The following report was delivered by Nick Beams, national secretary of the Socialist Equality Party (Australia) and a member of the International Editorial Board of the World Socialist Web Site to the SEP election meeting in Sydney yesterday. The meeting drew out the central axis of the SEP’s intervention in the March 24, New South Wales state elections. Beams is heading the party’s slate of 15 candidates for the Legislative Council (upper house).

In the founding program of the Fourth International, written in 1938 on the eve of World War II, Leon Trotsky wrote of the bourgeois regimes tobogganing “with closed eyes” toward a catastrophe.

While there are vast differences between the international political situation today and that of 70 years ago, these words, nevertheless, have a profound contemporary relevance.

At the end of the 1930s, the world situation was dominated by the eruption of German militarism as the Nazi regime of Adolf Hitler, driven by the irresolvable contradictions of German capitalism, set out to establish Lebensraum—living space—as a base from which to combat its main rivals, the British Empire and the United States, and secure its “place in the sun”.

Today, the world is confronted with the unrelenting drive of a no less aggressive power, the United States, as it seeks to use its military might to counter its loss of economic dominance.

This loss of economic power has been going on for some time. And, as with all fundamental changes in the economic base of society, it has found expression in the political superstructure, with the US now seeking to use military means to maintain its global position.

In the field of geology, we know, earthquakes are caused by shifts in the tectonic plates. These shifts can extend over a long period but they eventually lead to a build up of tension that can no longer be contained. In the field of politics, wars and revolutions are, in the final analysis, the outcome of massive shifts, often over an extended period, in the tectonic plates of the world economy.

Over the past three decades, since the breakdown of the post-war economic boom in the mid-1970s, we have seen such a shift take place. And now the latest phase in the process of economic globalisation, which began at the end of the boom, has reached a qualitative turning point.

An article in the latest edition of the journal Foreign Affairs points out that according to the National Intelligence Council, a US government think tank, by the year 2025, China and India will have the world’s second and fourth largest economies respectively. “This tectonic shift,” the author of the article notes, “will pose a challenge to the US-dominated global institutions that have been in place since the 1940s.”

In his use of the future tense the author is somewhat behind the situation. The challenge is already well under way.

The present global political structure was formed in the wake of World War II when the US was the undisputed hegemon of the Western world. It constructed a world order that reflected its dominance, and, at the same time, provided the framework for the expansion and growth of its European allies, as well as the defeated powers, Germany and Japan.

“Today,” as the Foreign Affairs article notes, “the distribution of power in the world is very different. According to Goldman Sachs and Deutsche Bank, by 2010, the annual growth in combined income from Brazil, Russia, India, and China ... will be greater than that from the United States, Japan, Germany, the United Kingdom, and Italy combined; by 2025, it will be twice that of the G-7 (the group of highly industrialised countries).”

Within this overall process, the outstanding feature is the loss of economic dominance on the part of American imperialism. There are many statistics one could point to but let me cite a couple.

In order to maintain its global financial position and to sustain relatively low interest rates at home, the US is now dependent on an inflow of more than $2 billion per day from the rest of the world.

Much of this inflow comes from China, which has foreign currency reserves of more than $1 trillion. This means that the US is financially dependent on a rising power, which it already regards as a strategic rival. Nothing like this has been seen in the history of world capitalism.

The health of the American financial system, and the economy as a whole rests on the Chinese banking and financial system. But this is a rather rickety structure, which is threatened with a major crisis if the investment boom and stock market bubble collapses.

Were such a collapse to occur, money would be removed from the US financial system, leading to a tightening of credit and rising interest rates. We saw that dependency illustrated in a dramatic fashion three weeks ago when a 9 percent fall in the Shanghai market touched off a global rout on share markets.

But the weakening US economic position is not simply a question of its dependence on China. In the past, American economic supremacy was based on vast developments in the manufacturing industry. Today, financial services make up 30 percent of profits, derived from increasingly parasitic activities.

This week’s 200-point slide on Wall Street is a case in point. It had its origins in the collapse of a major mortgage-lending firm active in the so-called sub-prime market—the issuing of home loans to families with low credit ratings where debt repayment consumes a dangerously high proportion of the weekly income. Such firms have been heavily financed by the major banks and investment houses, some of the most powerful in the world—Lehman Brothers, Bear Stearns, Morgan Stanley just to name a few—that have been cashing in on the housing bubble by pooling increasingly risky mortgage debt and then selling it off.

It’s a very different economy from the one that brought the US to its position of global dominance.

The vast shift in economic power which is expressed in these and many other statistics and processes is the fundamental source of the eruption of American militarism. Confronted with the decline in its economic power, the US is seeking to maintain its position in the one area where it still exercises supremacy—military might.

But in doing so it poses the threat of another worldwide conflagration. At a certain point, other great powers or groups of powers will be thrown into a conflict against the US. In the course of the twentieth century, mankind managed to survive two world wars—only by the skin of its teeth. A third world war, however, would bring even greater devastation.

How is such an outcome to be prevented? How can human civilisation resume the upward path of progress in the face of dangers that threaten to plunge it into unspeakable forms of barbarism? These are the issues that confront us today. We are not trying to exaggerate the situation but simply drawing out the objective logic of events.

Lessons of the antiwar protest movement

In order to find the way forward it is necessary to examine some recent experiences. There is no question that hundreds of millions of people all over the world oppose US militarism. They turned out in mass demonstrations against the Iraq war—the largest ever seen. But these protests proved to be impotent.

The lessons must be drawn: the struggle against war and militarism cannot be conducted as a protest. It is not a matter of trying to convince or pressure the ruling classes to change course for they are being driven forward by the contradictions of the system of global capitalism upon which they are based.

Writing in the midst of World War I, in the struggle to develop a new perspective for the working class, Lenin made a point of immense methodological significance. Finance capital, he explained, while exercising its domination over the whole world, and thereby uniting it, at the same time exacerbates the differences between the various parts of the world economy.

This means that any set of political relations between the various capitalist powers, which at one point formed the basis for an international equilibrium and provided some stability, must, of necessity, be disrupted by economic processes. It is not a question of if, but when. This is what gives rise to militarism and war because, as Lenin put it: “Once the relation of forces is changed, what other solution of the contradictions can be found under capitalism than that of force?”

This process, which erupted in two world wars in the twentieth century, is underway again. Far-reaching economic processes have shattered the equilibrium that prevailed after World War II. The capitalist great powers, America, Europe, Japan, and the rising powers, such as India and China, as well as Russia, are now engaged in a cut-throat struggle for markets, resources, profits and spheres of influence—a process that, at a certain point must lead to global conflict.

The working class has to chart a completely different course. Partial reforms and patchwork will not resolve the crisis. It is necessary to recognise that historical development has reached such a point where nothing less than the direct intervention of the masses themselves, sweeping away the outmoded social order based on private profit and the nation-state system, can take mankind forward.

As far as the US is concerned, the drive to war is not a product of the Bush administration. It is only the most ruthless exponent of the program of US global domination, which forms the foundation stone of all the bourgeois parties.

The November 2006 mid-term elections were a massive repudiation of the Iraq war and the Bush administration as a whole. But the Democrats, swept to power in Congress on this antiwar movement, not only refuse to cut off funding for the war; they are lining up to support an attack on Iran.

This week, the Democrats in the House of Representatives agreed to remove a provision from a bill providing supplementary funding for the wars in Iraq and Afghanistan, which would have required the administration to obtain the approval of Congress for a war on Iran.

And in an interview with the New York Times published on Wednesday, Hillary Clinton made clear that if she were elected president, American troops would remain in Iraq for the foreseeable future because there were “vital national security interests” there. As for what those interests were, she could not have been clearer: “It is right in the heart of the oil region.”

The differences between the Democrats and Republicans over Iraq are purely tactical.

Likewise in Australia. The Howard government signed on for the war in Iraq from the outset, just as the Hawke Labor government was the most enthusiastic supporter of the 1990-91 Gulf War, on the understanding that the interests of Australian imperialism in maintaining its position, especially in the Asia-Pacific region, required backing from the US political and military establishment.

The Labor Party completely shares this agenda. Had Labor been in office there is no question that it would have supported the invasion of Iraq. When the war criminal, US Vice President Dick Cheney, came to Australia last month, former Labor leader Kim Beazley was in the audience to hear him speak, and to be publicly acknowledged. The current leader Kevin Rudd held a private meeting with Cheney, at the same time denouncing those who protested against the visit as “violent ferals”. Cheney, for his part, issued assurances, on the basis of his discussions with Rudd, that the Australian-American alliance would remain solid under Labor.

The position of the Greens is no less revealing. In the demonstrations of February 2003, Greens leader Bob Brown called for Australian troops to be deployed in “our region”. He has his wish. Australian forces are waging offensive operations in Timor. They have been deployed in the Solomons, as well as in Papua New Guinea and Fiji. The so-called “war on terror” has been accompanied by unprecedented attacks on democratic rights, with the endorsement and votes of the Greens.

What of the Socialist Alliance and the Democratic Socialist Party? Let me cite an editorial that appeared in the January 13 edition of the Green Left Weekly.

“The anti-war movement in Australia,” it declared, “has to rise to the challenge and use this election year, and Bush’s visit to Australia for the APEC summit in September, to make a serious push to hold the Coalition government to account.” The antiwar movement must, it says, “creatively engage” with the broad antiwar constituency and “force the politicians to account for their criminal war”.

How terribly polite. How awfully parliamentary. Hold the war criminals to account! There could not be a clearer expression of the differences between our movement and all the radical and protest tendencies.

They aim to ensure that the “anti-war constituency” as they call it—the broad mass of the population opposed to the eruption of militarism and increasingly concerned over its implications—is kept within the framework of the existing order. Our perspective is the complete opposite.

Our party seeks to arm this opposition with a political understanding, grounded on the historical experiences of the international workers’ movement, that it can only go forward by consciously linking the struggle against war to the struggle for the ending of the capitalist economic system and the establishment of a socialist economy.

The protest perspective inevitably and rather rapidly leads back to the confines of the Labor Party, fostering the illusion that somehow they represent the lesser evil, and, after all, are the only viable alternative.

As the Green Left Weekly statement puts it: “The movement must also make clear that it expects the ALP opposition, led by Kevin Rudd, to stick to its promise to remove Australian troops if elected to federal government. Getting Australian troops out of Iraq will be politically important, as it will deepen the pressure on Washington and assist the movement to hasten the departure of US occupation forces.”

Any withdrawal of troops by a Labor government will do nothing of the sort. In the first place, Rudd is committed only to removing 500 troops out of 1,400—in consultation with the US. Secondly, any troop withdrawal will be followed by increased commitments in Afghanistan.

The need for a new strategy

This election campaign, like others in the recent period, has revealed the deep-seated hostility to the major parties. This sentiment, however, is often accompanied by another—the conception that nothing can be done. This view is openly promoted by the media which, sensing the hostility to the entire official apparatus, work assiduously to ensure that no alternative is heard and at the same time declaring that the only possibility is to choose which of the major parties represents the “lesser evil”.

Various academics and intellectuals are called into service as well. In the wake of the downfall of the Soviet Union, they proclaimed the triumph of the market and even the “end of history”. This assertion has since collapsed and so a different stance has been adopted.

The historian Timothy Garton Ash, for example, has written that “global capitalism has no serious rivals—but it could destroy itself”. In other words, the present order may be headed for a catastrophe, but there is no viable alternative.

Let us examine this assertion. It is true that absolutely nothing—to end the threat of war, advance social conditions or put an end to the ever-widening social inequality—can be accomplished within the framework of the existing parties and the parliamentary framework.

The universality of this phenomenon means it must have deep social roots.

They lie in the processes of economic globalisation. Under conditions where the processes of production, the financial system, indeed, all aspects of economic life, have been globalised, the old national framework of politics has been shattered as well.

The form assumed by the reformist politics of the post-war period was the application of pressure, through elections, on other occasions by strikes and industrial action, sometimes by way of protests, on the national state for concessions. These methods enjoyed some measure of success, although limited, insofar as economic processes could be regulated through the actions of the state. That period has gone.

In other words, the same processes of globalisation that have once again raised the inherent conflict between the world economy and the nation-state system, giving rise to militarism and the danger of war, have rendered utterly bankrupt the old forms of organisation—be they parties or trade unions—and the old reformist forms of political struggle. Nothing can be accomplished in dealing with the myriad of social and economic problems that confront the working class without a direct challenge to the very foundations of the profit system.

The political movement of the working class can go forward only on an international basis, with a strategy based on the socialist reorganisation of the global economy to provide for human need, not profit.

This is the significance of our party, the International Committee of the Fourth International, the world Trotskyist movement. The program of internationalism upon which it is grounded—starting with the perspective of world socialism on which the Russian Revolution was based, the struggle against Stalinism and its reactionary nationalist conception of socialism in one country, through to the struggle in the post-war period against those who sought to liquidate the Fourth International—is the only basis on which the working class can meet the challenges ahead.

We were recently asked what we could do about the war in the event that one of our members were elected to parliament. A great deal. We would use the platform provided by such representation to expose the real workings of the present system and develop the struggle for the socialist alternative. But we do not promote the illusion that the situation can be changed through the passage of new laws in parliament.

Our party, Trotsky once explained, is not a party as other parties. “Our ambition is not only to have more members, more papers, more money in the treasury, more deputies. All that is necessary, but only as a means. Our aim is the full material and spiritual liberation of the toilers and exploited through the socialist revolution.”

This great goal cannot be accomplished by legislation or acts of parliament. The days have gone when political objectives could be achieved through representatives who were sent off to parliament, to somehow act in the name of the mass of the population.

As Frederick Engels explained so well more than 100 years ago: “When it is a question of a complete transformation of the social organisation, the masses themselves must also be in it, must themselves have grasped what is at stake, what they are going in for, body and soul.”

The development of this consciousness and understanding requires persistent work, and the overcoming of the confusions of the past. But events are moving rapidly, making possible the clarification of even the most difficult questions. We urge you to consider seriously our program, join the ranks of our party and build it as the new leadership of the working class.