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Class Struggle 111

Summer 2014

Class Struggle 111


Flag Burning
The NACT regime tries to cover NZs naked neocolonial dependence on the US and China with a
new flag. Key says NZ is not dependent on the UK
or Australia. His ideal solution is a black flag with
a silver fern to state NZs national sovereignty.

Summer 2014
red flag of international socialism. Only then will
our flags represent socialist republics as part of
the socialist united states of the world.

Chinas Win-Win?
Xi Jinpings 2-day stopover in NZ was a success. It
sealed a strategic partnership upgrading the
2008 FTA (Free Trade Agreement) with China to
match Australias recent FTA. Its all about NZ as
supplier of cheap food plus high tech inputs into
Chinas rampaging economy.
This upgraded FTA access will be exploited by the
US when it succeeds in forcing NZ to sign up to the
TPPA (Trans Pacific Partnership Agreement). US
investors will have open access to grab control of
strategic NZ IP assets and piggy back into China on
the basis of the win-win partnership. So NZ is no
more than a stalking horse for US entry into China.

This flag stands for NZs independence by drawing

on NZs success as a sporting nation. Yet even that
is a lie. The All Blacks are sponsored by Adidas and
AIG, German and US-based MNCs. The silver fern
masks NZs naked re-colonisation. Here is a
national flag that would express NZs current neocolonial status well.

The socialist group Socialist Aotearoa rejects all

such pretence and wants to raise a red flag that
represents socialism and Tinorangatiratanga. We
sympathise, but before we can raise a socialist
flag for a socialist Aotearoa, we have to overthrow
the capitalist state that promotes the ideology of
nationalism. Workers have no country! For us, all
national flags must be burned and replaced by the

The US
that it
compete with China by penetrating its domestic
economy. China developed rapidly by welcoming
Western FDI but on its own terms. To date the US,
Japan and EU have been only able to buy into
China as joint ventures. The profits from these
ventures have not been enough to rescue the US,
Japan and EU countries from economic stagnation.
China has been able to quarantine its powerful
value producing economy from a Western
The rivalry between the TPPA and the APFTA
(Asia-Pacific Free Trade Area) is really about
getting access to more value produced in China.
China used APEC to promote the APFTA while the
TPPA was stalled over US and Japan Agricultural
trade protection. That is the meaning of the
symbolic bi-lateral deal between Xi Jinping and
Obama signed at APEC over climate change and
mutual exchanges designed to divert attention
from great-power rivalry.
Despite its setback, the US strategy is to open up
China to FDI access on the same terms as the
TPPA. That is, US corporations dictating the terms
and not China. So the next move by the US-led
bloc is to increase ownership of Chinas high tech

Class Struggle 111

value-added domestic production as the life-line it
needs to survive the impending global recession.
In this power play, NZ is no more than a client
state of both major players. Not only does NZ
provide a back-door mat for the US into China. All
parliamentary parties join the chorus preaching US
objections to Chinas failure to live up to 'Western'
human rights and the rule of law, as barriers to
open access of the global free market.
So this is no 'win-win' for NZ. It is a pawn in this
heavyweight bout between the US and China
imperialist blocs. The way ahead for NZ workers is
to fight both imperialist blocs by joining forces
with the workers in both China and the US, and
the client capitalists in NZ, to overthrow their
ruling classes and unite to build a socialist world.

Summer 2014
nationalism from the mid 30s to 1980s, to the
open, deregulated re-colonised semi-colonial neoliberal Super City of today.
What distinguishes the Super City from its earlier
forms is The Super City concentrates
city government in one big bureaucracy to rule
over the people on behalf of Sky City the high
point of Casino capitalism. Auckland gambles its
future on the ponzi schemes of property, banking
and the stock market parasitic on the production
of value.

A liveable Auckland?
Much hot air has been generated by the promoters
of Auckland City as a liveable global city. But hot
air cannot disguise the reality that the working
class has always paid for the city which exists only
to serve the interests of the capitalist class.
Liveable ultimately means living standards. The
truth is that its population only lives in the city
to exploit or be exploited.
Fred Engels wrote about how capitalist cities
worked nearly two centuries ago. Industry is
concentrated along with finance and services in
urban areas to maximise profits. Workers are
housed in the cheapest housing, transported the
shortest distances, and worked for the longest
hours under the most exploitative conditions to
serve profits. Everything else is bullshit.
Democratic reforms, local body elections, City
visions, public consultation on planning, etc are
a cheap veneer pasted over the bottom line which
is accumulating profits. They are no more than the
pretence that urban living is has more human
value than that of labour creating value for
capitalists. Even leisure activities in parks,
playgrounds and beaches and art galleries, are no
more than the replenishment of workers physical
and mental capacity to produce profits. Auckland
is no exception.
From its founding by British settlers in the 1840s
Auckland was constructed around the port, cheap
housing for workers in the valleys and colonial
mansions for the rich on the hills, and essential
transportation between home and work. Later as
NZ capitalism developed, Auckland reflected these
changes and went through several distinct stages,
as the national economy went from a colony in the
19th century, through the period of economic

Today, Auckland is liveable for the parasitic

ruling class and the middle class that services it,
and increasingly unliveable for the exploited,
taxed, tolled and otherwise oppressed working
class. The fate of Auckland cannot be separated
from the global economy. It will be ruined by the
plunder of Casino Capital, or re-invented by the
power of the working class to expropriate Capital
and plan Auckland to meet the needs of the

Global Crisis and Resistance

Michael Roberts quotes David Camerons speech
at the G20 referring to Red Warning Lights on the
dash of the Global Economy. The Great Recession
of 2008 has not destroyed enough capital for any
real recovery to take place. Therefore, the next
recession is already on the horizon. The problem is
the squillions of QE has not induced bosses to
invest in production because the devaluation of
constant capital (non-labour inputs) and variable
capital (real wages) have not been sufficient to
restore profits.
That is, while capital is not been devalued or
written off, it represents a cost of production that
cannot be recovered profitably. The main reason
for this failure is the resistance of the working
class to further exploitation. Therefore despite
global austerity workers face much bigger attacks
on their living standards and therefore their lives.

Class Struggle 111

Yet, despite all capitals efforts, we find workers,
from Gaza to Mexico, rising up in opposition to
these attacks and to the state forces that are
unleashed to smash resistance. So far the balance
of class forces is holding. But the fact that the
ruling classes have been forced to deploy military
repression everywhere proves that we are in a prerevolutionary situation. Either the worlds workers
overcome their national and sectarian divisions
and unite as an
international force, or
they will be isolated and
destroyed by the ruling
class and its mercenaries
and paramilitaries.

Summer 2014
government of complicity with organised crime
and the criminalisation of protest. Its demands
are to restore the Mexican state to its progressive
role in developing the national interest and
breaking with imperialism. All that is required is
the ousting of Mexicos president, Enrique Pea
Nieto, and its replacement by a populist regime
along the lines of the Bolivarian states. We say
that this position sows illusions in the Mexican
bourgeois state can play a
progressive role in
completing the national

Unless capitalism is
understood as a class
struggle between capital
and labour we cant see
labours historic role as
the gravedigger of
capitalism. The
economic crisis of capital caused by the TRPF
opens up the world historic opportunity for the
proletariat to expropriate capital and socialise

Marxists do not go to the

streets to defend the
disappeared without
calling for the
disappearance of the
bourgeois state. We are
for arming of the masses
to resist the bourgeois
state forces, led by a
Marxist party that calls for workers and poor
peasants to form workers councils, and fight for a
workers council government that breaks from both
imperialism and the corrupt national bourgeoisie.

Mexican 43 Uprising

OECD report fails NZ

The disappearance of 43 student teachers missing

since September 26 has sparked an angry nationwide protest movement. The 43 teaching students
went missing from the Ayotzinapa Normal School
in the state of Guerrero. The Attorney General
said they had been killed by a local gang after the
Mayor of Iguala, Jos Luis Abarca, ordered the
police to detain the protesting students. Mexicos
president, Enrique Pea Nieto defended the arrest
of the students to avoid violence. A wave of
protest exploded across the state and spread
across the whole country and internationally
against this state crime.

The OECD report just out on NZ has kicked off

another round of the debate on inequality. The
OECD seems to have adopted the now influential
neo-Keynesian line that capitalist growth depends
on reducing inequality. Which is another way
saying that too much wealth at the top prevents
the bottom from spending on consuming

Underlying this situation is the re-opening of the

frozen Mexican national revolution that
threatens to overthrow the neo-liberal regime and
complete the permanent revolution. Reactions on
the left range from Amnesty International charging
the Mexican state with condoning a wave of extrajudicial killings. We say this reformist position
sows the illusion that the crimes of the bourgeois
state can be punished by the same bourgeois state
to contain the growing militant resistance.

The solution for the OECD is in line with Picketty

to tax the wealth that is sitting in banks or
offshore tax havens and invest in job creation.
This would enable the impoverished masses whose
real incomes have been shrinking for decades to
buy more commodities and therefore stimulate
capitalists to stop speculating in existing
commodities inflating numerous bubbles and
instead invest in producing new commodities.
We examine this Keynesian revival and its chances
of success. To do that it is necessary to look at the
causes of capitalist recession and depression and
what must happen before the conditions are ripe
for a return to new capitalist growth. We do this
in the article Piketty vs Marx in this issue.

Slightly more radical was the national meeting of

all resistance organisations that accused the

Class Struggle 111

Summer 2014

NZ ruling class goes to War

As John Key and the NACT regime struggle to decide how much support for the US war
against IS they can give without jeopardising their warm trading relations with China, we
say that there is much more to be said about this capitalist war. It is in fact only the most
recent in a long history of wars into which NZ has been dragged as a semi-colony of first
Britain, then the US, as these imperialist powers fight their rivals, to re-divide the spoils
of war. That is, as long as they are not collaborating to defeat the threat of international
proletarian revolution. Read on...
Imperialist war
NZ was dragged into the First Imperialist War on
the side of British imperialism. The ANZACS
became cannon fodder on the beaches of Gallipoli
and the trenches of the Somme. NZ workers and
farmers were dragged into the Second Imperialist
war behind Britain and the allies to fight
fascism. They died in droves in North Africa, Italy,
the Western Front and
the Pacific.
Then NZ went to
Korea, Malaysia and
Vietnam on behalf of
the US ruling class to
fight the spread of
communism. In each
case the cause of the
war was to divide
workers nationally and
send them to war so
that they would not
become an international class force capable of
fighting for a world communist revolution.
In all of these wars the interests of the ruling
classes and working class were diametrically
opposed. The ruling classes were pitted against
one another to divide and re-divide the world at
one anothers expense. Yet when it came to
opposing workers revolution, they put aside their
rivalry to unite against the communist revolution.
The workers interests were therefore to oppose
fighting national wars unless they were fighting
against imperialist oppression, and turning their
guns on their own ruling class and unite to
overthrow capitalism and bring about communism.
In each case war armed workers and created the
conditions in which workers could organise armed
The First Imperialist war proved this. After the
Bolshevik revolution in October 1917, imperialist
troops on both sides began to actively oppose the
war. Within a year the German troops mutinied
and brought the war to a halt. The ruling classes

quickly signed a ceasefire, disarmed the troops

and sent expeditionary forces to attack the new
Soviet Republic. It was the threat of revolution
spreading throughout Europe that caused the rise
of fascist movements in every bourgeois state to
divide and smash the working class. The failure to
defeat the Bolshevik Revolution and to eliminate
the communist parties in the rest of the world
meant that communism was now the main enemy
of all bourgeois states.
However, because the
Treaty of Versailles
punished a destitute
Germany, the threat of
revolution was greatest
there and a strong fascist
movement arose to smash
it and to rally the masses
behind the territorial
expansion of imperialist
Germany. Fascist
Germany also took upon
itself to invade the Soviet
Union to complete the task of smashing
The Soviet enemy
France and Britain declared war on Germany to
prevent it and its allies from re-dividing Europe at
their expense. At the same time however, their
main enemy remained the Soviet Union. The allies
sided with Russia as a temporary ally which played
by far the most important role in the defeat of the
Axis. They then resumed their fixation on
defeating communism.
The Cold War began in 1948 when the Soviet Union
threw the capitalists out of Eastern Europe. They
also backed the anti-imperialist struggles in the
colonial world in Africa, China and Indo-China etc
began to break their ties with imperialism. At that
point the Allies united behind the US, the new
dominant global power, to stop the spread of
communism, and to ultimately defeat the legacy
of 1917. The anti-communist wars in Malaysia and
Vietnam in which NZ participated as part ANZUS

Class Struggle 111

were part of this long-term objective to restore
the soviet bloc to capitalist control.
The victory of the Western imperialists had to wait
until the collapse of the SU and its satellites from
1989 to 1991 and the restoration of capitalism.
China and Vietnam followed the same path of a
return to capitalism. That marked the end of
soviet communism and a scramble to pronounce
the historic victory of global capitalism.
That triumphalism proved short-lived however.
The ex-SU and ex-Communist China were not recolonised by imperialism. Instead they became
powerful state
capitalist regimes that
retained control over
their economies and
emerged as new rival
imperialist powers.
The rivalry between
capitalism and
communism, has
transmogrified into a
rivalry between two
big imperialist power
blocs today, the USled and China-led
The ISIS enemy
The fact is that imperialism today is re-dividing
the global world afresh and causing economic,
political and military wars on every continent. This
time the underlying rivalry behind every war is
that between the old Western bloc led by the US
and the ex-Soviet bloc led by China. But as is
always the case where the threat of the rise of
proletarian revolution becomes paramount this
rivalry is temporarily suspended.
This is the case in the Middle East today. The two
main blocs want to defend the status quo. The US
and is gendarme Israel want to continue to
dominate the MENA with the right to impose
puppet regimes to contain the masses struggles.
Its object is to prevent the other bloc from gaining
access to more oil and other resources.
Meanwhile, China and Russia, allied to Iran want
to defend their position in MENA also, including
greater access to oil etc. As the Arab masses have
risen up to oppose their dictators, this has led to a
stalemate as both blocs have backed dictatorships
which had not been able to defeat mass
insurgencies. The result is a vacuum in which the
masses have been increasingly driven into the

Summer 2014
arms of the Arab petty bourgeoisie that are trying
to create a new state based on the Islamic
Caliphate. Both imperialist blocs and their allies in
the MENA are against this enemy that has arisen
out of their failed policies to defend their spheres
of influence.
War and Revolution
In this situation revolutionary Marxists oppose all
imperialist wars, invasions and occupations,
including those against the Islamic Caliphate which
is a bourgeois proto-state that must align itself
with one or other imperialist bloc. The Caliphate
as a theocratic state is
no better or worse than
Israel or Saudi Arabia.
War between
imperialism and the
Caliphate is a process
of negotiation over the
fate of the Arab
How does the US and
China/Russia decide
which bourgeois faction
should rule the masses
on their behalf in
Egypt, Syria, Libya, Palestine, Iraq? Not by any
hypocritical humanitarian criteria but by their
ruthless efficiency in suppressing the masses.
Only the Arab masses rallying and organising
workers and oppressed as an international
revolutionary force can defeat both imperialism
and their secular and theocratic national
bourgeois dictatorships!
To support the Arab revolution, NZ workers
must oppose our lackey regimes alignment with
both imperialist blocs, and all military
intervention into their proxy wars in MENA,
specifically against IS. We must oppose the
designation of anti-imperialist fighters as
terrorist, and defend the right of NZ citizens to
travel overseas to fight wars they consider just.

Break with the imperialist militarism of


Victory to the Arab Revolution!

For the Defeat of the US led coalition

against IS!

Defeat the intervention of

China/Russia/Iran in MENA!

For a Socialist United States of MENA!

Class Struggle 111

Summer 2014

Treaty Politics: For a Socialist Aotearoa!

The latest revival of debate over the meaning of the Treaty of Waitangi has flared up
after the Waitangi Tribunal reported that Maori Chiefs (Rangatira) never signed away
their sovereignty (political control) to the British colonists. This may provide more
ammunition for the Maori Party to squeeze some more beads and blankets from the NACT
regime but it wont benefit most Maori. The Treaty was always a fraud, and Maori will
have to join the fight for socialism to achieve their self-determination as a people.
The Waitangi Tribunal Report on the Ngapuhi
Treaty claim re-asserts the finding that Maori
never signed away their sovereignty when they
signed the Treaty of Waitangi in 1840. Most of
the chiefs believed that they retained
tinorangatiratanga, or chiefly authority, over
their people. That meant in terms of Maori
society, the exercise of chiefly authority over
use of land and all things Maori.
Hone Heke, the first to
sign the Treaty, was also
the first to declare war in
the North when it became
clear that the British had
effectively seized
sovereignty. Many other
tribes, including Te Arawa
and Tuhoe, never signed
the Treaty for this reason.
Some Waikato chiefs
including Potatau Te
Wherowhero refused to sign and formed the King
Movement to resist pressure to sell land.
The Treaty was always a fraud. There was never
any 'partnership'. The Treaty was a ruse to
disarm Maori when the British did not have the
forces on hand to establish a capitalist colony by
force. Maori soon found that this required the
dispossession of their land and their conversion
into landless wage workers. Maori society was all
but destroyed and forcibly subordinated to the
British Empire.
The Treaty settlement process of the last 40
years has glorified the Treaty as New Zealand's
'founding document' that was only dishonoured
by excessive actions of military intervention and
land confiscation. This has sustained the
bourgeois liberal view that the Treaty can be
'honoured' retrospectively by settling all
historical claims with token distribution of land
and money, the modern equivalent of beads and
The Waitangi Tribunal Report doesn't challenge
this bourgeois settlement. It points out what

most iwi traditions have always known - that

Maori never signed away sovereignty. The
Tribunal is merely adding its authority to the
current bourgeois legal fiction of the Treaty as a
partnership of two sovereign peoples. So apart
from some arid academic disputes, the Report
will do no more than provide the Maori Party
embedded in the NACT regime with grounds to
claim bigger crumbs under the Cabinet Table on
behalf of the Iwi Leaders
The vast majority of
working class Maori will not
benefit in any way from
further crumbs trickling
into iwi capitalists pockets.
For them it is their class
struggle as workers against
the re-colonisation of NZ by
US and China that is
dominating their lives.
No reformist project to 'honour' the Treaty today
can overcome the historic defeat of colonisation.
Despite the massive wealth accumulated off the
stolen land, and from generations of Maori
workers, no capitalist government, left, right,
Green or Brown can redistribute value or assets
to Maori workers when global capitalism is facing
an existential crisis of economic and climate
Capitalism is on its last legs and only survives by
speculating in the inflating 'prices' of land and
existing assets. For this reason any demand
today to tax capitalists to compensate for the
widening income gap between rich and poor,
would meet with massive resistance.That is why
we advocate a speculation tax as a transitional
demand. The impossibility of implementing this
demand would demonstrate the futility of taxing
the rich and prove the necessity of a revolution
to socialise the land and all economic assets so
that the working class can collectively plan
society to survive the capitalist endgame and
climate collapse.

Class Struggle 111

Summer 2014

New Labour leader re-activates Split

Reactions to Andrew Littles election as Labour Party leader tend to reflect what the
Right, Left and Centre, want him to be. They are all partially correct since the classic
position of Labour leaders is to be centrists who stand in the middle and alternately face
both left and right to suppress class conflict and reconcile Labour and Capital. Little
personifies Labourite social democracy as a former union boss, now parliamentary wing
boss. As a former trade union bureaucrat he is perfectly placed to sit astride the class
divide and speak out of both sides of his mouth. Yet, however hard Andrew Little tries to
suppress the class divide, given the unstable crisis-ridden nature of global capital, he will
inevitably fail. He cannot de-activate the class contradiction and prevent the petty
bourgeois and working class wings of the Party from tearing it apart. Read on for our full
The election for the new Labour leader and his
performance so far proves one thing; that the
Labour Party has failed to suppress the class
contradiction between the working class base of
the Labour Party and its capitalist program. The
unions, and Mahutas second and third votes in
caucus and party, pushed Little over the line to
defeat Robertson the career politician oriented to
the middle class, and Parker the petty bourgeois
businessman turned
So the triumph of the
petty bourgeoisie
caucus majority that
destroyed Cunliffe is
incomplete. While
the left was defeated
when Cunliffe stood
down from the
Primary leaving two
centrist right
candidates preaching
platitudes about Labour values, the election of
the ex-union bureaucrat keeps the contradiction
alive. We will explain why.
By regrouping around Little and Mahuta, the left
lives to fight another day. Little as the former
Secretary General of the Engineers, Printing and
Manufacturing Union (EPMU) represents the
bureaucratic caste that has ruled the organised
labour movement since it created the Labour Party
in 1916 as a moderate alternative to the radical
Red Fed. As EPMU leader he was complicit in
CTU boss Ken Douglas policy of the social
partnership (class compromise) with business to
share the labour value created by workers.
Little won (thanks to Mahutas second and third
preferences) and that signifies Labour will stick to
its historical origins as the creature of the labour

bureaucracy that put profits ahead of wages. But

unlike a victory for the right, Little as the
candidate of the unions is also accountable to
them and this will keep the class contradiction
between the mass of the working class and the
labour bureaucracy in the unions alive and kicking
in parliament.
Not only that, Little has inherited the hopes of the
left. When Cunliffe endorsed Little he was
signalling that Little
would stand for
honouring the history
of Labour as a party of
the working class and a
break with neoliberalism. Then
Nanaia Mahuta joined
the race late and
performed very well in
the Primary as a
potential leader of the
left. She carries with
her the interests of Labours core constituency of
the low paid, Maori and Pacifica, as well as pakeha
workers, many of whom are disenfranchised and
So no matter how far Little is pulled to the right to
satisfy the demands of kiwi capitalism in crisis, he
will also be pulled to the left by the labour
movement, and the left wing and working class
factions in the Party. Such a contradiction cannot
be permanently suppressed. Sooner or later the
Party must split. The only question is what will
replace it on the left?

Left outside
Already leftists Bomber and Minto have writtenoff Labour as, yet again, National Lite. This sort of
resigned pessimism is what happens when you try

Class Struggle 111

to build a parliamentary party while the majority
of workers reject you and stay with Labour.
Because lefts who criticise Labour from the
outside abstain from activating the class
contradiction from the inside, they separate
themselves from the majority of workers still
hamstrung by illusions in the parliamentary Labour
Party. Ironically it is revolutionaries who have no
illusions in parliament as the solution to
capitalisms problems that see the need to put
Labour Parties in power to split the party and gain
mass support for genuine working class party.
Elsewhere, we see parliaments being transformed
by the exposure of social democratic parties as
pro-austerity and anti-worker, with the rise of new
parties expressing the will of the dispossessed and
disenfranchised. Syriza in Greece and Podermos in
Spain are two examples. Both are the result of the
masses rejecting the years of betrayal by the
ruling social-democratic parties that have
historically embraced neo-liberalism.
What characterises these parties is their rejection
of traditional union bureaucracies and elitist
parliamentary politicians who claim to represent
the political will of the mass of the working
population. Rather than defining workers as the
traditional blue collar manual workers and service
workers, the working class is now understood to
include all those who work to live, including large
sections of the self-employed and unpaid workers.
On top of this, it is increasingly clear that identity
politics has not trumped class politics and masks
the common oppression that most special interest
groups face in the casualised, precarious labour

Who are workers?

Labour is also going down this road of re-thinking
the working class. As the global slump we are
entering kicks in, expect the dispossessed,
disenfranchised and oppressed in NZ to rise up
too. Andrew Little seems to understand that the
working class must be defined to include the selfemployed and unpaid workers. His view that the
Universal Basic Income should be debated reflects
this reality. No doubt he thinks that a modern
Labour Party can somehow be reformed to force
capital to meet the basic needs of labour.
However, Labour will prove incapable of
reconciling the needs of workers with the demands
of corporate capitalism.
Having this debate will wake people up to the
common class interest between self-employed on
hourly contracts and wage workers who facing
individual hourly contracts. Both are heading

Summer 2014
towards zero hour contracts to join the
unemployed. As this common consciousness
develops the Labour Party will be pulled left and
split along the class line to break away to form a
new mass left party of the working people.
These new mass working class political formations
do not yet represent a fundamental break with
capitalism. But their programs for popular
democracy, mass activism, social equality,
internationalism, etc are impossible for global
capitalism to meet. They will become the basis for
a mass radicalization which takes the class war out
of the talk show of parliament to contest power on
the streets. Now is surely the time for historical
optimism as capitalism reveals itself as a threat to
human survival, and the growing mass movements
for change emerge on the streets. Meanwhile
revolutionaries have to do whatever they can to
speed up this split and the formation of a mass
workers party and program.

Fight for a workers program

Little doesnt make up the program, the Party
does. And since he is now the leader voted in by
the unions he must be held accountable by them.
That means there must be an all out fight to
defeat the reforms designed to bust the unions.
Labour should walk on both parliamentary and
industrial legs with steel capped boots. A union
fightback will rub the NACTs noses in their free
labour market and rebuild the unions as fighting,
democratic organisations of workers power!
Make the bosses pay! Smash austerity! The CGT is
a Speculator Tax! Dump GST! A Living wage! Jobs
for All! Free education (like Germany)! Free
Health! Massive state rental build! A living
Universal Basic Income or Social Wage (UBI) to end
precarite and reward unpaid labour! Stop benefit
bashing! Dump Parkers Pension Plan! Retirement
age at 60! Abolish the GCSB and SIS! NZ out of
These urgent economic and democratic demands
fought for by workers will be met with outright
hostility by the ruling class. This will force
workers to engage in strike action and
occupations, and to form workers councils and
When the imperialist monopolies send in the
Marines to enforce the TPPA and stop us taking
power we will need an organised peoples army to
send them packing and elect a Workers
Government to socialise the land, banks and
corporations, and plan for a socialist economy!
For a mass, revolutionary workers party!

Class Struggle 111

Summer 2014

USA and China do the Pacific Pivot

The two rival superpowers now openly face each other in the Asia Pacific. Karl Marx long
ago saw the Pacific as the key to the future of capitalism. Today it is the key to the future
of post-capitalism. Here the contradiction between the dying capitalist society destroying
humanity and nature, and the emergence of the revolutionary global proletariat struggling
to free humanity and nature from destruction, will be played out. Either we succumb to
the fight to the death of the Chinese and US ruling classes and get trampled in the process,
or the international working class unites to overthrow their ruling classes, freeing
humanity to build a new socialist society in which production to meet human needs is in
harmony with nature.
The two big power blocs are both dancing the
Asia- Pacific pivot at APEC in Beijing. Looking at
what is at stake here, the war against the ISIS in
the Middle East is
little more than a
sideshow. There
the rival big
powers try to
dance on the spot
to keep the status
quo and the oil
flowing while they
prepare for the
prize fight in the
Asia Pacific.
Obama has tried
negotiations to do
a nuclear free deal with Iran in exchange for
bringing a halt to the raging Shiite vs Sunni proxy
wars in Iraq and Syria. This means the US and
China/Russia blocs finding ways to collaborate to
neutralise the IS caliphate and do a power sharing
deal between Sunni, Shia and Kurds to partition
Iraq and Syria.
The IS would participate in exchange for territory
and oil and submit to OPEC dominated by the
Saudis. The IS would become just another
theocratic tyranny along with Israel, Saudi Arabia
and Iran. The US and China/Russia would come out
of this deal with their respective spheres of
influence retained.

G20 PR exercise
Never mind the missile flexing at the G20 and the
isolation of Putin the Terrible. This is PR for the
plebs. This is desperation to ramp up support for
the US bloc to counter the Russia China bloc
expanding into the EU and Middle East. NATO is
being used to bloc Russia China from Europe and

frustrate their plan to run the New Silk Roads right

into the heart of Europe and the Middle East.
Thats because the other end of the Silk Roads
begin in the Asia Pacific where the economic
engine drives the world economy. When the
engine is racing it
needs to get on
the road.
The Pacific is
where the rivals
are facing the big
showdown for the
most lucrative
economic spoils.
The pre-fight
tension was
evident at the
APEC and G20
meetings where
the big prize is a
victory for the US-led TPPA or the China-led FTA.
Who will win the war for the Pacific? According to
Pepe Escobar, roving ambassador for the BRICS,
China won on all fronts. Well he would say that
wouldnt he. But as the referee is he right?

Fighting on Four Fronts

Right at the start, President Xi urged APEC to "add
firewood to the fire of the Asia-Pacific and world
economy". Two days later, China got what it wanted on
all fronts:
1) Beijing had all 21 APEC member-nations endorsing
the Free Trade Area of the Asia-Pacific (FTAAP) - the
Chinese vision of an "all inclusive, all-win" trade deal
capable of advancing Asia-Pacific cooperation see South China Morning Post (paywall). The loser was
the US-driven, corporate-redacted, fiercely opposed
(especially by Japan and Malaysia) 12-nation TransPacific Partnership (TPP). [See also here.]
2) Beijing advanced its blueprint for "all-round
connectivity" (in Xi's words) across Asia-Pacific - which
implies a multi-pronged strategy. One of its key
features is the implementation of the Beijing-based


Class Struggle 111

US$50 billion Asian Infrastructure Investment Bank.
That's China's response to Washington refusing to give
it a more representative voice at the International
Monetary Fund than the current, paltry 3.8% of votes
(a smaller percentage than the 4.5% held by stagnated
3) Beijing and Moscow committed to a second gas
mega-deal - this one through the Altai pipeline in
Western Siberia - after the initial "Power of Siberia"
mega-deal clinched last May.
4) Beijing announced the funneling of no less than
US$40 billion to start building the Silk Road Economic
Belt and the 21st Century Maritime Silk Road.

Lame Duck Obama v the Putin Bear

Escobar is right. On all fronts China and Russia
have made a huge leap forward gathering support
for their FTAAP against the faltering TPPA, and
putting in place a gigantic economic bloc based on
Siberian oil/gas and the new Silk Roads that
plunge into the heart of Europe and the Middle
Obama comes out as the lame duck to Putins
Russian Bear:
What a drag the Bomber-In-Chief must be musing.
The global economy is mostly a disaster. China, even
growing at only 7% a year, keeps eroding his
indispensable nation aura. Japan has decided to copy
the Federal Reserve and embark on its own kamikaze
version of quantitative easing. Asian nations keep
freaking out about a few rocks in the South China Sea.
And last but not least, Obamas nemesis, pesky Vlad
the Hammer Putin, has just been crowned Most
Powerful Leader in the world even if for the most
stupid reasons (unpredictable head of a rogue
state) [1] while he, the Nobel Peace Prize leader of
the exceptionalist, indispensable nation, is now
nothing but a pitiful lame duck.

The US will try to keep its global dominance with

its TIA (Total Information Awareness) essentially
info wars against its rivals, Russia and China and
its BRICS partners. But Russia and China are
preparing to meet this total spectrum dominance
at every level. SCO is the anti-NATO defensive
alliance of the Russia China bloc. Its now total
war against the BRICS.

Chinas Silky Road to Glory

Of course Escobar cannot refrain from cheering on
the BRICS as if this creates a new progressive
multipolar alternative to the hegemonic US bloc:
APEC once again has shown that the more geopolitics
change, the more it won't stay the same; as the
exceptional dogs of war, inequality and divide and rule

Summer 2014
keep barking, the China-Russia pan-Eurasian caravan
will keep going, going, going - further on down the
(multipolar) road.

Escobar describes a scenario of the rise of ChinaRussia, the decline of the US-EU as Germany aligns
with the Eurasian Bloc. We differ with Escobar in
his view of Russia-China as that of a multi-polar
force that introduces order in the US Empire of
As we argue in BRICS around the neck of the
Proletariat the Empire of Chaos is not US
imperialism but the laws of motion of capitalist
imperialism in its terminal crisis. Russia and China
cannot resolve capitalisms terminal crisis and
prevent a third world war between the two rival
blocs. We can only overcome capitalist chaos
but overthrowing capitalism itself and imposing a
new socialist world order.

Revolutionary Politics
The consequences of APEC and G20 for the Asia
Pacific nations are clear. They are squeezed
between the two major imperialist blocs. NZ for
example, is now largely dependent on China
economically. The APEC endorsement of the
FTTAP led by China will tighten those links of
dependency because the Chinese economy, while
slowing down, is still expanding at 7% and
dominates the Asia Pacific economy.
The US is attempting desperately to rush through
the TPPA to shore up its economic power in the
region by locking its allies into US economic,
political and military deals to limit Chinas
expansion. This can only create huge tension in
the ruling elites pulled between the two blocs.
China will win this contest in the long run because
its rapidly developing productive capacity creates
real economic wealth, while the US strategy of
legally monopolising assets, technology and IP
backed by military force, is already being
overtaken and challenged by China and Russia.
The labour movement in the Asian Pacific states
must refuse to be drawn into the interimperialist rivalry that leads to economic and
military wars. The revolutionary left in Australia
and NZ must seek allies in the Chinese and US
working classes, along with those of the rest of
Asia and Latin America, behind an
internationalist strategy of socialist revolution
that overthrows their capitalist ruling classes
and puts in place Workers Governments and a
Federation of Socialist Republics of the Asia

Class Struggle 111

Summer 2014

Australia Re-Colonised (or not)?

Australia has just signed a Free Trade
Agreement (FTA) with China. This means that
Australia will be become more economically
dependent on China, exporting basic commodities
and importing finished goods. China will invest
Foreign Direct Investment,(FDI) in Australia to
control the value chain as much as possible. More
mines will open while car plants close even steel
mills will close. China will own and run the coal
mines and iron ore mines (in Australia) and the
transport links to export this to China, where steel
and cars will be produced and exported
internationally. What that shows is that China has
firmly ensconced Australia as a client state in its
sphere of interest.
Australia never
completely shook off its
dependence on the big
imperialist powers from
its days as a British
colony. While it
decimated the
Aboriginals it never
fought a war of
independence from the
Like NZ, Australia
developed as a white settler colony supplying food
and wool to Britain. Australia also found
resources and dominated mineral production for
coal, iron ore and bauxite (source of aluminium) a
source of profit through differential rent.
Based on the economies of scale that large opencast mining can provide; efficient production
prices, Australia was able to retain some profit.
These are raw materials ripped from the land
typical for a colony to provide raw materials to
the imperialist countries. With some secondary
processing to produce steel and aluminium they
also extracted profit.
Australia also took advantage of protected
manufacturing to accumulate capital in the postWorld War 2 period. The finance sector grew
based on the value extracted from the working
class and it banks dominate the NZ and Pacific
Island economies.
It was these factors which lead us in the 1990s to
consider that Australia may have accumulated
enough capital and become a local (minor)
imperialist power in the south west pacific region.

Since East Timors independence from Indonesia,

we noted that Australia is exploiting East Timor oil
in the Timor Sea in the manner of an imperialist
As Britains influence faded Australia became
dependent on the USA. Australia has clearly acted
(like NZ) as the USA agents in the Asia Pacific
since the Second World War. Has there been a
qualitative shift with the entry of China as the
dominant imperialist power?
Australia was certainly never more than a weak /
minor imperialist. But does it still have this
character today as its dependence on the US and
China superpowers is confirmed by recent changes
in the Asia Pacific such as
signing FTAs first with the US
and now China?
We need to review the
amount of inwards Foreign
Direct Investment (FDI) and
outwards (OFDI) from
Australia through the
financial sector both pre and
post the financial crisis of
2008. To what extend are
Australian banks owned by
major imperialist banks? We
need to review the ownership of the extraction
industries (eg. BHP, Rio Tinto) and check if there
is any industry where Australia dominates the
world economy.
So we need to decide if Australia was always a
protected settler semi-colony like New Zealand
with similar characteristics to the Latin American
semi-colonies such as Brazil and Argentina which
we have never seen as imperialist, let alone subimperialist despite such tendencies.
Or is Australia reverting from minor imperialist to
a semi-colonial role of having export prices for raw
materials prices fixed by the imperialist powers?
Are its politics and culture now subordinated to
both U.S. and Chinese imperialism? Has its
production and manufacturing sector been the
victim of deregulation and foreign competition?
Has Australia now joined other minor imperialist
powers like Greece and Portugal that have
declined economically to the extent that they
have been reduced to the status of semicolonies?


Class Struggle 111

Summer 2014

NUMSA: Which way forward?

NUMSA broke with the ANC before the recent election. It was then expelled from COSATU to
prevent it winning over a majority in COSATU to break from the ANC. This break however, is not
complete. President Irvin Jim calls for the return to the Freedom Charter which has been
abandoned by the ANC. He presents the Freedom Charter as in the interests of workers when it was
always a Stalinist program aimed at creating a Black bourgeoisie. Secretary General of COSATU
Zwelinzima Vavi has thrown fuel on this fire in his recent Open Letter to the SACP slamming it for
consistently opposing COSATUs resistance to the neo-liberal policies of the ANC since 1994.While
NUMSA calls for a united front, and a new workers party, without the rejection of the Freedom
Charter, this will lead to a new popular front with bourgeois figures like Ronnie Kasrils, former
Minister of Information in the ANC. We look at the stand taken by different currents on the left and
put forward out position for a revolutionary workers party and program.

NUMSA Splits from the ANC/SACP*

On the left we note the positions of Socialist
Project, the WASP and the WIVP. All welcome the
NUMSA break with the ANC but disagree on how to
make this break complete. The most immediate
disagreement is whether NUMSA should fight to
overturn its unconstitutional expulsion and
continue with its fight to get COSATU as a whole
to break with the ANC.
This is important because those like Socialist
Project who think NUMSA should not challenge its
expulsion abandon any fight for democracy in
COSATU, leaving the rank and file of other unions
at the mercy of the bureaucratic ANC/SACP
dominated leadership. It leaves uncontested
COSATU CECs unconstitutional action in blocking
a special congress where NUMSA could advocate a
COSATU split from the ANC. At the same time it
writes off the role of COSATU and advocates as
social movement perspective outside COSATU.
Second, those who want NUMSA to challenge its
expulsion are divided over the use of the bourgeois
courts. We say that since NUMSA is a workers
organisation and has fought for decades to
enshrine workers democratic rights in its
Constitution, going to the courts to overthrow an
illegal expulsion is not a matter of principle. It is a
tactic used only to advance the workers
We are opposed to using it in the present
circumstances. It takes the struggle out of the
hands of the rank and file of COSATU when it is
strong enough to challenge the leadership, defend
the constitution and overturn the expulsion. It
seems that appealing to the Court is a tactic used
by the leadership to foster illusions in the Courts
as not part of the ANC corrupt regime, rather than
mobilising the ranks to throw out the corrupt
COSATU leadership.
Therefore, those who argue that NUMSA should
abandon COSATU as corrupt and instead build a

new union movement, are weakening the

mobilisation of the rank and file within the unions
to oppose the Irvin Jim leadership in going to the
Courts, calling for a return to the Stalinist
Freedom Charter, and inviting progressive
bourgeois factions who are proven enemies of the
workers into the united front.
For example, the NUMSA United Front, at its
small preparatory assembly ahead of the launch
next April, put the bourgeois politician Ronnie
Kasrils, an ANC Intelligence Minister responsible
for collaborating with the CIA and Mossad, on its
interim leadership commission! His workers
credentials are no more than opposing Zuma, and
campaigning for a no vote for the ANC. We agree
with the WIVP that the NUMSA split is in danger of
becoming ANC Mk2 by including corrupt bourgeois
celebrities. Who is next: Julius Malema and his
personality cult to revive the Freedom Charter?

Break from the Freedom Charter!

All of this points clearly to the main weakness of
the NUMSA split from the ANC. It does not split
with the Freedom Charter. It does not complete
its break with the ANC/SACP program. If the
bureaucratic expulsion from COSATU leads to a
new bureaucratic labour movement, (despite the
united front, workers party, and socialism)
then the democratic will of the mass of workers
moving against the ANC/SACP/COSATU will face
yet another bureaucratic barrier to their class
independence and the socialist revolution.
The WASP approach to this problem is to ignore
the question of program and talk only about
organisation. It supports going to court to make
COSATU hold a Special Congress. At the same time
it calls for NUMSA to press ahead with its united
front to rally all COSATU and non COSATU unions
around a socialist program. Yet it neither
critiques the COSATU leaderships illusions in the
Freedom Charter nor comes up with a socialist
program of its own. It is not possible to build an
independent trade union movement on socialist

Class Struggle 111

principles without a clear call to break from the
Freedom Charter! Given the history of WASP in the
Militant tendency, we expect that it to be silent
about the united front failing to challenge the
Freedom Charter and making compromises with
the bourgeois politicians like Kasrils which turns a
workers united front into a bourgeois popular
That is why the WIVP call to replace the Freedom
Charter with a Workers Charter is correct.
In opposition to the Freedom Charter, we
propose the consideration of the development of
a Workers Charter, based on working class
demands, both democratic and Socialist, of a
programme for working class power and a
workers government. Let us cast off the old
clothes and prepare the basis for a new
revolutionary working class party.
WIVP rejects the Freedom Charter as the program
for the national democratic stage in which the
black bourgeoisie comes to power. The National
Democratic Stage (NDS) did not lead the nation to
independence from imperialism and open the road
to socialism. 20 years of black bourgeois rule has
proven beyond doubt that the rule of imperialism
has been entrenched and the working class has
been subjected to imperialist super-exploitation.
The Workers Charter as summarised by the WIVP is
the Trotskyist Transitional Program. The task of
revolutionaries is to raise it in all the united
front actions along with the call for the formation
of a mass workers party. It would become a
rallying point inside and outside the unions for a
genuinely independent workers movement.

Use the Transitional Method!

Underlying the Transitional Program is the
Transitional Method. This is another word for
dialectics, the method Marx developed as the basis
of his revolutionary critique of capitalist political
economy. Dialectics means that society is based
on a contradictory unity between objective reality
and subjective reality where the latter acts on the
former to make a new objective reality. Marxism
does not separate theory from practice. Theory
helps us understand how capitalism works
objectively as class society and this subjective
knowledge transforms our class consciousness to
guide our struggle to overthrow class society. The
highest expression of this subjective reality is the
Marxist Party which uses the program as a
scientific weapon to advance the consciousness of
the proletariat in its struggle to transform
capitalism into socialism!
Is South Africa right now, the objective reality is
the ANC bourgeois capitalist regime that oversees
the super-exploitation of the working masses in

Summer 2014
return for a cut in the profits for the new black
bourgeoisie. The bourgeoisie trickles down some
of its profits to buy the bureaucratic leadership of
COSATU as part of the popular front to strangle
any independent workers movement from breaking
with the regime. Marikana expressed the objective
reality of poverty in radicalising the subjective
consciousness of the miners. It is this radicalising
of the union base that has forced the NUMSA
leadership to split with the ANC and its Stalinist
SACP bedfellows to suppress this class
contradiction. The result is the big fight inside
COSATU where the mass membership is moving to
break with the Freedom Charter against the
resistance of the bureaucratic leadership that is
still defending it as the program of the black
In the words of Nelson Mandela:
The Charter is by no means a blueprint for a
socialist state...The Charter does not contemplate
such profound economic and political changes. Its
declaration The people shall govern! visualizes
the transfer of power not to any single social class
but to all the people of the country be they
workers, peasants, professional men or pettybourgeoisie... For the first time in the history of
the country the Non-European bourgeoisie will
have the opportunity to own in their own name
and right mills and factories, and trade and
private enterprise will boom and flourish as never
To activate this change in workers consciousness
to the point of a break from both the bureaucracy
and the bourgeois regime revolutionaries must
raise the Transitional Program in the unions.
Replacing the corrupt union bureaucracy with a
new leadership accountable to the ranks would
prove wrong Socialist Projects claim that trade
unions cannot represent the majority of workers
because they are irrevocably compromised by
their links to the bourgeois state.
Like the Marikana strike it would prove that
corrupted unions like NUM can be replaced by rank
and file struggle unions such as the AMCU and that
their isolation, as in the recent Platinum strike,
can be overcome by a united front of all
unionised and non-unionised, domestic and unpaid
workers preparing for a general strike.
Finally, it would coordinate all united front
actions under the leadership of a mass workers
party in which revolutionaries would fight for the
adoption of a transitional Workers Charter, for
Government, as part of an international struggle
of the working masses of the whole of Southern
Africa for a Federation of Socialist Republics!

Class Struggle 111

Summer 2014


Organize Labor, Black/Brown Self Defense!

There is No Justice in the Capitalist Courts!
The Working Class Must Never Forget Michael Brown!
Organize Labor, Black and Brown Struggle!
The majority white Ferguson Grand Jury in
refusing to indict Darren Wilson is has
whitewashed the summary execution of Michael
Brown. This outrage will embolden every racist
cop in the United States to continue their terror
against the black, brown and immigrant
communities. The cops know that all they require
is a complaint for sufficient cause to kill a black
person; that their weight with the justice system
is so great that they can routinely commit legal
lynching and walk away free.
The Ferguson
Grand Jury was
a Star
Chamber of
the most
type, with the
dragging on for
months, with a
majority white
jury that was
not sequestered
during the
media hype and
a prosecutor
who made
certain there
would be no
indictment. New
York State Chief Judge Sol Wachter once remarked
that a prosecutor could persuade a grand jury to
indict a ham sandwich.
In cases of police killings, indictments are
extremely rare. The Brown family will likely not
even find any compensation in a civil court for the
death of their loved one, as the media hype will
have tainted every jury pool. The report of the
Grand Jury was nevertheless a freak report.
In 2010, in 162,000 Grand Jury cases in the U.S.,
only 11 failed to bring indictments. That's
.0000679, i.e., 6.79 times per 100,000 cases. This
fact has to be known by Obama, legal scholar and
leader of the Democrats. The Democrats have no
fundamental commitment to defense of Black lives

or to Mike Brown's good name, but only to the

superior bourgeois rights of property.
There will never be justice for the black, brown or
immigrant persons in the capitalist courts. As we
wrote in our Class War supplement, There is No
Justice in Capitalist America!:
It has been reliably established that a black
person is killed by cops or vigilantes every 28
hours in the U.S.A. Only the most flagrant abuses
of police brutality and terror come to light, while
the black,
brown and
face daily
beatings and
murder at the
hands of the
racist cops."
Darren Wilson
will either be
reinstated to
full duty and
pay to be able
to freely
conduct racist
gunplay in
Ferguson and
the St. Louis area, or he will broker his resignation
and leave with a nice pile of money. Meanwhile,
the protesters demanding justice will be facing
massive state repression at the hands of the
militarized police forces, the FBI, the fascist KKK
and the National Guard.
It is only the organized self-defense of the masses
based on a political program of struggle that can
curb the excesses of an increasingly Bonapartist
police state. There will be ever-increasing racist
gunplay and there will be many more Michael
Browns until the masses start to organize Labor,
Black and Brown community self-defense militias
and carry out labor-centered actions to counter
the racist violence through political labor strikes.
They shoot us down, we shut them down! A

Class Struggle 111

fighting, multi-racial labor movement would have
launched a general strike in reaction to Michael
Browns murder.
We in the Communist Workers Group are not alone
in calling for these self-defense organizations, but
these run headlong into the resistance of a trade
union bureaucracy that has anchored its fortunes
in the capitalist Democratic Party and who are
happy to collect the dues of the Police Benevolent
Associations, telling us that the killers in blue are
union sisters and brothers! So our first task is to
drive the police out of the AFL-CIO and Change to
Win labor federations. The police are not workers.
They are the hired guns of Capital.

Summer 2014
The pacifists have led you into blind alleys and
into T streets for the police to ambush you, while
politically disarming the masses with impotent
attempts to reform the police. We will
remember the advice of Malcolm X who said
Well be non-violent with those who are nonviolent with us. Until such time as racists fear for
their lives and well-being, they will feel entitled
to act out their perceived white-skin privilege with
deadly force and none of the behaviour of the
bourgeois state will give them any reason to
believe otherwise.

No more Fergusons! Right now, the frequency of

police killings is increasing and is at epidemic
levels, with more Americans killed by cops in the
last decade than have been killed in Iraq. In order
to reverse this trend, the social vanguard of the
labor movement, the black, brown and immigrant
communities need to take to heart the historic
lesson of the Deacons for Defense and Social
Justice, the best days of the Black Panther Party,
Robert F. Williams and the Minneapolis Teamsters
Union Defense Guard.

An injury to one is an injury to all!

Defend Ferguson protesters!
Drop all charges and for the
immediate release of all Ferguson
For organized trade union contingents
to Ferguson to demand justice for
Michael Brown!
National Guard out of Ferguson! Down
with the militarization of the police!
No stop and frisk! Defeat racial
profiling! Down with La Migra and
police attacks on immigrants!
For immediate full citizenship rights
for all immigrants!
No faith in the bosses courts!
We need our own institutions to gain
Turn the meetings and mobilizations
into organizing meetings for Labor,
Black and Brown self-defense guards
and tribunals!
Form up multi-racial Labor, Black and
Brown self-defense guards to defend
against racist police, KKK and
vigilante terror!
For workers tribunals to bring
murdering racist cops and vigilantes
to justice!
Build Labor, Black and Brown political
strike actions to bring these criminals
to justice!

Communist Workers Group USA (CWG-US):



Class Struggle 111

New Zealand

Summer 2014

Piketty vs Marx
The publication of Pikettys book Capital in the 21st Century, on the historic inequality of
capitalism, has sparked a debate globally, and in NZ with the publication of The Piketty
Phenomenon: NZ Perspectives. We have commented that Piketty fails to understand the basic
cause of capitalist inequality so that his wealth tax cannot be the solution. The OECD Report on
Inequality goes further than Piketty to show that income inequality has a negative impact on
economic growth. It argues that income must be redistributed to increase labour productivity.
We explain that this solution means further increasing the exploitation of labour by capital. It
will fail because capital in the 21st century has outlived its capacity to meet the needs of
humanity so that humanity will refuse to be super-exploited. What is needed is Socialism in the
21st Century!

Pikettys New Law

Piketty challenges the crude assumption of neoliberal economics, that capitalist growth works
automatically (trickle down) to produce equality.
He has discovered a new law where capitalism
works so that those with wealth accumulate more
wealth at a faster rate than per capita GDP unless
the state steps in to regulate this inequality. The
solution is to tax wealth by 1 or 2% to keep it in
line with long-term GDP growth. Several
contributors to the Piketty Phenomenon (PP) see
this challenge as a paradigm shift in economics
that carries a progressive payoff for social
democrats. (Geoff Bertram in PP)
The rejoinder from the right is that the Gini Index
for NZ has been flat at 32 since the late 90s.
Bernard Hickey in PP, points out that wages,

benefits, Working for Families and subsidised

health and education kept the Gini rate flat. But
Hickey says Pikettys work is a warning against any
further erosion of the welfare state.
Radicals critique the Gini Index as a blunt
statistic, and GDP as a measure of growth.
Inequalities around gender, ethnicity, youth etc
fly under Pikettys radar. Given the prevailing
labour market super-exploitation of women, Maori
and Pacifica, and youth workers, such groups are
doubly unequal. Radical economists have been
doing much more detailed work for years to
redress such inequalities. (Susan St John in PP) For
Gareth Morgan (in PP) a reformed tax structure
that includes a Tax on Capital Assets and an
Unconditional Basic Income will do this. Feminists
and unions have been actually fighting on the
streets for such reforms. For Prue Hyman (in PP)

Class Struggle 111

taxing capital is not the answer. Capitalism as a
system that demands destructive and wasteful
growth at the expense of inequalities must be

OECD says inequality stops growth

The IMF and OECD have taken this challenge to
neo-liberal economics a step further. They say
inequality stops growth. The OECD research paper
says that in NZ rising inequality since 1985 has cut
GDP growth by 10%. The solution is a wealth tax in
some form provided it is targeted at increasing
labour productivity. In the OECD language GDP
growth depends on Human Capital Accumulation
(HCA). It argues that taxing the top 10% will not
damage growth, implying that much of this income
is not productively invested. The state should
redirect this surplus unproductive capital into
human capital.
Unlike classic Keynesian attempts to boost
consumption, or the bailing out of the banks, the
OECD fixates on education. Putting money into the
pockets of capitalists and/or consumers does not
necessarily restore growth. Just look at the
printed money that has flooded into the pockets of
the rich. And raising the dole may lead to more
consumption but not necessarily to more
investment. Work for the Dole everyone?
The research shows that increasing labour
productivity will increase profits and hence
encourage capital to invest in more production. So
improving the quality and quantity of education
[HCA] and creating incentives to work is the
answer. Has the OECD come up with education and
workfare as the holy grail of Social Democracy?
No. We will show that while education is related
to rising labour productivity, there is no guarantee
that that will induce capitalists to invest in more
production. This is no guarantee of profits. This is
because increasing labour productivity means
rising labour exploitation. Piketty/OECD type
policies cant work if the owners of capital resist
taxation. Or the owners of labour power resist
super-exploitation. The progressives seem to have
overlooked one small detail and that is the class

Marxist critique
Piketty is really lost without Marx. He lumps real
productive capital (that produces value) together
with unproductive assets (that dont produce
value) to make up his Pikapital. He discovers
booms periods when the wealthy accumulate much
more rapidly, then busts when they lose much of
their wealth. Had he bothered to read Das Kapital,
he would have realised that the switchback rides

Summer 2014
of the wealthy is a symptom of the inbuilt
tendency for capitalist crises.
This is a telling gap in Pikettys economics. The
underlying reality he ignores is the exploitative
relation between capital and labour where wage
labour is employed to produce more value than it
needs to reproduce itself; that is, surplus value
the source of profit. This is capitalist inequality
at the level of productive relations. Crises arise
when profits begin to fall when the amount of
surplus value is insufficient to cover total capital
investment. As the tendency for the Rate of Profit
to Fall (TRPF) kicks in capital in plant and
machines and wages must be destroyed, and
cheaper means of production employed, so that
the amount of surplus value is now sufficient to
return a profit on total capital outlaid. The
destruction of wealth of Pikettys wealthy class
then, is merely a symptom of capitalisms crises of
falling profits.
As Marx explains this relation of production
appears in the marketplace as a relation of
exchange as capitalists buy their labour power as
a commodity. Marx calls this commodity
fetishism. Exploitation of surplus value arising out
of production is perceived to be based on unequal
exchange in the market. Crises then occur when
labour demands the full price of labour and profits
fall. Or, capital demands low wages, so
consumption falls; in both cases investment stalls.
Neo-liberal economics in the thrall of commodity
fetishism argues that the market will
automatically correct for the share of wages and
profits so that demand rises and production
results. The crises, wars and depressions that
Piketty stumbles over are such corrections. Yet
as Keynes recognised in the 1920s, these painful
corrections might be avoided if wages were
boosted by the state to create sufficient demand
that would then be supplied by thankful
capitalists. Oh for a world with no more slumps!

NZ: a test of Marx v Keynes

However, Keynes was still a bourgeois economist.
Boosting demand did not create new production
unless investment was profitable. Demand was not
the key factor; it was the rate of exploitation.
The state could intervene in the market but only
to the extent that it met the need for rising
profits. In NZ the election of the First Labour
Government put this reality to the test.
However, far from representing a solution to
capitalist crises, The Labour Party acted to
guarantee profits for the emerging NZ capitalist
class. The First Labour Govt of the 1930s was able
to create a welfare state for workers because
the protected domestic manufacturers operated at

Class Struggle 111

low efficiency and there was a demand for labour.
Full employment was the hallmark of Labours
social policy because it could be exploited
profitably not because it could buy what it
produced. This was proven after the WW2 created
boom busted. The return of a crisis of falling
profits could not be averted by the Keynesian
state boosting consumption, so by the mid 1960s
the TRPF was re-emerging as the cause of a new

This time the return to profits required the end of

protectionism of both domestic capital and the
labour movement. The destruction (restructuring)
of productive capital (plants, machinery) and jobs
and the driving down of wages, was achieved by
opening up the domestic economy to the global
economy. The conditions under which Keynesian
intervention operated from the 1930s to the 1960s
were replaced by neo-liberal globalisation. The
destruction of wealth by depression, its revival by
war/boom, and now its further restructuring by
neo-liberalism, has inserted NZ into the global
division of labour where the concentration of
wealth and power in foreign and local crony
capitalist hands results from the rise of inequality
and deprivation in the working class.
So what are the prospects for progressive
politics, a revival of Social Democracy in defence
of the Welfare State, or even a modest
Piketty/Morgan/OECD type wealth tax? Piketty
knows that the power of the wealthy to resist even
a 1% tax on their wealth makes it a utopia. But
this does not stop progressives in NZ from
proposing various forms of wealth backed up by
the OECD claim that profits flow from increasing
labour productivity!

Summer 2014
Marxist Revolution in thought and deed
The detail that is overlooked here is that greater
labour productivity creates more inequality not
less. Not the superficial market inequality
measured by the national Gini Index, but the
concentration of capital in fewer and fewer hands,
and the accumulation of poverty and misery in the
lives of the masses of workers. Raising the rate of
exploitation means workers produce more per
hour (because of HCA) but get a lesser share of the

new value produced. This confirms Marx law that

the rise in the rate of exploitation is set by class
struggle and is ultimately the barrier that
capitalism cannot overcome. Workers resistance
to rising labour exploitation is the single factor
that guarantees that capitalist crises will sooner or
later result in the proletarian revolution and the
rise of socialism out of the ashes of capitalism.
We need a Marxist revolution in thought and deed.
A Marxist revolution in thought means
understanding that capitalism is a finite social
system based on the ultimate destruction of the
only sources of wealth - labour and nature. The
survival of humanity depends on this consciousness
that capital is nothing but the expropriation of
labour value, and that if labour is to survive it has
to take control over the value it produces.
The Marxist revolution in deed is the task of
organising the proletarian revolutionary class as
capitals gravediggers. It will require the
formation of mass workers parties in every country
that unite internationally to confront capitalisms
power and wealth on every front, creating
workers governments with the power to socialise
the wealth expropriated by capital over centuries
as the basis for building a new socialist world that
values the survival of humanity and nature.

Class Struggle 111

Summer 2014

What We Fight For

Overthrow Capitalism
Historically, capitalism expanded world-wide to free
much of humanity from the bonds of feudal or tribal
society, and developed the economy, society and
culture to a new higher level. But it could only do this
by exploiting the labour of the productive classes to
make its profits. To survive, capitalism became
increasingly destructive of "nature" and humanity. In
the early 20th century it entered the epoch of
imperialism in which successive crises unleashed wars,
revolutions and counter-revolutions. Today we fight to
end capitalisms wars, famine, oppression and
injustice, by mobilising workers to overthrow their own
ruling classes and bring to an end the rotten,
exploitative and oppressive society that has exceeded
its use-by date.

Fight for Socialism

By the 20th century, capitalism had created the preconditions for socialism a world-wide working class and
modern industry capable of meeting all our basic needs.
The potential to eliminate poverty, starvation, disease
and war has long existed. The October Revolution
proved this to be true, bringing peace, bread and land
to millions. But it became the victim of the combined
assault of imperialism and Stalinism. After 1924 the
USSR, along with its deformed offspring in Europe,
degenerated back towards capitalism. In the absence of
a workers political revolution, capitalism was restored
between 1990 and 1992. Vietnam and China then
followed. In the 21sst century only Cuba and North
Korea survive as degenerate workers states. We
unconditionally defend these states against capitalism
and fight for political revolution to overthrow the
bureaucracy as part of world socialism.

Defend Marxism
While the economic conditions for socialism exist
today, standing between the working class and
socialism are political, social and cultural barriers.
They are the capitalist state and bourgeois ideology and
its agents. These agents claim that Marxism is dead and
capitalism need not be exploitative. We say that
Marxism is a living science that explains both
capitalisms continued exploitation and its attempts to
hide class exploitation behind the appearance of

individual "freedom" and "equality". It reveals how and

why the reformist, Stalinist and centrist misleaders of
the working class tie workers to bourgeois ideas of
nationalism, racism, sexism and equality. Such false
beliefs will be exploded when the struggle against the
inequality, injustice, anarchy and barbarism of
capitalism in crisis, led by a revolutionary Marxist
party, produces a revolutionary class-consciousness.

For a Revolutionary Party

The bourgeois and its agents condemn the Marxist party
as totalitarian. We say that without a democratic and a
centrally organised party there can be no revolution.
We base our beliefs on the revolutionary tradition of
Bolshevism and Trotskyism. Such a party, armed with a
transitional program, forms a bridge that joins the daily
fight to defend all the past and present gains won from
capitalism, to the victorious socialist revolution.
Defensive struggles for bourgeois rights and freedoms,
for decent wages and conditions, will link up the
struggles of workers of all nationalities, genders,
ethnicities and sexual orientations, bringing about
movements for workers control, political strikes and
the arming of the working class, as necessary steps to
workers' power and the smashing of the bourgeois
state. Along the way, workers will learn that each new
step is one of many in a long march to revolutionise
every barrier put in the path to the victorious

Fight for Communism

Communism stands for the creation of a classless,
stateless society beyond socialism that is capable of
meeting all human needs. Against the ruling class lies
that capitalism can be made "fair" for all; that nature
can be "conserved"; that socialism and communism are
"dead"; we raise the red flag of communism to keep
alive the revolutionary tradition of the' Communist
Manifesto of 1848, the Bolshevik-led October
Revolution; the Third Communist International until
1924, the revolutionary Fourth International up to 1940
before its collapse into centrism. We fight to build a
new, Fifth, Communist International, as a world party
of socialism capable of leading workers to a victorious
struggle for socialism.

Class Struggle is the bi-Monthly paper of the Communist Workers Group of New Zealand/Aotearoa, in a

Liaison Committee of Communists with Communist Workers Group (USA) and Revolutionary
Workers Group (Zimbabwe)
Class Struggle and most articles are online at
Phone +64 0272800080
Archive of publications before 2006