Draft Resolution on the International Situation
Presented by the Comrades Who Signed the "Appeal for the Establishment of a Left Tendency in the Fourth International for the XIII World Congress"
January 1991

A. Introduction

1. The XIII World Congress of the Fourth International (United Secretariat) meets at a difficult moment in the development of the international class struggle.

For more than a decade workers and oppressed people around the world have been retreating, while imperialism has been advancing. The balance of class forces now has shifted so unfavorably that US imperialism feels free to launch a major war against Iraq and! is backed in this aggression by virtually every government in the world.

One complicated aspect of the working-class retreat is the retreat of the bureaucratically deformed workers' states, most importantly the Soviet Union.

Striving to resolve the impasse of Soviet economic development while protecting its own social interests, the Soviet bureaucracy under Mikhail Gorbachev has attempted to pursue three interrelated policies: perestroika, a market-oriented economic rest! ructuring; glasnost, a bourgeois-like democracy; and "new political thinking," a renewed international collaboration with imperialism.

In the name of "new political thinking" the Soviet bureaucracy has reduced or withdrawn its support for nationalist governments and national liberation movements around the world. Taking advantage of the Soviet retreat, US imperialism has achieved significa! nt victories in Southern Africa and Central America, and now in the Persian Gulf has launched its first major war since Vietnam.

A dramatic result of the Soviet retreat has been the collapse of the Stalinist regimes in Eastern Europe. Trotskyists have anticipated the demise of these regimes for more than forty years. But their destruction has not come as we had hoped, through workers! ' political revolution. Instead, it has come through a process much more likely to lead to capitalist restoration than socialism throughout Eastern Europe.

The developments in the Soviet Union and their consequences, particularly the collapse of the Stalinist regimes in Eastern Europe, have further weakened the working class internationally and strengthened imperialism.

Many workers -- not only in Eastern Europe but around the world -- equate the failure of Stalinism with the failure of socialism. Many are convinced that the only viable alternative to Stalinism is a market economy and bourgeois democracy.

At the same time, however, the developments in the Soviet Union and their worldwide consequences have made the most politically advanced workers and youth more receptive to Trotskyism. The vanguard elements want an explanation of these events, and they know! the Stalinists have no answers.

The imperialist war in the Persian Gulf has reinforced their distrust of capitalism and bourgeois democracy by adding systematic war against civilians to the everyday brutality of the capitalist system. The vanguard wants to believe in socialism and workers! ' democracy, and it can be won to Trotskyism.

2. The events in Eastern Europe have been at the center of recent debates in our international organization. This is appropriate, since these events challenge -- but ultimately confirm -- the Trotskyist analysis, program and strategy.

Only Trotskyism can explain how the Stalinist regimes of Eastern European came into being, what they were, why they collapsed, what exists now, the possibilities of capitalist restoration, the need for workers' democracy, the requirements of a transition to! socialism -- and what revolutionaries must do.

The leadership of our international organization and the largest opposition tendency, the tendency of Matti and the leadership of the International Socialist Group (ISG), share the objectivist view that the dynamic of mass struggle will lead automatically t! o successful revolution and that this reduces the role of Trotskyists to a left pressure on other, petty-bourgeois leaderships.

This is not apparent at first glance, since the leadership and the Matti-ISG tendency draw opposite conclusions about the balance of class forces resulting from the events in Eastern Europe. The leadership draws the "pessimistic" but correct conclusion that! the working class has been set back, while the Matti-ISG tendency draws the "optimistic" but absurd conclusion that just Stalinism has been set back.

Nonetheless, the convergence between the two becomes clear when, despite this, they both argue that Trotskyists have no independent role to play. The leadership argues, in effect, that Trotskyists must tail "existing forces" because events are moving too sl! owly, while the Matti-ISG tendency argues that we must do so because events are moving too fast.

Both the "pessimism" of the leadership and the "optimism" of the Matti-ISG tendency miss the point. Trotskyists must be proletarian leaders, not fans watching a televised football match, groaning as their team does badly or cheering as it does well.

Our task is the resolution of the crisis of proletarian leadership, beginning with the crisis of the Fourth International, so that the working class, as it rises in struggle, will have a party capable of leading it to victory. The imperialist war in the Per! sian Gulf underlines the urgency of this task.

The XIII World Congress should reject objectivist formulas and opportunist policies and begin a process of political regeneration and organizational reconstruction. The congress should focus not on armchair observations about the state of the world but on t! he key questions of program and party-building.

B. The Imperialist Offensive of the 1980s

3. The period from the 1979 XI World Congress to the 1985 XII World Congress was dominated by an ebb in the class struggle internationally and a renewed and partially successful imperialist offensive.

The world capitalist economy suffered a sharp downturn in 1980-82, recovered unevenly in 1983-84, and then expanded slowly until 1990. The recovery and expansion benefited mainly the imperialist countries and mainly the capitalists and the middle classes wi! thin these countries.

They were sufficient, however, to restabilize the world capitalist system temporarily, given the exhaustion of the workers after fifteen years of intense struggle, repeated betrayals by the Stalinist, social-democratic and nationalist leaderships, and two m! ajor economic downturns.

The 1979 revolutions in Iran and Nicaragua proved to be the last acts in the worldwide upsurge that began in 1968 with the Tet offensive in Vietnam and the May general strike in France. The explosions in Poland in 1980-81 and South Africa in 1984-86 were is! olated and did not break the pattern.

Conservative politics triumphed in the imperialist countries with the electoral victories of Margaret Thatcher in Britain, Ronald Reagan in the US, and Helmut Kohl in West Germany, and the "Thatcherization" of the other governing parties.

The conservative governments began carrying out their program. They cut social spending; attacked public-sector unions and public workers; sold off profitable state enterprises; eliminated many regulations on private enterprises; and rescinded, judicially r! eversed or failed to enforce laws favorable to workers, women and ethnic minorities.

The bourgeois workers' parties and bourgeois liberal parties like the Democrats in the US adapted to the rightward shift in capitalist politics. They rejected progressive measures as "out of touch with the mainstream" and promised that they would not revers! e the conservative measures, if they were elected.

The private capitalists also opened a campaign of "rationalization," demanding concessions from workers on jobs, wages, and working conditions. The trade-union bureaucracy capitulated immediately, allowing only sectoral resistance to the capitalists' attack! s and preaching the need for staying within the law and within the limits of capitalist "viability."

The 1980-82 economic downturn was much sharper outside the imperialist countries and was not followed by any significant recovery. This greatly aggravated social tensions but did not lead to a generalized upsurge in the semicolonies. Only in South Africa, a! country of intermediate development combining the characteristics of an advanced capitalist country with those of a semicolony, did major struggle break out.

On several occasions in the early 1980s the imperialists used military force to assert their dominance. In 1982 Britain attacked Argentina to preserve its Malvinas colony, and Israel, the imperialists' minion in the Middle East, invaded Lebanon. In 1983 the! US occupied the tiny island of Grenada and ousted its radical petty-bourgeois nationalist government.

Over the course of the 1980s, however, the imperialists increasingly felt secure enough to turn to less costly bourgeois-democratic regimes to impose the austerity they wanted. The 1980 election of Robert Mugabe in Zimbabwe and the 1983 election of Raul Alf! onsin in Argentina were key steps in this direction.

4. The period immediately following the 1985 XII World Congress seemed as if it might offer a break in the international situation, as the world capitalist economy weakened and a series of "hot spots" exploded. In particular, the year 1986 looked lik! e a possible turning point.

The world capitalist economy faltered in early 1986, with the US, Japanese and West German economies all showing negative growth in the first quarter. There was every reason to expect a new worldwide downturn, since the advanced capitalist countries had mas! sive excess capacity, large inventories, and an immediate crisis of overproduction.

The political situation seemed like it might break open too. In 1984 West German metalworkers had struck for a 35-hour workweek, and British coal miners had struck against pit closures and Thatcher's policies generally. Danish workers launched a general str! ike in 1985, and Belgian workers went out in 1986. Even in the US workers were resisting further concessions and in some industries regaining part of what they had lost.

The 1984-86 upsurge in South Africa had peaked in summer 1985, checked by the imposition of the state of emergency and the sellout of the gold miners' strike, but it continued as a powerful force into 1986. Then came the February 1986 revolutions that overt! hrew the dictatorships of Claude Duvalier in Haiti and Ferdinand Marcos in the Philippines.

Unfortunately, imperialism recovered its balance. The economies of the advanced capitalist countries began another weak, credit-based expansion, which continued through the late 1980s, despite the 1987 stock market crash.

The US economy was the "locomotive," as Reagan continued his military buildup with a budget deficit financed in part by loans from the other imperialists. Europe and Japan were pulled along through their exports to the US.

The workers' struggles in the advanced capitalist countries waned, as the bourgeois workers' parties and liberal parties moved to the right, and the trade-union bureaucracies channeled workers' militance into indecisive sectoral battles rather than potentia! lly decisive class war.

Lacking consistently revolutionary leadership, the South African struggle ebbed, and the revolutions in Haiti and the Philippines were contained within the framework of bourgeois democracy. Further asserting and testing the limits of its power, the US bombe! d Libya in 1986.

5. By 1986 the conservative governments in the advanced capitalist countries had pursued their agenda as far as they could without jeopardizing social stability, and in most industries the capitalists had gotten all the concessions they could get wit! hout provoking costly, destructive strikes.

In particular, the "Reagan revolution" in the US had run its course. During the "Iran-contra scandal" in late 1986 and early 1987 the media barons allowed their reporters to begin revealing that the emperor had no clothes. In 1989 Reagan was replaced by Geo! rge Bush, who promised a "kinder, gentler America."

Thatcher tried to pursue the conservative agenda further with her "poll tax" and attacks on the National Health Service. She provoked a strike wave among teachers, nurses and other skilled workers in 1989 and then the 1990 "poll tax riot." Fearing an electo! ral disaster, her own party finally removed her in fall 1990.

The exhaustion of the conservative agenda did not mean a return to the previous situation, however, since the social-democratic, Stalinist and liberal "oppositions" and the trade-union bureaucracies had capitulated long before.

The overthrow of Duvalier and Marcos -- as well as the early success of Thatcher and Reagan -- persuaded the imperialists and the comprador ruling classes to try more bourgeois democracy in the semicolonies.

In the late 1980s former military dictatorships from Brazil and Chile to Pakistan and South Korea suddenly discovered "democracy" and held elections. As in the imperialist countries, the elections generally returned either conservative candidates or "progre! ssive" candidates with conservative policies.

Conservative bourgeois democracy fitted conditions in the semicolonies in the late 1980s. The class struggle was contained enough so that the imperialists and the semicolonial ruling classes generally regarded military dictatorships as unnecessary, as well ! as inefficient and dangerous. For the moment, they wanted cheaper, safer government.

C. The Stalinist Retreat in the Soviet Union

6. The period leading up to the XIII World Congress was dominated by developments in the Soviet Union -- the Gorbachev policies of perestroika, glasnost and "new political thinking" -- and their consequences in the Soviet Union and around ! the world.

The starting point for the Gorbachev policies was the Soviet bureaucracy's urgent need to stimulate economic growth in order to maintain the military strength and political stability essential to its power and privilege. The Gorbachevites described their ai! m as uskorenie -- "acceleration" -- in contrast to the stagnation of the Brezhnev years.

For more than 70 years the Soviet Union has had to contend with imperialist encirclement, economic isolation, and war or the threat of war. Since the mid-1920s the bureaucracy has compounded this problem by its policy of "building socialism in one country."! It has obstructed the world revolution which would have ended the imperialist pressure and cleared the way for fully socialist economic development.

The Soviet economy also has been hampered by bureaucratic mismanagement. The bureaucrats rob the economy to pay for their extravagant consumption, and they distort it through their incompetence. But most of all, they sabotage the economy by limiting the cre! ative economic role of the workers, the peasants and even the "technical middle class."

Despite these obstacles, the Soviet Union has managed not only to develop but to become the second-ranking economic and military power in the world. This is eloquent testimony to the advantages of collectivized property in the means of production and centra! l planning.

Where the Soviet Union can apply the advantages of collectivized property and central planning -- mainly in the military and related heavy industry -- it can still match the US. But by the early 1980s the Soviet economy as a whole was stagnating.

An important reason for the stagnation is a change in the underlying resource situation of the Soviet Union. The Soviet Union is a huge country with a large population and rich natural resources. For decades it could grow with outdated technology simply by ! utilizing more labor, more raw materials, more energy, and more means of production.

This is no longer true. Demographic factors -- the continuing effects of 20 million fatalities in World War II and the slowing of population growth as a result of economic development -- mean that the Soviet workforce is no longer growing. And the most acce! ssible land and sources of raw materials and energy have been exploited and at least partially exhausted.

The Soviet Union urgently needs to switch from extensive to intensive methods of economic growth. It needs to use its labor power, land, raw materials, energy and means of production more efficiently and base its growth on that.

The Soviet Union also needs to change what it produces. It needs to produce more food, housing and consumer manufactures and to improve the quality of those goods in order to raise living standards and improve the morale of all sectors of the working popula! tion. Without this, it cannot achieve the increased productivity needed for intensive economic development.

7. The reflex response of a Stalinist bureaucrat to any problem is to give an order. This has given the Soviet Union a top-down "command economy" in which the center attempts to make all important decisions.

Gorbachev and his associates did not believe that such "administrative methods" could solve the problems of the Soviet economy. They sought another mechanism by which the consumer sector could develop in a decentralized way while the administrative resource! s of the center were focused on the military and large-scale development.

The Marxist solution would be workers' democracy and workers' control. Through democratically elected workers' councils the workers would determine the overall economic plan. Within this framework democratically elected committees of workers' control would ! tackle the problems of implementation and feed back corrections to the plan.

The Marxist solution is unacceptable to the Soviet bureaucracy, however, because it would mean the end of its power and privilege. Gorbachev's perestroika is an attempt to find another solution by borrowing from capitalist techniques.

The central idea of perestroika is what the Gorbachevites describe as a "radical reform of management" based on the principle of khozraschet or "cost-accounting."

The government would continue to own the major means of production, and the center would continue to make strategic economic decisions, including decisions affecting the military and decisions on major development projects. But much of the economy would be ! decentralized and coordinated through markets rather than administrative orders.

Enterprises would be given general guidelines for their activity. These would include laws and regulations of various kinds, tax rates, overall projections of needed output, state orders for some goods and services, set prices for some goods, and centrally ! controlled terms of credit from state banks.

Beyond that, however, the enterprises would be expected to obtain their own workforces, raw materials and means of production; determine their own production; dispose of their own products at negotiated or market prices; borrow from the state banks and repa! y the loans; pay taxes; and make a profit.

8. Prior to Gorbachev the Soviet Union had gone through two major "reform cycles," one under Nikita Khrushchev and another under Alexei Kosygin and Leonid Brezhnev. The two reforms had improved Soviet economic performance for a few years, but neither! had created a dynamic to overcome the Soviet Union's chronic problems in agriculture, housing, and consumer goods.

Gorbachev and his associates analyzed the previous reform efforts and concluded that they had failed because the economic changes were not carried through consistently enough. This, in turn, had resulted from a failure to make changes in the political arena! .

The reforms had been resisted by sections of the bureaucracy and the population. Central managers resented their loss of authority, many enterprise managers felt threatened by their increased responsibility, and workers feared that they would be laid off or! worked harder without a compensating increase in living standards.

The resistance meant that only half-measures were adopted, and these were implemented only partially. When the partial measures ran into trouble, as they inevitably did, the bureaucracy reverted to administrative solutions to the emerging problems. There wa! s not enough political will behind the reforms to carry them out.

Gorbachev and his supporters decided that the key to the success of future reforms was building a constituency for them. They saw this as a political as well as an economic task and proposed trying glasnost rather than accepting economic stagnation.

Gorbachev borrowed his plan for "parliamentary Stalinism" from the capitalists. Gorbachev is not a Leninist, but he understood Lenin's point in The State and Revolution about the capitalists' use of bourgeois democracy: "a democratic republic is the ! best possible political shell for capitalism."

Formal democracy -- freedom of speech, press, assembly and association, the right to organize unions and political parties, parliamentary elections, due process, jury trials, and so on -- does not give workers real freedom or political power. It allows them! to organize more easily, but it also helps the capitalists hide their class dictatorship behind the appearance of popular sovereignty.

As a result of this deception, the capitalists maximize voluntary cooperation and minimize the need for state coercion. Since coercion tends to be expensive, inefficient and dangerous, the capitalists both reduce their political overhead and stabilize their! system.

Through glasnost -- more openness, more freedom of expression and more bourgeois-like democracy generally -- Gorbachev hoped to pressure the recalcitrant bureaucrats and win the cooperation of the workers, especially the skilled workers, and the midd! le classes. Gorbachev regarded glasnost as the key to perestroika.

9. The Gorbachevites understood that perestroika could not achieve much if 15 percent of the Soviet economy -- including its best managers, scientists, technicians and skilled workers -- were tied up in the military sector. This was the origin! of Gorbachev's "new political thinking."

Under Gorbachev the Soviet bureaucracy began evaluating its military and foreign-policy options more critically to see whether each activity was "cost-effective." It also began again aggressively pursuing detente with the US and European imperialists! .

The two policy changes were linked. Some military and foreign-policy options were easier to forgo on the basis of an agreement with the imperialists, and some agreements with the imperialists were easier to get if the Soviet Union were willing to offer a un! ilateral or asymmetric move first.

In 1986 Gorbachev began signalling his desire for another "Yalta conference" to repartition the world in imperialism's favor, but it took him several years to persuade the imperialists that he really meant it.

Gorbachev tried to get US agreement to a comprehensive arms reduction package at the fall 1986 Reykjavik summit, offering to eliminate all intermediate-range missiles in Europe and to cut strategic nuclear arms by 50 percent, if the US would agree to drop "! star wars." Reagan refused.

Negotiations continued on the Intermediate Nuclear Forces (INF) Treaty, with the Soviet Union making nearly all the concessions. The INF Treaty, signed in summer 1988, was the first important breakthrough for "new political thinking."

Afghanistan was another early example of "new political thinking." Shortly after Gorbachev came to power the Soviet bureaucracy decided that a continued large-scale military presence in Afghanistan was unnecessary and harmful. The Soviet army had done what ! it could, short of social revolution or genocide.

In spring 1988 the Soviet Union and Afghanistan signed a "peace accord" with the US and Pakistan. Gorbachev knew that the US and Pakistan would not honor the agreement, but he proceeded with a unilateral troop withdrawal to continue pushing the US toward detente.

10. The Soviet government has implemented perestroika only partially. It has passed many measures to decentralize state industry and some toward allowing small-scale capitalism, but it has hesitated to take the key steps. Its most important he! sitation has been with regard to price restructuring, which is now delayed at least two years.

Gorbachev has had two overriding reasons for hesitating: fear of the Soviet working class and fear of the oppressed nationalities.

The basic idea of perestroika is "rewarding performance." This necessarily would mean increased economic insecurity and inequality, as workers, peasants, and even technicians, professionals and managers competed in the new markets.

Workers would face layoffs, real wage cuts, and speedup. The middle class would rise relative to the working class, skilled workers would rise relative to unskilled workers, men would rise relative to women, and the European nationalities would rise relativ! e to the Asian nationalities. In addition, individual entrepreneurs, managers and bureaucrats would enrich themselves by illegal as well as legal means.

Gorbachev has proceeded cautiously with perestroika in order to avoid provoking the working class. When the massive coal miners' strike broke out in summer 1989, the central government immediately offered concessions. All levels of government have of! fered concessions in most of the thousands of smaller strikes that have occurred since then.

Gorbachev has taken more chances with regard to national struggles. The Soviet Union contains more than 100 nationalities, the largest of which are recognized in the fifteen Union Republics. The Russian nation, which makes up about half the population, is t! he dominant nationality. The others, especially the Asian nationalities, are oppressed.

Perestroika has encouraged competition among the Soviet nationalities, while glasnost has permitted organizing on a national basis. The result has been frequent conflicts among nationalities, such as the conflict between the Armenians and the ! Azerbaijanis, and confrontations with the central government, such as the confrontations in the Baltics.

Gorbachev generally has tried to resolve these national conflicts and confrontations through negotiations rather than coercion. But he is committed to holding the Soviet Union together and has resorted to economic coercion with Lithuania and to military act! ion with Georgia, Azerbaijan, Lithuania and Latvia.

Gorbachev went much further in implementing glasnost than in implementing perestroika. By spring 1990 all the elements were present, including elections to the republican parliaments and the legal rescinding of the Communist Party's political ! monopoly.

The combination of partial perestroika and full glasnost brought the Soviet to the brink of collapse in 1990, as speculators filled the resulting economic vacuum and demagogues and capitalist-restorationists filled the political vacuum.

In fall 1990 Gorbachev turned to the Communist Party, the KGB, and the military to end the economic chaos and hold the Soviet Union together. Several prominent Gorbachevites, including Eduard Shevardnadze, resigned in protest.

Like Khrushchev and Brezhnev before him, Gorbachev has fallen back on command methods to deal with problems created by his decentralizing reforms. There is no reason yet to think that Gorbachev has abandoned his goals, but for the moment perestroika ! is frozen, and glasnost is chilled.

D. The International Consequences of the Stalinist Retreat

11. Until the mid-1980s the Soviet Union played a central and partly progressive role in the liberation struggles of Southern Africa. It provided economic and military aid, as well as counterrevolutionary advice, to the radical petty-bourgeois nationali! st regimes of Angola and Mozambique and to the South West African People's Organization (SWAPO) and the African National Congress (ANC).

This changed when the Gorbachevites decided that continued Soviet involvement in Southern Africa was not cost-effective. As they saw it, the region was not vital to Soviet security, and they could gain more by negotiating a sellout with imperialism than by ! continuing the aid.

In a breathtaking display of treachery, Gorbachev offered to cede the whole of Southern Africa to imperialism. The result was the summer 1988 accord by which the Soviet Union and Cuba agreed to end their military assistance to Angola, and South Africa agree! d to let Namibia become formally independent.

The radical nationalist regimes of Angola and Mozambique immediately accelerated their flight from "Marxism-Leninism." SWAPO laid down its arms to become the parliamentary governing party of a semicolonial Namibia completely dependent on South Africa. And t! he ANC redoubled its efforts to negotiate a sellout deal with the South African government.

Gorbachev also offered to sell out Central America, where Soviet and Cuban aid was vital to the Sandinista government of Nicaragua and the Farabundo Marti National Liberation Front (FMLN) of El Salvador.

Behind the scenes Gorbachev and Fidel Castro argued strongly that the Sandinistas should accept the 1987 Arias "peace plan" for Central America and its subsequent revisions. Gorbachev reinforced his arguments by reducing Soviet aid, particularly oil, and wa! rning the Sandinistas that they would face US imperialism alone if they did not agree.

As radical petty-bourgeois nationalists, the Sandinistas and the FMLN had no principled objection to what Gorbachev and Castro were demanding. Their programs called for "mixed economies," "political pluralism" and "international nonalignment," and the Arias! plan formally asked nothing more.

Following Gorbachev's and their own "new political thinking," the Sandinistas found themselves imposing draconian austerity on workers and peasants, relying on the Nicaraguan capitalists to rescue the economy, letting armed contras back into the country, de! nouncing the 1989 FMLN military offensive, leaving the fate of the revolution to the 1990 bourgeois elections, and then losing the elections.

The FMLN kept fighting -- with fewer weapons -- but it politically disarmed itself by renouncing most of its economic and social goals.

12. Gorbachev also applied "new political thinking" to Eastern Europe. He persuaded the Soviet bureaucracy that a buffer zone was no longer necessary for Soviet security and that the cost of maintaining troops in the Eastern European countries and su! bsidizing their economies was too high.

According to Gorbachev, the Soviet Union could gain more through a comprehensive European settlement with the imperialists, which could give the Soviet Union more access to the "common European home" and divide and weaken the imperialist alliance. This poli! cy doomed the Stalinist regimes in Eastern Europe, since they had little domestic support.

The workers did not love capitalism, but they hated Stalinism. They resented the fact that living standards were lower in Eastern Europe than in Western Europe. They objected to the Stalinist dictatorships, which they contrasted unfavorably with bourgeois d! emocracy in Western Europe. And they saw their governments as agents of an oppressive foreign power.

The reckoning came first in Poland. When workers struck against austerity in fall 1988, Lech Walesa and the Solidarnosc leadership offered to kill the strikes in exchange for legalization of Solidarnosc and negotiations. The Polish bureaucracy was receptive! , since it saw agreement with the Solidarnosc leadership as the only way to have a Polish perestroika without massive upheavals.

The result was the roundtable agreement and parliamentary elections in spring 1989. Solidarnosc-endorsed candidates won overwhelmingly, and the Solidarnosc political leadership formed a coalition government with the Stalinists.

This opened the floodgates. The Hungarian bureaucracy retreated quickly. A population exodus through Hungary and mass demonstrations brought down the East German government. Demonstrations and strikes brought down the Czech government. The Bulgarian governm! ent retreated. And then a half-revolution, half-coup toppled the Romanian government.

Parliamentary elections in 1990 confirmed the changes. By spring there were capitalist-restorationist governments in Poland, Hungary, East Germany and Czechoslovakia and "reform Stalinist" governments in Bulgaria and Romania.

By summer 1990 a majority of East Germans, including a majority of workers, favored the capitalist reunification of Germany. They saw this as a way to guarantee the bourgeois democracy they had won in the streets, to raise their living standards 50 percent ! overnight, and to end the Soviet occupation and unify their country. Kohl made outlandish promises to exploit this sentiment.

The East German workers needed time to think, which Gorbachev easily could have given them by delaying agreement on Soviet military withdrawal. Gorbachev would have faced little resistance from imperialism, since the non-German imperialists had their own re! asons for fearing German reunification.

Instead of buying time, Gorbachev reached an agreement with Kohl to pull out Soviet forces over four years and to allow immediate reunification. In return, Kohl promised to limit the size of the German military and to negotiate a treaty of "friendship and e! conomic cooperation" between Germany and the Soviet Union.

13. Since the early 1980s the Chinese bureaucracy under Deng Xiaoping had been trying to develop China through a market-oriented economic policy similar to perestroika in state industry but going much further in agriculture, retail trade, and ! foreign concessions, due to China's relative economic backwardness.

Deng and the Chinese bureaucracy rejected any accompanying glasnost policy, however. They thought that glasnost-type democracy would interest only the urban population -- 20 percent of the total -- and that they could rely on the weight of the! peasantry and the peasant-based army to control any urban discontent.

In spring 1989 students from Beijing's elite universities began demonstrating "for democracy," "against corruption," and "against privilege."

Workers rallied to support the students but modified the demands to emphasize social equality rather than bourgeois democracy. In Shanghai, the center of the workers' struggle, the demands were ranked "against privilege," "against corruption," and "for demo! cracy," opposite the order in Beijing.

The workers gave the spring 1989 demonstrations their huge numbers -- often a million or more -- but they played only an auxiliary role. The limited demands and tactics of the students precluded the militant mobilization of workers that could have paralyzed! the economy and government, won over the peasantry, and made it impossible for the bureaucracy to deploy the army.

The bureaucrats vacillated between repression and concessions in dealing with the demonstrations, and in the end decided for repression. They sent the army into Beijing, Shanghai and other cities, killing hundreds and arresting thousands. In many cities wor! kers responded with strikes and some sabotage, but without leadership they could not hold off the army.

14. As the XIII World Congress opens, the most acute question facing the international working class is the imperialist war in the Persian Gulf. The war is important in itself, because it is the first major imperialist war since Vietnam. But it is al! so important because it tests the balance of class forces and will determine whether the US undertakes more such wars in the near future.

US imperialism went to war against Iraq quite deliberately. On August 2, 1990, the day of the Iraqi invasion of Kuwait, the Pentagon updated its contingency plan for war in the Persian Gulf and presented it to Bush. The plan called for sending 240,000 troop! s and their equipment to fight a war in the air, at sea, and on the ground.

The Bush administration first lined up the Soviet Union through a treacherous joint statement condemning the Iraqi invasion. It then lined up the European imperialists, Japan, and finally Saudi Arabia. Within four days, without any discussion with Iraq, the! US military operation was underway.

The dispute between Iraq and Kuwait could have been resolved easily through negotiations, and Iraq would have left Kuwait even without resolution of the dispute, if the US would have agreed to an international conference on Palestine. But the Bush administr! ation rejected all compromises and "linkages," saying it would not "reward aggression."

The US wanted war partly to control Kuwait's oil but even more because it wanted to prove that it is the sole "superpower" in the "new world order" resulting from the Soviet retreat. It wanted to show that the "Vietnam syndrome" in the US is over and that i! t could use its power to destroy even the strongest semicolony.

Despite its words of gratitude for Soviet "support," the US also wanted to humiliate the Soviet Union. It wanted to show that it could crush a former Soviet client and the bureaucracy would applaud, not protest, let alone act.

The US also wanted to remind the other imperialists of their dependency on the US. Of all the imperialist countries, only the US currently could undertake an operation like the Gulf war. The US claims to be using its military power to "protect" the oil supp! lies of its imperialist rivals, but it could also use its power to cut them off.

Throughout the crisis British imperialism has played jackal to the US lion, supporting every US move, snarling ferociously, and asserting its "special relationship" with the US. French imperialism was unhappy with the US assertion of power and tried to main! tain some "independence" by sending ships and troops and talking of compromise at the same time.

German and Japanese imperialism were unhappy about the war. They knew they would get their oil whether Kuwait was ruled by Saddam Hussein or by the Emir, and they did not want to subsidize a US demonstration of power. Under US pressure, however, they have p! romised to provide money, equipment and logistical support.

E. The "New World Order" of the 1990s

15. The world capitalist economy as a whole grew slowly through the latter 1980s, narrowly avoiding recessions in 1986 and 1987. Profit rates remained relatively high as a result of the previous cutbacks and concessions in the advanced capitalist countr! ies and austerity in the semicolonies. Credit sustained effective demand.

Credit may alter the period and magnitude of the business cycle, but it does not abolish it. Sooner or later the lenders must be repaid. In the advanced capitalist countries governments, banks, corporations and consumers accumulated enormous debts by the en! d of the 1980s. Since continued borrowing on the previous scale was impossible, recession was inevitable. The only question was when.

The recession underway at the time of the XIII World Congress began in mid-1990. Britain, Canada and West Germany experienced negative growth in the third quarter, the US in the fourth quarter. By then the economies of all the advanced capitalist countries ! were either in recession or slowing rapidly.

Predictions about the timing, length or depth of downturns in the business cycle are risky, since capitalism is inherently anarchic, but this downturn "should be" deeper than the previous ones in 1974-75 and 1980-82.

The world capitalist economy is in an extended period of disequilibrium caused by a fundamental overaccumulation of capital and means of production and a breakdown of the post-World War II relationships between the capitalists and the workers, between the i! mperialists and the semicolonies, among the imperialists, and between the imperialists and the Soviet Union and the deformed workers' states.

During such a period the world economy generally is characterized by stagnation and decay, and the world political situation by conflicts, upheavals, wars and revolutions. Economic downturns tend to be sharp and long, and upturns weak and short.

Borrowing to pay for the imperialist war in the Persian Gulf and the reunification of Germany may make the recession milder than it would have been otherwise. But this would further aggravate the underlying economic and financial problems and make the next ! recession sooner and more severe.

Japan may ride out the downturn by cannibalizing the other imperialist countries. But this would mean only a shifting of production and wealth among the imperialists, not an overall expansion of the world capitalist economy.

16. In general, economic downturns tend to depress the level of class struggle temporarily, although this is not always the case. Then when the economy recovers even slightly, the level of struggle tends to increase rapidly, as angry workers fight to! recover what they have lost.

In the advanced capitalist countries the economic downturn is likely to depress workers' struggles for a year or two, as workers become caught up in the atomized fight for survival. But its effect on the struggles of the specially oppressed and youth may no! t be so negative.

More attacks on women, blacks and immigrants, and lesbians and gay men -- including the AIDS crisis -- may provoke more struggle by the specially oppressed. And the new political generation of youth seems eager to fight economic injustice, social oppression! , and imperialist war. This may stimulate struggle by workers.

In the semicolonies the situation has been so bad so long that the workers and peasants -- and also the unemployed poor -- may begin fighting out of sheer desperation. Such desperation led to the explosions of the 1980s and may lead to more explosions or ev! en a generalized upsurge in the 1990s.

In the Soviet Union, Eastern Europe and China too, the economic downturn may not have much negative impact on struggle. Reform Stalinists and capitalist-restorationists have promised the workers and peasants rapid improvement in their living standards. When! these promises are not realized, disappointment, frustration and anger may spur struggle.

Trotskyists must intervene in the struggles against the economic crises of the advanced capitalist countries, the semicolonies, and the bureaucratically deformed workers' states with transitional programs geared to the conditions in each country.

These programs should reject austerity and demand maintenance or expansion of the public sector and sliding scales of wages and hours to protect workers against layoffs and wage cuts. They should reject privatizations and demand expropriation of all large p! rivate enterprises, without compensation.

They should call for workers' control of production and democratic central planning. And they should defend the interests of women, national and ethnic minorities, lesbians and gay men, children, youth and the elderly.

In the advanced capitalist countries the specific emphasis in the programs of action should be taking socialist measures to combat the crisis. In the semicolonies the specific emphasis should be ending imperialist domination and comprador rule. In the burea! ucratically deformed workers' states the specific emphasis should be defense of collectivized property relations and central planning.

17. The administrative measures Gorbachev and the bureaucracy are taking should bring the chaos in the Soviet distribution system under control and make it possible to expand production again. But perestroika will not have been implemented, an! d the economic problems that led Gorbachev to propose it will not have been solved.

If perestroika is implemented, it will not in itself restore capitalism, but it will weaken collectivized property and have all the negative social effects that Trotskyists have predicted.

Workers and the oppressed, including the oppressed nationalities, will resist many of the moves, and Trotskyists should help them do so. But the particular role of Trotskyists is to help the masses resist consciously, in a way that defends past conqu! ests and prepares for future ones.

Trotskyists must defend the socialist perspective boldly and try to mobilize workers and the oppressed around transitional demands emphasizing internationalism, defense of collectivized property, workers' democracy, workers' control of production, national ! and social equality, and the right of the oppressed Soviet nations to establish independent socialist republics.

All sides in the public debate in the Soviet Union -- "conservatives," "reformers" and "radicals" -- basically agree with Gorbachev's "new political thinking" and support the betrayals carried out in its name.

Trotskyists must denounce the betrayals and counterpose the perspective of revolutionary internationalism. The Soviet Union should not withdraw its support for national liberation struggles, as limited and limiting as that has been. On the contrary, it shou! ld return to the policy of the revolutionary Comintern and support the struggles of workers and oppressed people politically, economically and militarily.

All sides in the public debate in the Soviet Union pose the question of democracy in bourgeois terms. Trotskyists must shift the terms of the debate. The bourgeois-like democracy of glasnost is a gain over the fascist-like totalitarianism of traditio! nal Stalinism only because it makes it easier for the workers to organize and fight for a higher form of democracy, workers' democracy.

18. If there is no immediate danger of capitalist restoration in the Soviet Union, the same cannot be said for Eastern Europe.

So far, however, capitalist restoration has occurred only in East Germany, and that occurred because of the national link between East and West Germany. In Poland, Hungary and Czechoslovakia the procapitalist aspirations of the governments have foundered on! a major problem: lack of acceptable capitalists.

The most likely buyers are the imperialist corporations, since they have the capital. The governments can sell some enterprises to foreigners but not too many, since nationalism is central to their demagogic appeal. Besides, the imperialist corporations hav! e little interest in most state enterprises, since they come with outdated means of production and recalcitrant workers.

The former Stalinist bureaucrats and managers are also possible buyers, since some of them have enough money to form capital. Again, the governments can sell some enterprises to them but not too many, since anticommunism is also central to their demagoguery! .

The neo-Stalinist governments of Bulgaria, Romania, Yugoslavia and Albania are trying to develop perestroika in hot-house fashion, because they feel their weakness and fear that the capitalist-restorationists will oust them if they move too slowly. B! ut they find it difficult to drive down living standards sharply enough under conditions of bourgeois-like democracy.

Trotskyists in Eastern Europe must give first priority to the fight to defend collectivized property against capitalist restoration. The starting point is defense of living standards against the austerity measures needed to make state enterprises profitable! enough to privatize. But this defense will be effective only if workers consciously reject the tyranny of the capitalist market.

Trotskyists must not equivocate or attach themselves to utopian, halfway measures. Parliamentary democracy, the "regulated market," "workers' self-management" -- none of these will pull Eastern Europe from its crisis or protect workers' interests.

Trotskyists must clearly affirm our commitment to workers' democracy, state ownership of the major means of production, and workers' control of the economy from the central plan to the shop floor.

19. As the XIII World Congress opens, the war in the Persian Gulf dominates the international situation. It is an imperialist war, a war by which the US hopes to establish its hegemony in the "new world order."

During the initial phase of the war in January 1991 US and other imperialist planes and cruise missiles bombed Iraqi military and economic targets. The US command claimed that it was not targeting civilians, and in a direct sense this may have been true.

But a military campaign that destroys workplaces, drives the urban population into bomb shelters and basements every night, and deprives cities of electricity, fresh water, sewage disposal, refrigeration, and the use of modern medical equipment -- thereby g! uaranteeing the spread of infectious diseases -- is a war against civilians.

The air war was not able to break the resolve of the Iraqi government, military or people to resist, however. Iraq's launching of scud missiles against Israel and Saudi Arabia and its initial ground probes into Saudi Arabia showed that it was militarily ver! y much alive despite the air war.

The combination of imperialism's war against Iraqi civilians and Iraq's ability to deliver unprecedented blows against imperialism and Zionism has won Iraq and Saddam Hussein wide support throughout the Arab world and all the semicolonies.

Meanwhile, opposition to the war has been growing in the imperialist countries. Large antiwar demonstrations have been held in the US, Britain, France, Italy, Canada, Germany and most other imperialist countries. If Iraq can inflict major casualties on the ! imperialist troops on the ground, support for the war will fall off even more sharply.

The US and the other imperialist belligerents have the technical-military power to defeat Iraq, and this may well be the war's outcome. But it is not the only possible outcome.

The workers and peasants of the Middle East and North Africa increasingly see the Gulf war for what it is -- a war of the Arab nation against its imperialist and Zionist oppressors. Workers in the imperialist countries can come to see it that way too. If th! is happens in time, the imperialists will find themselves in an impossible situation and have to withdraw.

Trotskyists must intervene in the anti-imperialist movement in the Arab countries and in the antiwar movement in the imperialist countries. In both interventions our central slogans must be, "Victory to Iraq! Defeat imperialism!"

In the Arab countries Trotskyists must explain that victory against imperialism requires revolutionary war based on the perspective and strategy of permanent revolution. In the imperialist countries we must explain that the defeat of imperialism requires br! inging the war home through working-class action.

This effort is essential even if it does not result in an Iraqi victory. If the imperialists win, but their victory is very expensive in military, economic and political terms, they will be reluctant to try war again soon. Even more importantly, the struggl! e will help Trotskyists build the revolutionary leadership of the working class and the Fourth International.

F. The Transitional Program, the Fourth International and the Proletarian Vanguard

20. The capitalist economic crisis, the political crisis of Stalinism, and the imperialist war in Gulf should give Trotskyists many opportunities to intervene in mass struggles. We should take these opportunities and do everything we can with them. But ! we must recognize that there are severe limits to our possibilities for mass work now.

Trotskyism has the analysis, program, strategy and tactics the international working class needs in order to win. But our being correct is not enough. So long as the workers are retreating, the capitalists are advancing, and we are so small, there is little! we can do to alter the course of history directly.

However, our Trotskyism tells us that the tide will turn. The period of working-class retreat will end. The workers will fight, mass upsurges will happen, prerevolutionary situations will develop, revolutions will be attempted.

Our Trotskyism also tells us that the outcome of these struggles -- the outcome of revolutions in particular countries and the outcome of the world revolution -- depends on the revolutionary leadership of the working class.

Our central aims in this period must be resolving the crisis of the Fourth International and winning the vanguard to our party. These aims can be achieved only in the context of active intervention in the struggles of the workers and the oppressed, but the ! success of these struggles is not the main criterion of our success.

Resolving the crisis of the Fourth International is a political as well as an organizational task. Trotskyists must base their work on the method of the Transitional Program. We must not look to objective developments in the mass struggle or the evolution o! f nonrevolutionary, petty-bourgeois leaderships to do our work for us. We must reject the political method of the current leadership of our international organization.

The organizational task in resolving the crisis of the Fourth International is to bring about a revolutionary Trotskyist regroupment. Reaffirming the program and method of Trotskyism ourselves, we must win to that program and method all revolutionaries who ! are ready to leave centrist vacillation and sectarian irrelevance behind.

The comrades who have called for the establishment of a Left Tendency in the Fourth International urge all comrades who agree with our "Appeal" and the perspectives outlined in this and the other documents we have presented to the XIII World Congress to joi! n with us in the essential struggle for the political regeneration and organizational reconstruction of the Fourth International.