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Elections 2012: Austerity, Third Parties, and the Global Economy

It is almost impossible to make an overarching assessment of the international and domestic situation in one article. Instead, we must try to grasp the central objective link that is pulling all the events in a certain direction at this particular moment. That link, generally speaking, is also connected to the central link of strategy. Political strategy isn’t something you invent and then struggle to impose on others. Political strategy must utilize the lumber, the historical relations and ideologies at hand, in order to achieve one’s goals under new conditions.

What is, and has been, America’s basic strategy to achieve and maintain hegemony in a world rapidly changing because of electronics and the resultant globalization? How does the capitalist class continually accommodate and struggle both at home and in the world to adapt to new conditions in order to maintain its control of power and wealth as a class.

World Instability and the Struggle for Markets

At the end of WWII a wave of national liberation and communist revolutions threatened to change all the world’s relationships. To confront this motion, the United States had to unite old enemies under the slogan of stopping communism. This meant to unite Europe on the basis of its being white, western and imperialist — for they could not maintain their profits without clinging to the colonies — even if that required a change in form.

Out of this mutual dependency a series of military, economic and political alliances such as NATO and the European Union emerged. Despite the importance of the emerging countries such as China or Brazil, the U.S. is financially, militarily, culturally and politically entangled with Europe. If the U. S. is pulled into economic depression, it will be because of Europe. In a contradictory way, all nations are scrambling for an economic foothold in Asia to avoid that depression. For the capitalist class, the elections were the means by which to persuade the American people to accept more war and greater sacrifices so the capitalists can gain that foothold.

We are seeing a general decline in the West. On the surface, the reasons for this are quite obvious. The capitalist system is absolutely dependent upon expansion — you can’t have a capitalism that stands still. There has to be expansion. There has to be a market. That is how the capitalists came out of the crisis in the late 1800s. It was the expansion represented by imperialism that allowed them to stabilize and to gain control of the world.

Today, the world has been completely converted to capitalist relations and there is nowhere for it to expand. Europe, which has run its course, got there first and developed the most rapidly on the basis of having a relatively small population, creating a huge percentage of the world’s wealth. Today, that is shifting. Southeast Asia contains something like 60% of the world’s population. China for example, has a growth rate of 7.5% a year (compared to 2% in the U.S.). The only place that it is possible to talk in terms of expansion is where there is still underdevelopment. That is Africa and South and East Asia.

The struggle is now about how the capitalists are going to get into those areas, how they are going to exploit the situation in such a way that it stabilizes the capitalist system. It is not possible to go into these countries in the old imperial way and simply steal their resources. A market has to be created. If there are no markets, there are no jobs. But jobs can’t be created politically. The job comes from the development of a market. Expansion is the only way a market is developed. But the development of qualitatively new technologies makes capitalist expansion impossible.

Today, the capitalists have nothing else left to them but war. The prosperity of the past period was based on rebuilding the world out of the destruction of World War II. The U.S. destroyed Japan. China was leveled. All of the productive capacity in Europe was destroyed. 60 million people were killed in WWII. In the entire world, the U.S. was the only country with productive capacity. Today, they cannot create a market except through the result of the destruction of war. And of course war is a market in itself. War is the most profitable industry there is — the slaughter of human beings is much more profitable than the slaughter of cattle.

The capitalists labeling of their economic competitors such as China, Russia and others as enemies of the U.S. is ominous and is leading to a dangerous situation. The capitalists are determined to win the American people to their vision of the world and its future. They seek to convince us that their economic competitors are our enemies. They are doing this in order to unite the American and the European people to prepare them to take greater cuts in their standard of living and to maintain order to face this enemy.

Automation and U.S. Austerity

Austerity both globally and domestically is not a policy choice but an economic and political necessity. The transition from industrial production to digital production is dominating the entire world process; the bourgeoisie is compelled to seek maximum profit at the same time that the source of their profit (labor power) is becoming superfluous. They must pursue austerity measures. The only debates are over how fast, how deep, and how to maintain political control of the process. This is not the 1930s where the New Deal was possible — it raised tax rates on the rich in order to preserve the system and access the huge profits made possible by the war and postwar expansion. Now there is no significant expansion on the horizon and no reason to (substantially) raise taxes on the rich.

The situation is exacerbated by the fact that the technological revolution is not sitting still but is accelerating. Every revolutionary advance in the productive forces dramatically exacerbates the antagonism between them and the system of distribution based on private property.

One example is the “additive manufacturing” recently described in Forbes Magazine: “In additive manufacturing, parts are produced by melting successive layers of materials based on 3D models — adding materials rather than subtracting them. The ‘3D printers’ that produce these use [powdered] metal, droplets of plastic, and other materials — much like the toner cartridges that go into laser printers. This allows the creation of objects without any sort of tools or fixtures. The process doesn’t produce any waste material, and there is no additional cost for complexity. Just as, in using laser printers, a page filled with graphics doesn’t cost much more than one with text, in using a 3D printer, we can print sophisticated 3D structures for about the cost of a brick…”

“In the next decade, we will see further advances. Engineers and scientists are today developing new types of materials, such as carbon nanotubes, ceramic-matrix nanocomposites, and new carbon fibers. These new materials make it possible to create products that are stronger, lighter, more energy-efficient, and more durable than existing manufactured goods. A new field — molecular manufacturing — will take this one step further and make it possible to program molecules inexpensively, with atomic precision. The materials we use for manufacturing and techniques for production will be nothing like the assembly-based processes that exist in China — and the U.S. — today.”

Based on the revolution in productivity, US domestic manufacturing continues to yield record output today, even after industrial employment has steadily nosedived since 2000. The result is ongoing, increasing unemployment and destitution, intractable economic stagnation, and relentless impoverishment and expansion of the new class.

Trend Toward Nationalization

The productivity explosion combined with the anemia of the market is forcing the government to intervene. The election was in many respects a referendum on the nationalizations of the last four years and the Obama victory marked a definite consolidation of the trend.

The battle for the hearts and minds of the dispossessed, especially in the Rust Belt, is the center of gravity of the class struggle today. Sure enough, that is exactly where the bitterest battles of the campaign were fought, and it was over the issue of nationalization — the auto “bailout” of 2008.

Obama won the critical swing states of Ohio, Michigan, and Wisconsin on the strength of popular support for the bailout. Romney wrote a 2008 New York Times OpEd called “Let Detroit Go Bankrupt” and paid the price for it. 60% of Ohio voters supported the auto bailout, and 75% of bailout supporters voted for Obama.

Auto nationalization was in no way a victory for the working class, accompanied as it was by draconian wage and benefit reductions. But it marked a shift in the form of the class struggle that facilitates the move from economic to political struggle.

The election result was also a major referendum on and victory for so-called “Obamacare”. The PPACA (Patient Protection and Affordable Care Act) is not a “government takeover of health care” as its opponents claim, but it does represent a whole new level of unity between (especially) financial corporations and the State. It is more accurately described as a “health industry takeover of government.”

Not only does it include massive government subsidies for insurance and pharmaceuticals, but it also imposes the “individual mandate” to guarantee the market at a time when more and more Americans can no longer afford premiums. The July Supreme Court approval of PPACA set off an immediate spate of mergers among managed health care companies racing to position themselves to corner as much of the new market as possible.

Finally, the Obama victory means that the fictitious “fiscal cliff” will be resolved along lines laid out by the Obama-appointed Bipartisan Deficit Commission. Its recommendations were so politically toxic that even its own commissioners refused to formally approve it. The result of Obama’s attempt to force it through the lame duck Congress remains to be seen.

PPACA and the Deficit Commission, like the auto bailout, are new forms of the class struggle. Each represents a consolidation of bourgeois economic and political control. Because neither of them can solve the underlying antagonism between revolutionary means of production and static property relations, they each contain the seeds of their own destruction. They cannot meet the needs of the people for jobs, housing, health care, and education. But they do offer new and important political battlefields where these issues can and will be fought out.

It is worthwhile to look at the November 18 New York Times article by Thomas Edsall, “Is Rush Limbaugh’s Country Gone?” which describes some of the post-election polls. It is clear that the Democratic Party and Republican Party represent the same interests — they are both parties of the ruling class. One conclusion that can be arrived at from the article is that there is a real difference between the Democratic and Republican parties about how to defend these interests.

It also provides some understanding of what the mood and level of development of the people are. There is a section of the American people who have “a very different approach to the role for government, very different views on race and tolerance, different views on gender roles, and very different views on economic opportunity and security. These are some of the biggest divides in our culture.”

For revolutionaries, these poll results dem-onstrate increasing support for government responsibility for meeting the basic needs of the people. At the very time the ruling class is forced to turn increasingly to nationalization, the people are spontaneously gravitating toward the idea that the government should serve them, not the corporations. It is the role of revolutionaries to attach ourselves to those impulses and develop and consolidate them through the introduction of new ideas.

Way Opening for Third Party in the U.S.

  • Over $6 billion were spent on federal elections, topping the record set in 2008 by $700 million, making this campaign the most expensive in U.S history.
  • Major parties listed (that have “an independent state organization… in a majority of the states”) are the Republican, Democratic, Libertarian, Green and Constitution parties. This does not include Independent Democrats or Independent Republicans.
  • 50+ regional parties and 35 minor national parties are listed (of those 35, 15 were founded since 2002) in Wikipedia.
  • The four-year trend shows third parties increasing their numbers by 400 percent over the next 4 years.
  • In total, 205,739 votes were cast for Green Party U.S. Senate candidates.
  • In total, 381,225 votes were cast across the U.S. for Green Party candidates running for the US House of Representatives.


The environment for development of a third party today is based on the objective situation. In the 20th century, third parties were vehicles for sections of the bourgeoisie to pressure for their interests when some were left out or crushed by the consolidation of monopolies during the quantitative stages of capitalist development. As such they were temporary diversions that actually facilitated the ongoing political domination of the twoparty system.

The underlying social antagonism and bipartisan austerity of today makes the situation completely different. It is no longer possible for the two-party system to contain the class struggle. A third party doesn’t just emerge because a political grouping decides to build it. It emerges because the economic and political polarization demands it, i.e. the two old parties cannot control the situation and/or they split.

There is going to be a tremendous impulse toward a third party. It will likely be something similar to the 1948 People’s Progressive Party in the effort to save the Democratic Party. There is no way for the progressive wing of the Democratic Party to save the Democratic Party except by destroying it by taking up the questions of the day in a way that corrals the impulses of the people within a system of private property. That is another part that is going to emerge out of this dynamic process.

Party fault lines are opening up right now. Republicans are polarizing over whether to continue to pursue the overtly racist Romney agenda. The Democrats are polarizing over whether to save the safety net or submit to Obama’s “Great Betrayal”. These are not minor policy disputes either. They are life-and-death battles involving key party constituencies that can determine the future makeup and/or survival of the parties themselves.

Economist Richard Wolff described how this happened in Greece: “Greece’s two main parties of the middle alternated power for decades, but they suddenly dropped to a combined 35 percent of the vote in the 2012 elections. Left and right parties surged into political prominence.”

The situation is dangerous because election results indicate that people’s consciousness is all over the map. Romney Ryan lost but not by much, running on a more or less overtly pro-fascist agenda. Obama voters thought they were resisting fascism but aside from that had very different, scattered agendas.

Bourgeois strategy is above all to prevent any kind of class unity. The propaganda appeals to the middle class are designed to divide the dispossessed and attack immigrants, poor whites, and African Americans. “I’ve got one mandate. I’ve got a mandate to help middle class families, and those who want to be part of the middle class,” Obama said in a wide-ranging news conference after the election.

Basic issues of access to food, water, shelter, utilities, etc. are becoming hard to ignore. Under the surface there is the compulsion to take what is needed. The appeal to the middle class will certainly be used to combat people who are being forced into being “criminals of want.”

An anti-corporate third party will simultaneously serve as a vehicle for the workers and for the ruling class. The bourgeoisie will try to retain control of the system after the two party system splinters and restructure the political system to maintain private property. Within the working class, the new class represents the force capable of abolishing private property, but only if they are united with the idea of transformation of the productive relations to conform to the new economic base of society.

Revolutionaries who participate in the development of an anti-corporate, anti-fascist third party will influence it by pulling together a working class trend within it. The stronger the working class trend, the stronger the third party. It is crucial to influence the consciousness of the revolutionaries involved in the process. Political polarization will develop from this engagement over ideas, strategy and direction: polarization that will lead to a true workers party and a separation of class interests.

Attitude toward government is critical to the development of consciousness. Up to 60% of Americans say they prefer “smaller government” with less regulation and services. Yet 70-80% still support Social Security, Medicare, and Medicaid, and almost 60% say the government should support people who can’t take care of themselves. The battle around these programs — especially where they intersect with the various battles around nationalization — will clarify the concept of what it means to fight for a government for the people, not for corporations. Consciousness will begin to develop out of the struggles for a government that serves the people.

The actual victory can only happen when the class becomes conscious of itself as a class. That is why we say that revolutionaries have no option but to create and disseminate propaganda that shows the roots of the problem, the vision of a new society and the strategy to get there. There is no other road to get to victory.

Political Report of the LRNA Standing Committee, December 2012.

January/February 2013. Vol23.Ed1
This article originated in Rally, Comrades!
P.O. Box 477113 Chicago, IL 60647 rally@lrna.org
Free to reproduce unless otherwise marked.
Please include this message with any reproduction.


Photo of Protest

30,000 March in Support of
Chicago Teachers Union Strike
Photo by Ryan L Williams
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The age-old vision of a world without scarcity, without exploitation, class domination, organized violence, and stultifying labor has been the dream of millenia. The new completely socialized labor-eliminating means of production ... sets the basis for its realization. Now human history can begin, the light of the individual shining in the full brightness of liberated life, that can only be realized within true equality and cooperation: communism, a cooperative society.

'Without Vision, the People Perish'
Rally, Comrades ! May/June 2011

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Rally, Comrades! is the political paper of the League of Revolutionaries for a New America. If you are one of the thousands of revolutionaries around the country looking for a perspective on the problems we face today, and for a political strategy to achieve the goal of a world free from exploitation and poverty, then Rally, Comrades! is for you.

Rally, Comrades! examines and analyzes the real problems of the revolutionary movement, and draws political conclusions for the tasks of revolutionaries at each stage of the revolutionary process. We reach out to revolutionaries wherever they may be to engage in debate and discussion, and to provide a forum for these discussions. Rally, Comrades! provides a strategic outlook for revolutionaries by indicating and illuminating the line of march of the revolutionary process.

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