Press Statement

Intensify Struggles for Cutting Down Petrol Diesel Prices

EVEN AFTER the price of a barrel of crude petroleum has gone below $ 50, there is no justification at all for not cutting
down the prices of diesel, petrol and cooking gas which were hiked heftly when the price of a barrel of petroleum in
international market had risen to $ 147. As one third of the price of these petroleum products are due to very high
central and state taxes, the price rise had benefited both the oil companies and the central and state governments. By
refusing to cut down these prices even after the crude petroleum prices started falling heavily following the
unprecedented financial crisis starting from the US in September, both the companies whose profits rates have gone
up many times and the central and state governments continue to reap huge taxes are benefited in a big way.
It is not difficult to understand that one of the main reasons for the present unprecedented price rice, which
continue to persist, is the high prices of petroleum products. Still the UPS government is refusing to cut down these
prices. It is justifying by repeating that it is helping the oil companies to overcome previous losses. This is an arbitrary
anti-people criminal argument. Even after the pressure is mounting from various sections of the people, the
government had cut down only the prices of aviation fuel, to help the airways and their elite passengers. Similarly the
price of non-domestic LPG is scheduled to be cut. But cost of diesel, petrol and cooking gas primarily responsible for
the price rise is not cut yet. On some pretext of other these prices are continued creating increasing hardships to the
people.
The UPA government is proving once again that it is representing only the interests of the MNCs, corporate
houses and elite classes. Unless the struggle against its anti-people policies is not intensified it will persist with the
high price of petroleum products. The toiling masses as well as the progressive democratic forces are appealed to
intensity the anti-government struggles so that it is forced to cut down these prices-soon.
25-11-08 CPI (ML)

Editorials
No Solution is Possible to Recession Within the Ruling System
THE VOLCANIC eruptions of imperialist meltdown have started the already distorted Indian economy grievously as
various reports show. Containers are piling up at the ports as importers of most of the goods have refused to receive
them. Many more factories have closed now. Workers and employees are laid off by the MNCs as well as corporate
houses. The much talked about IT and software sector is the worst affected with practically every unit laying off or
firing employees, or cutting down wages of hundreds of thousands engineers and technicians. The Infosys has asked
its more than a hundred thousand engineers to take one year leave offering 50% salary. The depression in the real
estate sector has forced almost all to cut down their projects. As a result man hundreds of thousands are going to
loose jobs. The formerly estimated 35 million job losses is going to be surpassed soon making the unemployment rate
the worst in recent decades.
Not only the industrial and service sectors are severely affected. The expert oriented cash crop sector promoted
with the MNCs, corporates and government agencies playing a major role is also seriously affected. Though
Manmohan-Chidambaram team is shamlessly repeating that still an 8% growth rate is possible in order to cheat the
masses going to vote in the six states now and later at all India level for Lok Sabha elections, the illusion bubble they
are trying to create is bound to burst soon. Similar to the inflation rate persisting near 10%, the growth rate is bound to
fall much more as the crisis in all export oriented industrial, service and agricultural areas escalate in coming days.
By the end of 1980s, four decades of comprador rule serving imperialist interests and native elite classes had
already worsened the imperialist globalization policies imposed under IMF-WB dictates in the name of energizing the
economy, instead of improving has worsened it. Increasing integration of Indian economy with the global capital-
market system led by US imperialism has led to the consequence of the bursting of the bubble in US and in other
imperialist ahead with the neo-liberal policies and their advocates are entirety responsible for the present acute
recession and crisis. In spite of it, the ruling forces are adding insult to injury by bailing out the villains, instead of
saving the masses.
This grave situation calls for intensifying the struggle to reverse all imperialist globalization connected policies
including kicking out IMF-WB-WTO and MNCs. Struggle to put an end to export oriented policies including creation of
SEZs, CMZ is urgently called for. What is required is a national and people oriented development policy giving priority
to self-reliance in all sectors, clubbed with revolutionary changes in land relations and promotion of agriculture. It is
foolish to boast about advances in rocket engineering and launching of Chandrayan, when the development of science
and technology to promote industry and agriculture a self-reliant basis is not taken up. In short what is called for is the
throwing out of the dependant and comprador policies and developing a national policy ensuring food, clothing,
housing, education, healthcare and employment for all.
But, in spite of the unprecedented crisis faced by the masses following the meltdown in imperialist centres starting
from the US, the ruling classes and the political parties of all shades serving them are not ready to reverse the
comprador policies which are making the rich richer, while the poor poorer. This has intensified the contradictions
between the masses and the ruling system unprecedentedly. The objective situation has become more favourable to
struggle for revolutionary social change. The revolutionary left, patriotic and democratic forces should seize this
opportunity to advance the people’s struggles in all fields with this objective.

Out Goes Bush, In Comes Obama

WHETHER a president is Republican or Democrat, it hardly matters in US, as both basically represent the interests of
the big business, the Pentagon-industrial complex and the barbarous imperialist system. But some presidents do stand
out as comparatively less aggressive, and some as extremely brutish. The eight year regime of Bush was most
barbarous, excelling his own father’s record. So when he is packing off from the White House his ‘popularity’ has gone
below 20%. It shows how much he is hated in US itself. The Republican candidate McCain was so worried about the
negative record of Bush that he always tried to keep himself away from him, even though he is also mechanically
repeating Bush’s policies.
What is his track record? In Afghanistan the seven year war is intensifying with increasing number of civilians and
occupying forces killed. This mountainous country is reduced virtually to a killing field for US/NATO forces, though
Taliban is not yet crushed and Bin Laden is still safe. In Iraq, though in 2005 Pentagon concluded that Saddam
Hussain had no links with Al-Quaida and 9/11 attacks in US, Iraq was attacked, occupied, razed down, more than a
lakh of Iraqis killed and Saddam murdered, while about 5000 US troops also killed and $ 600 billion spend on it. In
Pakistan, the border areas are continuously bombed and strafed killing hundreds. Israel is still protected as US goonda
force in middle east, putting down Palestinian struggle brutishly. Iran is still targeted for aggression. In Latin America
the Free Trade Agreement of America (FTTA) has failed and increasing number of countries are de-linking themselves
from US. Bush’s policies have not only alienated US imperialism from world people more than ever, it has also
intensified the inter-imperialist contradictions.. The horrific consequences of September meltdown have added to his
other evil records to make him the most hated president of US globally and at home.
Though he made $ 674 billion tax cuts, just 4% of it went to 40% of the poorest. The US families without health
insurance increased from 38.7 to 45.7 millions. US families living in poverty increased from 31.6 to 37.3 millions. Bush
administration was slow to react to Hurricane Katrina in 2005, which killed more than 2000 people. 180,000 evacuee
families are still not able to return to New Orleans. In US 65,000 families are homeless, rents are up, and many end up
using their cars as their house. The national debt before present crisis was $ 10.6 trillion. Each US citizen’s share of
debt is $ 33,928. For all reasons the approval rate for Bush is an all-time worst since 1945. The US history since 1945
shows that Bush was worst among a series of criminal US presidents. Through his barbarous 8 years administration
he has convinced the people of home and abroad more about the vital need for overthrowing the imperialist system led
by US imperialism. His packing off will be seen as a great relief, a good riddance by the poor in US and the world
people.
But Obama, the Democratic president is coming in with an already tainted record about the huge election fund his
campaign committee has collected from the corporate, speculative forces like George Soros. He has promised on
basic economic and military policies there will be not fundamental changes from those of Bush. Even regarding finding
solution to the worst ever crisis US economy is going through, he has promised to follow Bush’s policies in the main.
He has not promised to remove the US army from Iraq. Nor has he said anything about a different approach to
Afghanistan occupation. On the contrary, he has talked bout increasing troop strength to facilitate the elimination of Bin
Laden. Towards Latin America or other regions also there are no change in his approach. As far as India is concerned,
he has promised comprador rulers here about his continuing support to them in line with Bush’s policies.
All talks about a black becoming president for the first time are meaningless. White or black, all presidents and
their men serve the barbarous system there. Change of presidents do not make any changes in basic policies. If a
good riddance is needed the only way is to work for throwing out the imperialist system there itself.

From the pages of History

Overcoming Empiricism
Notes on studying Lenin’s “Materialism and Empirio-Criticism”
Ni Chih-fu
FOLLOWING Chairman Mao’s teaching “Read and study seriously and have a good grasp of Marxism,” I have
stepped up my efforts to study several works by Marx, Engels, Lenin and Stalin and Chairman Mao’s works in a
planned way over the past two years. Recently I have studied Lenin’s Materialism and Empirio-Criticism and I have
come to realize more deeply than ever that it is all the more necessary for me, formerly an ordinary worker and now
holding some leading posts, to redouble my efforts to study revolutionary theory, overcome empiricism and enhance
my consciousness of the struggle between the two lines. Only in this way can I become a conscious and sober-minded
proletarian revolutionary and firmly advance under the guidance of Chairman Mao’s revolutionary line.
Two Opposing Theories of Experience
Chairman Mao has pointed out: “Idealism and mechanical materialism, opportunism and adventurism, are all
characterized by the breach between the subjective and the objective, by the separation of knowledge from practice.”
(On Practice). Bogdanov and other swindlers like him who had sneaked into the Party in Russia were such
opportunists. In his Materialism and Empirio-Criticism, Lenin concentrated his efforts on trenchantly exposing this
characteristic of theirs. While these scoundrels opposed revolutionary practice, negated the materialist theory of
experience and advocated the idealist theory of experience, they also opposed the revolutionary theories, viciously
slandered dialectical materialism as ”mysticism” and ”dogmatism” and racked their brains to replace materialism and
Marxism with idealism and revisionism. In this respect, they were by no means isolated cases; Liu Shao-chi and other
political swindlers did exactly the same. While working overtime to trumpet the so-called theory of ”genius,” they
opposed the materialist viewpoint that man’s talent originates from practice; at the same time, they frantically attacked
Marxism-Leninism as outdated and vainly attempted to separate the revolutionary theories from the revolutionary
masses so as to lead them astray and deceive them. All this shows that while we wage struggles against opportunism,
we must uphold the viewpoint of giving first place to practice and oppose idealist apriorism, and at the same time
attach importance to the guiding role of the revolutionary theories and guard against and overcome empiricism so as to
avoid landing ourselves in idealism and metaphysics.
Marxism maintains that experience comes from practice in class struggle, the struggle for production and scientific
experiment. “All genuine knowledge originates in direct experience.” (On Practice). This is true from my own
experience. An example is the chun drill bit*. This has not dropped from the skies, nor is it innate in our minds. It is the
outcome of some one thousand experiments made by members of our research group who have had over a dozen
years of experience at the bench and who have drawn on the advanced experience at home and abroad. In other
words, it was created on the basis of the practical experience of the drilling machine operators.
Similarly, I have learnt much from my own experience. I became a child labourer at 11 in a factory owned by a
foreign capitalist in Shanghai. Toiling like a beast of burden, I barely eked out a living. I had my fill of sufferings from
harsh oppression by foreign capitalists and the exploiting classes. It was under the leadership of Chairman Mao and
the Communist Party that we drove away the imperialist pirates and overthrew the reactionary Kuomintang rule and
the evil exploitation system. We workers have since become masters of our own destiny and are now living a happy
life under socialism. Nurtured and educated by the Party, I quickly raised my political consciousness. My proletarian
feelings—deep hatred of capitalism and ardent love for socialism—are not inborn but are the result of my personal
experience. Prolonged practice in class struggle and the struggle for production has enabled me to realize that direct
experience is very valuable because it is first in order in the process of cognition. Without direct experience, our
knowledge would be like trees without roots and water without a source. In order to correctly know and transform the
world, we revolutionaries must respect practice and experience.
In opposing the materialist line with regard to knowledge, all idealists invariably do all they can to negate the
objective reality of the contents of experience. In order to disguise themselves and deceive others, they often resort to
the old trick of holding up the banner of ”experience” but actually interpreting experience from an idealist point of view.
This was exactly what Bogdanov and his ilk did. They babbled that experience and consciousness were ”identical
concepts,” the ”psychical” and the sum total of sensations, and so on and so forth, that they did not originate in
practice and had no objective contents, but came of themselves subjectively. So in appearance they were talking
about ”experience,” but in reality their distortions and adulterations had turned experience into something idealistic.
Lenin incisively exposed and criticized their trick of playing with the concept of ”experience” when he pointed out that
“there is no doubt that both the materialist and idealist … lines in philosophy may be concealed beneath the word
‘experience.’” (Materialism and Empirio-Criticism). It can thus be seen that adherence to the objective reality of the
contents of experience is the prerequisite for upholding the materialist line on cognition.
Never Regard Experience as Absolute
Can we automatically do our work according to the materialist line on cognition when we have direct experience?
No. We would commit mistakes of empiricism if we regard direct experience as something absolute and rigid—using
partial experience as an unalterable formula and applying it everywhere, using old experience to look at new things
which have developed and changed, or overrating our partial experience and underrating or even denying the correct
experience of others and the masses. And the result would be that we still could not make a clean break with the
idealist theory of experience advertised by Bogdanov and his like and would consciously or unconsciously sink into the
quagmire of idealism.
All things in the world are interconnected and at the same time different from one another. In practice, we should
not only pay attention to the general character of things. More important, we should pay attention to the individual
character of everything, that is, the particular contradiction it contains which distinguishes it from other things, so as to
take appropriate measures to solve the contradiction accordingly. This is what we mean by using the right key to open
the lock. Likewise, we cannot use one prescription to cure all diseases. As to experiences gained from one thing, some
may be applicable to other things, others may be partly applicable and still others may be completely inapplicable. To
neglect the particularity of contradictions and mechanically apply old experience is empiricism.
For instance, I used to bore holes on steel, so I was quite familiar with the characteristics of processing all types of
steel, but did not know much about the properties of cast iron and copper. Once when I was asked to process such
metals, I took for granted that they were more or less the same as steel, so I worked in the same way as I processed
steel parts. As a result, the first drill bit got burnt in no time and the second one was broken before it had bored deep.
What was the reason? It was simply because I one-sidedly stuck to the old experience I had gained in drilling steel and
regarded partial experience as something absolute. Since I took no notice of the specific properties of cast iron and
copper and did not use different methods to resolve qualitatively different contradictions, I divorced the subjective from
the objective and thus ran into snags.
Everything in the world is changing and manifests itself at a certain stage in the process of its development.
Therefore our thinking should not overstep the given stage of development of the objective things and we should not
do at present what can only be done in the future, dreaming of accomplishing everything at one stroke. Nevertheless,
as the objective things change, our thinking must change accordingly, so that we will not lag behind the development
of the objective reality and not use ”old experience” to solve new problems. We say that past experience is correct
because it is gained through practice. But if we cling to it when conditions have changed, then such experience
becomes something subjective.
Since I took up a leading post in the factory, I have been confronted with many problems every day. Being an old
hand in this factory, I subjectively thought that I was well acquainted with its conditions, political as well as in
production, and that with my past experience I could adequately deal with any problem. But contrary to what I had
imagined, I failed to do some of my work satisfactorily though I tried hard. The reason for this was that the conditions
had been constantly developing and changing and that new problems different from those in the past kept cropping up,
while I was still accustomed to doing things in the old way and my thinking was lagging behind reality. To remedy this
situation, I later paid attention to carrying out investigations and study, and strove to improve my methods of work,
freeing myself from routine work so as to devote more time and energy to problems relating to the political orientation
and line. In this way, I gained greater initiative in my work.
The realm of practical activity is extremely wide, but the scope of an individual’s practice is always limited. While
we attach importance to direct experience gained from personal practice, we should also treasure the creations of the
masses, be good at making investigations and study, and learn with an open mind from other people’s experience.
Only thus can we do our work well.
Recalling how the chun drill bit was invented and innovated, I came to a deep understanding that practice by the
masses is a veritable sea of wisdom. It was only after we had conscientiously studied and investigated the masses’
inventions and innovations in drilling and absorbed nourishment from their rich experiences that we were able to make
the five comparatively big changes on the chun drill bit. One cannot have direct experience in everything. Actually most
knowledge comes from indirect experience. If anyone believes only in himself and sets his personal experience
against the masses’ and direct experience against indirect, he will also commit empiricist errors. Chairman Mao has
said: “It is also necessary to learn with an open mind from other people’s experience, and it is sheer ‘narrow
empiricism’ to insist on one’s own personal experience in all matters, and, in its absence, to adhere stubbornly to one’s
own opinions and reject other people’s experience.” (Problems of Strategy in China’s Revolutionary War).
In order to push their revisionist political lines, all opportunists, from Bogdanov in Russia to political swindlers like
Liu Shao-chi in China, always frenziedly opposed materialism and advocated idealism. Empiricism is a manifestation
of subjectivism and formalism. Ideologically, it runs counter to the fundamental principles of dialectical materialism and
historical materialism. This is the ideological root cause why empiricists often blindly follow ”Left” or Right opportunists.
Following the victory of Marxism in theory, revisionists resort more and more to rumours and sophistry to deceive the
people. As Lenin said: “An ever subtler falsification of Marxism, an ever subtler presentation of anti-materialist
doctrines under the guise of Marxism—this is the characteristic feature of modern revisionism in political economy, in
questions of tactics and in philosophy generally, equally in epistemology and in sociology.” (Materialism and Empirio-
Criticism). Under these circumstances, because those people with empiricism neglect the guiding role of Marxism in
revolutionary practice, pay no attention to studying revolutionary theory, are complacent over occasional successes
and glimpses of the truth, are intoxicated with narrow, non-principled ”practicalism” and with being brainless ”practical
men” with no future, and lack firm and correct political orientation, they are easy ideological captives of political
swindlers who are sham Marxists.
Overcoming Empiricism by Conscientious Study
The fundamental way to overcome empiricism is to study Marxism conscientiously. In his Materialism and
Empirio-Criticism, Lenin summed up the historical experience of the struggle over ideology and political line within
the Party in Russia and repeatedly explained the importance and necessity of studying Marxist theory. To criticize the
Machists in Russia, he quoted copiously from Marx’s and Engels’ main philosophical works, dealing fatal blows at the
idealist theory of experience of Bogdanov and his like, thereby setting a brilliant example for us theoretically and in
practice. In order to criticize empiricism theoretically, we must study philosophy. Chairman Mao has said: “Those
experienced in work must take up the study of theory and must read seriously; only then will they be able to
systematize and synthesize their experience and raise it to the level of theory, only then will they not mistake their
partial experience for universal truth and not commit empiricist errors.” (Rectify the Party’s Style of Work). A worker-
cadre like me has deep class sentiments for the Party and Chairman Mao as well as experience in my work, but simple
class sentiments cannot replace consciousness in the struggle between the two lines and pure practical experience
cannot replace Marxism-Leninism. If I should overlook the importance of studying Marxism-Leninism-Mao Tsetung
Thought, which is a summing-up of the experience of the world revolution and the Chinese revolution, I cannot avoid
committing empiricist errors.
Although direct experience gained from practice reflects certain reality of the objective world, it is only perceptual
knowledge and the reflection is superficial, partial and incomplete. “Without comparatively complete knowledge it is
impossible to do revolutionary work well.” (Rectify the Party’s Style of Work). To transform incomplete knowledge
into comparatively complete knowledge, it is necessary to conscientiously study revolutionary theory, use the Marxist-
Leninist standpoint, view and method to sum up one’s direct experience, especially the experience in class struggle
and the struggle between the two lines, and to make a leap from perceptual to rational knowledge through
reconstruction—discarding the dross and selecting the essential, eliminating the false and retaining the true,
proceeding from the one to the other and from the outside to the inside. In this process, the correct standpoint, view
and method are especially important. A leap in cognition cannot be realized without the Marxist standpoint, view and
method. If one looks at things from the empiricist viewpoint, he will not be able to distinguish the dross from the
essential, but will reverse falsehood and truth. And of course he cannot correctly learn from the experience—both
positive and negative—in class struggle and the struggle between the two lines. It is only by studying conscientiously
to gradually grasp the viewpoints of dialectical materialism and historical materialism that one can know the essence of
things in a deep and comprehensive way, grasp the law of objective things, and enhance consciousness and avoid
blindness in work.
Lenin said: “By following the path of Marxian theory we shall draw closer and closer to objective truth (without ever
exhausting it); but by following any other path we shall arrive at nothing but confusion and lies.” (Materialism and
Empirio-Criticism). Class struggle and the struggle between the two lines will exist for a long time. New contradictions
will arise after the old ones have been resolved, and after victory in one battle, one has to fight new battles. The
changing movement of the objective world will never end, neither will our knowledge of truth in our practice. Therefore,
we should make revolution and continue to study as long as we live.
* This refers to a new-type drill bit invented by Ni Chih-fu and the group he belongs to by toppling conventional
theories on bit designing. The new bit has increased efficiency and service life by two to fivefold and three to fourfold
respectively. The fruit of collective wisdom, it is named after the Chinese character chun which means group or the
masses.
[Source: Peking Review, No. 43, Oct. 27, 1972.]

Articles
The International Financial Crisis 2008 Manifests a New
Phenomenon in the Imperialist World System
Stefan Engel

[Stefan Engel, Chairman of the MLPD, speech at a Hall Meeting on November 14th 2008 in Delhi on the issue “Global
Financial Meltdown & Portents for India” - Red Star]
Dear participants,
Dear guests of the meeting
Dear comrades!
I pay my cordial gratitude to you for inviting me to the today meeting. I want to make my contribution in order to
throw a light upon on the extraordinary character and the backgrounds of the current international financial crisis. With
respect to its depth and dimension there is no doubt that the present financial crisis outmatches all that we know in
capitalism since it came into being.
It is a new phenomenon that can be ascribed to essential changes the imperialist world system has
experienced since the beginning of the 1990’s on the basis of the reorganisation of the international production. In
Japan in 1990, there has already been a financial crisis manifested in comparable back-grounds as in 2007 in the U.S.
In my book “Götterdammerung (Twilight of the Gods) over the New ‘World Order’”, that was published in March 2003,
it reads in this respect:
“The 1990 banking crisis in Japan had a new dimension. Prior to this, bank crises always remained limited to
individual institutions or sectors, as, for example, the collapse of the Savings & Loans (thrifts) in the USA at the end
of the 1980s showed.
However, the crisis in Japan encompassed the entire financial apparatus. How could that happen? The
government in Tokyo had abolished the separation between mortgage and other banking operations at the end of
the 1980s. Real estate speculation then was heated up by large debt-financed construction projects. The real
estate prices rose to dizzying heights; the land prices alone doubled in Tokyo from 1985 to 1990. Simultaneously,
a speculative 430 Chapter III/3 stock boom developed.
The Japanese banks, which maintained little capital, had granted extensive loans against the deposit of securities
and property fund shares. To cool down the speculation, the Japanese central bank raised the key lending rates.
This increased the interest rates which individual banks had to pay to the central bank. The banks passed these
costs on to the borrowers, loans were made more expensive, the money supply was curbed, and the growth of
speculative capital was slowed.
The IFO-Schnelldienst described the dramatic consequences: The restrictive monetary policy practiced again
starting in mid 1989 finally made the bubble burst. As a result, stock prices lost almost two thirds of their peak
value in a “piecemeal crash.” Though the losses in value in the property and real estate sector were distinctly
slower, they were and are hardly less dramatic.
The assets destroyed to date are estimated at twice the value of the Japanese gross domestic product. In 1992
the crisis spread to the real economy. As a consequence of the losses in value and the increased cost of finance,
investment and consumption caved in. Then, for the first time, trade and industry came under pressure to reduce
capacities. Due to the cave-in of prices both on the stock exchange and in the property and real estate markets,
the banks were sitting on a huge mountain of now bad loans and dishonoured guarantees. (No. 8, 1999, p. 27;
emphasis added).
Numerous big banks collapsed, including the leading securities house Yamaichi Securities. Due to the bank crisis
the Japanese economy was dragged deeper into the maelstrom of the world economic crisis of 1991 to 1993 than
the other imperialist countries and, through the end of the decade, had considerable difficulty recovering.” (Twilight
of the Gods…, Kapitel III).
However, in those days this crisis was still limited to the Japanese finance capital and did not yet took on an
international character.
In the year of 2007 a mortgage crisis broke out in the U.S. Millions of small homeowners were unable to repay
their loans because the central bank systematically raised interest rates to pay off government debt. The foreclosure
sales took on such dimensions that the entire real estate market in the USA collapsed. Real estate in the USA lost
value so dramatically that millions of loans went bad, that is, no longer were covered by real equivalents. All big banks
in the world therefore had to write off billions, which netted them gigantic losses. To date the banks worldwide have
lost a total of 1.4 trillion US dollars solely because of outstanding loans.
The starting point of this mortgage crisis was based in a gigantic crisis program that was put up by US president
Bush in the year 2001. In my book from 2003 you can read about this:
 “In 2001 alone, the Federal Reserve Board cut the key lending rates for overnight money eleven times; they were
lowered from 6.5 to 1.75 percent, the lowest level in over 40 years. In 2002 a further reduction to 1.25 percent
followed. The interest rates were deliberately pushed down beneath the inflation rate so that a negative real
interest rate was the result. This deliberately devalued savings with the intention of stimulating purchases.
In addition, the US government adopted a tax reduction program on the scale of US$ 1.2 trillion through 2010 and
awarded extensive military contracts in connection with the preparations for a new war against Iraq. But these
measures too did not put a quick end to the overproduction crisis.
The Crisis of State Regulation 439 cheap money was used in many cases to refinance debt and was not spent. At
the start of 2003, US President Bush announced a comprehensive economic stimulus program (“Growth and Jobs
Plan”). It was supposed to pump US $670 billion into private business in the next ten years, US $98 billion in 2003
alone.
Even bourgeois economists doubt that this program will lead the US economy out of its crisis. Normally, an
increase in lower and medium incomes results in an increase in consumption, while the top incomes, the principal
beneficiaries of this stimulus program, are more likely to seek profitable investment.
Moreover, it was questionable whether the rise in stock prices by more than 10 percent, as anticipated by the Bush
Administration, would materialize. On the other hand, it was already certain that the government debt in 2003 –
even without the cost of an Iraq war – would grow by US $300 billion.
It is a well known fact that such debts are repaid at the expense of the broad masses. If a sustained economic
revival fails to materialize in the USA, a similar development as in Japan 440 Chapter III/4 threatens – with even
more far-reaching consequences for the entire world economy.’ (Twilight of the Gods, Kapitel III).
It is a fact that the interest rates of the US Central Bank (FED) increased up to 6,5% in 2007 also as a
consequence of the war on Iraq what as a result made a broad mass of US citizens incapable of paying off small scale
credits and what finally triggered the mortgage crisis.
Marx basically answered the question of how the bourgeoisie tries to surmount cyclical overproduction crises:
“And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of
productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old
ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means
whereby crises are prevented.” (“Manifesto of the Communist Party,” Marx and Engels, Selected Works in three
volumes, Volume 1, p. 114).
But matters wouldn’t have rested with the mortgage crisis. The gigantic losses of the international monopoly banks
triggered off an international bank crisis. In one week the 5 biggest investment banks of the USA disappeared from
the scene. A dramatic blow to the centers of finance speculation!
The bank crisis triggered off an international stock exchange crisis and is in turn being intensified by that crisis.
Massive profit setbacks, losses, and sudden falls in stock prices drain equity capital also at big banks and state-owned
banks.
The force and the speed with which the crisis spread from a relatively small segment, the mortgage banks and a
few hedge funds in the USA, to the international finance system as a whole, including big international banks, was not
expected by bourgeois experts and led to a profound crisis of confidence and even to real panic. To prevent the entire
world finance system breaking down, government measures on an unprecedented scale were taken to get the
international bank and stock exchange crisis under control.
All in all, up to now 5.2 trillion US dollars in state funds have been expended to shore up the banks. Nevertheless,
one still does not get the impression that the crisis has been brought to a standstill or that it has bottomed out.
In view of the danger of the collapse of the world finance system under the impact of the international finance,
bank and stock exchange crisis, the most powerful imperialist states have gotten together to pursue a joint, mutually
coordinated international crisis management. This is something new in this form and points to the political
significance of the current international finance and bank crisis.
This is not just about restoring ability to pay. A single state, and even the EU as a strong alliance, would no longer
be capable of this at all in view of the dimensions of the world finance market and its mutual international
dependencies. So they have no other choice unless they want to go down together. All government declarations
justifying the comprehensive support measures emphasize that the purpose is to restore “confidence in the economic
system”.
 What unites the leading imperialists is the will to maintain their rule at all costs to plunder and oppress the masses
in the imperialist countries, including their system of neo-colonialism for the plunder of the dependent and oppressed
countries.
However, the measures of the state can alleviate the problem of the international finance and bank crisis
temporarily at most, not solve it. The measures taken to cope with the international financial crisis are no new
measures. In my book I wrote the following with respect to the state crisis management:
“Japan, like Germany and France, was not able to get over the 1992–93 setback in industrial output until 1997.
But the next overproduction crisis in Japan came on the heels of this in 1998; this setback had just been made
good in 2000 when the third overproduction crisis within ten years arrived in 2001. In 2001, Japan’s industrial
output was 7.9 percent below the level of 1991.
This tremendous weakness of the Japanese economy was closely connected with the persisting bank crisis. The
Japanese financial system was saddled with a huge burden of “bad loans” estimated to total 50 to 100 trillion yen
(460 to 920 billion euros) in 2001. In ten years, the Japanese government launched ten economic recovery
programs with a total volume of 1,200 billion euros. The Japanese central bank staged one round of interest rate
cutting after the other until it finally came down to a “zero interest rate policy.
With these unprecedented state measures, consumers were to be moved to spend their money instead of putting it
aside for a rainy day. Investment also was to be stimulated. But contrary to expectations, no revival of the economy
occurred, not to mention an economic boom. In view of the gigantic destruction of capital the state programs could
merely keep the contradictions in a state of tension and avert the total financial collapse of the Japanese economy.
However, the other side of the coin was a record state debt amounting to 140 percent of the gross domestic
product. Unsuccessful in bringing about a relative revival of a more protracted nature, the state measures
produced exactly the opposite effect and hastened the further economic decline.
The weekly, Die Zeit, bemoaned the cul-de-sac into which state crisis regulation had manoeuvred itself:
Zero interest rates – no such thing?
Yes there is, in Japan.
There the Bank of Japan demands no more interest since the spring of 1999 – but to no avail.
The economy shrinks, deflation prevails.
The impotence of monetary policy is what dismays the guild of modern economists.…
“The Curse of All That Money,” (Die Zeit, No. 47, 2001).
In contrast to inflation, which devalues money relative to commodities, deflation devalues commodities relative to
money. Deflation is an expression of the law-based tendency to destruction of surplus capital….
Permanent inflation is a phenomenon based on the state monopoly measures taken to redistribute the national
income to the monopolies and on the effect of monopoly prices.
Deflation is a consequence of the battle of annihilation of the international monopolies, which gained in intensity
particularly in the overproduction crisis.
Marx already pointed out the devastating effects of a general deterioration of prices:
“it causes the production process of capital, which is based on certain price relations, to falter; it interrupts the
chain of payment obligations and destroys the function of money as a means of payment.
The collapse of the credit system in turn exacerbates the crisis in the reproduction process.” (Twilight of the
Gods…, Kapitel III).
The root cause of the international financial crisis is in the increasing decay of the imperialist world system,
which expresses itself in the ever larger scope of the share of speculative capital. Speculative capital is nothing but
accumulated capital which can no longer be invested in production to produce maximum profit.
In the speculation, international finance capital searches for new ways to realize maximum profits. The new
dimension of the speculation and the crisis-like bursting of its bubble is a consequence of the reorganization of
international production. The present bank and stock exchange crisis was not caused by a world economic crisis, but
by a speculation crisis.
 From December 2005 to 10 December 2007, the nominal value of the financial derivatives doubled to 596 trillion
US dollars. But that compared with a gross market value of only 14.5 trillion US dollars; this is a ratio of 41 to 1. This
figure shows the extent to which the speculation already has divorced itself from reality.
These financial markets operate outside stock exchange trading, that is, outside the supervision and rules
applying there, and contribute in a major way to destabilize the international finance systems. Mortgage and credit card
debt was securitized, that is, outstanding debts were turned into securities and sold worldwide. The higher the risk of
non-payment was, the higher the returns that were expected.
The other side of this speculation is that no lender can be certain any more that he will actually get the insurance
payout for the credit loss. This substantially contributes to the mutual distrust and the credit crises.
The stock exchange crisis already resulted in enormous losses by the end of September 2008. Compared with
October 2007, over 20 trillion US dollars in speculative capital have been destroyed on the international stock
exchanges. Compared with that: in the stock market crash of 1929 merely it was 50 billion US dollars, or 400 times
less!
The actual main problem is its effect on the process of production and reproduction of capitalist world production,
which further intensifies the finance and bank crisis.
The first block stoppages already are occurring in the automobile industry because the markets have rapidly
collapsed. Since many people today now only pay for their cars with small loans, and these small loans currently are
hard to get, the US car market has declined by as much as 50 percent. As a result, US auto production has been
reduced by one third. In the newest piece of news you can here, the car – sell in India was going back by menus 14%
too.
The danger of the outbreak of a new world economic crisis is imminent.
But as yet the finance crisis has not yet fully gone through to the world economy. In Germany leading economists
have now predicted a “recession” because after the gross national product slightly declined by 0.25 % in the second
quarter of 2008 in comparison to the first quarter, growth rates now decline by 0.5 % also in the third quarter in
comparison to the second quarter.
But this is not a crisis because either the level of the gross national product as well as the level of industrial
production are still extraordinarily higher than the year before. Also the entire year of 2008 will still experience a
positive growth of 1.7 % in Germany. That shows that we have to keep a cool head in analysis making.
The bourgeois governments and their economies currently need to produce a bulk of “credible” propaganda to
justify their subsidiaries benefiting the finance capital as never before.
I assume that the international financial crisis is a precursor to a real world economic crisis.
A new world economic crisis, which will come sooner or later, will throw all previous world economic crises into the
shade as a result of the internationalization of production. It will probably produce much stronger fluctuations than the
previous world economic crises in 1981, 1991 and 2001.
That for the following reasons:
First: Because the Chinese economy now is very closely intertwined with the world economy, we must expect that
China too will be affected by an overproduction crisis – as will India, Russia, Brazil and Eastern Europe, which was not
the case in the years 2001 to 2003.
This would eliminate the special factors which gave the international monopolies a way out of the world economic
crisis of 2001.
Second: The coming world economic crisis will be more comprehensive than the crisis of 2001/2002 on account
of the new stage of integration and interaction of the capitalist world economy and the dimension of the structural crisis
on the basis of the reorganization of international capitalist production.
Third: The transition to a new world economic crisis and the interconnection with the stock market speculation
intensifies the crisis of the reproduction process of capital and will give rise to a string of speculation, money, finance,
foreign exchange, stock market and bank crises.
Fourth: The possibilities of the state-monopoly-capitalist crisis regulation schemes are increasingly more limited
due to the new stage of the internationalization of production. The conventional instruments even have no effect for the
most part.
 When the world economic crisis breaks out with full force, no package of state crisis measures will be able to bring
this destruction of capital under control.
New drastic crisis-retarding measures will trigger off new government budget crises within a short period of time,
even to the point of national bankruptcy.
Against this backdrop, the Report of the Central Committee of the MLPD to the Eighth Party Congress
forecasts:
“Owing to the decreasing effect of the state crisis regulation, the upward variations between the crises and the
downward variations during the crisis are stronger.
That leads us to expect a far-reaching destabilization of the future social development especially upon the
outbreak of a new world economic crisis.” (pp. 18 ff.)
The world economic crisis that can expected with the force of law makes very clear that the temporary economic
upswing of 2004 to 2007, contrary to all public propaganda, was not an expression of a stabilization and positive
development of the imperialist world system. It was mainly the result of special effects in the world economy:
In fact, an upswing of the world economy since 2004 caused the world product to rise from 31,823 billion US
dollars in 2000 to 54,312 billion US dollars in 2007. The concrete causes of this growth can be found in an enormous
expansion of the world market due to the integration of East European and many neo-colonially dependent countries.
In these countries a tremendous structural crisis was and is taking place owing to the destruction of the
bureaucratic-capitalist mode of production.
So the basis of the upswing is an incredible destruction of traditional capital through the reorganization of
international production, the dimensions of which even throws the destruction caused by major wars into the shade.
International finance capital assimilates these economies, completely changes their production, smashes existing
production structures and builds up huge overcapacities to supply these new markets.
Just in the so-called BRIC countries – Brazil, Russia, India and China – 40 percent of humanity lives today.
Gigantic investments of international finance capital streamed into these countries, and this drew further countries into
an economic upswing.
The upswing of the world economy brought the international super-monopolies tremendous growth and gigantic
maximum profits. The sales revenues of the 500 biggest super-monopolies rose from 2004 to 2007 at an annual rate
of between 10 and 13 percent – their reported profits grew each year by 25 to 30 percent.
This was the result of tremendously increased exploitation of the industrial workers and shameless plundering of
government coffers around the globe. While the number of employees in the 500 biggest super-monopolies of the
world rose by 15 percent to 54 million from 2003 to 2007, the sales per employee exploded in the same period by 25
percent to 436,000 US dollars in 2007.
Dear Comrades,
With law-governed effect the coming world economic crisis will combine with deep political crises; the already
chronic latent political crisis will break out deeper and more often. It will intensify the class struggle between the
monopolies and the working class to the utmost and constitute the basis for the revolutionizing of the working class
and the broad masses.
The Hamburger Party Congress of the MLPD came to the conclusion:
“The large-scale failure of crisis-moderating government regulatory activities leads us to expect that the coming
world economic crisis will have a comprehensive and deep character never before seen since the Second World
War.
This can speed up the process of destabilization of the imperialist world system, sending tremendous shock waves
through the economic base and the superstructure and leading to an extraordinary intensification of the class
struggle.
Sudden, rapid developments in the transition to the global environmental catastrophe also can deeply shake the
social fabric.
Whether or not the economic and political crises that can be expected will grow into a revolutionary crisis depends
mainly on the interpenetration of the objective factor with the subjective factor of class struggle. .......
 It is the historical mission of the international working class, together with its allies, under the leadership of Marxist-
Leninist parties, to overcome imperialism and to make the dream of a socialist society rid of exploitation of man by
man come true through its conscious act.” (Dokumente des VIII. Parteitag, p. 236)
The ruling classes are well aware that the imperialist world system finds itself in a crisis-charged transitional
situation. The laws inherent in their worldwide rivalry force them to unscrupulously intensify the exploitation of the
international working class to the utmost.
They will make every effort to cut achieved wages, social benefits and democratic rights and freedoms to the level
of the lowest standards in the world. They will generate poverty, hunger and misery for billions of people, shedding
imperialist crocodile tears as they do, to ensure their maximum profits. The ruling forces systematically are preparing
to maintain their power with every means available to them in a future political crisis.
Dear Comrades,
Our theoretical analysis in the book, “Götterdämmerung over the “New World Order”‚ published in March 2003,
closes with the words:
“When the battalions of international finance capital marched out to reorganize production, distribution and finally
the world in their interest, they had no idea that their crusade would only accelerate their general decline.
Drunk from their own propaganda about the “end of history” they also were not aware that by unfettering the
international productive forces they would give new strength and perspective to the revolutionary aspiration of
mankind for a new society without exploitation, oppression and war.
The twilight of the gods, the Götterdämmerung of international finance capital has broken.
It is the eve of a genuinely new world order – of the united socialist states of the world.” (Twilight of the Gods
…,Kapitel III).

Crisis of Finance Capital

Sasidharan
ON SEPTEMBER 15, 2008, Lehman Brothers, one of the world’s leading investment banks, filed for bankruptcy.
Banks and financial institutions going up in smoke are not new phenomenon. But then it has generally been weak
banks that people ceased to trust. The Lehman episode was unique — here was a financial institution with the highest
investment rating suddenly going bust. And Lehman was not an isolated instance. Suddenly, within a gap of few days,
a spate of financial giants — Bear Stearns, AIG, Fannie Mae and Freddie Mae, Meryll Lynch, Washington Mutual —
collapsed like nine pins and were put up for sale or rescue by the United States Government. The latter was quick to
respond. In no time a bail out plan worth seven hundred billion dollars – more than the national income of India – was
put into effect. It literally meant placing Tax payers’ money [about $9400 per head] at the disposal of the very same
[financial sector] honchos, responsible for creating the problem in the first place. Similar bail out packages came up in
United Kingdom and other leading world capitalist centres.
The Sub Prime Crisis
The immediate backdrop to the failure of Lehman and others is the Sub Prime Crisis. As the name suggests, it
involves financial institutions lending or investing money to purchase financial assets that are below [sub] prime -
carrying higher risks of default but also promising higher returns.
A large part of these debts were in the housing and mortgage market. A curious logic was at work here. When
credit was freely available for buying property, it generated demand, which in turn jacked up property values. Higher
values meant more collateral and even more refinancing of mortgages. Borrowers were willing to pay higher interest so
long as they believed that capital gains they could make from property appreciation exceeded the interest costs of
servicing their mortgages. The lenders, typically mortgage finance companies, faced a problem — Where to find the
money to pay for all that mortgage? And what if the borrowers defaulted [or were unable to repay]. The solution was
easy —.these primary lending agencies simply repackaged the collateral they had at hand and offered these as
mortgage backed securities to be purchased by Lehman brothers and other financial behemoths. The latter purchased
the debt [whatever its quality] and assumed all the risks that went with it. For the purpose they used funds borrowed or
raised from all over the world [e.g. the Tokyo market where they could borrow at low interest rates]. It should have
been obvious to all concerned that the housing market was a giant speculative bubble. Property values could not rise
indefinitely. As property values crashed mortgage backed securities turned into a heap of bad debt held by financial
institutions. Though the collapse was predictable, the reality is nobody cared – since there was money to be made
meanwhile. Now suddenly everything seems to have gone wrong. The sub prime crisis ushered a strong sense of
mistrust of all credit, which spread to all collateralised obligations, so much so that even the inter bank market [banks
lending to one another for short periods] is in trouble. When credit dries up [no body trusts anybody anymore], its
impact on the real economy [which is credit driven] can be well imagined.
Financial market failures, such as we see today, are part of a far deeper crisis that has already engulfed the world
capitalist system. Long ago, Marx predicted that capitalism would dig its own grave. He based his prediction on the
fundamental contradiction of capitalism — between social production and private appropriation — to be reflected in
more specific crises of over production and under consumption. These contradictions continue to be at the heart of the
current recession — just as it was predicted by Marx. But capitalism has metamorphosed a great deal since the days
of Marx. Indeed for many decades capitalism, instead of collapsing, seemed to grow from strength to strength [while
the “socialism” of the Soviet Union collapsed] prodding bourgeois economists to gleefully gloat that Marx was a ‘failed
prophet’. It is necessary to examine, reflect and debate on what has happened to capitalism. How has it changed and
how have these changes impacted the world? In this essay, we shall confine to just one dimension of capitalism — its
financial dimension.
Finance and Finance Capital
We shall define finance as the transfer of purchasing power from one entity [person or institution] to another,
through creation of a claim. A hundred rupee note for example represents a claim on the government just as a bank
FD is debt created by a bank and a share certificate confers a claim to ownership over the company that issues the
share.
The emergence of finance was a critical step in the development of capitalism. Historically, capitalists were those
who invested their own capital [including borrowings from friends etc], put labour and machinery to work and created
commodities which they sold for profit. Small capitalists became bigger by reinvesting these profits to accumulate more
capital and so on. This process of accumulation and the need to find new markets provided the essential dynamism for
capitalism and made it a progressive force vis-à-vis the archaic feudal and pre capitalist environments in which it grew.
Finance capital brought a new angle to the process of accumulation. It enabled one to become big without having
to necessarily start small and work one’s way up. In other words one did not need to go through the process of Capital
> Production > Profits Re-invested > more capital
Through borrowing from a financial intermediary [like a bank] or raising capital via debt or equity securities, one
could gain access to enormous amounts of social surplus. A great deal of what we call capitalist enterprise in the
twentieth century, consisted of firms that had grown big through [financial] capitalisation. This had great significance for
the process of capitalist development. Wherever capitalism had torn asunder the feudal and other pre capitalist social
formations, it was driven by competition and the need to expand the market. Finance capital made it possible to create
monopoly enterprises without one having to go through competition. These monopoly holdings have been at the
centre of the ‘enclaves of development’ amidst the sea of poverty that we see in many third world countries.
It was Hilferding [cited by Lenin in his work “Imperialism..], who defined finance capital as bank capital [capital in
money form] which is transformed into industrial capital - controlled by banks and employed by industrialists. In reality,
there were three distinct models or paths through which finance capital was converted into real capital.
First was the Anglo–Saxon model that took shape in the United States, Britain and some other countries. Here the
needs of [long term] capital for enterprises were largely raised by way of corporate securities – bonds and equity
stocks. These countries consequently emerged as the natural homes of the ‘equity culture’. Over the decades
individual investors have been replaced by institutional investors like mutual funds, pension companies and portfolio
management services who now play the market and call the shots.
The second was the Jhunker or Prussian model of development – which typically emerged in Germany and
Japan. Here finance for industry came from the banks, typically in the form of large holding companies [financial
oligarchies like the Krupps family in Germany and the Zaibutsu combines in Japan]. It was perhaps not by chance that
the two countries came together during the Second World War.
The third model of development took the form of State Finance Capital – where finance capital [purchasing power]
was raised and disbursed through the intermediation of the state. The last of these is of particular importance to us
because it explains a great deal of what happened in the world, for nearly four decades, during the post war years.
State Finance Capital
Lord Keynes may be rightly considered to have fathered the logic of state finance capital. Classical and Neo
classical economists considered the economy to consist of three markets – goods, labour and money, in each of which
the demand, supply and price were determined separately. This was termed as the classical dichotomy. The role of
government in economy was minimal here. Keynes broke this dichotomy and showed how an action in the market for
money could influence outcomes in the other markets. Indeed, Keynes advocated ‘paying people money for digging
up holes in the ground and filling them again’. The logic was that once people had money in their hand, they would
spend it. This would stimulate demand, enable firms to clear unsold inventory and stimulate production, income and
employment.
The Keynesian prescription could best be understood by examining the “Budget”, the instrument through which
the state engages in its economic activities. For you and me a good budget is one that is balanced – that is, we do not
spend more than we earn. This notion was held to be relevant to government as well. Keynes refuted this logic and
ushered the principle of “functional finance”. The budget, [representing state expenditure and income], according to
him, had a major function to perform in influencing income, employment and other macro economic variables. A good
budget was typically unbalanced. The watchword was first decide what to spend and, if tax revenues and other
earnings fall short of what is needed to fund excess expenditure, obtain the rest through creating a fiscal deficit –
raising finance capital by means of public borrowing or simply printing money [deficit financing].
Keynesianism emerged as a dominant ideology of western capitalism, especially in the aftermath of the
depression and post war years. In advanced capitalist markets the state lent its support and succour to shore up and
stabilise the markets. It also actively engaged in setting up and managing economic enterprises and utilities,
complementing and supplementing private monopoly enterprises. State finance capital was also used to promote
various ‘welfare state’ initiatives.
Meanwhile, many third world countries had gained ‘political independence’ in the wake of changes in the old
colonial order. The ruling classes in these countries did not necessarily have ownership of large amounts of capital
[indigenous capitalism had been decimated during the years of colonial rule]. State finance capital emerged as the
means through which they could get access to and command social surplus. In India, for example, the pre 1991
regime involved an attempt to create a ‘national development path’ by relying on ‘Public sector at the commanding
heights’, ‘Import substitution industrialisation’ and ‘democratic socialism’. None of these would have been remotely
possible without the large budgetary deficits and public borrowings on which Nehruvian ‘socialism’ was founded.
The Post War Era
How were these systems of the third world integrated with the world imperialist order? The Second World War
had devastated most of the economies of Europe. The old colonial order was difficult to continue. The main challenges
facing post war western capitalism was economic reconstruction and fighting the cold war with the soviet bloc.
In 1946, a landmark conference at Bretton Woods in England led to the formation of the International Monetary
Fund [IMF] and the International Bank for Reconstruction and Development [later the World Bank]. The IMF was an
institution from whom member countries could borrow precious foreign exchange [in the form of special drawing rights
or SDR s] which is required to meet a crisis in their balance of payments. The World Bank was set up to provide
‘developmental aid’ to developing countries. The end purpose of both was to promote a stable environment where
world capitalism could thrive.
During the three decades that followed the US emerged as the world’s leading economic power.The US dollar
became the world’s base currency and its price [$35 = 1 oz of gold], the reference for pegging other world currencies.
Everywhere people sought to hold dollar reserves. A new surge in consumer demand backed by ease of credit and
buoyant optimism helped manufacturing in US and other western countries to leapfrog ahead. The two decades after
the war were golden years for US capitalism.
Cold war pressures led to leading capitalist states coming to new arrangements with the newly emergent third
world states. The objectives were twofold – to secure allies in the cold war and to ensure happy hunting grounds for
western capitalist enterprises. The old colonial discourse was replaced by new theories of development economics –
which advocated take off through diffusion of western culture, technical know how and capital goods to ‘overcome
centuries of stagnation’. Integration with the world capitalist system was secured through tied aid – both bilateral and
multilateral – where would be borrowers had to submit to numerous conditionalities. In India, the state led ‘socialistic’
path of development involved large infusions of foreign capital and technological imports [under various collaboration
agreements] financed by massive budgetary financial support. The imperialist powers also sought and secured
concessions and facilities for foreign capitalist firms to set up branches, subsidiaries or joint ventures with local
capitalist enterprises. We must note that import substitution industrialisation as attempted in India and other third world
countries did not fundamentally alter the old colonial pattern of trade – these countries still exported low value primary
commodities and imported high value manufactures, placing them at a disadvantage. The fact remains that quite a lot
of indigenous industry was developed during this period. Agriculture also underwent a transformation in certain areas,
resulting in the emergence of a sizeable middle class.
The Neo Liberal World Order
 The transition to the neo-liberal phase of imperialism was brought to head by a number of factors, some of which
are discussed below:
Firstly the post war economic revival and rapid industrialisation in Japan, Germany and other markets soon
ushered a decline of US hegemony in industrial manufacturing. This was visible in many key industries like
automobiles and home electronics. A more multi polar world was emerging at least where industry and economy was
concerned. With home markets fast shrinking [in US, UK and elsewhere] firms needed to seek fresh pastures with an
urgency that was unprecedented.
The intense competition that emerged among firms also brought about a spate of cross border mergers and
acquisitions, strategic tie ups and global interpenetration of ownership holdings across countries that both created a
trans national capitalist class and led to the emergence of Global Corporations. Globalisation, we all know, has
become the mantra of the neo liberal world order. Its essential kernel was given by the internationalisation of
production and with it, an international division of labour that was affected under the aegis of these Trans National
Corporations [TNC s]. Even in earlier periods we had cross country flows [exports] of goods and capital [foreign
portfolio investments and aid]. What is relatively recent is the internationalisation of the [production] value chain. This
has happened because of the vertical disintegration of production activity [so that production processes are relocated
and geographically dispersed]. At the same time there is even stronger vertical integration of control. The head office
of many a TNC has centralised its management of finances and other aspects of strategy. Thus when you buy a
Computer today it may only have been finally assembled in India. The mother board, the monitor, the CPU and the
keyboard are all manufactured elsewhere while the software is typically American [Microsoft]. The assembled product
in turn may be sold in a dozen other markets. Globalisation is a programme of the TNC, for the TNC and by the TNC.
The internationalisation of production made it vital to have standardisation – of market conditions, private property laws
and contract enforcement, dismantling of barriers to trade, profit repatriation and capital flows – all of which were to
form a part of the neo liberal agenda.
The rise in oil prices during 1973, while ushering a stag-flationary crisis in western energy intensive economies,
also made the Arab sheikhs a flush with money, which they typically held as dollars and euro dollars [US dollar held
outside the US] with international banks at London and other world financial capitals. Since money cannot stagnate in
bank vaults but must be rolled, a large quantum of it was lent out to third world countries during the seventies and
eighties at high rates of interest. When these economies [e.g. Mexico] began to default, the banks began to panic. It
was here that the multilateral agencies like IMF stepped in. While helping to reschedule some of the loans, they also
imposed a rigorous discipline and rules of order on member countries that had been forced to turn to them for succour
against their debt and balance of payments crisis. The Structural Adjustment Programme, which was advocated for
third world countries by the IMF and World Bank, contains a series of prescriptions derived from what has been known
as the Washington Consensus. Meanwhile, the onset of the World Trade Organisation [WTO] established a whole set
of international rules and protocols to be ushered through enforcement and dispute settlement mechanisms [of the
WTO]. These sought to undermine the sovereign right of individual countries to regulate and structure their trade,
investment and market practices.
Let us consider some of the mechanisms of integration that form part of what we may call the neo colonial system
First of all there is the neo liberal agenda. As an economic ideology it has its roots in the writings of Milton
Friedman and the Monetarist economists. As opposed to Keynesianism [which essentially advocates the state’s role in
reform of the market], Monetarism calls for a cut back of all measures [particularly government expenditure] that might
lead to increasing the fiscal deficit [it is termed as fiscal discipline]. The other aspect of neo liberal ideology was Market
Fundamentalism – the strong advocating of the view that markets must be allowed to freely play so that they tend to
equilibrium. All participants must be allowed to pursue their self interest untrammelled. In the advanced western
markets, neo liberalism was driven in the eighties during the Thatcher – Reagan regimes. There was a strong cutback
on the role of the state. The privatisation of health care and other social utilities and infrastructure dispossessed those
who could not afford these facilities which had previously been their entitlement. Old age security for millions
meanwhile has been undermined by changes in pension markets. Almost all western industrial economies, we must
remember, are aging societies with a huge and increasing proportion of old. The neo liberal measures firstly cut the
state pensions that they were entitled to and secondly ushered a move from defined benefit programmes [where the
pension benefit to be given was definite and guaranteed] to defined contribution programmes [where the pension now
depended on earnings in the stock market or wherever the employer – employee contributions were invested].
The neo liberal agenda as ushered in third world countries, found formal expression in the Washington consensus
– a set of prescriptions that form the basis of the Structural Adjustment Programme imposed by the IMF and World
Bank. The prescriptions include:
Fiscal policy discipline – in essence a cut back on state financial borrowings and expenditure
 - Redirection of public spending from subsidies [and areas involving state interventions in markets [to areas like
primary education, health care and infrastructure [where foreign capital may not be much interested].
- Tax reform – broadening the tax base.
- Interest rates in the economy to be entirely market determined. Similarly foreign exchange rates to be set by
competition.
- Trade liberalisation – elimination of licensing and all quantitative restrictions and reduction of tariffs to
minimum.
- Liberalisation of conditions for foreign direct investment.
- Privatisation of all state enterprises.
- De – regulation : the abolition of all controls that impede market entry and restrict competition, particularly for
foreign enterprises.
- Flexible labour laws that permit freedom of operation in the labour market [in effect freedom to hire and fire at
will].
- Legal enforcement and security for property rights.
Take a look at the various economic policies of the Indian government during the last few years [including the
much touted rural development initiatives for improving education and primary health care]. Do you see how the
Washington consensus is being played out?
Another major imperialist thrust area in the third world has been the attempt to encourage [to some extent force]
commercialisation of economic activities that were not earlier seen as strictly being commercial. For example in
agriculture we have the shift of large masses of land from food grain cultivation to production of cash crops [for export],
whose fortunes now came to depend on the vagaries of international price movements. Similarly many industries that
were previously in the public domain [like telecom, power, transport and financial services] were now brought within
the private domain. An important point to note here is that with the US being booted out of its hegemony position in a
number of manufacturing industries, it now found ascendancy in the area of services [like IT, retail, financial services].
This has prompted an attempt to seek privatisation and opening up of a number of service sectors in third world
markets, where it could dominate the show. Services incidentally have come to dominate India’s GDP in last few
decades.
The third area is integration of labour markets. This has mainly taken the form of outsourcing and body shopping.
In both instances third world labour [including highly skilled and educated workers like engineers] is hired cheap,
relative to their counterparts in the industrial markets, for performing a range of production and service operations.
From the IT boom to medical transcription, to call centres and BPO / KPO units, a good segment of the emerging
educated youth in India draw their sustenance from these units.
Financial sector integration is the fourth area. In particular we are referring here to the opening up of bond and
equity markets and the large flush of foreign institutional investor [FII] funds in various markets including India’s. A
major cause of the East Asian crisis of the nineties, for example was the operation of hedge funds [high-risk purely
speculative foreign investor funds]. The recent collapse of Indian stock market is mainly due to the exit of FII s from
the market. The ease of inter-country investment in stock and bond markets hs also made ownership of enterprises
takes a more global character.
Finally we have the cultural hegemony of imperialism. Information and entertainment have been among the fastest
growing segments of the world economy. The wave of mergers, acquisitions and strategic partnerships have ushered
a set of global media and channel giants identified with a ‘global culture’. From beauty pageants to IPL; realty shows
to M - TV; Pop religion [gurus] to the culture of equity; ascendance of the MBA s in education to the language of SMS
– in each aspect of life we see a shift in the way people think and act; their belief systems and what they consider to be
right. We can see the predominance of values like crass individualism; viewing everything as a commodity with a price
tag; aggressive competitiveness and dog eat dog; growing alienation in relationships stemming from a view of people
as objects to be used. These values are not only promoted through media and various channels but increasingly have
become a way of life.
In a word, the neo liberal era marks a phase of far deeper integration with the world capitalist system. An
important factor in this process has been imperialism’s ability to draw the local elites and middle classes across the
world into its orbit and ranks. Many of them have been deluded by the offer of inclusion into a privileged band of
international elite. Cultural hegemony and the opportunity for crossing borders for better jobs form part of the noose.
 One implication of global integration of markets is that failure in one country [especially like the US] can send
markets crashing elsewhere. It is in this context that we must view the current crisis in the world financial system.
Casino Capitalism
Let us start with certain home truths about finance.
All financial assets are ultimately just pieces of paper which embody a promise to pay in future. The value of the
asset [the promise] hinges entirely on expectations about the future. Buying equity shares is profitable if their prices go
up. Bonds lose in value if market interest rates rise. Holding dollars is hazardous if dollar values crash. Health
insurance comes handy only if one incurs hospital expenses. Expectations about the future differ from person to
person. It depends a lot on what information people have and how they process and use that information. This
asymmetry [difference in the level] of information is what enables some people to make money while others lose it in
financial market speculation.
Another home truth is that financial values must ultimately reflect real values. An economy grows and generates
value only when financial assets are used to harness productive forces which are utilised to generate real goods and
services, leading to growth of income in real terms. Debt cannot be repaid unless debtors have surplus in hand –
which is again the result of using debt productively to generate income in real terms. Prices of shares must ultimately
reflect earnings from production and sale of goods. However these rules become more potent in the long run than in
the short. In the short run it is possible for prices of financial assets to deviate from the real value of these assets.
There is quick money to be made by betting on how these prices would move – what we call risk assumption in the
language of finance.
A third point is the power of leverage. Let’s say that X has a capital of Rs 1000 and borrows another 2000 at 15%.
If X now invests the entire 3000 in a risky venture that yields say 18%, its earnings are Rs 540 [@ 18% of 3000] while
it has to pay out Rs 300 [15% of 2000]. X makes a net profit of Rs 240, which amounts to 24% on its initial capital of
Rs 1000. This is an example of how huge profits can be made by using financial leverage and assuming risk. Indeed
the corporate profits of the financial sector in 2004 stood at $ 300 bn, as against $534 bn for non financial sector – or
40% of the domestic corporate profits. This share had grown from less than 2%, forty years earlier.
Finally, too much money chasing anything – be it commodities or shares - sends prices up in a tizzy and vice
versa. Prices can be rigged up or down. Speculators in financial markets do not make money so much by assuming
risk [volatility] as by creating it – and fooling other investors in the process. Speculation can thus be a case of
legitimised stealing, only here the thieves become the anointed.
Casino capitalism is a term we shall use to refer to a situation where more and more finance capital is expended
for speculative purposes rather than to harness real capital goods for production. In a casino the stakes are loaded so
that which ever way you look at it the ones who place the bets ultimately lose. When financial assets and their markets
become playgrounds where investors ultimately are left holding the bag, we get a situation similar to a casino. Let us
examine some major trends that signify this shift in the way finance capital has come to work.
The most significant trend perhaps, is the enormous growth in consumer spending that has been financed through
multiple credit cards, personal loans, home loans etc. The binge in consumer spending on borrowed money began in
the US several years ago – even as recessionary trends led to loss of jobs; death of several domestic companies and
decline in real incomes, demand remained buoyant. In fact, over the years the US has emerged as the world’s largest
consumer, gobbling goods and services from all over the world – In fact by 2006 the US trade deficit had reached a
record 817.3 billion dollars. This was possible because the rest of the world held dollars as a reserve currency. Indeed
so long as there has been a demand for dollars overseas, the federal reserve of the US could as well print dollars out
of thin air. Again, a large part of the money for financing consumption was provided by banks and other financial
intermediaries who in turn borrowed or raised capital from the rest of the world. In essence this meant that the savings
surplus of the rest of the world was used to finance US consumption. All this was fine so long as people believed that
the US economy was strong and the US government could honour its commitments. The panic is in part because the
world is no longer as sure. The sharp depreciation of dollar as a currency vis-à-vis other world currencies is an
indication of the uncertainty..
The other trend is the change in the profile of banking and other financial institutions.
Commercial banking have been traditionally in the business of accepting deposits [current, savings and fixed] and
giving secured short and medium term loans to industry. Bank deposits were guaranteed by federal [central bank]
reserves, which in turn required banks to maintain adequate amounts of secure assets [e.g. provisioning under Cash
reserve ratio and Statutory liquidity ratios] in their balance sheets. Investment banking was meanwhile meant to meet
Industry’s long term needs of capital, through underwriting of securities, project financing, funds for capital
restructuring etc. Insurance companies addressed life and non life contingencies and placed their premiums in secure
investment avenues. Investment intermediaries like mutual funds engaged in portfolio management and investment in
capital markets.
The current financial crisis can be traced in part to financial institutions straying from their traditionally assigned
roles and assuming increased risk in a bid to generate more returns. The instances are numerous. They include:
Commercial banks flouting time honoured principles of credit management and ending up with large amounts of
Non Performing Assets [NPA s] in their books
Banks getting more and more into Off Balance sheet items [not reflected in their balance sheets] – these enable
them to get out of the purview of regulatory stipulations but also lead to more risk taking
Investment banks taking highly speculative positions in derivatives and commodities markets – creating exotic and
overvalued ‘structured products’
The emergence of leveraged buyouts [LBO s] where debt is used to raid and buy out beleaguered companies,
who are then driven to desperation, in trying to pay the debt
The predominance of investment linked products in portfolios of life insurance and pension companies – these
may yield promise of higher returns but they also can wipe out one’s lifetime savings in a trice
The redeployment of finance capital in food, fuel and minerals causing a new bubble in prime commodities and
generating price inflation. This comes at a time when people are already reeling from depression and unemployment.
Note that the casino has in recent decades become the frequented haunt of corporate capital. As corporate units
found that the revenues they earned could not be absorbed in production outlets they spilled out into financial
speculation. Indeed, financial assets have come to occupy a disproportionately high share of their balance sheets.
The profits of the speculative bubble were what enabled them to sustain their growth and high earnings per share
[EPS], enabling CEO s and Vice Presidents to earn their high bonuses and royal life styles.
The party is over. The thieves who have ripped the world so long are laying low or have begun to don holier than
thou garbs. What does it all mean for us?
As seen above, the reforms process in India was very closely aligned with the structural adjustment agenda of the
IMF / World Bank. The integration of India to the capitalist world system has increased multifold. At the heart of the
reforms in the financial sector was the obsession to develop capital markets at the expense of other segments of the
financial sector. In a sense, the whole effort of financial sector policy seemed to be wedded to the mantra of promoting
the cult of equity. The newspapers and the media seem to talk of nothing else. Thus development finance institutions
in India [like IDBI and IFCI] were deemphasised and allowed to decay in their avatar as investment banking
institutions. Commercial banks were discriminated against vis-à-vis mutual funds. Public sector banks have been
prodded to involve both directly and indirectly in capital markets. Artificial props like fiscal incentives were given to
boost equity investments under successive fiscal regimes. Several measures were taken to boost FII investment in the
capital market. Government savings [like PF and NSS] have been suppressed by limits imposed on their interest rates.
Opening up of insurance market has resulted in most of the premiums being invested in the capital markets [under unit
linked policies]. In spite of all these developments the equity cult has not quite caught up in India. The large mass of
people are wary of it, especially because of its numerous scams and the still widespread mistrust of the role of brokers
and fly by night operators. The stock market crash [fall of index from 20000 to 8000] came about primarily because
foreign institutional investors took their money back home. It has directly hit only a segment of households. At the
same time, industrial units in India are reeling both because of falling demand [at home and abroad] and lack of
capital. Again, it is not easy to determine the degree and extent of exposure of many Indian financial institutions to the
vagaries of financial speculation in the world market. There are a lot of hidden skeletons lying around. We also do not
know the actual extent to which Indian markets have come to be intertwined with the global market. All we can do at
present is repeat after the prime minister that “things are not going to be easy”. Obviously he knows a lot more than he
is prepared to reveal.
In sum
Imagine you have a neighbour called Uncle Sam. For years he has been taking money from you and other
neighbours, with a vague promise of return in future. He uses this money to buy a lot of goods from you and other
neighbours [30% of all consumption in the area is by his household]. There is worry that if he stops buying many in
your household would run out of jobs and income. He has also chipped in his money to raise the stakes in your in
house poker table [it has names like Dalal street]. Now Uncle Sam is in trouble and many [including those in your
house] who were his partners are crying hoarse. They scream “TINA” [There is no alternative] – “Uncle Sam must be
saved for all our sakes”
Uncle Sam is World Capitalism. Should it be saved? Is there no alternative?
Recent Economic Crisis and The Tasks of the Working Class
Sanjay Singhvi
TODAY, a lot is being said in the media about the recent crisis in the US, and global, economy. Editorials in leading
dailies have made bold to predict that the melt-down will not affect India. They point out to what they insist on calling
“the strong fundamentals” of the Indian economy. Even in today’s Hindustan Times (25th November, 2008), the
Finance Minister has stated the India was “nowhere a recession”. He insisted that there was merely a “slow-down” and
that we may expect a “moderation in the growth rate. Of course, that has become the target of bourgeois economists
nowadays – to assuage public fears and prevent “a run on the bank”. In fact, this insistence on fiddling while the
economy is burning is not a new phenomenon. It has been in existence for long as can be seen from what John
Kenneth Galbraith had to say in his book “Money: Whence it came and where it went”
“Where economic misfortune is concerned, a word on nomenclature is necessary. In the course of his disastrous
odyssey Pal Joey, the most inspired of John O’Hara’s creations, finds himself singing in a Chicago crib strictly for
cakes and coffee. He explains this misfortune by saying that the panic is still on. His term – archaic and thus
slightly pretentious – reflects the unfailing O’Hara ear. During the last century and until 1907, the United States
had panics, and that, unabashedly, is what they were called. But, by 1907, language was becoming, like so much
else, the servant of economic interest. To minimize the shock to confidence, businessmen and bankers had
started to explain that any current economic setback was not really a panic, only a crisis. They were undeterred by
the use of this term in a much more ominous context – that of the ultimate capitalist crisis – by Marx. By the
1920s, however, the word crisis had also acquired the fearsome connotation of the event it described.
Accordingly, men offered reassurance by explaining that it was not a crisis, only a depression. A very soft word.
Then the Great Depression associated the most frightful of economic misfortunes with that term, and economic
semanticists now explained that no depression was in prospect, at most only a recession. In the 1950s, when
there was a modest setback, economists and public officials were united in denying that it was a recession – only
a sidewise movement or a rolling readjustment. Mr. Herbert Stein, the amiable man whose difficult honour it was
to serve as the economic voice of Richard Nixon, would have referred to the panic of 1893 as a growth
correction.”
A crisis by any other name will stink just as much. However one may try to assuage the “panic” in the general
public, by giving mild and innocuous names to the current economic misfortune, it is clear that we are bang in the
midst of a full-blown economic crisis.
Even today, bourgeois economists make do with the explanation that the crisis was created by the unbridled
“greed”. They point out to the greed to financial institutions like Lehman Brothers who proliferated housing loans to
people who were unable to pay them back. It is quite misleading to refer to these “sub-prime” loans as the result of
greed – as if they had to do with some individual characteristics of the powers that be in Lehman brothers. It is now
clear that the crisis has taken on a more general and all-embracing character. Besides many of the top banks which
have already shown the white flag, iconic legends like General Motors and Citibank are also on the verge of claiming
bankruptcy. In India also, the Tata group has apprised all its CEOs and MDs to prepare for a financial crisis. Such an
all-pervading crisis can hardly have been caused by the excessive “greed” of a few men. The crisis, in fact, is endemic
to the capitalist system and the question to be asked, clearly, is, “Why did seasoned banking institutions give such
risky loans, like the sub-prime loans, in the first place?”
The answer lies in the crisis of over-production, or the realization crisis, which Marx has shown to be endemic to
the capitalist system. The capitalist can realize his profits only when his goods are sold in the market place. He has to
keep resorting to sales gimmicks and promises of discounts to ensure that he has a greater share of the market than
his competitors. Since capital is itself a commodity that can only be realized upon “sale” in the market, it is capitalist
competition and the ever-increasing need of capital for an expanding market that is responsible for the “sub-prime
crisis”.
The problem is worse confounded by the fact that in the decrepit and moribund state that capital has now
attained, it is increasingly channeled into speculative paths. Since finance capital expands at a faster rate than
production (as otherwise there will be no surplus left to expropriate), capital is bound to find higher and higher returns
in speculation. As speculation increases, there will be increasing pressure for more channels for investment.
Today, capitalism has exhausted the possibilities for geographical expansion. The last great such opportunity
presented itself during the collapse of the “Soviet empire”. In the early 90s there was a sudden growth in various
markets, including the investment market due to the vast social resources of the erstwhile socialist countries being
thrown open to investment. It was this period whi3only ch saw the growth of the anarchist “Russian mafia” capital.
Today very such possibilities exist, even for the future.
 In this situation the only way in which capitalism is able to expand the market is by inventing newer and newer
products for the market. At the same time, the new products being offered for sale are not in the nature of conventional
goods. More and more, international trade seems to be focused on the trade of rights. International trading in carbon
credits is nothing other than buying the right to pollute or, in other words, selling the common peoples’ right to a clean
and healthy environment. The latest attempt by the Government to form a “Coastal Management Zone” is an attempt
to sell the coastline and, in consequence, to sell the right of the common people, especially the coastal people, to the
enjoyment of the same. That is exactly what Lehman Brothers was doing. It was packaging the misery of home loan
borrowers into intricate packages for sale.
The World Trade Organization, despite the projected perception, of the primary purpose of formation being to
overcome the inequities in international trade, was actually formed to allow for free flow of international capital. This
phase of globalist has led to the most unrestricted access of capital to varied markets all over the world. In other
words, all sort of rights of the common people are being packaged into “financial instruments” or “commercial projects”
and are being put up for sale on the international market. What first started out as a set of common rules for trade in
goods soon expanded to include trade in services and even in the capital market. It now includes trade in carbon
credits and other commercial trade of the environment, unrestricted trade in the most esoteric securities and
instruments and trade in “futures” - not only of commodities - but also of human beings in the form of trade in pensions
and provident funds.
Today, the US is more concerned with the economic terror than with Islamic terror. The recent election of Obama
to the Presidency shows this. The attempts made by the McCain camp to make capital out of his middle name –
Hussain – tamely fizzled out. However, what was significant was Obama’s emphasis on stopping outsourcing and
bringing jobs “back” to the US. Even todays new states that he is thinking of appointing Hillary Clinton as the Secretary
of State since he wants to concentrate on the economy. Neither McCain nor Obama dared to disapprove the trillion
dollar bailout given by Bush to the US banks. It seems quite possible that the immediate future holds promise of a new
US “war on terrorism” - not on Islamic terrorism but on “economic terrorism”. Just as the war on Islamic terror meant
open and barbaric trampling of the rights of Muslims, the war on economic terror will be an all-out war to snatch away
all the existing rights of the working class and to push them ever further into enslavement and misery.
The first and most obvious outcome of the economic crisis is massive shrinking of industry and massive
unemployment. The International Labour Organisation predicted that at least 20 million jobs will have been lost by the
end of 2009 due to the crisis - mostly in “construction, real estate, financial services, and the auto sector” - bringing
world unemployment above 200 million for the first time. In February, 63,000 jobs were lost, a 5-year record. In
September, 159,000 jobs were lost, bringing the monthly average to 84,000 per month from January to September of
2008. In UK, the number of companies that went into administration in May–July was 938, an increase of 60 percent
compared with the same period in 2007. The number of company liquidations in the second quarter rose to 3,689, a 16
percent increase and the highest quarterly figure in five years. According to the Office for National Statistics
unemployment claims in August 2008 increased by 32,500 to reach 904,900. The wider Labour Force Survey measure
found joblessness rose by 81,000 to 1.72 million between May and July, the largest increase since 1999. By
November, unemployment had risen to over 1.8 million and is projected to surpass 2 million by Christmas and perhaps
even as high as 3 million by 2010. In Spain, unemployment in the country has risen by 425,000 over the past year,
reaching 9.9 percent. The German Chamber of Industry and Commerce warned of up to 200,000 job losses in coming
months. In India, it is expected that textile and garment orders will decline by at least 25% over winter and mass layoffs
have already begun. On October 29, the Association of Chambers of Commerce and Industries predicted that
companies in seven key industries (steel, cement, finance, construction, real estate, aviation and information
technology) would need to cut 25% of their workforce.
Of course, all this unemployment and closure and contraction of industry cannot be seen as merely leading to
tragic misery. On October 11, a meeting of progressive economists in Caracas, Venezuela, issued a statement
warning that the dynamic of this crisis “encourages new rounds of capital concentration and, if the people do not firmly
oppose this, it is becoming perilously likely that restructuring will occur simply to save privileged sectors”. In other
words, the crisis will encourage concentration of capital to extreme extents and will rely upon “restructured” state forms
to crush the protests of the people.
It cannot be seen as mere coincidence that Tata has shifted its Nano factory from Singur in West Bengal to
Sanand in Gujarat. No doubt, the fight of the farmers of Singur, who made Tata flee, is historic. However, it would be
naive to think that Tata has left only because it became impossible for them to function here. The fact is that Tata has
very clearly seen the writing on the wall. They have seen that to survive in this economic crisis, they will have to
squeeze every last bit of surplus out of the workers. That the exploitation of workers will have to be greatly heightened.
They have seen that there can be no place for democratic protest. They have moved out of Singur because they have
seen that it will not be possible to curb democratic protest in Singur. By the same coin, they moved to Narendra Modi’s
Gujarat, rather than to any other state like Jharkhand, Karnataka or even Maharashtra because they can easily see
that it will be here, before any place else, that democratic protest will be ruthlessly cruhed. This is just a particular
example of what Dimitrov had pointed out in 1935, that economic crisis will push finance capital in the direction of
favouring ever more fascist forms of Government.
The recent outbreak of communal riots in Kandhamal, Karnataka and Kerala must also not be seen as a
coincidence. When Keynes put forward that the correction mechanism for a capitalist crisis of over-production was
contraction in aggregate demand – leading to fall in production and unemployment – one aspect of this theory remains
unexplored. Contraction in aggregate demand and growth of unemployment is directly proportional to the growth of
communal riots and bomb blasts.
Imperialism will only try to alleviate the crisis with “more of the same”. A Keynesian solution is sought to be given
by stating that the solution lies in the Governments’ raising their expenditure, especially in public works, thereby also
raising their borrowing. In India, P. Chidambaram has been talking of the main aim of the RBI being to build up
“infrastructure”. In the US Obama has talked of pumping billions into “creating jobs” and also for repairing roads,
infrastructure, etc. The $700 billion bailout that the US Congress has already approved will only be going to the banks
and financial institutions to buy up the mortgage-based financial instruments. It is estimated that Governments around
the world will be spending at least $10 trillion to try to save the world economy. All this is actually going to be money
collected from the tax-payer – the common man – and given to the large banks and financial institutions for a song. It
is going to be money diverted from other purposes, like providing education, health-care, etc. Even the jobs that
Obama seeks to create will be by giving soft loans to large industry. The roads will be repaired for the benefit of this
industry, not for the poor people.
However, all such solutions are doomed to failure as the bail-outs can only serve to plug the losses of the big
corporates. They cannot create avenues for new investment, certainly not permanently. The crisis, at most, will be
postponed or prolonged.
This then is what is staring the working class in the face. The economic crisis will lead to further heightening of
exploitation – both of natural resources and of human beings; further stripping of the rights of the working class – and
other oppressed sections including peasants and landless labour; further closures of factories and mills and productive
facilities – with resultant massive unemployment; and further fascization of the system of Government. However, our
analysis would be, at best, a prediction of doom were we to only leave the issue at this point.
The last few years have seen one of the most sustained and widespread movements against globalization and its
effects, all over the world. There have been widespread protests against US imperialism and its “war on terror”. There
have been massive marches against the WTO and globalization. There have been massive strikes by workers on all
the continets. Farmers protests have spread all over the globe. Gigantic movements of slum dwellers have developed
throughout the earth. The anti-US, anti-imperialist Governments that have been formed in Latin America in the past
decade are all a result of such protest movements.
At the same time, it is clear that there can be no long-term solution to this crisis other than socialism. The problem
is that the revolutionary forces in the working class movement and in the democratic movement are dispersed and not
able to exercise any leadership on this movement. To be able to mould the working class into a force capable of
providing revolutionary leadership to the democratic movement of various sections is the task confronting the working
class movement all over the world.
The current crisis also affords us with a new opportunity. It has made crystal clear that the imperialist system is, by
no means, the solution to all the evils facing the world. Even before the crisis,we could point out, from statistics, that
imperialism had, in fact, increased the misery of the world’s people. Unemployment was growing, illiteracy and lack of
educational facilities had hardly been addressed. The vast majority of humanity still remained devoid of the basic
human amenities like drinking water and sanitation. However, figures of the growth in GDP, profits of Indian and
Chinese companies and expansion of their market capitalization were being flung in our faces as proof in support of
the benefits of globalization. Now, even that bubble has burst. There is no hiding from the fact that imperialism offers
no solution.
What is required, therefore, is a unity of all the forces who are genuinely willing to battle globalization and all its
effects. Most of the mainstream parties like the Congress, BJP, BSP, SP, TMC, etc. have not only been in favour of
globalization but are also implementing it in the states where they are able. The “Left front” led by the CPI (M), while
shouting slogans against globalization, is, in fact, implementing it as the only alternative today. Such parties can never
provide leadership to the discontent of the people as expressed in the massive movements taking place all over the
country, like in Nandigram, Singur, Kalinganagar, Plachimada, Raigarh, etc. What is necessary, therefore, is to unite
the people under a leadership that genuinely willing to fight, uncompromisingly, against imperialism and globalization.
The TUCI, in its last conference, held at Mumbai in October 2007, had given a call for the unity of the working
class, based upon an uncompromising struggle against imperialism and globalization. Recent events have only
reinforced the validity of that call. We take this opportunity, therefore, at Kolkatta, in November 2008, to once again call
for a unity of the working class, and, indeed, of all oppressed sections of the people, based upon an uncompromising
struggle against imperialism and globalization. We call upon the working class and all the oppressed people to beware
of the divisive communal and casteist forces who would channel the anger of the working class towards a section of
itself, leading to internecine warfare. Such forces are the agents and helpers of imperialist globalization. It is the duty of
the working class to expose and isolate and weed out such forces from among the people.
We therefore put forward the following two slogans before the working class as the need of the hour:
- Unite for uncompromising struggle against imperialism and globalisation and for establishing genuine
democracy and socialism;
- Unite the vast majority of the people to fight all divisive communal, casteist and parochial forces and to resist
the fascist forces

National Scene

Consequences of Global Financial Crisis to India

AS THE crisis in the imperialist system starting from US is deepening speedily creating recession, depression and
destruction of productive forces everywhere, its impact is fast spreading to India in every field as its economy is
integrated to the global financial system through the globalisation-liberalisation regime. While the prime minister and
finance minister continue to hoodwink the people minimising the impact and CII, FICCI like corporate bodies are silent
as their arguments to promote imperialist globalisation are proved totally false, the impact is already felt everywhere
severely. For example the foreign exchange reserve of the country have started declining very fast with $ 40 billion fall
already. Depreciation of Indian rupee by over 20% within a short time has made imports costlier and export cheaper.
The much trumpeted growth rate of the economy has started falling from last years’ 9% to 7%. And Chidambaram
boasting about a healthy stock market is proved utterly meaningless as the BSE index which had cross 21,000 has
fallen below 8,000 after September and is not recovering to even 10,000 for weeks. As a result of liberalisation
successive governments had cut interest rates on savings in banks pushing people to invest their life savings in the
stock market. Now all those who invested in mutual funds and stock markets have lost most of their savings.
The inflation rates and price-rise are refusing to go below double digit still even after many claims by the
government about fall in prices. One of the main reasons is that ever after price of crude petroleum per barrel is falling
from $ 147 to below $ 50, the government is refusing to cut down diesel, petrol, cooking gas prices. In this way the
Ambanis and all oil companies are helped to reap big profits. When ICICI was about to go bankrupt the government
bailed it out by pumping Rs. 1000 crores from the SBI, but the government is not ready to bail out the people who are
suffering from no mistake of theirs. Similarly, a government which encouraged people to invest in housing by providing
cheap credit has increased the interest rates on loans as in US creating difficulties for them to pay the instalments.
This has created a sub-prime crisis at a smaller scale in India also cutting down the demands for real estate. As a
result, all the real estate companies are forced to cut down their construction activities, making lakhs of workers
jobless.
The export oriented industries are facing crisis as US, Europe and Japan have started cutting down import of
goods heavily. The textile, garment, leather, machine tools, jewellery like sectors have started throwing out workers
heavily. This crash in export have affected the IT sector seriously. For example, India’s second largest IT service
provider Infosys whose employees mark has crossed 1,00,000 mark has asked its employees to opt for one year leave
with 50% of the salary. Though it has covered its statement with hollow claims that “it should be perceived as pure
voluntary act by the employees” (see Business Standard dated 15th November), it is nothing but a large scale
retrenchment. The IT sector is going to face a major crisis spreading gloom to the hundreds of thousands of students
who are enrolled in mushrooming private colleges paying huge amounts also.
In the name of maximising profits Indian banks have also lent large loans to major corporate houses and real
estate companies without any security. As a result, unsecured loans by banks have shot up to 44% now. The top 20
borrowers alone account for 56% of the unsecured loans. As the growth rate falling and due to recession most of it is
not going to be returned. Once again government is going to ask the banks to write off the loans of the big corporate
houses as it did once earlier. This is going to put pressure on Indian banks also as their much bigger counterparts in
US and other imperialist countries are going bankrupt in dozens. The Citigroup Inc. has already cut down 10,000 jobs
and most of the foreign banks are going to do the same. Employment in Indian banks are also going to be stagnant or
fall down soon.
In US the Sun Microsystems, the producer of high-end business computers has cut 5000 to 6000 jobs as the
demands for the computers are falling. This is the fate of most of such companies. In continuation to these, lakhs of
jobs are going to be lost in India in the computer assembling, servicing like sectors, apart from those working in techno
parks, BPO, etc.
The global financial crisis has only started exposing its monstrous consequences. As they unfold in their full
gravity, their impact on the working class and all sections of oppressed masses is going to be unprecedented. The
working class, oppressed masses and their vanguard parties should get prepared to meet the new challenges.

UPA Government Persists with Unhealthy Relations in the

Neighbourhoood
KN Ramachandran
THE RECORD of the five years rule of UPA government will go down in history as one which further alienated India
from its neighborhood countries in line with its eagerness to cosy up with the US interests as its regional bully. It is this
failure to overcome its subservience to US imperialism which has increasingly defeated the chances to develop an
independent foreign policy ensuring equality based relations with its big and small neighbors alike. The latest
developments have underlined this fact. The Sri Lankan developments have proved that to a great extent India’s
interference there is responsible for the present predicament of the Tamil people there particularly, and of this small
island country in general.
In spite of its much repeated policy of non-alignment, Nehruvian policies had thrived on manoeuvring between the
imperialist and socialist camp initially, and between US imperialism and Soviet Union after the latter’s degeneration to
capitalist path. In spite of his left of center posterings, Nehru was not ready to abandon the heritage of British
imperialism in the relations in the neighbourhood and in resolving the problems arisng from the aspirations of the
Jammu and Kashmir people as well as the peoples of the North East for national self-determination. This heritage
continued to worsen and has reached a serious situation today in the present fast changing international situation.
Take the case of the smallest nation, the Maldives with a population of 300,000 in the neighbourhood. After British
colonialists left, it was an ‘elected sultanate’ till 1978. It was followed by three decades of autocratic rule of Abdul
Gayoom which is now replaced by the new president Mohammed Nasheed in a more democratic elections. A
progressive approach from India could have helped Maldives to transform its tourism-fishing based economy in to a
self-reliant one. In its efforts to play the role of a bully in South Asia, as a junior partner of US imperialism, the relations
with Maldives has only worsened. It is looking at India with suspicion and tries to develop relations with China to
combat Indian moves.
Still worse is India’s role in Sri Lanka. Its big - brotherly attitude and incorrect understanding of Sri Lankan
problems have played a major role in the present predicament of this island country. While it failed to play a positive
role in developing the self-reliant progress of its economy, its arrogant attitude towards the Tamil peoples there had led
that country to a civil war now. First it trained and armed the Tamil militants including LTTE. When LTTE exterminated
other Tami militant groups and scoring victories was against Sri Lankan state, India intervened on the side of the Sri
Lankan government by sending the IPKF which had a very bad record of an occupation force. India was forced to
withdraw the IPKF in an ignominious situation. Today when the Sri Lankan forces are launching all out offensive
against the LTTE and in that process the Tamil people are caught in the crossfire suffering, instead of taking lessons
from its past interventions, it continues to send arms and equipments to Sri Lankan army which is used to straf and
bomb the Tamil people on the one hand, while trying to advise the Sri Lankan government to keep restraints, even
when it is contemptously rejected. Thus Indian is getting further estranged from both Tamil people as well as the Sri
Lankan government.
India has worsened its relations with the Pakistan government during the last six decades by mechanically falling
a victim to the imperialist policy of ‘divide and control’ everywhere. It is British colonialists who followed the policy of
‘divide and rule’ by encouraging Hindu-Muslim divide. The colonial heritage is pursed by both Indian and Pak ruling
classes against the interest of the people on both sides. By refusing to settle the J & K problem politically based on the
right of self-determination of J&K people, the Indo-Pak divide is made worse. Besides, even when the Hindu
fundamentalist actions are responsible for the growth of terrorism, by entirely targeting Pakistan and the whole Muslim
community for it, the relation with Pakistan is worsened. The big brotherly arrogant actions of consecutive
governments, including the arms race and creating a nuclear arsenal have made the situation dangerous in spite of
occasional nominal steps taken in the name of normalization of relations.
Almost similar is the relation with Bangladesh. The problem started by sending the Indian army there in 1971
instead of allowing the people there to resolve the problems created by the Pak military dictatorship. Though Indian
armed intervention led to creation of Bangladesh, its activities there like an occupation force soon alienated the people
from it. The growth of Hindu fundamentalist forces in India and Islamic fundamentalist forces in Bangladesh and the
strident propaganda of the Hindu fundamentalists against the migrants from that country have created lot of bad blood.
Even when there are excellent opportunities for developing relations with that country which will be mutually beneficial,
due to the bullying policies of India government, these relation remain lukewarm or worse.
Though relations with the Himalayan Kingdom, Bhutan, is not much talked about it is far from satisfactory. What
happened in Sikkim haunt Bhutan, especially when Indian authorities continue the bullying policies.
As far as Nepal is concerned, the attitude of Indian authorities towards it was so arrogant and dominating that the
Nepalese people started seeing India as a hegemonic power wantonly interfering in their internal affairs. Like in the
case of all other countries, it is the interventionist policies, the attempts to behave like the British colonialists earlier,
which have worsened the relations. The recent historic developments in Nepal overthrowing the monarchy and turning
the country in to a federal republic are not looked upon as positive developments by the ruling system here. While
viewing with suspicion any attempt by Nepal to develop relations with China, along with US imperialism the Indian
government is hatching plans to prevent a progressive or revolutionary government getting established there. As a
result the excellent possibilities for taking up a number of development projects including mutually- benefiting huge
hydro – electric projects are progressing only very slowly.
In case of Myanmar, the eastern neigbour, India has no policy at all for long to improve relations with it. Many time
it seems that Indian authorities are least interested to develop relations with this country. They treat it as more distant
than the Latin American countries. It is a totally confused policy, worsening relations with this neighboring country.
With regards to China, right from Nehruvian days the US imperialists were trying to make India a bulwark against
that country, first for ideological reasons, now to challenge its economic might. From the days of Korean war of early
1950s, trying to fit in to the shoes of a bully in the region, consecutive Indian governments have tried to build up anti
China phoebia. The latest instance is India refusing to join the Shanghai alliance and instead cultivating strategic
relations with US imperialism. Steadily Indian ruling system is falling in to the trap of US imperialists to become part of
an anti-China grand alliance in the newly emerging international scenario. The still unresolved border disputes are
utilized for this purpose by vested interests. A section of the ruling classes are trying to project the advances made by
India in procuring nuclear weapons and in the rocket engineering as a challenge to China’s growing strength. Instead
of cooperation, alliance and mutual aid, they are talking about confronting China in line with US interests. The
corporate media is used to propagate this line.
In this way, today Indian ruling classes represented by the Congress and BJP led alliances and other ruling class
parties, in their bid to go ahead with the policy of strategic servitude to the imperialist camp, especially US imperialism,
have alienated the country further from all neighbouring countries. In line with the internal policies the foreign policy
has became more retrogressive.

On Restructuring of Centre-State Relations

THE CPI(M)’s press release on restructuring centre-state relations reveal the extent to which it has degenerated to
reformist, ruling class positions. Though it has asked for strengthening the federal character, no concrete steps to
basically change the present overwhelmingly unitary system is put forward. The political reasons for this is not dealt
with. That imperialist globalization is sidelined. Experience has proved that the state governments are central
government’s instruments for it. So what is required is not reforming the method of selection of governors, but abolition
of this post itself.
Cosmetic legislative, legal and fiscal reforms can not change the ruling administrative system which is becoming
increasingly centralized and autocratic. It wants a basic restructuring. The planning and developing should start from
the panchayats/towns. The post of secretaries who bureaucratically control the panchayat/town councils should be
abolished. Instead these councils can appoint advisory should start from these lowest bodies and co-ordinated at
district, state and government should have only currency, defence, foreign affairs, inter-state the responsibility for
devolution of taxes. On the whole, CPI(M)’s exercise is to create a smoke-screen that it is concerned about the present
autocratic centre-state relations. It asserts possible only by implementing genuine federal principles based on the right
of self-determination. It calls for finding political solution to the problems of Jammu&Kashmir and North East based on
their right to self-determination.
CPI(ML) calls for decentralization of power up to Panchayat level. It calls for cutting down bureaucratic
concentration of power in all fields with the central government. The centre-state relations should be fundamentally
changed. The development policies should be implemented in a scientific and democratic manner in order to resolve
the problem of uneven development which is encouraging parochial demands by vested interests. All tribal majority
areas should be provided autonomy. Ensure the right of the adivasis and all oppressed sections over the water, forest
and land. All anti-corruption laws to be strictly implemented to abolish corruption in all fields and at all levels. All
scamsters including political leaders to be published. The foreign bank deposits and property of all scamsters should
be confiscated.
As the comprador bureaucratic big bourgeois- big landlord classes serving the imperialist camp is working against
such a demonstration of the state, it is possible to achieve it only through its overthrow and bringing into existence a
people’s democratic state.

Noida Incident: Brewing Discontent Against the Inhuman and

Unbearable Working Conditions
Panigrahi
THE NEO-LIBERAL policies of the imperialist globalization being implemented in our country by our rulers are
creating perverse consequences. The recent incident at Greater Noida is an example. In the name of industrialisation
a big farce is being enacted in our country. Public assets valued of thousands of crores and the public monies are
being easily given away to the capitalists and companies (Foreign and Indian) in the name of projects. As a result of
these policies, the people are left with no minimum guarantee to their lives and are thrown to the mercy of private
individuals and industrial capitalists for survival. Particularly the workers and working masses are left to the mercy of
the industrial managements whom they serve. The workers who have been creating wealth valuing lakhs of crores of
rupees are forced to lead life without even a minimum guarantee.
The so-called global investors viz foreign trans-national corporations which are conducting their manufacturing
activities in our country are ruthlessly exploiting the workers without paying them proper wages and without providing
them the required minimum benefits violating the existing labour laws and other laws of the land. They even disregard
and disrespect our governments as well as our constitution including our judiciary. We have witnessed how the Honda
management of Gurgaon played havoc with its workers in connivance with the state authorities, brutally suppressing
the agitating workers through police force.
We have also witnessed how the management of Super Max and the management of a diamond industry at Surat
have inhumanly killed their agitating workers through the firings of the Company’s security guards.
We have been witnessing how various big-industries are viciously thwarting the attempts of their workers to
organize an union. We are also witnessing how these big industries are denying the minimum rights of the workers in
the name of HRD practices.
All these anti-worker policies of ruthless exploitation by the big industrial managements are causing severe
discontent and disapproval among the workers. The workers pushed so hard by the industrial managements, left with
no option are becoming exasperated and are goaded to outburst violently - a situation of perverse consequences
created by the big industrial capital.
The Italian auto component manufacturing company, Cerlikon Graziano Transmissions India Pvt. Ltd., located at
greater Noida of Uttar Pradesh was established in 1998, with a modest turnover of Rs. 15 crores. At its Suratpur
facility this company manufactures gears, shafts, trans-axles and axles for tractors, commercial vehicles and
construction equipment and exports them to US and Italy. By 2007 its turnover has greatly increased to Rs. 270
crores and the company is earning huge profits and thriving tremendously.
All this development is caused by the workers and their labour. But the company management is against to any
inclination to part with it’s a paltry amount of profits to the benefits of its workers welfare. In fact the company has been
ruthlessly exploiting the labour of these workers through various methods to amass its profits. The workers are denied
with full pay and other benefits on pay the permanent workers in the name of trainees, probationers, temporary
workers and contract workers. The labour laws are being violated.
The workers are not even given with their due leaves in the name of good HRD practices and productivity. The
managements is even disallowing the workers to organize in to an union of their choice. The management has been
resorting to unfair labour practices and victimization tactics against those workers who have been questioning its anti-
worker practices. These conditions have crystallized the discontent and disapproval among the workers of the
company compelling them in to a violent out burst on September 22nd.
When the permanent workers of the company asked for their appointment letters to enable them to register a
trade union, the management had bluntly refused to do so. From that time on wards the discontent among the workers
was brewing. Subsequently in May, 2008, when the management has denied the employment contract to five trainees
on completion of their probation period, the discontent of the workers flashed up in to protest strikes in the form of go-
show and sit-ins. The management had suspended 27 workers in the name of maintaining discipline. But the workers
continued their protest. Again the management had ‘locked-out’ (terminated) 100 workers from their services.
Through the so-called “substitute workers” the management is obtaining production in the place of ‘locked-out’
workers. After intervention of labour officials and some talks it was agreed that the 100 workers will be taken back into
service in a phased manner. But the management was not willing to abide to this agreement. It has taken only 44
workers back on to duty leaving the remaining 55 on flimsy pretexts. Finally the management called the remaining
workers on 22nd September to finalise their issue. These workers were forced by the hired goons of the management
to sign on a so-called apology letter drafted by the management to which the workers denied. A scuffle followed
between the workers and the goons and security guards of the company. The enraged workers have stormed into the
office and attacked and beaten the C.E.O. of the company who has been creating all these troubles to them. The
injured C.E.O. has subsequently died at hospital while being treated at.
The media and the big industrial capitalist class and their associations who were conspiratorially silent with
regards to the dastardly incidents of killing of the workers by the managements of Super Max and Diamond Company
of Surat have raised a big hue and cry and lamented as if the sky has broken and fell on them. They condemned this
as a gory incident in the history of modern industrial relations of North India.
Whether consciously or unconsciously the Central labour minister had commented that “the simmering discontent
among workers” could be the reason among the workers for the incident and appealed the big industry that the
“workers should be dealt with compassion” since there are disparities in the wages of permanent employees, contract
and temporary workers and that “the workers should not pushed so hard”.
Though the central labour minister was not totally correct in assessing the causes for the discontent among
workers, since they are about the unbearable working conditions without a leave, refusal to organize in to an union,
victimisation of the managements by way of firing them from service as per the managements whims, ever increasing
work-load and working hours in the name of productivity etc. also - the associations of the big industry have fell on
him harshly condemning his remarks in severe terms even to the extent of insulting him arrogantly; disregarding
even his governmental position. The chairman of the northern region of Indo-Italian chamber of commerce, TITUS
had audaciously criticized the labour minister’s comment as “if we go by his argument, then he should be lynched in
his constituency if he does not perform”.
No doubt the concerned minister has not taken insult from that, but this is a clear case how the big capitalist class
dis-respects and disregards our government and the rulers.
The other association of the big industry including Indo-American chamber of commerce out cried that this
incident will damage the country’s image among global investors, that this is a bad precedent, that the incident has
sent out wrong signals, the consequences of which would have to be suffered by the state etc. The Italian embassy
demanded that (the government) should ensure such tragic events will not be repeated”.
A fearing the condemnations and warnings from the India Inc., the so-called top leadership of UPA government,
in the absence of prime minister who was in US, have immediately held a high-level meeting in which the external
affairs, defence minister, Home minister and a senior officer of the PMs office attended; as if this is an issue of
national emergency, and have assured the government of Italy and India Inc. that they will see that no such incident
is repeated. Meanwhile the labour minister offered his “profound apology” to the India Inc. UP government had sent
police forces to protect the company premises, besides arresting the workers and jailing them. Thus our rulers have
assured their masters viz foreign capital and domestic big industry that they are subservient to them and exposed
their true nature.
While the management of the Italian company has been stoutly asserting its act of dismissing the workers as per
its whim and justifying its act of hiring 400 so-called “substitute workers” to replace the ‘locked out’ and sacked
employees, our government and the ‘high-level’ ministers have stooped down before the foreign capital lacking the
minimum guts to defend even the nominal rights of the Indian workers. They have readily agreed to submit to the
interests of the foreign capital and to surrender the interests of the working class to its advantage. They admitted that
industrial production takes the precedence to any human interests.
This incident and the subsequent developments are not only a warning to the big-industrial corporations but also
to the working class movement of our country.
No doubt the main cause for the brewing discontent among the workers is the anti-worker, exploitative methods
and the disparities created among the workers and the unbearable working and living conditions, by the industrial
managements, but the trade union movement in India which is suffering with many a weaknesses can also not
absolve itself for being a cause for this sad state of affairs due its failure in organizing the workers, unitedly and
militantly, on the basis of working-class orientation and politics against the onslaught of the big-industrial capital. This
failure too is a cause for the perverse consequences in the working class movement.
 It is no secret that even today the leadership of the Indian trade union movement is of the opinion that it can solve
the problems of the workers without the aid of working – class politics, but with amenable relations with the ruling –
classes and the leadership of the ruling –class political parties in power. This trend has been increasing day by day
and can be seen in the recent ‘drama’ of setting the Jet –air ways employees retrenchment issue.
But if one can comprehend the class nature of the foreign capital, comprador nature of Indian capitalist class
and its subservient Indian rulers, the futility of such a class-collaboration policy and the weakness of Indian trade
union movement can be easily seen. Pursuance of such policies of class collaboration will lead the working class
movement of India in to a totally helpless condition to become subordinate and subservient to the interests of the
capital and big industry. This is the warning given by the Noida incident to the working-class movement.
It is clearly evident that the responsibility for this incident squarely lies on the big industry and the unbearable
inhuman conditions created by it, but not at all on the workers who were goaded and forced to outburst violently by
such conditions.

Reports From States

CPI(ML) Launches Ideological-Political Offensive as Election

Campaign Intensifies
Election Commission in Autocratic Mode
AS THE election campaign in Chhattisgarh, Madhya Pradesh and Rajasthan is reaching its climax, the Election
Commission (EC) is acting autocratically, providing all facilities to BJP and Congress, while denying normal campaign
facilities to smaller parties. In getting necessary certificates for candidates, permission for campaign vehicles, public
meetings, etc. CPI(ML) candidates are facing many difficulties, which are not resolved even after repeated complaints.
On the question of symbols, as CPI(ML) has decided not to register the party with the EC surrendering to its dictates,
including the demand it puts forward to change party programmes to the parties applying for registration, the state
committees had applied to the State Election Commission in advance to provide axe or mashal as symbols to all
candidates. As it was informed that these symbols are removed from the list this time, kite or candle was asked for. But
while presenting nominations it was found that there was no single list of symbols for independent candidates even at
state level. The axe, which was discontinued, came back in the list on 9th November in MP. In this way autocratic
measures are pursued to discriminate those contesting as independents. Smaller parties with symbols are complaining
that they are also discriminated against in many seats.
In MP, especially in rural districts, it is found that voters’ lists are prepared hurriedly with out 25% of voters going
to loose votes as their names and details are given incorrectly. Privatisation of some parts of the preparation and
verification of voters lists is responsible for it to a great extent. Though many police and administrative officers are
transferred before announcing the election process, the EC and the major parties, especially BJP and Congress, the
police and administration have turned the elections in to a stage-managed drama to help the major parties. All
violations of poll code by them are overlooked including propaganda using scores of vehicles, distribution of favours
including money, clothing, liquor etc., and preventing democratisation of the election process. As in these three states
BJP is in power, the state administration is communalised, religious fundamentalist offensive, communalisation of all
walks of life, acute caste divisions, superstitions etc. are helping the forces of reaction represented by BJP and
Congress to continue their domination. Even while speaking about impartial, democratic election, the EC is serving to
perpetuate and worsen this situation. A major offensive is called for from the part of the democratic forces to expose
this situation and to radically transform it.
In Chhattisgarh CPI(ML) Launches Ideological-Political Offensive
HERE the EC and state administration along with the police helping BJP and Congress, the major ruling class parties
to destroy whatever democratic content the bourgeois parliamentary system is having. The EC has not found any
impropriety in the state EC allowing these parties to campaign among the adivasis who are forced to live in Salva
Judum camps, while others are disallowed. While these two parties are nakedly violating the code of principles,
CPI(ML) and other are disallowed to use the due rights of their candidates for campaign. In spite of all this, CPI(ML)
has launched a vigorous campaign, finally fielding six candidates and supporting an independent.
As far as CPI and CPI(M) are concerned, they have cut a sorry figure fighting each other in a number of seats,
besides failing to forge a ‘third front’. The so-called ‘third front’ of CPI including Loktantrik Samajvadi Party (a break
away fraction of the SP) and Chhattisgarh Mukti Morcha has become a non-starter also. In spite of all opportunist
games, the influence of both CPI and CPI(M) is dwindling in the state. The BSP with its dalit-brahmin card and ruling
class agenda is also loosing in its dalit base in the state.
 In 2003 elections erstwhile CPI(ML) Red Flag had contested four assembly seats with its Belha (Bilaspur district)
candidate scoring about 4000 votes and other candidates above 1500 votes. The growth of party and class/mass
organisations, and the influence created through numerous struggles including the one against privatisation of
Shivnath river, the successful campaign that stopped the Special Industrial Area in Rajnandgaon, the campaign with
‘land to the tiller’ slogan, number of working class struggles etc. are reflected in the campaign launched by the Party. In
the press conference at Durg, Jagdalpur and Raipur and in his speeches in the public meetings from 4th to 7th
November, com. KN Ramachandran repeatedly called for focussing on the economic issues, on the consequences of
imperialist globalisation pursued by all ruling class parties, especially Congress and BJP. In this connection he pointed
out the fall out of the imperialist crisis starting from US. It is to divert attention of the people from these communal,
casteist, chauvinist cards are frantically utilised. From pursuing communal fascism BJP and Sangh Parivar has further
degenerated to defending terrorism of Sadhvi Pragya, while Shiv Sena offshoot Raj Thakerey has gone to chauvinist
fascist methods. From dalit politics BSP has proceeded to Dalit-Brahmin-Thakur ‘Sarvajana’ politics. It is in this context
CPI(ML) is utilising the election campaign as a revolutionary one to put forward its class line and necessity for
overthrowing the ruling system to usher in people’s democracy and socialism.
In Bastar district both in the general seat of Jagdalpur and reserved seat of Chitrakut, Party has fielded two
adivasi youths as candidates. While aggressively targeting BJP and Congress, CPI-CPI(M)’s right opportunist line and
the anarchist line of the so-called ‘Maoists’ are uncompromisingly exposed and attacked. The campaign has won over
new forces for the Party. While in Raipur district the two youth comrades contesting from Abhanpur and Rajim are
focussing on agrarian revolutionary programme based on land to the tiller, in Durg grameen seat com. Kunjubai is
focussing on the past and present working class struggles and issues like privatisation of Shivnath River and SEZs. In
Durg city seat while Party is supporting the independent candidate com. Pinky Sawant, at Belha com. Ramesh is
targeting the land question as well as the consequences of so-called industrialisation in the area. The vigorous
campaign is paving the way for emergence of an “Anti-Imperialist People’s Democratic Alternative” at state level by the
time of Lok Sabha elections.
Com. Sanjay Singhvi participated in the campaign on 11 to 14 November, addressing press conference on 14th at
Bilaspur and addressing a number of public meetings. The cultural troupe from Maharashtra also toured Durg and
Raipur districts performing street drama and presenting Jangeet. Com. Arun Velaskar, secretary Maharashtra state
committee also joined the campaign.
Party Campaign in MP
IN 2003, CPI(ML) had fielded a single candidate from Churhat in Sidhi district when its activities were in the beginning
stage. During the last five years the Party and class/mass organisations have made significant progress through
numerous struggles. Navjanvadi Bhumiheen Kisan Morcha has spread its activities developing campaign and
struggles based on land to the tiller slogan. A mass rally was organised at state capital Bhopal demanding immediate
distribution of surplus land, government land, banjar land and opposing confiscation of agricultural land for bio-fuel
cultivation, SEZs and real estate mafias. The launching of Teka Nirman Mazdoor Sangathan (TNMS) where
membership has reached 24,000 in Sidhi and Singrauli districts alone has provided a new fillip to the party work.
Through continuous struggles the rural workers who were cheated from getting the benefits of the projects like
Employment Guarantee Scheme have started getting these benefits in areas where the TNMS active. Navjanvadi
Navjawan Sabha and Krantikari Vidyarthi Sangathan has also spread its activities. A cultural troupe is launched from
Ashoknagar uniting former ITPA activists. In this positive atmosphere party had planned to field 15 candidates. But due
to many technical difficulties now 9 candidates are in the field, 3 from Guna, 2 from Sidhi and one each from
Ashoknagar, Vidisha, Bhopal and Singrauli. Due to mistakes in electoral roll, administration refusing to provide
necessary certificates in time etc. some of the candidates including women comrades could not be fielded. From 11th
November, after getting election symbols the campaign has gained momentum in all the seats where party is
contesting.
The Election Manifesto published in September by the state committee has exposed the hollow claims of both
BJP and Congress about their achievements while in power. Except for the urban pockets, most of the state is
extremely backward. The number of people living below poverty line (BPL) is continuously increasing. It has reached
45% now. Landless peasants and agricultural workers constituting 60% of population have hardly 10% of the
agricultural land, while 5% of feudal remnants, rich landlords and land mafias control 75% of the land. The extreme
backwardness and poverty are well visible in most of the districts. While BJP is repeating about its achievements in
‘development’, neither ‘roti, kapda, makan’, nor education-heath care-employment condition of the 60-70% has not
improved. Roads are dilapidated, electricity supply is extremely erratic, drinking water is difficult to get and corruption
is becoming more and more rampant. This horrendous situation is covered up by spreading religious fundamentalism,
casteism in most vulgar forms, superstitions, parochialism which flourishes through demand for a number of state like
Vindhyachal, Gondawana, Malwa etc. People are increasingly getting alienated. They want an alternative. But neither
opportunist BSP, SP like parties who have fielded large number of candidates, nor a number of parochial, caste-
based parties can provide it.
Though CPI called for a ‘Third Alternative’, BSP has rebuffed it and even CPI and CPI(M) could not come to an
understanding. So it is a non-starter in MP Also. Whatever influence these social democrats had is going to be further
eroded this time.
It is in this context CPI(ML) is emerging as the revolutionary left alternative in the state with a clear cut class line
and revolutionary orientation, utilising the election to carry the message of people’s democracy and socialism to the
masses. Its slogan “March Forward Along the Path of Telangana and Naxalbari” raised during the campaign has
started disturbing the sleep of the class enemies. Based on its class line Party has fielded three adivasi youth
candidates from the general seats of Churhat and Sidhi where central minister Thakur Arjun Singh’s son and his
brother’s son are contesting with the backing of feudal forces as well as against BJP candidates using money and
state power lavishly, and from Chitrangi seat of nearby Singrauli district where the feudal forces are in full domination,
a reserved seat. Besides, from Bamori general seat in Guna district also an adivasi youth Mahesh is fielded. From
Ashoknagar and Guna seats two dalit youths are fielded.
Participating in the campaign com. KN Ramachandran toured Guna on November 2, Ashoknagar on November 3,
Sidhi-Singrauli on November 8 to 11, Bhopal on November 12-13 and Sironcha (Vidisha) on November 14th.
Addressing press conferences everywhere, attending party activists meetings and speaking in public meetings even in
remote villages like Sukhar and Lohda in Chitrangi, he stressed the need for exposing the real condition of the people,
45% of whom are pushed down below poverty line, and the neo-liberal economic policies which have worsened the
unemployment and poverty in every region. Even existing land ceiling laws are reversed and 75% of land is controlled
by the elite 5%, while more and more sections are becoming landless in this state with 78% of adivasis and sizable
dalit sections. To divert attention from these stark facts, communal-casteist-parochial factors are propagated and
feudal domination is continued utilising superstitions and caste feelings. NREGA like schemes are subverted. It is in
this context the small beginning made by the Teka Nirman Mazdoor Sangathan to force local authorities to distribute
the amount to a good numbers of people has created good impact. Election should be utilised to expose the ruling
class policies pursued by BJP and Congress which are “making the rich richer, while poor poorer”. Election should be
turned to a struggle to intensify the class struggle to overthrow the ruling system.
Com. Arun Velaskar, Maharashtra state secretary of CPI(ML) along with 12 member cultural troupe has toured the
Bhopal (West) constituency on 13th and 14th November creating good impact. A cultural troupe organised by com.
Jaspal Singh is touring Ashoknagar, Guna, Bamori and Radhogarh constituencies. Com. Babulal Yadav, state
secretary, CPI(ML) has toured the Ashoknagar, Guna, Vidisha constituencies attracting large number of people
everywhere. On the whole the campaign has created a small but significant ripple in the otherwise reactionary election
campaign which is using money-muscle-liquor power. It has provoked CPI activists in many more districts in the state
and they are expected to join the party in big numbers after the election, as in Shivpuri and Rewa districts.
Election campaign in Rajasthan
DEFEATING the pessimistic approach of those forces who do not see the possibilities to develop revolutionary left
forces in Rajasthan and the necessity to utilise the election campaign aggressively to take the party line to the
masses, under the leadership of com. Mahesh Mahrashi, the Sriganganagar district committee organised a party cadre
meeting in which it was decided to field two party candidates from Ganganagar and Sadulshahar seats. The Election
Manifesto discussed at various levels was finalised and published, putting forward the concept of revolutionary
alternative against the ruling system and all the political parties who are the executioners or apologists of the neo-
liberal policies imposed under imperialist dictates.
Participating in the election campaign com. KN Ramachandran attended press conference at Sriganganagar on
31st October and at Jaipur on 1st November, in which he explained how the ruling classes and their main political
parties, Congress and BJP has enslaved the country to US-led imperialist dictates of globalisation-liberalisation-
privatisation. Integration of Indian economy to global capital-market system is going to intensify the devastation under
present imperialist meltdown. More than ever it is proved that socialism, not imperialism, is the alternative before the
people. Under neo-liberal policies more and more sections of people are pauperised and feudal domination, crypto-
capitalist initiatives and privatisation of food distribution, education and health care, and unemployment are devastating
their life. To cover up this the ruling BJP and all other opposition parties, mainly Congress, are competing to utilise the
communal, caste, parochial cards, keeping alive all types of superstitions and retrogressive traditions and customs.
The degeneration of CPI and CPI(M) to ruling class positions have dealt a serious blow to the hopes about a left
alternative. It is in this context CPI(ML) is reviving its activities in the state by calling for a revolutionary left alternative
putting forward a comprehensive election manifesto.
 On 31st October com. KN Ramachandran attended gate meeting of workers at Ganganagar Sugar Factory which
is being privatised and shifted to a far away location, throwing out most of the workers. The district committee has
started village level campaign in the two seats with a handbill. Com. MS Randhawa, Punjab state secretary of the party
along with a cultural team campaigned in the two constituencies from 24th November. Party has decided to extend
support to five independent candidates who have upheld the basic line of Party’s election manifesto. The campaign is
picking up momentum drawing support from more areas and forces, raising the hopes of a polarisation of revolutionary
left forces in the state after the election.
Meanwhile CPI and CPI(M) are neither succeeded to forge any ‘third front’, nor they could come to understanding
even among themselves. So they are fighting each other in few seats. As far as CPI(ML) Liberation is concerned, the
decision of its party Congress to opt for peaceful transition has further demoralised its already weak force. In this
situation the possibilities are bright for the CPI(ML) to emerge as the real revolutionary left force, the genuine
communist party in the state.
The ideological-political offensive launched by the state committees in Chhattisgarh, MP and Rajasthan, pursuing
a Bolshevik approach to the elections, linking the international and national developments including the consequences
of present unprecedented crisis spreading from the imperialist centre, US, with the politics in these states has helped
to politicise the election campaign atleast to a small extent. This is significant when CPI and CPI(M) who have
alienated the masses from left politics through their social democratic line have now totally failed not only to launch
their so-called ‘third front’ on the eve of the Lok Sabha elections, but even to come to seat adjustments among
themselves. Their decline in these states is much evident, both politically and organisationally. CPI(ML) Liberation
degenerating to the path of ‘peaceful transition’ is further loosing whatever influence it had in Chhattisgarh and
Rajasthan. While the line of election boycott of CPI(Maoist) is further exposed as it is a non-starter anywhere outside
Dantewada district in Chhattisgarh and as there also it is preparing for its oft-repeated opportunist back door support to
this or that ruling class party under cover. Uncompromisingly fighting against all the ruling class parties, and exposing
the right opportunist and anarchist deviations, by fielding 17 candidates, supporting a number of independents, and
organising a vigorous ideological-political campaign, CPI(ML) state committees in the three states have succeeded to
actively put forward the Communist agenda before the people, and to win over new forces to their fold. The Bolshevik
line of utilising bourgeois parliamentary election as a form of struggle to develop the class struggle is effectively put in
to practice. However limited it may be at present, the media is forced to take note of CPI(ML) line differentiating it from
the CPI-CPI(M) line on the one hand, and the CPI(Maoist) line on the other. The campaign in these three states is a
good beginning for the launching of the all India campaign for the April-May Lok Sabha elections with the call for an
Anti-Imperialist People’s Democratic Alternative.
Press Statement
REPRESENTATIVES of Madhya Pradesh State Committee of CPI(ML) and comrade Sunil, Secretary of
Samajvadi Jan Parishad (SJP) discussed about the MP Vidhan Sabha elections and have decided to support
each other based on following slogans: Land to the tiller, Throw out imperialist globalisation and Struggle for a
national, self reliant development policy that ensures food, clothing, housing, education, health care and
employment for all. CPI(ML) Party Centre Secretary comrade K.N. Ramachandran and state secretary comrade
Babulal Yadav have announced the decision to support the five SJP candidates from Holudongri (Betul district),
Sohagpur and Seonimalwa (Hoshangabad district), Timorin and Harda (Harda district), while comrade Sunil has
stated that SJP shall support nine CPI(ML) candidates contesting from Sidhi and Churhat (Sidhi district),
Chitrangi (Singrauli district), Bhopal South-West, Sironcha (Vidisha district), Ashoknagar, (Ashoknagar district)
Guna, Bamori and Radhogarh (Guna district) based on above slogan.
13-11-2008 Bhopal

W. Bengal: Massive Rally and Peoples’ Convention Against

Imperialist Onslaught Organised at Raiganj
ON NOVEMBER 19th hundreds of adivasi peasants, agricultural workers, youths and women held a massive and
militant rally denouncing the pro–imperialist and pro-ruling class policies and programmes of UPA Government and the
Left Front Govt. It was a colourful rally decorated with red flags, festoons and placards. The rally marched through the
main thoroughfare of the Raiganj town in North Dinajpur district with hundreds of enthusiastic common people
thronging the entire rally route. The anti-imperialist slogans mingled with the beating of drums by the adivasi comrades
rent the sky of Raiganj.
 The rally was followed by peoples’ convention against out and out anti-people ‘development policies’ and
programmes of the Buddhadeb Govt. The convention venue was Raiganj Institute hall. The hall was packed to the full
and hundreds of the ralliests and common people had to listen to the speeches from outside. The first to address the
convention was West Bengal State secretary Subrata Basu. Comrade Basu read out the welcome message from
general secretary – Kanu Sanyal, who could not attend the convention because of his ill health. Com. Sanyal wished
all success to the convention.
Comrade Basu placed the convention resolution and explained how the disastrous effect of imperialist
globalisation being pursued with thrust and speed by the Left Front Govt. is causing increasing attack on life and
livelihood of the toiling millions of our country. He called upon the gatherings to strengthen the worker peasant alliance
to resist anti-people reform policies. Comrade Basu was followed by central executive members comrade Subodh
Mirta and comrade Asit Sinha respectively. They urged upon the people for intensifying class struggle of the working
class and the peasantry to meet the challenge of globalisation.
Among other speakers were Mr. Jyotirmay Basu – a veteran left leader of undivided Dinajpur district and comrade
Ajit Das – the veteran peasant leader and north Dinajpur District secretary. Comrade Das presided over the
convention. In his eloquent speech comrade Das explained the urgency of speeding up the process of building up a
genuine communist party to provide effective leadership to the anti imperialist and anti feudal movement. He candidly
declared - it is to build up peoples’ movement along the path of Naxalbari struggle that he and several hundred
comrades (including leaders and activists) from the “Liberation” joined CPI(ML) . The convention came to its end with
the singing of international.

Kerala Under the threat of Global Meltdown and CPI (ML)

Campaign
KERALA which is more integrated with global economy than any other region in India has already started
experiencing the negative fall out from the global economic meltdown. Historically Kerala is an export oriented
economy with its conspicuous dichotomy between production and consumption. In fact whatever produced in Kerala,
including its educated and skilled labour, is exported abroad and whatever consumed is imported from external
sources. With the advent of neo-liberal globalization since the 1990s, successive governments in Kerala led both by
the UDF and LDF through their pro-imperialist policies have been strengthening this distortion and extraversion in the
State’s economy.
In this context, the ruling CPI(M)-led LDF government has taken the neo-liberal position that agriculture and
traditional industries are archaic and that the priority sectors for State’s development are IT and Tourism
euphemistically called the ‘new economy’, thereby closely tying Kerala to the fluctuations in global market.
Consequently, the imperialist crisis whose immediate cause has been the neo-liberal policies has dragged Kerala into
a worst critical situation. Until the onset of this crisis, the CPI(M) theoreticians, including the Finance Minister Thomas
Isaac, were spreading the illusion that Kerala will become an IT hub in the short run .But the fact of the matter was that
this IT bubble was based on the outsourcing of work from American and European financial companies who were
eager to maximize their profit by exploiting the cheap labour in Kerala. In fact, the so-called Smart City, Techno Park,
IT Parks and Call Centres which are mushrooming in Kerala with no forward or backward linkage with the really
productive sectors in the economy. When the global speculative bubble had burst and imperialist banks and financial
institutions collapsed, outsourcing of work from such imperialist centres have abruptly vanished.
Same is the case with Tourism which also was based on the outflow of foreign tourists to the State. But this has
also become an illusion consequent on the global slump as even the middle classes in America have become
pauperized. Consequently, the State will experience a 40 percent reduction in the inflow of foreign tourists this year. In
a press conference, Kerala finance minister said exports from Kerala had come down, prices of cash crops were
declining, tourism and information technology sectors were facing a downturn and there was a squeeze in the credit
market. He went on saying that growth this year may come down to six percent from last year’s eight percent. He also
pointed out an employment loss of about one-and-a-half lakh during this year. The global economic collapse has
already begun to have its impact on rubber and coconut, two major cash crops of Kerala. Global recession in motor
vehicles industry and fall in prices of synthetic rubber following fall in crude oil prices in global market has drastically
brought down the prices of natural rubber which had fallen by more than 60 percent between August and November
2008.
However, the most gruesome scenario relates to the fate of 14 lakh Keralites working in Gulf countries. Following
an abrupt reduction in crude oil prices to almost one-third of its June 2008 level, the oil exporting countries are
experiencing a rapid reduction in their earnings, which will squeeze the construction and consumer boom, thereby
reducing employment prospects there. This may result in large scale return of Gulf Malayalees in the short run. All
these and related developments are going to result in an unprecedented socio-economic situation in the State.
Obviously, the root cause of this critical situation is the liberalization-globalisation policies pursued by the CPI(M)-
led LDF government in Kerala. An unholy relationship between the CPI(M) leadership in the State and speculative
mafia of all hues including land mafia who are the true beneficiaries of imperialist globalization is well established in
the State. True to their arrogance, the CPI(M) leadership is hesitant to learn lessons from the global meltdown brought
about by speculative finance and they are still the champions of SEZs, townships and satellite cities in the state which
are embodiment of moribund and decaying speculative capital. This has also unleashed a large scale
deindustrialization, agricultural retrogression and widespread joblessness in the State. In fact, when this global crisis
was unfolding in America, as a manifestation of the ideological bankruptcy of the CPI(M), both the State Tourism
minister and Industries Minister were having their American tour for attracting speculative investors to Kerala.
It was in this context that the Kerala State Committee of CPI(ML) launched a political campaign with the central
slogan ‘socialism as the only alternative to imperialism’ unraveling the root causes of the imperialist crisis and
putting forward its alternative from the proletarian perspective. A pamphlet explaining Party’s approach towards the
present global economic crisis and bursting of the bubble was prepared. Tens of thousands of handbills were
distributed through four zonal jathas covering all the fourteen districts of the State during November 12 to 22. These
Jathas were led by Com K. Sivaraman, Central Committee Member, Coms. TC Subrahmanyan, PN Provint, and MP
Kunhikanaran, State Executive Committee Members. Hundreds of big and small street meetings addressing broad
masses of people were organized.Through this State wide political campaign, CPI(ML) pinpointed that the present
crisis confronting imperialism is systemic and inherent in the capitalist production relations and that it cannot be
overcome by a policy change, for instance, a reversion to Keynesianism which was abandoned in the seventies. In this
way the CPI(ML) also exposed the CPI(M) advocacy of a Keynesian prescription as the solution to the meltdown.
The State Committee’s campaign for a socialist alternative to imperialism and its apologists evoked good response
from all progressive and democratic sections in the State.

TN: Campaign against bombing and massacre of Sri Lanka Tamils

THE TN state committee of the CPI(ML) has called for a week long state-wide campaign demanding that the SriLanka
government stop the bombing of Tamil was and the massacres. In a press statement it has demanded that the Central
Government should stop supply of arms and military equipments forthwith to the SriLanka government and stop all
forms of intervention there. It has demanded that the Indian Navy should provide full protection to the Indian fishermen
fishing in Indian waters. It has called for equal treatment to Tamil people in SriLanka and for ensuring their right to self
determination. The state committee has also decided to expose the opportunist positions taken by various shades of
ruling class parties and chauvinist forces on this question.
Communal-caste divisions proliferated in the educational institutions : The recent caste-based attacks by
students of Dr.Ambedkar Government Law College at Chennai exposes a conscious effort by the vested interests to
divide the students on caste lines. The criminal attack on dalit students leading to retaliation by them and the police
remaining silent spectators to it, including the criminal attitude of the college management show a conspiracy, a will
planned move of the anti-imperialist progressive struggles in the past. The TN statecommittee of CPI(ML) has called
on the students that they should not become a victim of the conspiracy of the reactionary forces to destroy their
capability for struggling for the secular, anti-caste, democratic, national aspirations of the people.
Comrades Gajendrakumar and Shanmugam released : Comrades Gajendrakumar, Chennai district secretary and
S.Shanmugam, DC member who were arrested for leading a poster campaign against the fascist measures of chief
minister to protect his narrow family interests were released after 42 days of imprisonment through the granting of bail
by the High Court. The bail levels in open service of the chief minister. The released comrades were received at the jail
gate by many comrades led by the state secretary com.Surendran and taken in procession to a meeting place where
the speakers declared that the campaign against the fascist attitude of Karunanidhi will be continued. Comrades
Gajendrakumar and Shanmugam expressing thanks for the reception explained how bad is the living conditions of the
prisoners in many jails.
Venmani Martyrs Day to be Observed: The TN Coolie Vyavasai Sangam has decided to obersve the
KeezhuVenmani martyrs day on 25th December at Husur with a rally and public meeting. The land struggle campaign
will be vigorously taken up from the martyrs day.
Not Imperialism, Socialism is the alternative Campaign : The TN state committee launched a campaign with the
slogan: Not imperialism, Socialism is the Path Forward, with a hall meeting and public meeting at Coimbatore
addressed by com. K.N.Ramachandran on 23rd November. Meetings will be organized at other district headquarters
also.
Punjab:More Leaders and Cadres Leave Liberation and
Joined CPI(ML) in Mansa and Ludhiana
COMRADE Jarnail Singh Bahadurpur, a veteran communist from Mansa district who was among the first few
revolutionaries who joined Naxalbari movement in Punjab and had been vice-president of IPF, left the Liberation group
and joined CPI(ML) in the presence of com. KN Ramachandran and MS Randhawa. Com. Jarnail Singh said that
Liberation is now no way different from CPI and CPI(M), which had totally degenerated after deviating from the path of
revolution. Along with com. Jarnail Singh about a dozen of youth leaders and activists from Mansa district lead by com.
Gurtej Singh Khima left Liberation and joined CPI(ML) and NJNS. These youth comrades were critical of the line of
peaceful transition adopted by Liberation. Com. Randhawa welcomed these young revolutionaries.
Marching ahead on the Khrushchovian path of peaceful transition, the Liberation group is disintegrating in many
states. Beginning from Punjab last year, then Tamilnadu, Andhra Pradesh, UP, West Bengal and now Punjab again,
where in Ludhiana district, the industrial hub of Punjab, its Ludhiana tehsil committee has said goodbye to Liberation
and its opportunist line. Led by com. Ramesh Gautam, secretary of the Tehsil Committee 25 party members and a
large number of trade union activists have joined CPI(ML) on 10th November 2008 in the presence of com. MS
Randhawa, state secretary. These comrades who had been with Liberation fro more than a decade were in
disagreement with the political line pursued by it and widespread corruption in organisation. Com. Randhawa asked
these comrades to work among industrial workers and organise them by putting forward the revolutionary agenda of
NDR to defeat the revisionist, opportunist trends in the trade union movement. These comrades have decided to build
trade union under the banner of Krantikari Sanathi Mazdoor Union to be affiliated with TUCI.
NJNS Organises Seminar on Bhagat Singh Birth Anniversary: 101st birth anniversary Shaheed Bhagat Singh was
observed with revolutionary fervour by the Nav-Jamhoori Navjawan Sabha, Punjab at Samaon in Mansa district. On
this occasion NJNS organised a seminar on ‘The Challenges too the youth in the era of Imperialist Globalisation’.
About 150 youth from the area participated in the seminar. Com. K.N. Ramachandran and the former leader of Punjab
Student Union (PSU) in 1980s com. Sukhdev Singh Pandhi were main speakers.
Addressing the youth com. Sukhdev Pandhi said that the importance of the birthday of Bhagat Singh is because of
the great sacrifices he made for the revolutionary cause, which inspired lakhs of youth in the country. Comparing the
role and vision of Bhagat Singh with the Congress and Mahatma Gandhi, com. Pandhi said that the Congress party,
which was formed by a Britisher, Mr. Humes, with the aim of serving the interests of British imperialists in India had
nothing to do with the interests of toiling people of India. Even today it is keeping the legacy of pro-imperialism. It is
acting as a stooge of imperialists which is becoming clear to the common masses from the policies of liberalisation,
privatisation and globalisation it had adopted to serve the interests of imperialists and leading the country to strategic
subservience of imperialists, especially US imperialists. He said on the other hand Bhagat Singh’s vision was that as
long as there is exploitation of man by man, there can be no independence in the true sense. Their struggle against
the regime of exploiters will continue without any compromise. It makes no difference whether these exploiters are
foreigners or Indians, or both of them collaborating. As a result of the policies of imperialist globalisation adopted by
the govt. of the ruling class parties, large number of MNCs have come here to exploit the labour and natural resources,
which is dangerous to the sovereignty of our country.
Speaking on this occasion com. KN Ramachandran said that importance of Bhagat Singh is that he sacrificed his
life for freeing the society from the tyranny of imperialism and feudalism. He said that many people of the ruling
classes and so-called left who have nothing to do with the ideology and vision of Bhagat Singh are today misusing his
name. Talking about policies of the government, he said that Manmohan Singh has surrendered the interests of
country to Bush, which is shameful and anti-national. Today when the USA is facing the worst ever economic crisis,
deeper than the Great Depression of 1930s, the imperialist forces are trying to shift the burden of their crisis, which is
the ‘crisis of capitalism’, to the poor countries through various agreements which is the part of the strategy of US
imperialists. Talking about imperialist globalisation com. Ramachandran said that today when the imperialists are in
the worst ever crisis, it has proved that the future lies in socialism, not with the imperialist globalisation. He stressed
and asked the youth to put their energies and work for social system which is free from exploitation of man by man, i.e.
socialism. It is in the socialist society, not in imperialist globalisation, where they have bright future. He asked the youth
to align with the forces who are struggling for building a society which is free from all kinds of exploitation. This is the
only way to fulfill the dreams of Shaheed Bhagat Singh.
Political Conference on the Occasion of 95th Martyrdom day of Shaheed Kartar Singh Sarabha: Kartar Singh
Sarabha, Young revolutionary and leader of Gadar Party was hanged by the Britishers on 16th November 1915 at the
age of 19 years. On his 95th martyrdom day, Nav-Jamhoori Navjawan Sabha, Punjab and Pendu Mazdoor Mukti
Morcha jointly organised a political conference at Barnala. The day was observed at anti-imperialist day. Com. Labh
Singh Aklia (Convenor, PMMM) and com. Jarnail Singh Kotduna (leader of NJNS) along with com. M.S. Randhawa,
Punjab state secretary of CPI(ML) addressed the large number of youth and workers.

Karnataka : Campaign against communal facist attacks

AFTER BJP government coming to power, with the open connivance of the state machinery the Sangh Parivar
including Bajrang Dal, Sreeram Sena etc have started attacking dalits, adivasis and the minorities in the name of
opposing religions conversion, a false façade. Christian churches were attacked in many places in the state. The
Udupi Petawar Swamy has openly supported these communal fascist attacks. The Congress, Janatha Dal (S), SP,
BSP like parties which are indulging in communal appeasement policies for creating vote banks have not come out to
mobilize the people against these attacks. CPI (ML) state committee called for a state wide militant campaign against
the communal fascist attacks and the campaign was successfully carried out in different districts through postering,
street corner meetings, public meetings, rallies etc.
RYF State Conference : The second state conference of Revolutionary Youth Front (RYF) will be held at Raichur on
28,29 December. The district conferences are started and will be completed by the first week of December. These
conferences are announced through state wide propaganda. Meanwhile on November 10th a dharna was organized
by RYF in Raichur, Koppal, Kodagu and Chikmangalur districts against the increasing corruption, caste oppression,
communal attacks and terrorism of religious fundamentalist forces, with large number of youth participating.

International Scene

The $700 Billion Robbery in USA

Michael Moore
LET me cut to the chase. The biggest robbery in the history of this country is taking place as you read this. Though no
guns are being used, 300 million hostages are being taken. Make no mistake about it: After stealing a half trillion
dollars to line the pockets of their war-profiteering backers for the past five years, after lining the pockets of their fellow
oilmen to the tune of over a hundred billion dollars in just the last two years, Bush and his cronies — who must soon
vacate the White House — are looting the U.S. Treasury of every dollar they can grab. They are swiping as much of
the silverware as they can on their way out the door.
No matter what they say, no matter how many scare words they use, they are up to their old tricks of creating fear
and confusion in order to make and keep themselves and the upper one percent filthy rich. Just read the first four
paragraphs of the lead story in last Monday’s New York Times and you can see what the real deal is:
“Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began
looking for ways to profit from it.”
“Financial firms were lobbying to have all manner of troubled investments covered, not just those related to
mortgages.”
“At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the
books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees.”
“Nobody wants to be left out of Treasury’s proposal to buy up bad assets of financial institutions.”
Unbelievable. Wall Street and its backers created this mess and now they are going to clean up like bandits. Even
Rudy Giuliani is lobbying for his firm to be hired (and paid) to “consult” in the bailout.
The problem is, nobody truly knows what this “collapse” is all about. Even Treasury Secretary Paulson admitted
he doesn’t know the exact amount that is needed (he just picked the $700 billion number out of his head!). The head of
the congressional budget office said he can’t figure it out nor can he explain it to anyone.
And yet, they are screeching about how the end is near! Panic! Recession! The Great Depression! Y2K! Bird flu!
Killer bees! We must pass the bailout bill today!! The sky is falling! The sky is falling!
Falling for whom? NOTHING in this “bailout” package will lower the price of the gas you have to put in your car to
get to work. NOTHING in this bill will protect you from losing your home. NOTHING in this bill will give you health
insurance.
Health insurance? Mike, why are you bringing this up? What’s this got to do with the Wall Street collapse?
 It has everything to do with it. This so-called “collapse” was triggered by the massive defaulting and foreclosures
going on with people’s home mortgages. Do you know why so many Americans are losing their homes? To hear the
Republicans describe it, it’s because too many working class idiots were given mortgages that they really couldn’t
afford. Here’s the truth: The number one cause of people declaring bankruptcy is because of medical bills. Let me
state this simply: If we had had universal health coverage, this mortgage “crisis” may never have happened.
This bailout’s mission is to protect the obscene amount of wealth that has been accumulated in the last eight
years. It’s to protect the top shareholders who own and control corporate America. It’s to make sure their yachts and
mansions and “way of life” go uninterrupted while the rest of America suffers and struggles to pay the bills. Let the rich
suffer for once. Let them pay for the bailout. We are spending 400 million dollars a day on the war in Iraq. Let them
end the war immediately and save us all another half-trillion dollars!
Wall Street Bankers are staging a financial coup in our country! They are pushing and cajoling the US Senate and
Congress to push it through.
You need to know that these US Wall Street Fat Cats will make in SALARY. According to Republican Senator
Brad Sherman of California, these top managers will continue to receive Million Dollars a month paychecks under
this new bill. There is no direct ownership given to the American people for the money that is being handed over. The
foreign banks and investors will be allowed to receive billion-dollar handouts. A large chunk of this $700 Billions is
going to be given directly to Chinese and Middle Eastern Banks. There is absolutely no guarantee that the
America will ever see this money again.
As I found out from the people I know in Washington, they told me that the reason that so many Democrats (led by
their candidate for president Obama) is that Wall Street had put a gun to their heads and told them that either they vote
and hand over the $700 Billions or that Wall Street will pull the plug on the US pension funds and 40% of your middle
class constituents. This is not the time to back down. The Democrats had handed over a stolen election to Bush. The
Democrats gave Bush the vote he needed to invade Iraq and proceed in Afghanistan. Now that the Democrats have
the majority in the US Congress since 2007, they refused to pull the plug and stop the war in Iraq. And now the
Democrats have been beaten into submission and are accomplices to the biggest crime of the Century!
[North Star Compass, Nov. 08]

On the Imperialist War in South Ossetia

THE LONG-RUNNING conflict in South Ossetia entered a more violent stage last August 8, 2008, when Georgian
troops carried out an open aggression and intruded into South Ossetia, shelling the capital city of Tskhinvali with
Grad Missiles. The Georgian bourgeois regime of Saakashvili tried to keep the illusion of Georgia’s national unity
at all costs, without consideration of how many lives this may cost. The Russian government, which also got
involved in this conflict, sent a large number of military resources to the area and started a military action. There
were many victims on both sides.
Both the Russian and Georgian governments tried to use this conflict for their own benefit, and this also
included the promotion of nationalistic hysteria, drawing the working peoples’ attention from the problems and from
the ongoing class struggle. As rightly noted in the declaration of the RCWP-RPC that the slogan by both
governments was “Support our country!” We condemn this attempt to set working people of different countries
against each other by using nationalism as a tool. Lenin write on this in this way: “People have always been and
will always remain dumb victims of deception and self-deception in a capitalist state in politics, until they
learn to discern the class interests behind the various moral, religious, political and social phases,
declarations and promises.”
It is obvious that the Georgian govt. and its capitalist class, who are very dependent on Imperialists and the
USA, the EU, wanted to solve this problem urgently in order to become part of NATO and turn Georgia into an
alternative route for transporting oil and gas into Europe around Russia.
Naturally the Russian ruling capitalist class was not happy with that scenario. The Russian bourgeois class
wanted to have a presence in that region and a weak Georgia and the unsettled national issues served that
purpose very well. Moscow made many “patriotic” statements about protecting the Russian citizens in South
Ossetia, but everyone seems to have forgotten that when for a whole week at the begging of August there was
shooting on both sides, the Russian government didn’t interfere in the conflict, allowing the Georgian government
and its US backers to think that they can take more radical actions. Moreover, the Russian govt. did not use its
powerful economic leverage that it had and that could have had a significant influence on Georgia.
 We believe that the current situation, when the govt in South Ossetia is formally Georgian, but actually
dependent wholly on Russia, is directly beneficial to the Russian capitalist class. If the Russian govt. is really
interested in solving this problem that was created by dismemberment of the USSR, and Russia is even now
engaging in a furtive political game and trying to use this situation for its own gain.
We consider the South Ossetia war an imperialist war, which does not serve the purpose of justice and which
was conducted for the benefit and profit of capitalists in different countries. The people of Ossetia became victims
of a struggle between two capitalist cliques. Neither Georgia or Russia are really interested in an actual resolution
of the issue of South Ossetia for self-determination as South Ossetia enjoyed under Socialism and in the union of
the USSR. We do not support either of these countries in that war. We respect the right of the people of South
Ossetia to self- determination, which had been expressed in a referendum. National borders should not serve as
an interference in the struggles of the working people against capitalists and capitalism!
We condemn the aggressive actions of the Georgian government and its foreign backers which could have led
to a lengthy conflict in the Caucasus. The Russia government is also responsible for this war because of its
inconsistent actions.
Once more Lenin’s words have been proven true: “In the capitalist order of things the rearrangement of the
spheres of influence can only take place by war”. All the responsibility for this war lies with capitalism and more
particularly, the government of Georgia, as well as America, European Union and Russian imperialists. “Peace
Enforcement” that the present regime of Russia speaks about, is nothing more than “patriotic rhetoric”, which is
meant to obscure the real interests that the capitalists are pursuing in an imperialist war from which the working
people of all countries cannot benefit.
Our Revolutionary Communist Youth League (Bolshevik) called for an immediate end to the war in South
Ossetia, the complete withdrawal of all Georgian and Russian troops from the region and granting South Ossetia
inviolability by both countries. The Georgian Government that devastated South Ossetia must restore all villages
and utilities. All sides of this conflict must ensure the return of all refugees of all nationalities to their homes.
Russia and Georgia and the UN must recognize South Ossetia as an independent state! No support for
Russia or Georgia in South Ossetia! We are against imperialist war! No to the aggression and militarism of
the ruling regime of Georgia! Down with Capitalism-Imperialism which are the reasons for all wars!
[North Star Compass, Nov. 2008]

Faiz and His Fight Against Tyranny

THE LIFE and poetry of Faiz, somehow have become intertwined with the fate and fortune of people of Pakistan
pounded by the dictatorship of the generals, obscurantism of the pulpit and exploitation by the potentates. His hopes
and dreams for a bright and blissful dawn were the same as cherished by every folk while his destiny like them was to
be stung and deprived of them.
His poetry thus captured the agony and anguish of a common suffering and helplessness and a yearning for
change thwarted by torturous odds and impediments. Any stirring or struggle for deliverance was relentlessly
suppressed through a fiendish armoury of administrative and penal codes and a perilously grinding court system. Any
deviation from the monopolistic and exploitative interpretation of religion was treated as sedition. Yet he sang of a dire
need to alter this system through a persistent and protracted struggle. For this, Faiz endured the fate of many other
illustrious enthusiasts and crusaders in the Afro-Asian and Latin American countries.
Faiz, however, also had a stellar distinction to render the purpose, pursuit, paradoxes and course of the crusade
into an epic of enchanting beauty, thrill, diction and appeal. Though many of his compositions like Come Back Afrikia,
Curbs on Kenyan Activists and the Anthem and the Three Voices exuding the Palestinian passion for freedom mirror a
far wider concern for the movements of the oppressed of the earth yet most of this epic is rooted to this soil.
This epic, certainly, is not sequenced like narratives in great classics like Aeneid, Odyssey, Iliad or Shahnama but
its strands are strewn in a marvelous mosaic of his life and verses. This evidently was inevitable as Faiz was not
chronicling some past legends or events but depicting his own life and times, rapidly realigning and fending off a
relentless four pronged (chow mukhi) onslaught. Yet his oeuvre, despite being strung into different poems and
volumes, can be surmised as distinct phases of the same fight.
S. Habib