The following six sections deal with various topics, but does not represent an attempt to offer general definitions. Rather, here we will take up some questions on which up to now we have not formally made our viewpoint clear. For example, we had developed the concept of "state capitalism"-summed up in our program, bit we had not completely defined the new situation of the Nineties following the collapse of the Soviet Union and the shift to "free" capitalism in Russia and Eastern Europe. Also lacking was a depiction of some of the phenomenon of the "post cold war" capitalist world. This is, therefore, the first step towards discussing the various problems and tasks that the workers are facing today.

I. The Financial Crisis and Modern Capitalism

Exactly what kind of system is modern capitalism? The global financial crisis is becoming increasingly profound. Finance capital worldwide has amassed an enormous amount of bad credit and is facing collapse. While interest rates in some countries (Russia, for example) have reached 10% or even 100%, in countries like Japan it is almost zero percent. Of course, capitalism with zero percent interest rates would already no longer be capitalism. Stock prices which were expected to rise collapsed, and in one day exchange rates fluctuated ten or even twenty percent making it foreign trade and capital exports precarious. Speculation has spread everywhere. Economic activity either cannot be distinguished from the crisis or is deeply connected to it.

This financial "chaos" and crisis is a characteristic trait of modern capitalism and is inseparably linked to its essence. This also reveals that capitalist society is decadent and rotten to the core.

From the 1930's capitalism had shifted to a "managed currency system" and abandoned the gold standard. After World War II this gold system was reconstructed in a weak and extremely twisted form as the outer crust of a system governed by the dollar. In 1971 this finally collapsed, and the rule of the dollar appeared in its naked form. It was only in this form that bourgeois society could abolish gold as currency, and the Keynesian ideal of a system of managed currency could become possible on an international scale.

When convertibility was ended world-wide, naturally "money" as a means of circulation and as money capital would be inevitably invested in to some extent (When we use the concept of "money" without distinguishing between the concept of money as a means of circulation, and money as money capital. In other words, money that exists in both ways, and formerly could shift reciprocally.)
Of course there are two sides here: one is the expansion of the dollar and other currencies as "international currency", and the other is the expansion of domestic currencies such as the Yen. In fact, these two sides are inseparably linked.
Dollars are scattered throughout the world in order to make up for the U.S. trade deficit and furnish American finance capital with world-wide investment which also drives down its price. This is also a process whereby the United Sates can exploit the world On the other hand, many bourgeois states also have expanding financial deficits, and an expansion of the direct state or state supported credit which has led to the increased issue of money. In other words, with the cessation of convertibility (the abandoning of the gold system) credit has expanded and become incredibly accessible and disorderly, as well as growing in scale. This has meant a heyday for finance capital, as well as the golden age of speculation and the bubble economy.

The overflow of currency can only be dissolved through inflation. If this it is not dissolved through inflation, it is accumulated as surplus money capital, becomes excess money, and sets the stage for a period of bubble and crisis.

Throughout the world today investment has expanded at a furious rate, and the unceasing speculation in currency capital has become enormous. The sum of investment of the large banks in the main countries is 600 million dollars and the exchange transactions in one day are 1.2 trillion dollars but trade business (exports) in one year is only 5 billion dollars. It should be stressed that this investment unrelated to "real demand" has spread. It is also said that transactions in derivatives represent 5 or 6 billion dollars which shows how speculation pursuits and money capital have scampered around the globe. If a collapse of confidence were to occur the effects would be devastating. In order to avoid such a collapse the bourgeois states have introduced an increasingly large sum of state money (public funds!) which only leads to the inevitable development of the conditions of capitalist speculation. This vicious circle will only be ended with the death of capitalism.

Of course, the world's bourgeoisie were not unaware of the fragility and danger of the postwar system, and for this reason from the 1980's they criticized Keynes, advocated the principles of free competition, the easing of restrictions, small government and personal responsibility.

However, this position was essentially only in the interests of U.S. monopoly and finance capital in order for U.S. finance capital to plunder the world and behave in a more selfish and tyrannical way. Under the slogans of free competition and eased restrictions, the U.S. was able to obtain huge profits, while increasing its trade deficit, by withdrawing dollars worldwide through high interest rates and then investing these dollars globally. Roughly speaking, in order to make up for its trade deficit, the U.S. has collected 600 billion dollars globally, and has invested 400 billion dollars throughout the world. This is indeed the decadent "kingdom of finance".

Now this form of modern capitalism is failing. This is the typical form of modern capitalism. To those who depict this capitalism as "twisted" or capitalism without rules and advocate "democratic reforms" we must say that this sort of capitalism is precisely the typical form of modern capitalism and that capitalism can only exist in this "twisted" form.

II. Social Democracy: Barren Flowers Bloom in Europe

It is being said that European politics have taken a "left" turn.

It is certain that 13 of the 15 EU member nations have seen the birth of Social Democratic governments or governments in which Social Democrats participate. In the UK Tony Blair's Labour Party is in power, Germany has seen the birth of a coalition between the Greens and Social Democrats in Schroeder's government; and in Italy there is a Left government headed by the former Communist Party member Darema, which includes two CP cabinet ministers. In France, Jospin is in power under the banner of centrism. In everyone of the main European countries, like a row of houses, the "conservatives" have lost power and "social-democratic" governments (i.e. reformist governments) have appeared.
Certainly in a sense this is a "left turn", but one which the workers should hold out no expectations or illusions. These "left" governments are not the real thing, but are only in power during this period of intensifying capitalist contradictions in order to divert and misdirect the struggle of the working masses who, suffering from unemployment, and burning with anger over their increasingly difficult lives, are hoping for a fundamental change. In other words, they are merely serving the interests of big capital in a different form than the conservative parties.

Of course, internally these governments are not all identical. For example, the Blair government insists on the principles of a "market economy", and argues that globalization and intensified competition are inescapable, and that trying to stop this is a waste of time. Instead, the important thing is to prepare for this, and the governments' role is to enable businesses to become self-sufficient, while resisting employment policies and the expansion of welfare. However, the social democratic governments on the European continent are proclaiming in unison the defense of workers lives and the expansion of welfare. Stressing this policy is the reason for the victory of the Social Democrats in Germany and the Left Wing Democratic Party in Italy.

Every country in Europe has prepared for the eminent EU monetary union by pursuing policies which reduce trade deficits, strengthen their currency, and make their economies "healthier". These policies have led to a stagnation in business activity, and an increase in unemployment. Now the question of how to fight the recession and deal with the increasingly serious employment crisis has become a matter of European public opinion.

To respond to these objective demands, the social democrats or "center leftists" appeared under the banner of "a third road", and gained power in place of the conservatives.
But there is very little that they can do. The EU's monetary union is now an urgent and inescapable requirement for European big capital, and no new government can ignore or oppose this. Of course, it is completely unthinkable that the "social democratic" governments would raise the flag of rebellion. In fact, they intend to respond positively to these desires and requirements.

Thus, they are caught in a self-contradiction and can only oscillate and be stymied between two conflicting tasks, and reveal their own impotence and lack of direction. In the end they will only incite the anger and dissatisfaction of the workers.

If these governments respond to the needs of big capital, that is if they successfully achieve EU monetary union, it will be impossible to employ a policy to expand finance while protecting workers and increasing trust.

Furthermore, if the recession is to be fought, workers welfare expanded, and a serious struggle against unemployment is to be waged, finance and credit will not be able to be expanded (and under capitalism there is no other method). If this occurs it will lead to more and more discord within the EU, and each country will have to increasingly place priority on their own national interests.

The only road that the European "left" governments can take is the contradictory, tightrope act of protecting the workers and expanding finance on the one hand while pursuing policies for EU monetary union, on the other. However, as the conditions of the global crisis of capitalism become increasingly severe the chance of successfully achieving this policy becomes smaller and smaller. Therefore, we insist that in the near future these bogus "left" governments can only come to a miserable end, and be hastily ushered out of power.

In Japan there is no indication that this sort of government will soon come into existence. However, Naoto Kan and others in the Democratic Party are pursuing this goal, and the JCP is following close behind. However, unfortunately for them, before they will be able to take power, it will have probably become clear overall in Europe just how impotent and reactionary this attempt is.

III. From the End of State Capitalism to "Free" Capitalism

Close to ten years have passed since the collapse of the Soviet Union and the dissolution of the Communist Party, and now the liberal economic dream has already been defeated, the state is in shambles and faces bankruptcy, the national economy is collapsing, and the entire population is sinking into the abyss of deep disappointment and despair. Present day Russia is the same as 1920's Weimar Germany, and it can even be heard that the birth of a fascist government is inevitable (this prediction was made by the former ambassador Perry). What has become of Russia, and where is it headed?

Trotsky once claimed that since the means of production in the USSR were commonly owned, there would definitely not be a return to private ownership capitalism. On the other hand, the modern bourgeoisie dreamed of and proclaimed the realization of an "ideal" market economy under the rule of free competition where the "invisible hand of god" would skillfully guide the economy.

But history has taught us that both of these views were wrong. Unlike the expectations of Trotsky, state capitalism in the Soviet Union "progressed" towards "free" capitalism, but this was certainly not the "free" capitalism that the liberals had dreamed about. Rather, this was a "free" capitalism under the rule of corrupt oligarchic capital.

Certainly the publicly owned property has been privatized, but this only led to the rule of corrupt monopolies. The state run property has been appropriated by former state bureaucrats and Communist Party leaders, as well as the class which became rich during liberalization. Thus an powerful new financial clique (zaibatsu) has arisen in the areas of natural resource industries and finance. Privatization became pillage. The idea that Russia could jump from state capitalism back to a 19th century style "healthy" and "private" capitalism with competition proved to be a fairy tale. What ever happened to the promised "healthy" capitalism and 'free market economy' that was supposed to replace stagnant and weak "socialism" (state capitalism), and improve efficiency and smoothly develop the productive power leading to prosperity and rapid improvements in Russia?

However, this was a fantasy from the start. State capitalism was merely replaced by the rule of oligarchic and corrupt capital, and this is the same as the capitalist world centering on the United States. Indeed it would have been strange if the "revival" of capitalism had occurred in a form other than that of modern capitalism under the rule of the United States.

The intellectuals feign comprehension and claim that the failure of capitalism in Russia is due to the absence of the prerequisite "market morals" such as sincerity, and a respect for contracts. They then disingenuously conclude that this is due to the crisis and lies prevailed during the period of "socialism". However, it is obvious that there is no difference between capitalism in countries such as the U.S. and Japan where these good market values are said to exist and the capitalism of Russia. In fact, Russia could be said to be imitating American capitalism with their rapid liberalization.

In present day Russia, the simple faith in "wild" uncontrolled economic liberalization and "free" capitalism is being reconsidered, and the there is an attempt to revive the formerly criticized "old" methods. In other words, the method of strengthening state regulation and intervention in the economy such as a return to nationalization (the slogan of the Communist Party is to re-nationalize "strategic industries") or public ownership, strengthening the influential power of currency, and tightening controlled exchange. In a certain sense this is a return to state capitalism.
China, on the other hand, seems to have chosen a better path than the Soviet Union, and is gradually advancing liberalization, while the Communist Party maintains state power. However, is this really the case? Is there any guarantee that China will not follow the same path as Russia? This is the question!

In China the contradictions of state capitalism are developing day by day. No one can say whether this will explode with the collapse of the Communist Party's rule or with an economic breakdown.
It is certain that the Soviet Union (as well as Eastern Europe and elsewhere) has shifted from state capitalism to "free" capitalism.-However, in fact this is not a shift to a capitalism that is essentially distinct or opposed to state capitalism, and in the age of monopoly capital (moreover the age of decadent monopoly capital) this cannot occur. Therefore it becomes clear that apart from socialism there is no escape route from state capitalism.

In this sense, the transition is from state capitalism to an oligarchic or lawless morally bankrupt capitalism not an essential transformation. The essential transformation will be the transition from state capitalism or oligarchic capitalism to socialism.

IV. The Decay of State Protectionism Capitalism-"Financial Reconstruction" and "Economic Revival"

Due to the financial crisis, the thought and actions of the bourgeoisie has once again changed dramatically.

Only one year ago they were devoted to neo-liberal economic theory, and roughly dismissed Keynesianism as a bankrupt theory. Their watchwords were economic liberalism, small government, financial reconstruction, and the establishment of personal responsibility, etc. Representative of this intention was the economic reconstruction bill established last autumn by the ruling LDP who claimed that without it Japan had no future.

However, the financial crisis suddenly changed the bourgeoisie's position. Now they angrily speak about the "policy recession" or "political crisis". It is said that the government got things wrong and instead of the needed firm recession policy, they employed an untimely deflationary policy which only made things worse.

The bourgeoisie which only one year ago who calmly said that there was too much state intervention, the economy should be left alone, and the state should take a hands off approach, are now saying that through comprehensive state intervention the depression can be overcome..

At first they mentioned that 1.3 billion Yen in public capital should be "prepared" to relieve the financial institutions, but the scale of the budget soon began to increase first to 3 billion, and is now up to 6 billion Yen.

They still timidly talk about easing restrictions, but what remains of "liberalism" or "personal autonomy" within the logic of enormous sums of state support, or the compulsory infusion of public funds into the banks?

The bourgeoisie has criticized Keynesianism, but what they are now employing the same method of Keynesianism. In other words, they are carrying Keynsian policies without Keynesianism.
They have now been driven into a serious dilemma. Frightened by the contradictions of the capitalist system which can be seen everywhere, and in order to escape from them, they place their hopes in the strong power and policies of the state and economic intervention is expanded excessively, state credit is expanded recklessly and there is an infusion of state money.

However, on the other hand, they are aware of the danger of the bankruptcy and dissolution of the state and they know that the current policies can only increasingly prepare the destruction of the state. They are frightened by this premonition.

But even while they shudder at the collapse of the state, they have no choice but to seek their salvation by carrying out policies which hasten and prepare this. This contradiction is perfectly self-evident, but they have no other option or hope.

The fact that a sudden 180 degree turn had to be made from the position of last autumn-without any serous reflection-shows that the rule of big capital in Japan is deadlocked and has begun to collapse. In fact their historical role has already ended and they have become unnecessary and are theoretically and practically bankrupt. From now on they can only cause the decay and dissolution of the state. The continuation of their rule means the beginning of a period of discontent and disaster for the workers.

V. The Increasing Exploitation and Oppression of Workers, Big Capital's Scheme to Cause Differences and Division-Against the Policy of the "Free" Employment System

The old system of lifelong employment and seniority pay is becoming more and more hollow and breaking down.

A "free" employment system seems to be taking the place of the old system. For example, for the first time in fifty years there will be a major revision of the basic labor laws including the abolition of the discretionary labor system, and protective rules for women, as well as reconsideration of the temporary labor law now being considered.

The bourgeoisie claim that a "free" system and "autonomous" ways of working will not only ensure competitively internationally and bring prosperity for capital, but that this will also expand employment, and give workers the opportunity to work as they like, as well as increasing worker income.

They also offer the seemingly reasonable argument that the implementation of this approach resulted in the creation of many new jobs in the United States. Prime Minister Obuchi has said that the "industrial revival plan" will create 500,000 jobs and make a "smooth change to a meritocracy".

Even though the old system has become outdated and less and less in the workers interests, and workers have no regrets for its passing, this does not mean that the new system will be in the workers interests.
In place of the old system will appear a form of employment based on the "individual" in which capital and the individual workers have a more direct relation. This is the outcome of the dissolution of the workers as a class, and will further deepen this trend.

The over-involvement of the state in the relationship between capital and labor is outdated, and runs counter to the principles of the "market economy". Ultimately this would lead to the decline and downfall of capital. Thus it is said that the relationship between the workers and capital has to be "liberated", and state has to refrain from meddlesome intervention.

However, when the power relationship between capital and labor completely inclines in favor of capital the removal of any protection only relatively strengthens the power of capital and weakens the position of the workers.

The "liberation" of the form of employment was only carried out in the interests of capital. The direct outcome of this was the strengthening of the power and rule of capital and the deepening of the oppression and exploitation of the workers.

Working women have been forced into a more difficult situation and will have to do increasingly "unstable" work.

Companies have already decreased the number of "regular employees" and rapidly increased the use of part time and temporary workers. For example, according to the employment figures for the period between January and March of this year (1998), the number of workers working less than 35 hours a week increased by 780,000, while those working over 35 hours decreased by 960,000. As a result, the percentage of part time workers reached close to 20%. The greater part of these part time workers are women.

Not only has the overall position of the workers been lowered, but divisions and differences between workers have been introduced and different levels are being created. This also strengthens the power of capital, and weakens the power of the workers and breaks up their unity.

Today the system of free labor is going to be expanded from 11 various areas such as designers and directors to include white collar important planning, analysis, and research related to business management. The "fundamental liberalization" of temporary labor also appears on the horizon. This offensive is a problem for the entire working class.

Under capitalism "free" labor is a fantasy. What is called "freedom" essentially is not the "freedom" for the workers to work freely or the freedom to choose a job freely, but conversely nothing but the realization of capital's "free" exploitation and the workers being ever more "freely" exploited under the rule of capital. Under capitalism this is the only form that "freedom" can take. We must counterattack by decisively crushing the fashionable-and anachronistic-fantasies of liberal individualism, and strengthening the unity of the working class.

VI. The Disappearance of the Socialist Party and The Deepening of the "social-democratization" and bourgeoisification of the Communist Party

These past few years have also been a time of turmoil in Japanese politics. There has been a constant changing of alignments, and several new parties have appeared and disappeared. This period has been characterized by the following: the complete decay of the Liberal Democratic Party (LDP) which has already lost any substance which could attract the people; the dissolution and corruption of the SP and JCP which had shouldered postwar "reform" politics, and resisted the LDP; and the shameful vacillation of the so-called "middle road" parties has been revealed and their disintegration has progressed.

We won't discuss the LDP here. However, as for the middle road parties (Komeito and Democratic Social Party), the experience of the past few years has revealed the extent of the "middle road" or "third path" fantasy. In reality, they have made a stir in between the struggle of the bourgeoisie and the working class, but not surprisingly in the end that have fallen into support of bourgeois politics. Komeito has made alliances with reactionary bourgeois forces and even attempted to dissolve the party. However, the "dream is broken" and they are losing all they had gained. As for the Democratic Social Party, they have essentially fallen apart and been absorbed into the bourgeois camp.

Further, the SP and JCP's opposition to bourgeois political parties, which characterized postwar politics, has been completely swept away.

The period where the political struggle of the working class was represented and reflected by the SP and JCP, however imperfectly, is now a thing of the past. It has been replaced by the appearance of liberal bourgeois reformist parties like the (Japanese) Democratic Party.
We must strongly challenge this trend. Workers must be won from the bogus workers parties to socialism, not liberalism and reformism.

The dissolution of the Socialist Party was the unavoidable outcome of this party's bourgeois collaboration. This final point of arrival was obvious, and there is no difference of opinion on this within our party.

Now the JCP can be seen rapidly following the path of the SP, and it is certain that they are walking the same path of dissolution that the SP walked.

The JCP is now calling for a "better government" and is earnestly attempting to shift towards bourgeois collaboration. This is precisely the same method of the SP which has failed so splendidly in the past.

The SP also called for a "better" government that the LDP run one. They then made a 180 degree turn and assisted the revival of a LDP government and abandoned one principle after another until they had completely fallen apart.

Originally one of their beliefs had been to not support the Japanese-US Security Treaty and the Self-Defense Army, and they appeared to be different the than the standpoint of the LDP and reaction because they happened to depart from the position of the ruling cabinet and ruling party. One could say that their true intentions were different. However, as the contradiction between their words and actions grew, they eventually stopped paying even lip service to opposition to the Security Treaty and the Self-Defense Army, and brought their words in line with their actions throwing out all of the policies they had supported in the past.

Now the JCP has begun to say that they will "shelf" opposition to the Security Treaty (i.e. in fact they will recognize it), and not deny the emperor system. They justify this by saying that this is merely an expedient measure in order to make alliances with other parties, and that opposition to the Security Treaty, the Self-Defense Army and the emperor system will firmly remain their position to the end.

However, if the JCP continues to insist that their transformation is only an expedient measure, the bourgeois parties are unlikely to ally with them. In order for the JCP to be taken seriously by the bourgeoisie they will need to convince the bourgeoisie that their own transformation is serious. In this way, their transformation will be deeper and deeper (they will go for wool and come up shorn), they will become entangled in the bourgeoisie and complete their betrayal. What begins as something transient or expedient will become more serious and will be fatal for this party. This party will follow in the path of the SP towards destruction and this is unavoidable (they are also following in the path of many European parties).

The JCP believes there is no contradiction in its position. However, the former Socialist Party suffered from the split between its position as a political party, and its founding principles. There was no way to skillfully balance this two standpoints, and in the end they fell into the political standpoint, i.e. the standpoint of a bourgeois party and big capital. This finally led to the SP's negation as a political party and its dissolution. Now the JCP is following closely at the heels of the Socialist Party.

Class conscious workers should let the fraudulent workers parties continue on their path of deepening opportunism, corruption and dissolution and must firmly unite to carry out their tasks.

On the one hand, the dissolution or bourgeois corruption of the SP and JCP is something that we should welcome since it is a decisive chance for us to make connections with the mass of workers. The workers have had to abandon their illusions of these parties, but they haven't been able to find another political party that they can trust to take their place. We have to respond to the expectations of the workers and appear as a new class party of the workers.

(Translated by Roy)

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