complains time and again about the obsolete, broken, and useless arms available to his own unit at the front, and that even these arms were in short supply. If, as Radosh suggests here, the armed anarchists were all in the rear, what were they doing there? If armed communists had been “all in the rear,” would Radosh not think this sinister?

51. In Document 21 Antonov-Ovseenko quotes an informant, “X,” who told him that the anarchists were carrying out mass executions in Catalonia and that they had executed 40 priests.

X. told me . . . [t]hree days ago, the government seriously clashed with the anarchists: the CNT seized a priest. . . . The priest pointed out another 101 members of his order who had hidden themselves in different places. They [the anarchists] agreed to free all 102 men for three hundred thousand francs. All 102 appeared, but when the money had been handed over, the anarchists shot forty of them. (76-7; emphasis added).

52. Radosh does not condemn the anarchists at this point for shooting the priests. Nor does he suggest that this charge against the anarchists is false (p. 71). Imagine if the communists had been executing up to 50 people a day, as “X” told Antonov-Ovseenko — would Radosh have let this pass without criticism? Rather, such a document would have been featured as a major find, one of the most important documents in the book. Yet when anarchists are alleged to be committing mass murder, and Communists are opposed to it, Radosh scarcely mentions the matter, and certainly does not praise the Communists for stopping such massacres. This illustrates one of the central weaknesses in Radosh’s commentary: he is, in fact, not much interested in these documents except insofar as they can be used to show the communists as “bad.”

53. A strongly positive review of the Radosh book in First Things states baldly: “Although leftist atrocities against the Church, including the execution of thousands of nuns and priests, were widespread, they are nowhere mentioned in these documents.” In his rush to provide Radosh with another positive review, this anonymous reviewer in a right-wing, “pro-religion” journal clearly never read even Radosh’s own commentary, much less the documents themselves.

Document 46

54. This is a report by Dimitrov, head of the Comintern, to Marshal Voroshilov. Radosh makes many false statements about the contents of this 14-page report. For example, Radosh states that “the writer [of the report] came to the stunning conclusion that the war and revolution “cannot end successfully if the Communist party does not take power into its own hands.” (212). In fact, Dimitrov explicitly refuses to endorse the idea that the only way to victory is if the Communist party takes power.

The influence of the party is growing more and more among the masses, and chiefly among the soldiers; the conviction is growing among them that the war and the popular revolution cannot end successfully if the Communist party does not take power into its own hands. Who knows, that idea may indeed be correct. (232; emphasis added)

Arnold Beichman’s review makes the same inaccurate statement: “It is sad to read these Soviet archives and read the words of a Soviet agent to the Comintern’s Georgi Dimitrov: ‘The war cannot end successfully if the Communist Party does not take power in its own hands.'”

55. In fact, this is a very interesting statement, especially coming from Dimitrov, famous since the Seventh Comintern Congress in 1935 for championing the concept of the Communist International’s abandoning its independent advocacy of socialist revolution in order to make possible “united fronts” with all anti-fascist parties, as in Spain. The Spanish Communists, with the support of the Comintern, were struggling hard to make the United Front in Spain work. Here Dimitrov shows that he himself has doubts about it. The documents published in this volume could indeed provide much evidence for an argument that it was precisely the insistence on a United Front with the Spanish socialists and Anarchists that doomed the Republic. A competent commentary should have discussed this issue.

Document 70

56. This long report by General Walter (a Polish communist general whose real name was Karol Svershevsky) is of special interest since it includes the longest discussion of the International Brigades among the documents in this volume. These pages give Radosh a chance to slander not only the Soviets, but the members of the International Brigades as well, and he tries his best to do so by ignoring positive statements made about the Brigadistas in the documents at hand, while emphasizing the criticisms made about some of them.

57. Radosh begins with the following statement:

By early 1938, the international units were important to the Soviets and the Comintern only as a means of scoring points in the propaganda war and as bargaining chips in negotiations with the other great powers. (431)

Radosh continues immediately with the words, “Nowhere is this more clearly shown than in the series of documents that follow.” However, nowhere in these documents is the statement above documented in the least.

58. Walter shows admirable frankness in discussing both strengths and weaknesses within the Brigades. Radosh ignores the strengths and distorts Walter’s words about the weaknesses.

59. For example, Radosh generalizes Walter’s criticism of some Brigadistas, that they thought themselves superior to the Spanish, and implies Walter said it was true of all Brigadistas. (431)

In Sverchevsky’s words, they [the international soldiers] believed they had come to Spain to save it from the fascists. This viewpoint had led directly to their superior attitude toward the Spanish, whom they treated like second-class citizens. (431)

60. In reality, Walter’s remark is a general one, critical of an ideological attitude to be found in the Brigades (438). The words “second-class citizens” are never used. Rather, Walter’s incisive political criticism is directed towards a shallow understanding of internationalism among many Brigadistas, as illustrated in the following passage:

It seems to me that the fundamental reason for, and primary source of, our troubles lies, first and foremost, in a deeply rooted conviction which stubbornly refuses to die that we, the internationalists, are only “helping,” that we “save” and “are saving” Spain, which, they say, without us would not have escaped the fate of Abyssinia. This harmful theory prevents the German and Italian comrades from seeing the silhouettes of “Junkers” and “Fiats” in the fascist air force; they forget that here, on Spanish soil, they are fighting with arms in hand, that is, in the most effective and revolutionary way, first and foremost against their own enemy, which has already oppressed their own countries and peoples for many years. French “volunteers” do not always notice the direct connection between Franco, De la Roque, and Doriot; they forget . . . that their vital interests lie in preventing a fascist sentinel from looming on the last border, the Pyrenees. The Poles do not completely comprehend that every one of their victories here is a direct blow against the Pilsudski gang, which has turned their country into a prison for the people. . . . (438)

61. Walter is unsparingly frank in his criticisms of the shortcomings of the Brigades. His analysis appears to be a model of honest criticism, including much criticism of the performance of communists. But Walter’s report also contains the highest praise for the Brigades (for example, see the first three paragraphs, p. 436). Typically, Radosh’s commentary is utterly one-sided; he mentions many of Walter’s critical comments, but not a single one of the positive ones.

62. In his extremely positive review, Schwartz is more shameless yet in quoting some of Walter’s frank criticisms of the political problems in the Brigades as though they were characteristic. Radosh and Schwartz are of the same kidney; see Radosh’s praise of Schwartz on p. xxv.

Schwartz: “Anti-Semitism was a serious problem among these “progressive” fighters.”

Document 70: “It is true that even then there were more than enough petty squabbling and strong antagonisms in the international units. The francophobia was most transparently obvious . . . anti-Semitism flourished (and indeed it still has not been completely extinguished). . . . (448)

Schwartz: “Above all, the International Brigades possessed transport, food, and other supplies far in excess of their Spanish counterparts, with whom they resolutely refused to ‘share their wealth.'”

Document 70: “The English and American soldiers not long ago were smoking ‘Lucky Strikes,’ not paying attention to the Spanish fighters next to them, who had spent days looking for a few shreds of tobacco. The internationalists receive frequent packages from home but are very rarely willing to share them with their Spanish comrades.” (453)

Schwartz: “International Brigade officers accounted exactly for the numbers of foreigners killed and wounded in battle, but ‘never knew of the casualties of the Spanish personnel.'” [emphasis added]

Document 70: “Richard, the commander of the 11th Brigade, reporting on the casualties suffered by the brigade at Brunete and Saragossa, always gave the exact number of dead and wounded and frequently even the names of the internationalists. But he never knew the casualties of the Spanish personnel.” (454)

In this case, Schwartz transformed the behavior of one commander, in one battle — behavior that the Communist general Walter was holding up for criticism — as typical of “International Brigade officers” generally. (Schwartz gives no page numbers, so verifying his dishonest quotations is a tedious job.)

63. Neither Radosh nor Schwartz put Walter’s criticisms of the Brigades into context. But Walter does. In addition to high praise for the International Brigades’ heroism and importance in the war (see pp. 436 and 459) Walter explains the difficult problems of overcoming national chauvinism, racism and distrust among nationalities:

The International Brigades and units were created literally within the course of one or two days from those volunteers who were on hand at the time . . . there were subunits that contains dozens of nationalities all of these were people who were absolutely unacquainted, not accustomed to one another, and right off found themselves in a battle. If you add to this the extremely acute shortage of political workers, the lack of qualified military cadres, and a whole number of other needs, then the weaknesses and the solution to this problem (adequate at that time) are not surprising. (448)

Schwartz: “According to Walter, the International Brigades, inspired by slogans of worldwide unity against Fascism, were plagued by a ‘petty, disgusting, foul squabble about the superiority of one nationality over another. . . . Everyone was superior to the French, but even they were superior to the Spanish, who were receiving our aid and allowing us to fight against our own national and class enemies on their soil.'”

Immediately preceding the passage quoted by Schwartz (449) occurs the following passage (Document 70):

The great, very exalted, and revolutionary objective, armed struggle with fascism, united everyone, and for its sake Germans, Italians, Poles, Jews, and representatives of the world’s numerous nationalities, including blacks, Japanese, and Chinese, had to agree among themselves, found a common language, suffered the same adversities, sacrificed their lives, died heroes, and were filled with the very same hatred for the common enemy.

But at the very same time as the volunteers were unifying, this petty, disgusting, foul squabble about the superiority of one nationality over another was going on. . . .” (448-9)

64. At a time when every army in the world except communist-led armies were organized along officially racist lines (and some, like the Israeli army, are officially racist even today), this struggle for internationalism inspired millions around the world. Yet the venomous Schwartz sees the racist attitudes among Brigadistas as “the most shocking element of the picture, especially for those who for sixty years have witnessed the Lincoln veterans preening themselves for their antifascist virtue” (emphasis added). The International Brigades set a standard for anti-racism and internationalism that has never been equaled before or since. Schwartz’s insult is simply a measure of his contempt for such values.

Conclusion: Why Lie If You Have the Truth On Your Side?

65. The flagrant inadequacy of Radosh’s discussion of these very important and fascinating documents itself would fatally mar any work with scholarly pretensions. But there is a deeper problem with Radosh’s work. It is not merely that Radosh fails to comment accurately on the documents he publishes (Habeck did most of the translations; Sevostianov did the archival work in Moscow). More than that: Radosh actually lies, time and again, about the contents of documents which readers can study themselves a few pages after his commentary.

66. Radosh is one of a small number of former Communist Party members who, once they realized that the Soviet-led world Communist movement no longer championed an egalitarian, non-exploitative world and was not the answer to human liberation, simply decided that the other side must, therefore, have been right all along and became uncritical supporters of American capitalism and imperialism. Anyone familiar with Radosh’s history — any reader of his autobiography, Commies and the many reviews of it — might expect to find a lot of anti-communist prejudice — for example, giving a document the most anti-communist possible interpretation whenever there was any ambiguity.

67. But even a wary reader would also expect at least a couple of real “revelations” of communist deviousness, dishonesty, double-dealing, some kind of “betrayal” — something that would at least partially substantiate the claims of Radosh, and of those who reviewed his book positively. Even the wary reader would be unprepared for the extent of Radosh’s dishonesty. Not a single of Radosh’s allegations of Comintern or Soviet trechery is born out by the documents he himself publishes and comments on.

68. Is Radosh deliberately lying about the documents on which he’s commenting? Is he hoping that his only readers will be like-mindedly anti-communist drones that will simply take his word at face value? Or that those who notice his mendacity will be ignored or marginalized? Some of the distortions in the commentary are so blatant that one cannot account for them in any other way.

69. Yet I think that dishonesty and incompetence cannot provide the whole answer. On a deeper level, Radosh’s anti-communism, and specifically his allegiance to the demonization of Stalin, seems to produce a kind of tunnel vision that imposes a systematic distortion on everything he sees or reads.

70. Radosh mentions the name of Stalin dozens of times, although none of his documents were written by Stalin or are under his name, and only a few were sent to him. For Radosh, the word “Stalin” no longer denotes an individual, but is a synecdochal signifier for — depending on the circumstance — the Comintern, the Soviet political leadership, or even any Communist, anywhere. Like a kind of mirror-image of the “cult of personality” that existed from about 1930 until Stalin’s death in 1953, Radosh too attributes all the initiative and agency of all communists to Stalin alone. A more radical reductionism can scarcely be imagined, and is all the more noteworthy since Radosh seems entirely oblivious to his own practice here. It never occurs to him to justify it theoretically, historically, or in any way at all.

71. This ideological distortion is more serious because more pervasive. Many who think of themselves as “liberal” or even “left” share with Radosh a kind of reflexive assumption that, whenever “Stalin” — read, the Comintern — seems to have been acting according to its professed motives of supporting the exploited and oppressed around the world, it must really have been acting out of selfish motives which, if not obvious, are simply cleverly disguised. [4] 

72. I hope that readers of this review will be inspired to read Radosh’s book and see for themselves. In view, however, of the inaccurate and misleading nature of Radosh’s commentary there is only one way to read this book:

First, ignore Radosh’s commentary entirely. Read the documents themselves, and only them, very carefully.

Only after doing that should you read Radosh’s commentary. But every time Radosh makes any kind of assertion about any document, go to that document, find the relevant passage, and note what the document really says.

Often this is not easy to do. Radosh does not include page numbers to the passages of the documents when he gives his comments or summaries. Often he will write things like “As we have seen . . .” ( p. 502); “Nowhere is this more clearly shown than in the series of documents that follow . . .” (p. 431); “The documentary evidence, as we have shown . . .” (p. 372). Here the job of finding the passage in question can take quite a long time. It’s always worth taking the time, though, because what one usually discovers is that that NO previous document has shown anything of the kind.

73. Radosh reminds us that one of the main stumbling blocks for Marxists is the figure of Stalin. Stalin has been demonized — by Trotsky and those who have relied on Trotsky; by some Soviet émigrés, also imitators of Trotsky, in the main; and by Khrushchev and those who have been accustomed to believe that Khrushchev’s so-called “revelations” about Stalin were true. As Robert Thurston has written, the demonized “Stalin” is “a powerful cultural construct in scholarship, film, popular works, etc. The difficulty is to try to get past that construction as best we can.” (Thurston, 2000). Radosh has not even tried.

74. As Roger Pethybridge, a well-known British Sovietologist, commented long ago:

If one considers all the well-known biographies of Stalin, a common feature emerges: the volumes are a quite accurate reflection of biographical method current at the end of the nineteenth and the beginning of the twentieth centuries, when historical biographies dwelt on so-called “good” and “bad” kings. The personality who reigned appeared to dominate not only the political but the social and economic life of his kingdom, so that by a sneeze or a yawn he could magically change the whole socioeconomic pattern of his reign. This method of historical biography has long been discounted in the treatment of authoritarian rule in earlier history. It has also been discarded with regard to the study of Nazi Germany. Unfortunately, it still remains as a specter from the past in the study of Soviet personalities in high politics. (Pethybridge, 1976).

75. Since the end of the Soviet Union, many formerly secret Comintern and Bolshevik documents have been published, with more coming out all the time. Like the Comintern documents in Radosh’s book, most of them contradict the widely-propagated, and widely-believed, horror stories about the history of the Communist movement during the Stalin years. [5] 

76. It’s up to us all of us who recognize the desperate need for a truly classless, egalitarian society to learn from the successes and failures of our predecessors, including, especially, the Bolsheviks during the time of Stalin’s leadership. But in order to do this, we must first convince ourselves that we do not already know these things.

77. For example, many of the Comintern documents in this collection support the suggestion made by some on the Left that the United Front Against Fascism was doomed from the outset, even as a tactic in fighting fascism. [6]  For no matter how devotedly the communists supported only bourgeois democratic goals, many capitalist forces refused to co-operate with them, in effect preferring to risk a fascist victory rather than take their chances in a liberal capitalist state with a strongly organized working class and peasantry under communist leadership. The subsequent fate of the communist parties of Western Europe and the USA after World War II, who were viciously attacked by the capitalists despite their adherence to a reform-oriented, non-revolutionary program, further suggests that the united front strategy was wishful thinking.

78. That is, we have to be ready and willing to question the Cold-War, Trotskyist, and Khrushchevite versions of this history, and “do it all again,” so we can actually begin to understand what really happened. [7] 

79. If that’s what we’re about — and I think we should be — then Radosh’s book can help us, by reminding us not to be like him.

Reviews used in this essay 

Beichman, Arnold. “Deceit in the Spanish Civil War.” The Washington Times, Op-Ed, July 17, 2001, p. A21.

Bernstein, Richard. “Aiding Dictatorship, Not Democracy.” The New York Times, July 23, 2001. Cited at <http://www.nytimes.com/2001/07/23/books/23BERN.html>.

Review of Spain Betrayed in First Things 116 (October 2001). Cited at <http://www.firstthings.com/ftissues/ft0110/reviews/briefly.html#spain>

Hitchens, Christopher. “Who Lost Spain?” Wilson Quarterly, Summer 2001. Cited at <http://wwics.si.edu/OUTREACH/WQ/WQCURR/WQBKPER/BOOK-1.HTM>

———, “The Unfolded Lie.” Los Angeles Times, July 15, 2001. Cited at <http://www.calendarlive.com/top/1,1419,L-LATimes-Books-X!ArticleDetail-38407,00.html>

Schwartz, Steven. “The Red and the Black. The end of the myth of the Spanish Civil War.” Weekly Standard, July 16, 2001. Cited at <http://www.weeklystandard.com/magazine/mag_6_41_01/schwartz_bkart_6_41_01.asp>

Other materials

Graham, Helen. “‘Against the State’: A Genealogy of the Barcelona May Days (1937).” European History Quarterly 29(4), 485-542.

Pethybridge, Roger. 1976. Review of Ronald Hingley, Joseph Stalin: Man and Legend (New York, 1974), in Slavic Review 35 (March 1976): 136.

Thurston, Robert W. Post to H-RUSSIA list, August 24, 2000.

Notes

1 There is absolutely no question that Radosh is lying in some places — e.g., in Document 62 where, as I discuss in the text, he attributes to Togliatti the views that, in the document itself, which any reader can study a few pages later, Togliatti explicitly criticizes. Radosh does this kind of thing many times.

The book is also an example of incompetence. Radosh simply does a poor job at what a commentator should do: summarizing the documents, isolating the most important aspects of them, putting them into an overall historical context, and so on.

These kind of faults should have been red flags to any editor. But there is a long history of anti-communist works getting published even though filled with errors that would doom any other kind of research.

The uncritical praise of so many reviewers suggests that one purpose of Radosh’s book is to influence those who will not read it carefully. Perhaps someone made the estimation that few people will read such a book anyway, and most of those who do will probably rely on the commentary, rather than study the documents themselves. Again, this is no excuse for the kind of mendacity displayed in Spain Betrayed, but rather a grasping after some kind of explanation for so poor a work.

Finally, the book is a failure. Radosh had boasted for years — in some ways, since the ’80s, when he began publishing stuff about the Spanish Civil War, but explicitly since he began working on this book — that it would “prove” the USSR (“Stalin”) betrayed Spain. In the event it not only fails to “prove” any betrayal; it fails to come up with a single example of anything devious, dishonest, anything at all to make the communist side or the USSR specifically look bad.

2 Radosh betrays his ignorance of Soviet history. “Purge trials” is a term no longer used even by anti-communist Sovietologists. The chistki, or “purges,” were expulsion of Communist Party members for many reasons, most commonly drunkenness, neglect of duty, etc., though sometimes for political deviations. They were completely separate from the three famous Moscow Trials of 1936-8, of persons who confessed to plotting to overthrow the Soviet government. The best, and classic discussion of this is J. Arch Getty, Origins of the great purges: the Soviet Communist Party reconsidered, 1933-1938. Cambridge [Cambridgeshire]; New York: Cambridge University Press, 1985.

3 See the excellent typology of anti-communist rhetoric in James R. Prickett, “Anti-Communism and Labor History,” Industrial Relations 13 (October, 1974), 219-227.”

4 For example, Stalin stated that “The cause of Spain is the cause of all humanity.” The USSR sent huge amounts of aid, in materiel and men, to the Republic both itself and through the Comintern, much of which was not, in fact, repaid. Yet Cary Nelson, a staunch supporter of the American veterans of the Spanish Civil War and a prominent left-liberal, still feels compelled to explain Soviet aid in this way: “Stalin’s motivations, no doubt, were pragmatic. He probably hoped, for example, to use an alliance to help the Spanish Republic as a way of building a general antifascist alliance with the Western democracies.” (“The Spanish Civil War: An Overview,” accessed at <http://www.english.uiuc.edu/maps/scw/overview.htm> on 20 February 2003). “Pragmatic” in this context explains nothing; the Soviets knew very well that the antifascist alliance they aimed at was jeopardized by their aid to the Republic, but did it anyway. For Nelson, the International Brigade volunteers can, and did, have idealistic motives, but Stalin cannot, even though the whole effort could hardly have taken place without his strong support at every step.

5 For example, the interrogations and confessions by such major figures as NKVD chief Genrikh Yagoda and Marshal Mikhail Tukhachevsky have been published, making it clear that the accusations leveled against them by the Soviet government in the late ’30s were substantially accurate. There is also some additional evidence of Leon Trotsky’s contacts with oppositionists in the USSR who were plotting the overthrow of the government, as well as the first evidence of Trotsky’s contact with the Japanese fascist government, both central claims of the Communist movement in the ’30s but both strongly denied by Trotsky’s followers.

6 See, for example, “Lessons of People’s War in Spain 1936-1939,” Progressive Labor, Vol. 9, No. 5 (Oct.-Nov. 1974), 106-116, cited at <http://www.plp.org/pl_magazine/pws.html> (February 22, 2003). For more on a left critique of the consequences of the Popular Front strategy upon the world communist movement, see “Road to Revolution III: The Continuing Struggle Against Revisionism” (1970), at <http://www.plp.org/pl_magazine/rr3.html#RTFToC5>.

7 J. Arch Getty, the dean of the younger generations of American historians of the USSR, is quoted by the prominent (and very anti-communist) Russian historian Yuri Zhukov as having said Soviet history is poisoned by Cold War “propaganda,” and has to be done all over again. See Aleksandr Sabov, “Zhupel Stalina” (“Stalin’s Boogeyman”), Komsomolskaya Pravda, Nov. 5, 2001.

Contents copyright © 2003 by Grover Furr.

Format copyright © 2003 by Cultural Logic, ISSN 1097-3087.

Source

Alliance Marxist-Leninist: The Cominform Documents

meeting_cominform_1949_november_hungary

THE COMINFORM DOCUMENTS

INTRODUCTION (by N. Steinmayr); For Alliance and Communist League. Published on web June 13th 1999.

The Cominform documents have been published – in their original versions in both Russian and English – in The Cominform: Minutes of the Three Conferences 1947/48/49 (edited by Giuliano Procacci, in Fondazione Giangiacomo Feltrinelli, Annali, 1994, Feltrinelli Editore, Milano, ISBN 88-07-99050-4).

The volume contains both the original texts (the bulk of which had never been published before) and some introductory essays and notes. This critical edition resulted from an agreement of scholarly cooperation between the Russian Centre of Conservation and Study of Records for Modern History and the Feltrinelli Foundation.

As known, nine European communist parties (from the USSR, Poland, Czechoslovakia, Bulgaria, Romania, Hungary, Yugoslavia, France and Italy) joined the Cominform and participated at its three Conferences – respectively, in September 1947, in June 1948, and in November 1949. No other conferences were organized from 1950 until its disbanding in 1956.

The reasons of its decline may be found in the emergence of Khrushchevite revisionism and in the new changes in the international situation (namely, the Chinese revolution and the Korean war). I have selected below only a few sections from the original documents which highlight some interesting and revealing aspects, i.e., the presence of revisionist, centrist positions in the international communist movement at that time and Dimitrov’s role in Bulgarian-Yugoslav-Soviet relations.

These original sources, as well, contribute to explain – in retrospect – the origins of the revisionist degeneration that later became apparent in the international communist movement. I have numbered the various sections of the original documents I quote. The extracts are preceded by some notes that I present.

EXTRACT 1:
FROM THE REPORT BY A. A. ZHDANOV (SOVIET DELEGATION) “ON THE INTERNATIONAL SITUATION” AT THE FIRST CONFERENCE (25 September 1947) .

NS:
I have selected the definition of people’s democracy. In this famous report by Zhdanov, outlining the “two camps” theory, the main task of the communists appears to be the defence of peace and democracy against US-led imperialist expansionism, rather than the advance of socialism. There is no mention of the dictatorship of the proletariat as the main feature of the socialist society. But the crucial phrase is mentioned of the “transition to socialism”. It was this very key step that the revisionist Dimitrov would neglect in his policies for Bulgaria.

EXTRACT 2:
THE REPORT BY V. CHERVENKOV (BULGARIAN DELEGATION) “ON THE ACTIVITY OF THE BULGARIAN WORKERS’ PARTY (COMMUNISTS)” AT THE FIRST CONFERENCE (23 September 1947)

NS:
This emphasizes the special relationship existing between Bulgaria and Yugoslavia. Reference is made to the meeting which took place at Lake Bled from 30 July to 1 August 1947 between a Bulgarian delegation, headed by Dimitrov, and a Yugoslav delegation, headed by Tito. At the end of the meeting, a joint declaration was signed (on 1 August) and announced, providing for a conclusion of a treaty of friendship, cooperation and mutual assistance which they intended to sign.

In a harsh telegram sent to both governments on 12 August, Stalin criticized the initiative, both because it had been taken without prior consultations with the Soviet government and because it might feed Anglo-American opposition to a treaty signed by a country, such as Bulgaria, which would have lost the status of conquered nation won only with the entry into force of the peace treaty on 15 September 1947.

In early July, in fact, both Tito and Dimitrov had informed Moscow of their intention to imminently sign this Yugoslav-Bulgarian treaty. But Stalin, in his answer to Dimitrov on 5 July, had instructed them to wait until the peace treaty came into force. The Yugoslav-Bulgarian announcement of 1 August 1947, therefore, was a deliberate violation of Stalin’s directives.

Extract 3:
FROM THE SPEECH BY T. KOSTOV (BULGARIAN DELEGATION) AT THE SECOND CONFERENCE (21 JUNE 1948).

NS:
I have selected quotations relating to:
a) Yugoslav-Bulgarian relations, with particular regard to the Macedonian question (it is now stated that it was Yugoslavia which had had territorial and hegemonic pretentions in the Balkans against the USSR), and:
b) mistakes and defects in the Bulgarian Workers’ Party (Communists), apparently corrected thanks to Soviet advice.

It must be taken into account that:

(a) during that period of time, both Dimitrov and Kostov were the two most prominent leaders in the Bulgarian party (the former held the position of Central Committee chairman, the latter was first secretary). Both of them had remained in Moscow until November 1945 and Kostov had been appointed party secretary thanks to Dimitrov’s personal intervention and backing;

(b) Kostov was replaced by Dimitrov as party general secretary at the fifth party congress in December 1948 (the post of party chairman having been abolished). Soon afterwards, Dimitrov began a discussion of “mistakes” made by Kostov, accusing him of nationalism and “intellectual individualism”. Kostov was purged from the party in March 1949 while Dimitrov died of natural causes in July.
In December Kostov and others were accused of being agents of the Anglo-Americans and having committed treason in connection with the Balkan federation proposals (aimed at making Bulgaria an appendage of Yugoslavia, thus severing links with the Soviet Union and the people’s democracies). But no blame was attached to Dimitrov in connection with these proposals, while Kostov was executed immediately after the trial (he was partly rehabilitated in 1956 and completely exonerated in 1962). Kostov’s trial can eventually be regarded as an episode in the struggle for leadership within the Bulgarian party after Dimitrov’s death.

According to J.D. Bell, in The Bulgarian Communist Party from Blagoev to Zhivkov (1986):

“When the charges against him were read to the court, Kostov admitted that he had tried to keep the prices of certain Bulgarian goods from Soviet officials, but he pleaded innocent to the rest of the charges and repudiated his confession. Even after the final guilty verdict was pronounced, he remained unrepentant. ‘I never served English intelligence,’ he said, ‘never participated in the criminal plans of Tito and his clique . . . I have always held the Soviet Union in devotion and respect . . . Let the Bulgarian people know that I am innocent!’”
(Bell, op. cit., p. 106);

(c) It is a well-known fact that it was Dimitrov that had publicly and ardently expressed himself – at variance with Soviet positions – in favour of a Balkan federation until early 1948. (The Soviet-Yugoslav split began to emerge in March). In an interview on 17 January 1948, he expressed himself in favour of a large federation including Bulgaria, Yugoslavia, Albania, Romania, Hungary, Czechoslovakia, Poland and eventually Greece. The rebuke came from Pravda on 28 January and on 2 February, at the second Congress of the Fatherland Front, Dimitrov made self-criticism expressing Bulgarian acceptance of the Soviet line;

(d) new documents have recently been declassified in Yugoslav, Bulgarian and Soviet archives with regard to the meeting on 10 February 1948 between delegations from these three countries (Bulgaria being represented by Dimitrov, Kostov and Kolarov).

The meeting’s proceedings amounted to a harsh reproach by the Soviets for Dimitrov’s statement about a federation in Eastern Europe and for Tito’s attempts to send a Yugoslav division into Albania. Emphasized once more were both the incorrectness of these steps and the inadmissibility of any action taken without informing the USSR. The Yugoslav and Bulgarian delegations admitted their “mistakes”.

What resulted from the meeting was the signing on 11 February, as proposed by the Soviet side, of agreements in which an obligation was recognized for consultation on international questions to take place between the USSR and Yugoslavia and between the USSR and Bulgaria.

EXTRACT 4
FROM THE REPORT BY G. MALENKOV (SOVIET DELEGATION) AT THE SECOND CONFERENCE (23 JUNE 1948).

NS:
We discover that Moscow was not in favour of the Communist Party of Albania (CPA) even after the official Soviet/Cominform split with Yugoslavia. Its entry was regarded as “inexpedient” and, it was argued, it would have complicated Albania’s international position, since it hadn’t been admitted to the UN and since its independence was allegedly guaranteed, at that time (i.e., June 1948), by “an agreement between three Powers” reached six years before!

The reference is, in fact, made to the agreement between the governments of the USSR, USA and Great Britain, according to which on 17-18 December 1942 each of the threee powers had made a similar declaration concerning the repudiation of the Italian occupation of Albania and support for the re-establishment of its independence. But already in November and December 1946, the Council of Foreign Ministers in New York had agreed to consider Albania an associated power with regard to the application of the peace treaty with Italy and had also recognized Albania’s right to an indemnity of five million dollars, which was to be paid by Italy in respect to war damages.

Finally, in February 1947, the peace treaty with Italy was signed (and later ratified by Tirana on 24 October 1947): Albania was not one of its signatories but ranked among the victorious states. Accordingly, Italy was bound to respect Albanian independence and Albanian legal and administrative sovereignty was sanctioned over the island of Sazan.

But, indeed, the CPA’s admission to Cominform was rejected on the basis of rather preposterous justifications on the part of the Soviet representative at the second Cominform conference in 1948! And also, Albania hadn’t been admitted at the UNO due to Anglo-American opposition: by 1947 both Washington and London had established diplomatic links with all Eastern European states – except Albania (whose gold, looted by the Germans, continued to remain kept in the vaults of the Bank of England in London).

What about all the Soviet and Cominform calls for struggle against the new American imperialist and warmongering plans to enslave Europe? Particularly in the light of the consistent Marxist-Leninist policies which had been implemented in Albania since its liberation, there can be no doubt that the Albanian communists’ continued exclusion from Cominform – even after Yugoslavia’s withdrawal from the organization – was masterminded by hidden and powerful revisionists within the Soviet leadership.

From Hoxha’s memoirs, it becames crystal clear that Stalin was personally determined to support Albania’s political stands and its independence at that crucial time. For its part, the CPA immediately and unconditionally supported the Soviet and Cominform positions on Yugoslav revisionism. The 9th Plenum of its Central Committee convened between 27 and 30 June 1948, having on its agenda analyses of the three letters addressed to the Communist Party of Yugoslavia by the Communist Party of the Soviet Union (on 27 March, 4 and 22 May 1948) and the Cominform resolution on Yugoslavia. Unanimous solidarity with and support for the stands adopted by the CPSU and the Cominform against Yugoslavia were expressed. Consequently, all the agreements and conventions which had been signed with Yugoslavia – except the Treaty of Friendship, Cooperation and Mutual Aid of July 1946 (later abrogated by Belgrade in November 1949) – were denounced by Albania. These decisions were made public on 1 July 1948 in a communiquè of the CPA’s Central Committee.

EXTRACT 5
THE REPORT BY M. A. SUSLOV (SOVIET DELEGATION) ON “THE DEFENCE OF PEACE AND THE STRUGGLE AGAINST WARMONGERS” AT THE THIRD CONFERENCE (16 November 1949):

NS:
This emphasizes and further develops – along the positions expressed by Zhdanov two years earlier – the necessity of maintaining peace and independence as the main task of the communist and workers’ parties. However, two years had elapsed. What had happened to the “transition” correctly discussed by Zhadanov? Was the establishment of a socialist society now forgotten? What about the dictatorship of the proletariat as the indispensable transition stage towards communism?

All these political stands, which effectively dump class struggle for socialism in favour of class collaboration, became included in the final Cominform resolution on “The Defence of Peace and the Struggle against the Warmongers”. As for the other resolution on “Working-Class Unity and the Tasks of the Communist and Workers’ Parties”, this was unanimously approved on the basis on Togliatti’s report on the subject: similar revisionist and right-wing stuff calling for “peace, bread and democratic liberties”! The third approved resolution dealt with “The Communist Party of Yugoslavia in the Power of Murderers and Spies”.

Extract 6
THE SPEECH BY V. CHERVENKOV (BULGARIAN DELEGATION) AT THE THIRD CONFERENCE (17 November 1949).

NS:
Directs a sharp criticism to Kostov who now becomes the scapegoat for former Bulgarian attempts to detatch, together with Tito, the country from the anti-imperialist, democratic camp (namely, the USSR) and to prevent the consistent advancement towards socialism in Bulgaria.

As for Dimitrov’s role in preventing the transition from the first stage of the anti-fascist, democratic revolution to the second, socialist stage, see “Alliance (Marxist-Leninist), n. 12, January 1995 (“Georgii Dimitrov and the Bulgarian Communist Party”).

Kostov was to be executed in December, while Dimitrov had died in July. It was also widely known that they had both coordinated Bulgarian policies towards the USSR and Yugoslavia during the forties. According to Chervenkov, Bulgaria had been able to strengthen its socialist foundations and fight nationalistic deviations only thanks to the Soviet Communist Party and Stalin, who is referred to as the “direct teacher and leader” of the Bulgarian people. Not even a passing reference is made to Dimitrov in Chervenkov’s whole report.

EXTRACT 7:
THE SPEECH BY V. POPTOMOV (BULGARIAN DELEGATION) AT THE THIRD CONFERENCE (18 November 1949);

NS:
Deals with the condemnation of Yugoslav revisionism. I have only selected a few quotations referring to the Balkan federation proposals. Not even in this report is mention made to Dimitrov. In fact, the Bulgarian delegates’ speeches at the third Cominform Conference do imply Dimitrov’s serious responsabilities for right-wing errors which had occurred in the international communist movement and in Bulgaria. From these proceedings, as well, Marxist-Leninists can hardly draw the conclusion that Dimitrov had been an outstanding and consistent Communist fighter during his lifetime.

THE EXTRACTED DOCUMENTS

1. FROM THE REPORT BY A. A. ZHDANOV (SOVIET DELEGATION) “ON THE INTERNATIONAL SITUATION” AT THE FIRST CONFERENCE (25 September 1947) (pp. 219, 227,229,251):

“…The new democratic power in Yugoslavia, Bulgaria, Romania, Poland, Czechoslovakia, Hungary and Albania, supported by the mass of the people, has proved capable of carrying through in a very short time progressive democratic changes…a new type of state was created – the People’s Republic, in which power belongs to the people, large-scale industry, transport and the banks belong to the state, and the leding force is a bloc of all the classes of the population who work, headed by the working class. As a consequence, the peoples of these countries have not only been delivered from the clutches of imperialism, they have laid the basis for transition to the path of socialist development…The aim of this [anti-imperialist and democratic] camp is to fight against the threat of new wars and imperilalist expansion, to consolidate democracy and to uproot what remains of fascism…All the forces of the anti-imperialist and anti-fascist camp have rallied to the task of ensuring a just and democratic peace. This is the soil on which the friendly cooperation of the USSR with the democratic countries on all questions of foreign policy has grown and strengthened. These countries, and in the first place, the countries of new democracy – Yugoslavia, Poland, Czechosiovakia, Albania – which played an important part in the war of liberation against fascism, together with Bulgaria, Romania, Hungary and, to some extent, Finland, which have joined the anti-fascist front, have all become in the post-war period staunch fighters for peace and democracy, for their own freedom and independence against all attempts by the USA and Britain to reverse the trend of their development and drag them back under the imperialist yoke…The Communists must be the leading force in drawing all anti-fascist, freedom-loving elements into struggle against the new American expansionist plans for subjugating Europe…A special task falls to the Communist Parties of France, Italy, Britain and other countries. They must take up the banner of defence of the national independence and sovereignty of their countries…”

2. FROM THE REPORT BY V. CHERVENKOV (BULGARIAN DELEGATION) “ON THE ACTIVITY OF THE BULGARIAN WORKERS’ PARTY (COMMUNISTS)” AT THE FIRST CONFERENCE (23 September 1947) (pp. 103):

“. . . We can regard Bulgaria’s international position as having been normalised. The basic line of our foreign policy consists in safeguarding at all costs our national independence and state sovereignty, in co-operation with all freedom-loving peoples. The fundamental principle of this policy, as Comrade Dimitrov has frequently stressed, is eternal friendship with our liberator, the great Soviet Union, fraternal alliance with the new Yugoslavia, and close collaboration with all the other Slav countries and with the other democratic peoples.

The conference held at Bled and the decisions adopted there mark the beginning of a new phase in relations between the new Bulgaria and the new Yugoslavia and signify a big step forward in establishing close rapprochement between them. Decisions were taken at Bled on co-ordinated action and common defence of peace in the Balkans.

We are going to conclude treaties of friendship and mutual aid with Yugoslavia, Romania, Czechoslovakia and Poland which will still further strengthen Bulgaria’s position in the world. . . .”

3. FROM THE SPEECH BY T. KOSTOV (BULGARIAN DELEGATION) AT THE SECOND CONFERENCE (21 JUNE 1948) (pp. 561, 563, 565, 567, 569):

“. . . Comrade KOSTOV says that the CC of the Bulgarian Workers’ Party (Communists) received with amazement and alarm the news of the anti-Marxist and anti-Soviet stand of the leaders of the KPJ, because they realise that in the present international situation, which calls for cohesion of all democratic forces under the leadership of the Soviet Union, any split in the democratic camp plays in the hands of the imperialists and is a stab in the back for the forces of democracy. The Bulgarian communists have further ground for anxiety because they were moving towards closer relations with Yugoslavia, going so far as a federation, which was to have strengthened the position of democracy in both countries and facilitated their progress along the road to socialism.

The policy of the present leaders of the KPJ is leading to rupture of the line which had been marked out and advanced for rapprochement between Bulgaria and Yugoslavia. . .

. . . Comrade Kostov turns to the question of Bulgaro-Yugoslav relations and, in particular, speaks about the Macedonian question. After the First World War, says Comrade Kostov, Royal Yugoslavia annexed part of Western Bulgaria which remains to this day within the frontiers of Yugoslavia. During the Balkan Wars part of Eastern Macedonia (the Pirin region) became part of Bulgaria. The population of Eastern Macedonia speak Bulgarian and are linked economically with Bulgaria.

The process of forming the Macedonians into a nation was intensified after the creation of the Macedonian People’s Republic within the Yugoslav Federation. Even today, however, this process cannot be reagrded as complete.

Proceeding from the principles of the teaching of Lenin and Stalin, and considering the national question to be a subordinated one, we proposed to the Yugoslav comrades to consider as fundamental the possibility of a closer rapprochement between our two countries which must result in the near future in the creation of a federal state. The national question, too, could find its solution within the framework of a federation. In that there would be no special obstacles to the solution of this question, because in a federation there would be no frontier between Macedonia and Bulgaria.

Until the federation was formed we undertook, on the advice of the Soviet comrades, to promote the national development of the Macedonian people. To this end a hundred teachers were invited from Yugoslav Macedonia, agreement on this being arrived at between Comrades Dimitrov and Tito at Bled. In spite of this, differences continue to exist.

The Yugoslav comrades, especially Djilas, Vukmanovic and Kolisevski, still consider that the Macedonian question should be settled separately from the creation of the federation. Anybody who does not agree with their view they accuse of Greater-Bulgarian chauvinism. They want simply to annex the Pirin region to Yugoslav Macedonia and thereby to weaken Bulgaria. . . .

. . . In the light of the current behaviour of the leaders of the KPJ it has become clear that they were never sincere when they discussed the question of federation, that in their federation Bulgaria would not have had equal rights, that, in reality, they were trying to bring it about that, by means of federation, Tito’s Yugoslavia would become hegemon of the Balkans against the USSR. Evidently, Comrade Kostov concludes, the question of federation must be put aside for the time being. . . .

. . . Comrade Kostov proceeds to describe the situation in the Bulgarian Workers’ Party (Communists) and to criticise certain mistakes made by and defects in this Party. Alongside great achievements there are, says Comrade Kostov, major defects and mistakes in the Party’s work. Inner-Party democracy does not prevail at the level it should. Criticism and self criticism have not yet become the basic driving force in the Party. The CC itself does not yet work as a firmly welded collective, and command methods in relation to the Party organisations have not yet been fully outgrown. There has been no Party Congress for 20 years: since 9 September 1944 the CC has confined itself to convening enlarged plenums and conferences.

Comrade Kostov mentions the unfavourable state of affairs in respect of the Party’s social composition. There are persons in it who ought to be merely candidates for membership. Certain Party members have in the past sabotaged government decisions on grain-procurement. Some have joined the Party with venal aims and some Party organisations are being torn apart by squabbles over the allotment of jobs. Within a short space of time the Party has increased its membership twentyfold, from 25,000 to 500,000.

Taking account of the danger inherent in excessive growth of the Party, the CC has taken measures to restrict recruiting, and at the moment recruiting is suspended until the congress takes place, when a probationary period for candidates for Party membership will be laid down.

Comrade Kostov says that he considers his Party’s line to be fundamentally correct. They have achieved serious successes, smashed the forces of reaction, strengthened the Fatherland Front and proceeded to lay the foundations of a socialist economy. A correct general line does not mean, however, says Comrade Kostov, that the Party is free from mistakes and defects. The Party has these: underestimation of the class struggle, illusions about the possibility of softening this struggle in the conditions of present-day Bulgaria, failure to have a clear notion of the roads and tempos of developoment, talk of harmoniously combining the state, co-operative and private sectors in the economy, and so on. But all these mistakes have been corrected in good time, often thanks to advice from the CC of the VKP(B) and comrade Stalin personally.

All these mistakes of ours resulted in a number of cases in slowing down the pace of our struggle and our advance. In some cases, though, we ran too far ahead, as with the formulation about complete liquidation of the antagonistic classes. . . .

. . . On behalf of the Political Bureau of the Bulgarian Workers’ Party (Communists) Comrade Kostov declares his agreement with the conclusions of Comrade Zhdanov’s report on the situation in the KPJ.”

4. FROM THE REPORT BY G. MALENKOV (SOVIET DELEGATION) AT THE SECOND CONFERENCE (23 JUNE 1948) (pp. 601, 603):

“. . . We must also, says Comrade Malenkov, tell the Information Bureau that the CC of the CP of Albania has also expressed desire that their Party join the Information Bureau. We should like to state our view on this, namely, that it must be explained to the Albanian comrades that for the present it would be inexpedient for their Party to enter the Information Bureau. Our motives for this decision are these. The independence of Albania is at present guaranteed by an agreement between three Powers, Albania has not yet been admitted to the United Nations Organisation and there can be no doubt but that joining the Information Bureau in this international situation would complicate Albania’s international position, which is delicate enough even without that. It seems to us that the Albanian comrades agree with these reasons. We think that the Albanian comrades, too, should be kept informed of the activity of the Information Bureau. . . .”

5. FROM THE REPORT BY M. A. SUSLOV (SOVIET DELEGATION) ON “THE DEFENCE OF PEACE AND THE STRUGGLE AGAINST WARMONGERS” AT THE THIRD CONFERENCE (16 November 1949) (pp. 699, 701, 705):

“. . . The change in the relation of forces in the world arena in favour of the camp of peace and democracy evokes fresh outbursts of frenzied fury in the camp of imperialism and warmongering. . . .
. . . In this situation in which the danger of another war is intensifying, a great historical responsibility is imposed on the Communist and Workers’ Parties. They must use every means of struggle to ensure a firm and long-lasting peace, subordinating all their activity to this, the central task at the present time . . . .

. . . It is the duty of the Communist and Workers’ Parties in the capitalist countries to merge together the fight for national independence and the fight for peace, tirelessly to expose the anti-national, traitorous nature of the policy of the bourgeois governments, which have been turned into direct bailiffs for American imperialism, to unite and weld together all the democratic and patriotic forces of each country around the slogans of doing away with the shameful slavery to America and going over to an independent external and internal policy which corresponds to the national interests of the people. The Communist and Workers’ Parties must hold high the banner of protection of the national independence and sovereignty of their countries.

The Communist and Workers’ Parties must unite the broad masses for defence of democratic rights and liberties, tirelessly explaining to them that defence of peace is inseparably bound up with defence of the vital interests of the working class and all the working people, that the fight for peace is at the same time a fight against poverty, hunger and fascism.

Particularly important tasks face the Communist Parties of France, Italy, and Britain, West Germany and other countries whose peoples the American imperialists want to use as cannon-fodder for carrying out their aggressive plans. Their duty is to develop still more strongly the fight for peace, to frustrate the criminal designs of the Anglo-American warmongers.

To the Communist and Workers’ Parties of the people’s democracies and the Soviet Union falls the task, while opposing the imperialist warmongers and their accomplices, of further strengthening the camp of peace and socialism, for the defence of peace and the security of the peoples. . . .”

6. FROM THE SPEECH BY V. CHERVENKOV (BULGARIAN DELEGATION) AT THE THIRD CONFERENCE (17 November 1949) (pp. 749, 751, 753, 755, 757):

“. . . At the present time the question of the defence of peace and national independence is the decisive question for the working class and the Communist Parties.
Since the time of the first conference of the Information Bureau, says Comrade Chervenkov, our Party has achieved important successes on the consolidation of people’s democracy in Bulgaria. . . .

. . . the people’s democracy of Bulgaria has been substantially reinforced, both economically and politically, in the past two years. One of the most important factors in this reinforcement is the nation-wide and profound nature of Bulgarian-Soviet friendship, which is a most important driving force in our social development. . . .

. . . Our working people see Comrade Stalin as our direct teacher and leader. . . .

. . . ruthless struggle against any manifestations of nationalism within the CP is a direct duty, an absolutely necessary precondition, or more correctly, a component part of the fight for peace.

Comrade Chervenkov stresses that nationalism not only helps the warmongers, it is actually the ideology of the enemies of peace, the enemies of the Soviet Union, the warmongers themselves. Nationalists are direct agents of imperialism. . . .

. . . What we are dealing with is a plan by the imperialists to subvert the Communist Party from within, to implant nationalists espionage agents in the Party. . . .

. . . Comrade Chervenkov says that with the direct aid of the CC of the VKP(B) and of Comrade Stalin personally – for which the Bulgarian people will be forever grateful – Kostov, the former secretary of the Party’s CC was exposed.

What did Kostov turn out to be? A British spy. He confessed that he had been recruited by British intelligence so far back as 1942 and that since 1944 he had had links with the Tito clique.

On the orders of the Anglo-American intelligence agents in our country and in conjunction with the Tito-ites, Kostov formed in the Party and the state apparatus a group of persons, spies like himself, who sought by various ways and means, exploiting our weakness, trustfulness, and carelessness, to damage the Party and the state primarily in the economic sphere, and to prepare, with the Tito-ites’s help, to detach Bulgaria from the Soviet Union, restore capitalism, and bring Bulgaria into the camp of imperialism.

This separation of Bulgaria from the Soviet Union they proposed to bring about by using the slogan of a federation of the Southern Slavs and a Balkan Federation. Of course, says Comrade Chervenkov, Kostov’s federation of the Southern Slavs had nothing and has nothing in common with what we mean by an alliance of the Southern Slavs, since Kostov’s federation of the Southern Slavs was to have been directed against the USSR. The Kostovites wanted to unite Bulgaria with Yugoslavia, and counted on military help from the Tito-ites…

. . . Our successes, says Comrade Chervenkov, would have been very much greater but for the wrecking done by the Kostovites. They did damage mainly through distorting in practice the policy of the Party and the governrnent, thereby creating discontent among the people. They harmed us especially in the sphere of our econornic policy, in our relations with the peasants. . . .

. . . All the preparation for the coming elections to the organs of state power is proceeding under the sign of ruthless criticism of shortcomings and determined reorganisation of our work. Comrade Chervenkov says that the whole of the Party’s work is being subjected to thorough criticism, along with the work of the state apparatus and of the social and economic organs. The working people are being very vigorously involved in creative criticism of shortcomings and weaknesses.

Speaking of the Party’s immediate tasks, Comrade Chervenkov emphasises that it is first of all necessary to purge the Party, from top to bottom, of Kostovites and of all who maintain a conciliatory attitude to them. This task will be carried out. Although a Party purge has not been formally announced, purging of the Party’s ranks is going on, and after the Kostov trial this purge will be pursued still more vigorously.

It must be said, Comrade Chervenkov observes, that we exposed Kostov in good time. That we owe to the VKP(B) and Comrade Stalin.

The fight against the Kostovites, says Comrade Chervenkov, has welded our Party together as never before. Vigilance has been heightened, inner-Party democracy has been extended and strengthened, and the process of Bolshevik tempering of the Party is progressing. We realise that Kostov was not, of course, alone. Kostovites have hidden themselves in the Party. But they will not be able to go on hiding after the exposure of Kostov and his principal associates. . . .”

7. FROM THE SPEECH BY V. POPTOMOV (BULGARIAN DELEGATION) AT THE THIRD CONFERENCE (18 November 1949) (pp. 935, 937):

“. . . The Tito-ites now not only do not conceal their territorial pretentions regarding Bulgaria, they quite openly and impudently speak of their intervention to seize the Pirin district – Bulgarian Macedonia. They are negotiating with the Greek monarcho-fascists not only about strangling the national liberation movement in Greece, and not only about dividing Albania with them, but also about forming a united front against Bulgaria. . . .

. . . The task of Trajcho Kostov’s gang was, with the aid of the Tito-ites, to take all power in Bulgaria into its hands, and then to wrest it from the Soviet Union and the front of peace and democracy, and behind the screen of some sort of federation to join the country to Tito’s Yugoslavia, i.e., to make it an actual colony of American imperialism. . . .

. . . Comrade Poptomov notes that the Tito clique, which previously did all it could to prevent the realization of a South-Slav federation, is now trying to appear as a warm supporter of such a federation, trying in this way to speculate on the fraternal feelings of these two Slav peoples, trying to give the slogan of a South-Slav federation an anti-Soviet character which would help to bring about a breakaway of the South Slavs from the Soviet Union. This same speculation is being practised by the Tito-ites with the slogans about a Balkan and a Balkan-Danubian federation, in an attempt to create a bloc of the peoples of South-Eastern Europe directed against the Soviet Union. . . .”

END

ICMLPO (Unity and Struggle): NATO: Organization of War and Terror

NATO_logo_lLIBYA NO-FLYZONE

The North Atlantic Treaty Organization was founded 60 years ago by a coalition of Western capitalist countries, led by the U.S., as an organization of military encirclement, aggression, attack and war against the Soviet Union and the people’s democracies.

NATO was conceived as an instrument of aggression of the imperialist camp that was trying to reconstruct its forces under United States leadership, to apply its aggressive policy in all spheres: Economically by means of institutions like the IMF and World Bank; politically through different regional organizations, the Western alliance was lined up in battle order and fortified its system by founding NATO militarily. Contrary to what is generally stated and accepted, NATO was not created against a possible threat by the USSR, but it was founded with aggressive aims six years before the formation of the Warsaw Pact.

NATO’s objective was one of militarily encirclement, aggression and subversion, without excluding the use of force against the Soviet Union and the Eastern bloc; at the same time it would serve to repress the internal opposition in the Western capitalist countries.

The most concrete example is the clandestine creation in almost all the NATO countries of (counter-guerrilla) organizations such as Gladio, several of which still exist. Those forces, which have organized provocations, sabotage, assassinations and coups d’état in the European countries to prevent the development of a workers and popular opposition, have done it under the shelter of NATO and the U.S.

NATO was formed in 1949 by 12 countries as a “regional defense organization”. It spread quickly among other Western countries, and after the collapse of the USSR and the Eastern bloc, it was transformed into a “global” organization of 26 countries, including former states of the Eastern bloc.

In a document entitled “Strategic Concept for the 21st Century”, approved in 1999 in a summit on the occasion of the 50th anniversary of NATO, it clearly says that NATO is “a global military organization”. That is, the fifty-year-old great lie was acknowledged openly when NATO stated that the organization had a clearly fixed objective, which was the destruction of socialism and the Soviet Union. This was in contradiction with the fundamental principles of the UN, and therefore it was not “a regional and defensive organization.”

Today NATO is the armed branch of the global war of the capitalists and imperialists, an enormous war machine with a budget of 1,500 billion Euros, 22,000 employees and an army of 60,000 men prepared to intervene at any time; NATO organizes operations and interventions beyond the region established at its foundation (Afghanistan, former Yugoslavia, Somalia, and indirectly, Iraq, Sudan, etc.).

Presently NATO has dozens of military bases established in different countries, hundreds of bombs and nuclear warheads, weapons of mass destruction, both biological and conventional, etc. They are trying to extend this organization and thus permanently impose their order by force,

The financial, economic and social crisis that is shaking the world, and that is getting worse day by day, is increasing tensions and leading to an increasing militarization: the threat of war is palpable.

Worldwide military expenses have risen to $1,335 billion dollars in 2007. Clearly, these weapons will not be allowed to rot in warehouses. Therefore the idea of getting out of the economic crisis by means of war is being raised seriously.

The summit that the imperialist powers organized on the 60th anniversary of NATO debated its expansion towards the East, deploying anti-missile shields in Poland and the Czech Republic; plans against the workers, peoples, oppressed nations, and even against rival imperialist forces.

We, the members of the International Conference of Marxist-Leninist Parties and Organizations (ICMLPO), call on the progressive forces and workers of the world to participate in the protests organized on this 60th anniversary of NATO, and to take part in the common demonstration planned for April 4 in Strasbourg, France.

Stop the militarization, reduce the budgets for arms and use that money to satisfy the needs of the peoples and youths!

  • Dismantle the military bases, destroy the nuclear arms!
  • Withdraw the NATO occupation forces!
  • Dissolve NATO, a military organization for aggression!

International Conference of Marxist-Leninists Parties and Organizations

March, 2009

Source

Anasintaxi (1918-1955): The Struggle of the Greek Communists against Revisionism

zachariadis nikos

Published by the Organisation for the Reconstruction of the Communist Party of Greece 1918-1955

a) The Tashkent events

At the end of August 1949, after a three-and-a-half-year armed struggle against the Greek monarchist-fascist reaction and the Anglo-American imperialism, following a decision by the Central Committee of the Communist Party of Greece (KKE), the partisans of the Democratic Army of Greece (DA) left behind their homeland and retreated to Albania. It was a mass exodus. In 1949-50, an overall number of 55,381 people (of which 67.6% were adults 18-55 years old, 1.7% were very old and 17,352 were children up to 17 years) abandoned Greece and settled in the various People’s Republics and the Soviet Union. Almost 18,000 communist refugees went to Tashkent, the capital of the SSR of Uzbekistan where they were organised in separate residential quarters called Politeies.

After adjusting to the new life conditions, the Greek communists proceeded to reorganise their party. From the 10th to the 14th of October 1950, the 3rd Conference of the KKE took place. This body purged almost all the opportunists from the party. For the first time since 1940, a heavy blow was dealt to the right opportunism and to all opportunists who had betrayed the popular movement during the time of the Nazi occupation by signing the agreements in Lebanon (20.5.1944), Gazerta (26.9.1944) and Varkiza (12.2.1945) and who, moreover, had sabotaged the development and enlargement of the DA during the Civil War.

Shortly after the death of Stalin in 1953, the revisionist faction of Khrushchev-Mikoyan-Brezhnev that prevailed in CPSU started making approaches to the secretaries of the Communist Parties in order to assess their readiness to adopt its counter-revolutionary line. They found out that the KKE leadership headed by Nikos Zachariades was not willing to abandon the revolutionary Marxist-Leninist-Stalinist course and follow the anti-Stalinist revisionist course. In particular, they requested that he revise his attitude in three fundamental questions of the world communist movement: 1) to regard the capitalist Yugoslavia as a ‘socialist’ country, 2) to turn against Stalin by writing articles in Pravda on the ‘cult of personality’ – this infamous, Khrushchevian myth of idealist origin, and 3) to assent to the liquidation of Cominform. The reply given by the great and unwavering communist leader on all the above requests was negative.

When the members of the Khrushchevian revisionist clique became sure that this kind of pressure will not have any effect, they tried to form a right opportunist faction in the Tashkent Party Organisation (KOT) – the largest KKE Party Organisation in the socialist countries – and to push it right up to the Organisation’s leadership. Unfortunately for them there was a lack of support for it save for a few opportunists. The revolutionary KKE leadership headed by Nikos Zachariades acted immediately; the faction leaders were unmasked and removed from the leadership of KOT.

Nikos Zachariades, speaking in a meeting of Party cadres in the theatre Mu Ki Mi in Tashkent, said the following among other things: ‘comrades, several speakers attacked Demetriou and more or less consider him the leader of the revisionists. Demetriou, comrades, is just the end of the tail of a clumsily camouflaged elephant. The serious and historic task allotted to all of us is to pull this tail so that the whole world will see the elephant: Khrushchev’ (K. Karanikola, ‘Mia lefki selida tou KKE’, p. 59).

The confrontation between the members of the faction and the rest of the Greek communists was escalating and the situation in Tashkent was very tense during the period of August-September 1955. In such an atmosphere, three assassination attempts were made against Nikos Zachariades. In the first one, the Armenian KGB Colonel Saakov tried to give him a poisoned ice cream but Zachariades refused being always careful what and where he ate. In the second one, somebody threw a heavy brick at him while he was delivering a speech in a party meeting; Zachariades dodged it at the last moment (Ahillea Papaioannou, ‘H apagoreumeni eikona – Dioktes kai ieroktonoi tou Nikou Zachariades’, Athens 2004). In the third one, the best organised of the three, three individuals ambushed the car that was to carry him to airport. The plan failed only because Niyazov, the Stalinist general secretary of the CP of Uzbekistan, found out about it and notified Zachariades.

`There was good reason why the revisionists wanted to exterminate Zachariades, already in 1955. They knew very well that if Zachariades had been present in the 20th Congress he would have upset his plans at least in relation to the ‘criticism of the cult of personality’. This is because Zachariades was courageous and bold enough to express his opinion openly in contrast to the leaders of the other communist parties. D. Vlantas (member of the KKE Politburo) writes in his book, ‘Nikos Zachariades and 22 associates’, the following: ‘When I arrived in Tashkent on July of 1955, a representative from the Soviet leadership proposed to me to help him complete the conspiracy that started in 1949 and they, in return, would help me become General Secretary of KKE. I rejected this proposal. Zachariades came to Tashkent in the mid-August 1955. I reported him about an extremely critical situation. I stressed to him that it was not any more just the Tashkent Organisation that is at stake but the whole party. I suggested to him that we should return to Bucharest, the seat of the CC, convene a session where we will demonstrate the existence of conspiracy and then send a delegation to Moscow asking for full explanation. Zachariades turned down my suggestion.’

When even the formation of a sizeable faction failed, on the 9th of September 1955 the Khrushchevian revisionist group, organised a bloody pogrom in Tashkent employing a group of Greek opportunists. This was ‘an open provocation against the delegation of the CC of KKE: the violent and gangster assault on the offices where the delegation was based and injury of three of its members’ (from 5th Plenum, December 1955). About 200 opportunists headed by the faction leaders Ipsilantis, Demetriou, Barbalias and others – who were under the direct guidance of the Soviet revisionists – carried out a bloody assault on the offices of the Tashkent Party Organisation, but they failed to capture them: ‘at 4 pm, on the 9th of September, around 200 people gathered in the courtyard of 7th Politeia together with the faction leaders who were bracing their followers with vodka, beer and wine’ (K.D. Karanikola: ‘Mia lefki selida tou KKE’, p. 53).

The assault on the KOT offices was preceded by the faction’s provocations in various Politeies: ‘In those Politeies where the factionists had some support, like in the 2nd, 3rd, 7th, 9th and 11th, they started looting the local libraries and burning books, especially those written by Zachariades, Bartziotas and those about the struggle of the DA’ (ibid, p. 46).

This provocative act raised an outcry among the thousands of party members who rushed immediately to defend the KOT offices. Clashes and beatings followed with the factionists until police and cadet detachments came to their rescue. Many were injured and had to be transported to the hospital while hundreds of Greek communists were arrested, mainly high-ranking DA officers, thrown in jail and tried later for ‘hooliganism’.

All the political refugees in Tashkent knew that the instigators of the provocative ‘Tashkent events’ were the Khrushchevian revisionists who aimed at the liquidation of the KKE. Everybody knew that the handful of Greek opportunists were in permanent contact with and under the direct guidance of the treacherous Khrushchevian revisionist group. One of the noted opportunists, Kostas Gritzonas, confesses: ‘One evening, during the time when the Tashkent events reached their climax, as I was on my way from the 7th to the 9th Politeia together with the secretary of KOT, Aristotelis Hatouras, he confided to me that the anti-Zachariadist movement enjoyed the support from the Soviets. He left me with the understanding that they were having talks in private with the Khrushchevians from the CC of the CP of Uzbekistan’ (K. Gritzonas: ‘Meta to Grammo’, pp. 18-19).

The overwhelming majority of the Greek communists, more than 95% of the KOT members, condemned the Khrushchevian revisionists’ intervention in KKE and they rallied around their Party headed by Nikos Zachariades. Their violent and bloody confrontation with the factionists was the first act of resistance in the communist movement against revisionism before the 20th Congress. This anti-revisionist attitude was clearly expressed in the historic 5th Plenum of the CC of KKE convened at the end of December 1955 (26-28.12 1955). It was historic because: 1) it openly condemned the anti-communist Khrushchevian revisionist intervention in KKE and 2) it was meant to be the last convened body of our heroic party before its final liquidation. In the Plenum’s decision, in relation to the situation in KOT, it is mentioned that: ‘the faction would have achieved nothing at all had it not received the support by certain Soviet comrades, who were convinced that the faction is the strongest and the most pro-Soviet part of KOT which they must support and help. This fact encouraged the factionists even more to act and to openly declare that ‘whatever we say and do are approved by the Soviets’ (Demetriou) and that ‘I am not afraid of anything because 200 million Soviets stand behind me’ (Hatouras) etc. etc’.

The 5th Plenum was a real triumph for the Marxist-Leninist side in KKE and Nikos Zachariades personally. This is actually admitted by the main factionist leader in KOT, Demetriou (‘Eleutherotypia’, 2004). However, the revisionist faction was not yet totally defeated and the outcome of internal struggle in KKE would be decisively determined by the corresponding struggle in CPSU between the supporters of Stalin and the supporters of Khrushchev.

The overwhelming and militant opposition of the Greek communist political refugees, headed by Nikos Zachariades against the Khrushchevian clique in September 1955 in Tashkent, was chronologically the first in the history of the international communist movement’s struggle against Khrushchevian revisionism, and, also, a culmination of the revolutionary KKE (1918-1955) heroic struggle. If one takes into account the unheard-of disaster that inevitably followed the enforcement of Khrushchevian revisionism to the communist parties (destruction of socialism and restoration of capitalism in the Soviet Union, breaking-up of the capitalist Soviet Union, liquidation of the communist parties), it can be said that it was not just a culmination of the long struggle of the Stalinist-Zachariadist KKE, but was at the same time a great and unique moment in the struggle of the international communist movement (Comintern-Cominform) against the new counter-revolutionary treacherous trend of Khrushchevian revisionism which emerged in its lines in the mid-1950s: it was precisely this moment that marked the beginning of the most fierce ideological-political struggle against Khrushchevian revisionism in international level, a struggle that has been going on for half a century now, is still going on and it will be going on in the future until its final victory.

In this context, the ‘Tashkent events’ acquire a triple historical importance: First, they constituted the first open and brutal intervention of the Khrushchevian revisionists in the internal affairs of a communist party aiming at its liquidation. Second, they marked the beginning of the resistance and struggle of the Greek communists against Khrushchevian revisionism even before its emergence as a complete ideological-political trend in the 20th Congress of CPSU (February 1956). Third, they raised the banner of struggle of the communists in all countries against this counter-revolutionary trend. The rising and battle of the Greek communists in Tashkent, in September of 1955, ushers in the period of struggle against Khrushchevian revisionism on international level.

b) The ‘6th Plenum’

In February of 1956, during the counter-revolutionary 20th Congress of CPSU, the show trials of the Greek communists, political refugees, started in Tashkent. In this travesty of justice, battle-hardened DA veterans, like Giorgos Kalianesis (general), Dimitris Vyssios (lieutenant-colonel) and others, were tried for hooliganism and vagrancy. Following their convictions, they were exiled to Siberia and, in fact, into concentration camps ‘that were intentionally adjacent to concentration camps of German war criminals sentenced to 25 years of imprisonment, the maximum period according to the Soviet criminal law. The Germans didn’t work because of their ‘prisoner of war’ status, and, apart from having the meals of a Soviet soldier, they received parcels of medicine and foodstuffs from the West German Red Cross every ten days. The sentenced refugees were fed with rotten potatoes and mouldy crushed grain. This “diet” was followed under conditions of heavy and exhausting labour’ (D. Vyssios: ‘Open letter to M. N. Ponomariov’, former Head of the Department of International Relations of the CC of CPSU, January 1991).

The opposition of the Greek communists to Khrushchevian revisionism was expressed en masse. The overwhelming majority (95%) of the members of the Tashkent Party Organisation came out against the Khrushchevian intervention in KKE and defended the revolutionary party line and the CC headed by Nikos Zachariades showing a stunning decisiveness and unparallel courage. The attitude of the captive communists in jails and concentration camps in Greece was similar.

It was exactly this overwhelming opposition by the Greek communists (ranging from 85% to 95% in Tashkent and in the People’s Republics) that prevented KKE from being transformed into a bourgeois party of social democratic type. The revolutionary KKE is the only communist party of a capitalist country that was never transformed into a counter-revolutionary, bourgeois, social democratic party. This fact compelled the Khrushchevian revisionists to create a completely new party in place of the old one.

At the time of the 20th Congress of the CPSU, the Khrushchevians formed the infamous ‘International Committee’ whose alleged purpose was to examine the situation in KKE. It comprised of cadres from six communist parties: 1) Yugov, from the Communist Party of Bulgaria; 2) Kovac, from the Hungarian Workers Party; 3) Mazur, from the Unified Workers Party of Poland; 4) Dej, from the Workers Party of Romania; 5) Kuusinen, from the Communist Party of the Soviet Union; 6) Barak, from the Communist Party of Czechoslovakia. The president of the International Committee was, formally, Georgiu Dej – Khrushchev’s puppet – but essentially Otto V. Kuusinen member of the Politburo of the CPSU. Nikos Zachariades, addressing Dej, during one of the committee’s sessions said the following regarding his interference in KKE internal affairs: ‘who granted the right to examine the problems of heroic KKE to you, who slept in August of 1944 under fascism and woke up one day under a People’s Republic, established by the Red tankists all the way from Stalingrad when they crashed the fascist Romanian Division and offered it to you as a present. What experience do you have to criticise the struggles of Greek communists who, to their credit, through their struggle, did not allow not even a single Greek citizen to fight in the Eastern Front against the USSR (K. Karanikola, pp. 70-71).

The International Committee openly and without pretexts intervened in the KKE by arbitrarily summoning the infamous ‘6th Plenum’ on March 1956. In this illicit meeting the report was read not by a Greek, but by the president of the ‘International Committee’, Dej. Former cadres and expelled members participated, but not the lawfully elected General Secretary of the Party Nikos Zachariades. The brutal intervention of the Khrushchevian revisionists through the ‘6th Plenum’ resulted in the actual liquidation of KKE (1918-1955). This was done by: a) the illegal and forcible removal of the elected revolutionary leadership of KKE, including the Party’s General Secretary Nikos Zachariades, who was arrested and isolated, and appointed a right opportunistic puppet leadership. b) the mass expulsions of thousands of communists and c) the liquidation of the remaining party organisations in 1958.

The new party that was established in 1956, the ‘K’KE did not and does not bear any relation whatsoever – ideological, political, organisational – with the old revolutionary KKE (1918-1955). It was a monstrous creation of the Khrushchevian revisionists that adopted the counter-revolutionary social-democratic line promulgated in the 20th Congress of CPSU, namely the peaceful transition to socialism. For this reason, the new party has been, from the very beginning, a bourgeois social democratic party guided not any more by the Marxism-Leninism-Stalinism, but by the counter-revolutionary trend of Khrushchevian revisionism, a variant of bourgeois ideology.

One year later, in 1957, the revisionists of ‘K’KE summoned the ‘7th Plenum’, a meeting as illicit as the 6th Plenum. According to the decisions of this ‘Plenum’, Zachariades was stripped even of his party membership and sentenced to exile. In addition, he was shamelessly accused of spying for the Germans when he was a prisoner in Dachau. A special committee set up to investigate the matter didn’t find any evidence whatsoever that supports this monstrous charge.

c) The persecutions of the Greek communists

The great majority of the Greek communists under the leadership of Nikos Zachariades not only rejected but they were the first ones in the communist movement to put up a strong resistance against the decisions of the 20th Congress and the 6th Plenum already in 1956 – the rejection of revisionism by Mao Zedong and Enver Hoxha was expressed four years later, in the summit of Communist parties in 1960. More importantly, in the difficult period that followed the 20th Congress the struggle of the Greek communists against Greek and Soviet revisionism continued taking various forms. In 1958, 6,000 communists of Tashkent wrote a letter to the CC of the Communist Parties of the Soviet Union, of China, Italy, France, Bulgaria, Poland, Czechoslovakia, Hungary, Romania, Vietnam, Cuba, Korea and Albania concerning the situation in KKE. In the first page of this letter the following is mentioned: ‘Today’s CC of KKE is not the leadership that led the revolutionary struggles of our people. This is because: 1) the rise of this leadership is the result of a political provocation against KKE on 9.9.1955 in one of its largest organisations, the Party Organisation of Tashkent and, subsequently, of the arbitrary convention and decision of the 6th Plenum in 1956; 2) this leadership’s policy is the revision of the revolutionary line KKE had before the 6th Plenum, it is the revision of the Marxist-Leninist theory; 3) it follows an opportunist line which deviates from the Marxist Leninist principles; 4) by pursuing its opportunist policy, it weakens struggle of our people and aims at subordinating our movement to the interests of the Greek bourgeois class.’

The historical and political importance of this document can be hardly overestimated. Apart from being an example of resistance against revisionism in KKE, it contains a comprehensive historical outline of the party’s internal affairs covering the whole period before the 20th Congress. It most clearly demonstrates the counter-revolutionary and treacherous role of all those opportunists, like Vafiades and Partsalidis, who were in the leading ranks of KKE during the armed struggle against the German occupation forces, the Anglo-American imperialism and the Greek fascist reaction. They were the same people who accused the Zachariades leadership of ‘leftist mistakes’ and ‘adventurism’ in relation to the party’s strategy and tactics during the civil war, in the 3rd Conference of KKE in 1950. Finally, they were the same people appointed later in the KKE leadership by the Khrushchevian revisionists.

Because of their continuous and active struggle against revisionism thousands of Greek communists in the following years, were expelled by the appointed right opportunist leadership. Others chose to break away from the new opportunist bourgeois party. Moreover, they were subjected to a whole series of fascist persecutions that took various forms: surveillance, spying, arrests, imprisonments, exiles to Siberia, etc. Many party cadres were exiled to Siberia and among them the Party’s General Secretary, Nikos Zachariades, who, after 17 years of exile, died in Sorgut. The events that took place in Tashkent in 1962 are quite indicative of the atmosphere of terror and oppression against the Greek communists.

The secretaries of all the party organisations of Tashkent and the committee for the support of the imprisoned and exiled communists in Greece decided to organise a mass meeting on the 27th May 1962 to mark the 21st anniversary of the lowering of the swastika from the Acropolis. Evidently, this event was going to be very successful and attract a lot of Greeks of Tashkent. The idea of such an event appealed also to many supporters of the revisionists who declared that they approve it and that they were going to take part. In this way, the meeting would serve to bridge the gap between the supporters of the revisionists and the great majority of Greek communists of who opposed their line. At the same time it would allow each side to gauge its real strength; it would become obvious that the revisionists snatched the leadership of KKE only thanks to violence, terror, persecutions, blackmails and the liquidating intervention of CPSU.

As it was expected, the preparations for the meeting made the Greek and the Soviet revisionists extremely anxious and therefore they did everything they could to cancel it. The revisionists of ‘K’KE threatened with expulsion anybody from their supporters who joined the meeting. The CC of the CP of Uzbekistan held a special session to discuss this event. As a first step, the head of militia General Sloenensky summoned cadres from the Tashkent party organisations and threatened them with hard measures if they dared to take part in the event. Factory administrators threatened with sacking from work, a punishment already inflicted to many Greek communists after the 6th Plenum. The whole state and party apparatus were actively engaged in cancelling the meeting.

Nevertheless, the Greek communists full of fighting spirit ignored the threats and the psychological pressure and continued with their preparations. As a result, the Soviet authorities resorted to brute force in order to stop the event that scared them so much. On the 18th of May, the first secretary of the party organisation of the 9th Politeia was arrested and sentenced to 15 days of imprisonment for vagrancy. When his arrest became known next day, delegates from all Politeies of Tashkent went to the head of militia in order to protest about it. Although he promised them to set Sidiropulos free, they soon faced an organised and barbarous attack. Policemen went at them furiously, started beating them with clubs and belts and dragged them on the pavement covered in blood. Sixty people were arrested and many of them were convicted for vagrancy and hooliganism. On the 21st May the first secretaries of the Tashkent party organisation presented themselves at the offices of the town committee of the CP of Uzbekistan to protest about the brutal attack and the illegal arrests that took place on the 19th. Not only did they receive no reply whatsoever but also the secretary of the party organisation of the 13th Politeia, Petros Touloudis, was arrested on the spot.

During the week from the 21st to the 27th May, the Soviet authorities unleashed an unseen orgy of terror in all Politeies of Tashkent. Many men and women were dismissed from work. Under the guidance of the revisionists, the police forcibly entered in people’s houses at night confiscating money and personal belongings. The portraits of Nikos Belogiannis and the heroes from the Greek Revolution of 1821 that would decorate the meeting venue were confiscated and destroyed. On the 19th and 22nd of May, the secretary of the party organisation of the 5th Politeia, Mitsos Eleutheriou, and the member of the committee of the party organisation of the 4th Politeia were arrested and being held for a long time in solitary confinement they were charged with ‘anti-Sovietism’ and received three and four years sentences respectively. On the 25th of May, the secretaries of the party organisations of the 7th and the 12th Politeia Achileas Papaioannou and Spiros Stamatakos were sent to exile in Kazakhstan. Many others followed them.

The persecutions continued after May. On the 14th of September, four leading Greek communists of Tashkent were summoned and told that they had 12 hours to prepare to leave for Petropavlovsk, their place of exile. On the 20th of October, Slonenski summoned another 24 cadres of the KKE and DA and announced them the following: ‘You don’t recognise the decision of the 6th Plenum of the CC of KKE and the 8th Congress of KKE and, moreover, you have embarked on an active struggle against the leadership of the KKE and its political line recognised and supported by the CC of CPSU. This is considered a hostile action against the Soviet Union and this is why Soviet Union is depriving you of the status of a political refugee and is sending you to exile in Kazakhstan’. Thousands of men, women and children bade a warm farewell to the last large group of refugees leaving for their place of exile. They declared that the generation of DA fighters refuses to be subdued and continues the struggle against the new fascism.

Savvas Palles, a volunteer in the Spanish civil war, in one of his letters from his exile in north Kazakstan in October 1962 wrote the following: ‘In a time when Karamanlis closed the concentration camp in Ai Stratis and released communists, the “communist” leader Koligiannis was setting up another concentration camp in the vast steppes of north Kazakhstan. Why? For what reason? What crime we committed in order to have such a cruel and inhuman punishment imposed on us? Let our opponents, the opportunists, answer; let them publicly state why they imprisoned and sent us to exile? Of course they will not answer because they don’t dare to do so. Because they are cowards and they want pass for tough ones having the support of others. Because they don’t have the courage to tell the truth and they try to conceal their crime.

But we know why they threw us to prison and sent us to exile. Our crime is political. We refused to become servants, lackeys. We refused to bow to the bowed ones. We refused to bury the truth, to deny our revolutionary principles, to step on the revolutionary traditions of our people and our Party; we refused to deny our revolutionary honour! This was our sin, our crime. This is why they scattered us in the vastness of north Kazakhstan.’

What is the reason for the resolute opposition of the Greek communist political refugees (95% in Tashkent and 85-90% in the other People’s Republics) against Khrushchevian revisionism, of people who had been brought up in a spirit of deep trust and devotion to the Socialist Soviet Union?

First of all, it is the guiding and decisive role played, in this extremely difficult struggle, by the courageous, unyielding and uncompromising revolutionary Nikos Zachariades, in order KKE not to abandon its revolutionary line. Besides his opposition to the Khrushchevian group, in the beginning of 1956, he replied thus to some Greek revisionists, members of the CC of KKE, when they asked him to resign: ‘I won’t grant you this favour now, I won’t allow you to convert KKE into a bourgeois party’ (Dimitri Votsika, ‘Portraita koryfeon stelehon tou KKE’, Athens, 1999, p. 21).

Secondly, it is the fact that the members of KKE were battle-hardened partisans who had given everything to the armed revolutionary struggle against the indigenous monarchist-fascist reactionary forces and the imperialism, having almost a decade (1940-1950) of armed struggle to their credit. This long revolutionary experience helped them to show the necessary political-ideological maturity, firmness, consistency and decisiveness in this critical moment.

Nikos Zachariades had foreseen the disaster that would come in case Khrushchevian revisionism dominated, and it is this prediction that allows for his historical eminence as a great communist revolutionary leader to be assessed: ‘watch out comrades, these are international provocateurs, they are going to cause a great damage to the world’s communist movement and their Greek collaborators will cause great damage to our country’ (Tashkent, September 1955). Not only did he foresee the disaster, but also he was the first leader in the world’s communist movement who stood up and fought against the counter-revolutionary trend of Khrushchevian revisionism right up until the end of his life.

Later, in 1962, Zachariades, from his place of exile, wrote: ‘The factionist-opportunist group pursuing a policy of appeasement towards the bourgeois reaction, bastardised and hided the revolutionary legacy of the popular movement in Greece. It is not accidental that in the programme of the so-called 6th Plenum, the socialist character of KKE was completely buried and, instead, the peaceful transition and a democratic change were presented as a panacea; an anti-Leninist, and revisionist transition’

d) Splits in the KKE after 1956

The 6th Plenum marked the first major split in KKE. As mentioned above, many thousands of party members and cadres who were devoted to the revolutionary leadership headed by N. Zachariades were expelled from KKE. The exiles, the imprisonments and all kinds of fascist persecutions after 1955-56 were not enough to yield the majority of the Greek communists into submission, to make them abandon the revolutionary Stalinist course and break their monolithic ideological-political-organisational unity. For many years after 1956, they were ‘illegal’ Stalinist-Zachariadist party organisations working in Tashkent and elsewhere. The Soviet revisionists, realising their failure and the isolation of their planted treacherous clique of Kolligiannis-Partsalidis and Co, decided to change tactics. In addition to the fascist oppression and persecutions, they tried to cause a split in the camp of Stalinist-Zachariadist communists from inside by employing agents who would maintain an ‘anti-Khrushchevian’ and a ‘Stalinist-Zachariadist’ façade. There is no doubt that the Khrushchevian revisionism was the one which caused the greatest and the most disastrous split in the international communist movement including our own party, KKE. However, the later splits, for whatever excuses and pretexts, had also disastrous consequences. A major split was caused by the new opportunistic trend that appeared in the political refugee community of Romania at the end of the 1960s and led by Gavrilos Papadopoulos. Polydoros Daniilidis, Vaskos Pasxalis and others.

The common goal of the Khrushchevian revisionists, the treacherous cliques of Kolligiannis-Partsalidis and the new right opportunistic group was the ousting of Nikos Zachariades from our party; their slogan was: ‘Zachariades should leave the leadership of KKE’. As far as the first two is concerned there is no doubt that this was precisely their goal. In relation to the right opportunistic group, here is what P. Daniilidis openly confesses: ‘I was always saying that Zachariades should be dismissed from the party regardless that this was not properly done’. (P. Daniilidis, ‘O Polydoros thymatai’, p. 288, Istorikes ekdoseis, Athens, 1990). The anti-KKE attitude of this group caused very serious damage to the Greek communist movement because: first it disorientated from the ideological, political and organisational point of view and second it brought its fragmentation driving thousands of communists to isolation. They went so far to claim that Zachariades became a defector, a traitor and that he allegedly joined the Khrushchevian revisionists. As a matter of fact, they instructed all the Stalinist-Zachariadist organisations in Tashkent and People’s Republics to discontinue all the protests towards the Soviet government for the release of Zachariades because he was allegedly ‘free and strolling in Moscow’ while in fact he was in complete isolation in Sorgut.

e) The death of Nikos Zachariades

In the beginning of August 1973, when the Soviet authorities and the Khrushchevian Florakis leadership announced that Nikos Zachariadis died, two different versions of his death were immediately formulated. The first and the official version was presented by the social-democratic Brezhnev-Florakis leadership: ‘On the 1st of August Nikos Zachariades died from heart attack at the age of 70’ (Announcement from the CC of ‘K’

KE). The second version was promulgated by the overwhelming majority of Greek communist who rejected at once the first one according to which Nikos Zachariades died from a ‘heart attack’, and believed that he was actually murdered by the Khrushchevian revisionists in Sorgut, Siberia, his place of exile.

Seventeen years after the initial ‘announcement’ of the Soviet authorities, in 1990, Alexander Petrushin, a KGB Colonel, sent a note to the newspaper ‘Tiumenski Izvestia’ in which he contradicted the original version and presented a third one, that of ‘suicide’.

It is obvious that the two above versions of Nikos Zachariades death, the one of heart attack and the other of suicide, are mutually exclusive and, therefore, most probably false. The treacherous social-democratic cliques of Brezhnev-Florakis obviously contradict themselves. When were they telling the truth, in 1973 or in 1990?

The overwhelming majority of Greek communists correctly reckoned, and continue to do so, that the Soviet revisionists murdered Nikos Zachariades in accordance to an agreement with the revisionist leadership of ‘K’KE. in order to preserve the existence of their social-democratic party whose presence and action served, on one hand, the foreign policy of the revisionist-capitalist Soviet Union and, on the other, the interests of the indigenous reactionary bourgeois class acting as its agency in the ranks of the Greek working class movement.

It would be interesting to point out that Nikos Zachariades death took place on the eve of political ‘change’ in Greece. The Soviet revisionists, due to their collaboration with the American imperialists, were aware that a political ‘change’ was imminent in Greece, namely the replacement of the military-fascist dictatorship by a bourgeois ‘democratic’ government. If the new government wanted to maintain its democratic façade, it had not only to legalise the revisionist ‘K’KE but, also, to allow the repatriation of the communist political refugees, the former DA partisans, from the revisionist countries. However, it was known to both the Greek and Soviet revisionists that the great majority (about 85%-95%) of the Greek communists were staunch supporters of Zachariades and, upon their return to Greece, would immediately raise the issue of his liberation from exile employing all possible means including daily demonstrations in front of the Soviet embassy and an international campaign. Under such pressure, the Soviet revisionists would be compelled to set him free and let him return to his homeland.

Consequently, under circumstances beyond their control, and aware of the great authority Nikos Zachariades enjoyed among the Greek communists, the Soviet revisionists would have felt extremely uncomfortable had the great communist leader and former member of the EC of the Third International returned to his country. In particular such an outcome would have the following consequences: a) the inevitable downfall of their instruments in the country, that is, of the two social-democratic parties ‘K’KE and ‘K’KE (interior). b) the reorganisation of the communists and the formation of the revolutionary massive KKE, guided by revolutionary Marxism, that is of Leninism-Stalinism, and the concomitant preservation of the antifascist, anti-imperialist EDA party (that was liquidated by the revisionists and replaced by, the harmless to the interests of the bourgeois and the imperialists, PASOK) c) the prospect of a revolutionary KKE in alliance with the socialist Albania would be very dangerous, at that time, to the fate of Khrushchevian revisionism in Europe, to the existence and activity of the Soviet and European revisionists.

Apart from the aforementioned, what suggests that the third version of Nikos Zachariades death, i.e. the one of his murder, is the most probable and convincing are the following:

First, the statement-confession made by Stavros Zorbalas, the director of the Centre of Marxist Studies, in 1980: ‘How could there be a Party (meaning the revisionist ‘K’KE) if Zachariades would come to Greece?’ (D. Vyssios: ‘Open letter to Boris Nikolayevich Panomariov’, former head of the Department of International Relations of the CC of CPSU) but, also, by Panos Demetriou: ‘at any rate, only a KGB report can solve the riddle concerning his death’ (‘Ethnos’, 29/12/1990).

Second, the very important testimony of the journalist Vera Kuznechova in her interview: ‘I brought G. Mauros (Greek journalist) in contact with competent persons like Zachariades guard and the forensic doctor who, under pressure, wrote falsely in his report that Nikos Zachariades died from heart attack. When I talked to him, he admitted that he had diagnosed assassination, not heart attack’.

Third, the statement made by N. Tomilina, the director of the Russian State Archives, in the spring of 2000: ‘Not all evidence pertaining Nikos Zachariades has been published and, especially, the documents related to the circumstances of his death. These documents have been classified as top secret and no access to them is allowed until they are declassified.’

Considering all the above, the following fundamental question arises: if the case of Nikos Zachariades death was drawn to definite close with the establishment of the ‘suicide’ version, why, then, the part of the Archives related to the circumstances of his death is not published? Why the documents about the circumstances of his death are, still, classified as top secret and no access to them is allowed? It is evident that the anti-communist Khrushchevian revisionists and their fascist secret services, even after more than three decades (1973-2006) and despite continuous ‘editing’, cannot render their Archives plausible as to the second false version of Nikos Zachariades death, the one of ‘suicide’.

Without a doubt, Nikos Zachariades, through his revolutionary struggle, rises to eminence as a great revolutionary and communist leader, as ‘one of the most important figures of the world’s communist movement’ (Niyazov, Tashkent 1955); Joseph Stalin during the proceedings of the 19th Congress of the CPSU (1952), had said about him: ‘Do you see him? He is a great leader. He will bring the revolution not only in Greece but also in Europe’ (P. Demetriou, ‘Ek vatheon’, Athens 1997, pp. 202-203). He was by far the most competent General Secretary the KKE ever had and who was suggested by the Third International for this post in 1931. Nikos Zachariades remained until the end of his life an unwavering opponent of revisionism. Towards the end of his life he said: ‘Nobody can take away your honour, you can only lose it yourself’ and also: ‘he, who does not know how to die when it is necessary, does not know how to live and will fail in his life. He, who is afraid of falling, is going to crawl for the rest of his life’.

Quite naturally, the revisionist group of Khrushchev-Brezhnev saw him as a serious, powerful and very dangerous ideological, political opponent whom therefore it had to forcefully remove from the leadership of KKE at all costs, and destroy politically and physically; so dangerous was he considered, that one of Khrushchev’s fervent supporters, the French poet Louis Aragon, saw fit to mention him in his two-volume ‘History of the Soviet Union’: ‘The charge for personality cult resulted in the removal of Nikos Zachariades from his post as General Secretary of KKE’ (L. Aragon, ‘History of the Soviet Union’, v. 2, p. 268, Athens, 1963).

To conclude, we believe that the aforementioned events, covering the period between the pogrom in Tashkent in 1955 and the death of Nikos Zachariades in 1973, leave the contemporary revolutionary movement a most valuable legacy that could serve its task of reorganisation in the 21st century.

Source

Enver Hoxha on the Titoite Betrayal

enver_hoxha_1974_oil-painting

“Traitors to Marxism-Leninism, agents of imperialism and intriguers like Josif Broz Tito, try in a thousand ways, by hatching up diabolic schemes like the creation of a third force, to mislead these people and the newly-set up states [in Africa and Asia], to detach them from their natural allies, to hitch them up to U.S. imperialism. We should exert all our efforts to defeat the schemes of these lackeys of imperialism.

[….]

U.S. imperialism has given and is giving billions of dollars to its loyal agents, the treacherous Tito gang.

[….]

It has been said that J. V. Stalin was mistaken in assessing the Yugoslav revisionists and in sharpening his attitude towards them. Our Party has never endorsed such a view, because time and experience has proven the contrary. Stalin made a very correct assessment of the danger of the Yugoslav revisionists, he tried to settle this affair at the proper moment and in a Marxist way. The Inform Bureau, as a collective organ, was called together at that time and, after the Titoite group was exposed, a merciless battle was waged against it. Time has proven over and over again that such a thing was necessary and correct.

The Party of Labor of Albania has always held the opinion and is convinced that Tito’s group are traitors to Marxism-Leninism, agents of imperialism, dangerous enemies of the socialist camp and of the entire international communist and workers’ movement, therefore a merciless battle should be waged against them. We, on our part, have waged and continue to wage this battle as internationalist communists and also because we have felt and continue to feel on our own backs the burden of the hostile activity of Tito’s revisionist clique against our Party and our country. But this stand of our Party has not been and is not to the liking of comrade Khrushchev and certain other comrades.

The Titoite group have long been a group of Trotskyites and renegades. For the Party of Labor of Albania, at least, they have been such since 1942, that is, since 18 years ago.

As far back as 1942, when the war of the Albanian people surged forward, the Belgrade Trotskyite group disguising themselves as friends and abusing our trust in them tried their uttermost to hinder the development of our armed struggle, to hamper the creation of powerful Albanian partisan fighting detachments, and, since it was impossible to stop them, to put them under their direct political and military control. They attempted to make everything dependent on Belgrade, and our Party and our partisan army mere appendages of the Yugoslav Communist Party and the Yugoslav National-liberation Army.

Our Party, while preserving its friendship with the Yugoslav partisans, successfully resisted these diabolical intentions. It was at that time that the Titoite group tried to found the Balkan Federation under the direction of the Belgrade Titoites, to hitch the Communist Parties to the chariot of the Yugoslav Communist Party, to place the partisan armies of the Balkan peoples under the Yugoslav Titoite staff. It was to this end that, in agreement with the British, they tried to set up the Balkan Staff and to place it, that is to say, to place our armies under the direction of the Anglo-Americans. Our Party successfully resisted these diabolic schemes. And when the banner of liberation was hoisted in Tirana, the Titoite gang in Belgrade issued orders to their agents in Albania to discredit the success of the Albanian Communist Party and to organize a “putsch” to overthrow the leadership of our Party which guided the National-liberation War and led the Albanian people to victory. The first “putsch” was organized by Tito through his secret agents within our Party. But the Albanian Communist Party frustrated this plot of Tito’s.

The Belgrade plotters did not lay down their arms and, together with their agent in our Party, the traitor Koçi Xoxe, continued the re-organization of their plot against new Albania in other forms, new forms. Their intention was to turn Albania into a seventh Republic of Yugoslavia.

At a time when our country had been devastated and laid waste and needed to be completely rebuilt, when our people were without food and shelter but with high morale, when our people and army, weapons in hand, kept vigilant guard against the plots of reaction organized by the Anglo-U.S. military missions who threatened Albania with a new invasion, when a large part of the Albanian partisan army had crossed the border and had gone to the aid of the Yugoslav brothers, fighting side by side with them and together liberating Montenegro, Bosnia, Herzegovina, Kosova and Metohia and Macedonia, the Belgrade plotters hatched up schemes to enslave Albania.

But our Party offered heroic resistance to these secret agents who posed as communists. When the Belgrade Trotskyites realized that they had lost their case, that our Party was smashing their plots, they played their last card, namely, to invade Albania with their army, to crush all resistance, to arrest the leaders of the Party of Labor of Albania and of the Albanian State and to proclaim Albania a seventh Republic of Yugoslavia. Our Party defeated this diabolic scheme of theirs also. Joseph Stalin’s aid and intervention at these moments was decisive for our Party and for the freedom of the Albanian people. Precisely at this time the Information Bureau exposed the Tito clique. Stalin and the Soviet Union saved the Albanian people for the second time.

The Information Bureau brought about the defeat of the conspiracies of the Tito clique, not only in Albania but also in other countries of People’s Democracy. Posing as communists, the renegade and agent of imperialism, Tito, and his gang, tried to alienate the countries of People’s Democracy in the Balkans and Central Europe from the friendship and wartime alliance with the Soviet Union, to destroy the communist and workers’ parties of our countries and to turn our States into reserves of Anglo-American imperialism.

Who was there who did not know about and see in action the hostile schemes of imperialism and its loyal servitor Tito? Everybody knew, everybody learned, and all unanimously approved the correct decisions of the Information Bureau. Everyone without exception approved the Resolutions of the Information Bureau which, in our opinion, were and still are correct.

Those who did not want to see and understand these acts of this criminal gang had a second chance to do so in the Hungarian counter-revolution and in the unceasing plots against Albania. The wolf may change his coat but he remains a wolf. Tito and his gang may resort to trickery, may try to disguise themselves, but they are traitors, criminals and agents of imperialism. They are the murderers of the heroic Yugoslav internationalist communists and thus they will remain and thus they will act until they are wiped out.

The Party of Labor of Albania considers the decisions taken against Tito’s renegade group by the Information Bureau not as decisions taken by comrade Stalin personally but as decisions taken by all the parties that made up the Information Bureau.

[….]

The Party of Labor of Albania remained unshaken in its views that the Titoite group were traitors, renegades, Trotskyites, subversionists and agents of the U.S. imperialists, that the Party of Labor of Albania had not been mistaken about them.

The Party of Labor of Albania remained unshaken in its view that comrade Stalin had not erred in this matter…

[….]

Some comrades hold the erroneous idea that we maintain this attitude towards the Titoites because, they claim, we are allegedly eager to hold the banner of the fight against revisionism or because we view this problem from a narrow angle, from a purely national angle, therefore, they claim, we have embarked, if not altogether on a “chauvinist course”, at least on that of “narrow nationalism”. The Party of Labor of Albania has viewed and views the question of Yugoslav revisionism through the prism of Marxism-Leninism, it has viewed, views, and fights it as the main danger to the international communist movement, as a danger to the unity of the socialist camp.

[….]

The Yugoslavs accuse us of allegedly being chauvinists, of interfering in their internal affairs, and of demanding a rectification of the Albanian -Yugoslav borders. A number of our friends think and imply that we Albanian communists swim in such waters. We tell our friends who think thus that they are grossly mistaken. We are not chauvinists, we have neither demanded nor demand rectification of boundaries. But what we demand and will continually demand from the Titoites, and we will expose them to the end for this, is that they give up perpetrating the crime of genocide against the Albanian minority in Kosova and Metohia, that they give up the white terror against the Albanians of Kosova, that they give up driving the Albanians from their native soil and deporting them ‘en masse’ to Turkey. We demand that the rights of the Albanian minority in Yugoslavia should be recognized according to the Constitution of the People’s Federal Republic of Yugoslavia. Is this chauvinist or Marxist?

 – Enver Hoxha, “Reject the Revisionist Thesis of the 20th Congress of the Communist Party of the Soviet Union and the Anti-Marxist Stand of Khrushchev’s Group! Uphold Marxism-Leninism!”

Bill Bland: Enver Hoxha As World Statesman

November 1945, preparing to take Tirana; from p.100

November 1945, preparing to take Tirana; from p.100

Hoxha at the Permet Congress 1944; p.64

Hoxha at the Permet Congress 1944; p.64

On Red Square podium, Novmber 1947, with J.V.Stalin & V.Molotov; p.104

On Red Square podium, Novmber 1947, with J.V.Stalin & V.Molotov; p.104

ALL IMAGES FROM “ENVER HOXHA”; Tirana

(Talk by Bill Bland to an Albanian Society meeting in 1985)

Transcribed by Comrade NS

I feel that the title of my address – “Enver Hoxha as World Statesmen” – must have caused some raised eyebrows. Whether they like their policies or not, most people would accept Ronald Reagan and Mikhail Gorbachov as world statesmen. But Enver Hoxha was the leader of a small country, the size of Wales with a population of less than three millions. Can the leader of a small country ever really be a statesman, or stateswoman, of world stature?

But it is only a few years ago that tens of thousands of people were marching through the streets of cities all over th