Monday, December 31, 2007

Benazir's Murder and the Inconsolable Grief of the Pakistani People

(The following statement was released by the Communist Mazdoor Mahaaz Party of Pakistan on December 28, 2007):

By Taimur Rahman

Tragically, the fate of the first female prime minister in the Muslim world has met with a violent end. The people of Pakistan are gripped by inconsolable grief at the news of the murder of Benazir Bhutto.

In the PPP the people of Pakistan saw a mainstream political party that spoke about the rights of poor people. The slogan of roti, kapra, makan (bread, clothes, housing) galvanized millions against the military dictatorship of Ayub Khan in the late 1960s. The democratic reforms undertaken by Zulfiqar Ali Bhutto challenged the interests of the traditional ruling class of Pakistan. The ruling class in turn began to support Islamic fundamentalism and military rule as a counter-weight to this democratic upsurge. After Zulfiqar Ali Bhutto was hanged by the religious fundamentalist regime of Zia ul Haq, Benazir Bhutto led the PPP for the restoration of democracy.

Despite the ostensible return of democracy in 1988, the establishment continued to harbour intense hatred and refused to reconcile themselves to the "populist" currents of the PPP. General Pervaiz Musharraf treated the PPP no different than all previous military dictators.

Political rumors notwithstanding, repression within the country forced Benazir into an eight year exile.The "war on terror", however, forced the army to renege with great reluctance its long-standing collaboration with religious fundamentalists. Seething with hatred, the fundamentalists made a serious bid for power this July leading to the episode of the lal masjid (red mosque). Benazir was the only national leader with the courage to take a clear and uncompromising stance against Islamic extremism. Moreover, she was the only political leader with the popular support that made such a statement legitimate and gave it weight.

Given the precarious position of Musharraf's dictatorship, Benazir's stance opened up the opportunity for a softening of the attitude of the military towards the PPP. The military saw it as an opportunity to stabilize their rule. The PPP saw it as an opportunity to get their principle leader back into the country. The West saw this as an opportunity to stabilize Pakistan and keep it focused on the "war on terror". People, groaning under poverty and increasing cost of living, saw it as an opportunity to obtain some relief. And the fundamentalists saw it as the incarnation of their greatest mortal enemy. The latter openly declared that they would kill Benazir if she dared to return. In October, upon Benazir's return to Karachi, they tried and failed. Today they did not.

The overwhelming number of people hold the military dictatorship of General Pervaiz Musharraf responsible for failing to provide adequate security. Furthermore, the finger of suspicion cannot so easily be lifted away from elements within the establishment. Benazir herself stated that in addition to Islamic fundamentalists in tribal areas, she suspected that certain elements within the ISI also wanted her dead.

While there will be many who try to minimize the public outcry against this incident by pointing to the many short-comings, inconsistencies and faults of the PPP, it is clear that the biggest fault of Benazir was that she spoke for the secularism, democracy and most importantly for the rights of the poor and dispossessed of Pakistan. For this fault, she was prepared to and did pay the ultimate price.

The Communist Mazdoor Kissan Party condemns the murder of Benazir Bhutto.

Down with religious fundamentalism and military rule!

Long live a peoples revolution!

Saturday, December 29, 2007

Book review - Monarchy vs. Democracy: The Epic Fight in Nepal

Some months ago, I ordered Baburam Bhattarai's collection of articles and interviews, Monarchy vs. Democracy online from Vedams Books in India ( ).

The book was published in 2005, and so predates the ceasefire between the Peoples Liberation Army and the Royal Nepalese Army and the decision by the Communist Party of Nepal (Maoist) to suspend the people's war and engage in parliamentary tactics.

That suspension was made from a position of military strength by the CPN(M) which had established effective control over the Nepalese countryside, inflicting countless defeats on the royalist army and police.

The book remains, however, an essential read in understanding the programme and strategy of the CPN(M).

The choice of title is quite deliberate. In an "Appeal to Friends in India" (June 22, 2002), Bhattarai states that "…the real fight in the country is between monarchy and democracy." On this basis, the CPN(M) had advanced three demands: "an interim government, election to a constituent assembly and institutionalisation of the republic". This Appeal followed the dissolution of parliament in May 2002 by King Gyanendra. This in turn led to the dismissal of Nepal's elected Prime Minister and assumption of executive powers by the King in October 2002 which culminated in the imposition of absolute monarchy on February 1, 2005.
Bhattarai makes quite clear that the monarchy in a country such as Nepal can only be a bastion of reaction and an obstacle to progress.

On July 3, 2001, in The Question of Outlook on Monarchy, he described the differences between the capitalist constitutional monarchies and those of the Third World: "There are two types of monarchies in existence in the present-day world. The first types are the capitalist monarchies, as in England, Japan and several other European and Scandinavian countries, which are surviving as powerless, living museums. And the second types are the pre-capitalist monarchies in several Third World countries, which are still powerful and active as in the past. In the present era of imperialism and proletarian revolution, such historically outdated monarchies are merely being utilised by imperialism and comprador and bureaucratic capitalism for their own counter-revolutionary ends."

In A Rejoinder on Some Current Issues on September 4, 2002, Bhattarai states "The feudal aristocratic monarchy has been principally targeted because it is the historical bulwark of all class, gender, national, regional and religious oppression and main impediment to all round democratization of the polity, economy, society and culture."

Bhattarai (right) sees Nepal as caught between two triangular contentions - internally, between the "revolutionary democratic, parliamentary democratic and monarchistic forces", and externally between "the USA, India and China". In 2004, it was still the case that the monarchy was able to play off these contradictions to its own advantage, but that era closed with Parliament's vote, on December 28 2007 to abolish the monarchy after elections the next April.

Bhattarai also deals convincingly with the attempt by opponents of the people's war waged under the leadership of the CPN(M) to portray the PLA as a 'terrorist' group.

Speaking at Jawaharlal Nehru University, New Delhi, on March 24, 2002, Bhattarai observed that "in the aftermath of September 11, it has been fashionable for any unpopular and anti-people ruler of any country to brand all the dissenting movements against his/her rule as 'terrorism' and invite international military or otherwise intervention against it. Following this by now hackneyed tradition, (then Prime Minister) Deuba as a loyal stooge of Gyanendra has begged for massive Indian military intervention or aid against the people's democratic movement led by the CPN (Maoist). No genuine people's democrat would ever vouch for terrorism, as it is a sinister disease that destroys the people's democratic movement."

And in a letter to "Our Friends in America" on May 6, 2002, Bhattarai explains that "history has always made a clear distinction between a legitimate 'revolutionary war' with a progressive ideological/political mooring and the lunatic acts of terrorism with a regressive intent."

The revolution in landlocked Nepal is now entering a new era, the era of the bourgeois democratic or new people's democracy in which the oppressed classes and people will seek to lift the level of struggle to that of the socialist stage of the revolution.

Comrade Baburam Bhattarai's book is essential reading for all who empathise with and support the cause of the Nepalese people.For regular updates on developments in Nepal, bookmark The Red Star, the first volume of which appeared last November, here.

Nepalese Parliament votes for democracy and against monarchy

(Left: Prachanda, Chairman of the CPN(M))

On Friday December 28, 2007, the Nepalese Parliament voted to formally abolish the Nepalese monarchy and to declare Nepal a federal democratic republic.

The abolition of the monarchy will take effect after the election of a constituent assembly in April of 2008.

The decision of the Nepalese Parliament was carried by the required two thirds majority. Out of 321 MPs, 270 voted in favour of the amendment with three against. Two pro-Indian Rastriya Prajatranta Party MPs and Nepal's revisionist Communist Party-United leader Pari Thapa voted against the Bill.

The vote reverses a previous decision which had seen the Communist Party of Nepal (Maoist) delegation walk out of the Parliament and engage in street level agitation for the abolition of the monarchy.

The CPN(M) will now rejoin the Government and contest the elections in April.

The number of seats in the proposed Constituent Assembly has been increased to 601 under a 'mixed electoral system' in which 240 would be elected to the CA under the first-past-the-post system, 335 under the proportional electoral system while a further 26 members would be nominated by the council of ministers. The CPN(M) had demanded a fully proportional electoral system so as to ensure the representation of women, oppressed classes and oppressed nationalities in the new republican Government.

The immediate obstacle to the smooth transition to a federal democratic republic is the Royal Nepalese Army. Its command structure has been a bulwark of King Gyanendra's regime and has been targetted for infiltration by both the US imperialists and the Indian expansionists.

Trying to foment discord, the international capitalist media, under the guise of reporting on the situation, is sending out signals for preferred options to derail the democratic victory. The BBC news service reported on October 8, after the CPN(M) withdrew from the Government, that "the wider held view is that a final showdown between the army and the Maoists in Kathmandu is more likely than ever. If such a situation arises, nobody knows who will prevail. However, one Indian expert on Nepal, retired Gen Ashok Mehta, believes that Delhi would be prepared to give military help to the government in Kathmandu rather than see the Maoists seizing power by force."

Direct Indian intervention is now a more difficult task given that it is the Nepalese Government itself that has accommodated the CPN(M) demands and voted to abolish the monarchy.

That leaves the staging of some typical CIA provocation, such as the assassination of Gyanendra, to serve as a pretext for a military coup. There are two obstacles to that, however, the first being the direct presence of the United Nations International Monitoring force which is observing both the People's Liberation Army and the Royalist Army in their respective camps, and the second being the PLA itself, which has shown in the past that it is more than a match for the royalist military.

At the moment, it seems like the US imperialists, the Indian expansionists and the feudal regime of King Gyanendra have been checkmated by the revolutionary democrats led by the CPN(M) and their allies among the parliamentary democratic parties of Nepal.

Wednesday, December 26, 2007

You Ain't Goin' Nowhere

'Tis the season to be jolly, fa-la-la-la-la, la-la-la-la.

Peace and goodwill to all. It's that time of year. And after the heaviness of my last Democratic Socialism is Capitalism post, something in keeping with the festive season is in order.

This is a tribute I wrote to a work colleague who pretended to be oh so progressive, yet turned into a vicious sell-out over a particular issue, and who then thought she'd be rewarded for siding with the boss with a promotion. I was still waiting to hear whether she got the promotion when I wrote this (she didn't!).

So this is goodwill to all who fight self and serve the people, and the plague of contempt and derision on those who put self first:


Congratulations are in order, or so they say
You've come so far but baby that's OK
Cos you, you ain't goin' nowhere

You think you're the sun movin' across the sky
It's all an illusion, but you don't know why
Cos you, you ain't goin' nowhere

With your nose in the air and your mouth like an arse
You've convinced yourself that you're really high class
But you, you ain't goin' nowhere

You're a fake and a phoney and a danger too
Mirror, mirror on the wall'll soon be telling you
That you, you ain't goin' nowhere

You stand out like a silo in a country town
Everyone can see you for miles around,
But you, you ain't goin' nowhere

Well you beat your dog and you kick your cat
Yet you prance around inside your RSPCA hat
And you, you ain't goin' nowhere

Write a poison letter that you won't even sign
Disguise your handwriting but I ain't blind
I see that you, you ain't goin' nowhere

You're a fake and a phoney and a danger too
Mirror, mirror on the wall is even telling you
That you, you ain't goin' nowhere

Talk of mutton dressed as lamb – it certainly shows
With the clothes that you wear and the ring in your nose
Tattoo on your arm and the bells on your toes
That you, you ain't goin' nowhere

Well you big-note yourself and you put on airs
What you don't know is that nobody cares
Cos you, you ain't goin' nowhere


Congratu(G)lations are in order or (C) so they (G) say
You've(C) come so far but baby (F) that's O (C) K
Cos (G) you, you ain't goin' no (D) where

You're a (C) fake and a phoney and a (F) danger (C) too
Mirror, (G) mirror on the wall'll soon be (C) telling (G) you
That (D) you, you ain't goin' no (G) where

Thursday, December 20, 2007

Mandurah workers fined for strike

On November 24, 2007, the Australian people threw out the rotten anti-worker Howard Government.

A major factor in Howard’s loss was the Your Rights at Work Campaign which became deeply embedded in working class communities and marginal electorates.

But despite Howard replacement Brendan Nelson declaring, as the new Leader of the Opposition, that the anti-union “Work Choices” legislation was now dead, it still lives and breathes as legislation.

And so does its soul mate in the construction industry, the fascist-like Australian Building and Construction Commission (ABCC) and its so-called building industry Code of Conduct.

The construction industry historically, has been one of the toughest and most dangerous industries in the country. On average, one worker a week is killed in this industry somewhere in Australia.

Construction workers rely on their own elected shop stewards and Occupational Health and Safety reps to ensure that worksite safety standards are met. The bosses, on the other hand, are always looking to cut corners, to take risks with workers’ safety in order to meet job deadlines and ensure maximum profits.

On February 24, 2006, Construction, Forestry, Mining and Energy Union (CFMEU) shop steward on the Western Australian Mandurah rail project, Peter Ballard, was sacked.

Leighton Kumagai, the company building the rail line, alleged that it was falling behind schedule because of industrial activity, and thought it could intimidate the workers into copping poor conditions by sacking their shop steward.

But Leighton’s actions had the opposite effect. Despite the CFMEU advising against further strike action, given the punitive powers of the new laws introduced by Howard, the Mandurah workers stood by their mate and voted to strike.

In March, Ballard won a case against Leighton’s for unlawful dismissal, donating all of the proceeds from the case to the Make a Wish Foundation which supports children with cancer (see here).

The workers were entitled to think that that was the end of the matter, but they had not reckoned on the vindictiveness of Howard’s ABCC.

Howard set up the ABCC after first demonizing the unions with allegations of corruption and violence, which were subsequently investigated by the Cole Inquiry throughout 2001. Cole was unable to find any evidence to warrant the laying of charges against any union official. But the mud stuck, and like some cinematic monster emerging from the slime came the ABCC.

The ABCC’s unwritten mandate has been to bust the building unions. It was a change of direction for Howard, who had unsuccessfully tried using scabs protected by masked goons and Dobermann dogs to bust the Maritime Union of Australia (MUA).

So, on July 5, 2006, long after the dust had settled on the Mandurah dispute, the ABCC waded in with writs against 107 workers on the site.

Each worker individually was faced with fines of up to $28,600 for taking “illegal” industrial action.

Support for the 107 blossomed around the nation with rallies and demonstrations, and later, public showings of the film “Constructing Fear”, in which the 107 - and other similarly victimized workers – told of the ABCC’s standover tactics and threats.

Leightons continued to make things hard for workers on the site. Mal Peters, (with wife Bernadette, below left) the OHS rep was sacked on August 8 after returning from a national speakers tour undertaken during two weeks of annual leave. He spoke of workers who had been “severely shafted, sent to other areas and victimized because they opened their mouths” on health and safety issues.

Finally, on December 20, 2007, 91 of the original 107 workers were fined up to $10,000 each for their “illegal” strike.

Fully one month after Howard was trashed by the people in the election, his laws and his legacy have resulted in working people being fined massive amounts of money for standing by a mate and for defending their entitlement to a safe working environment.

The new Rudd labor Government has signaled the end of “Work Choices”, but is in no great hurry to act on the clear mandate to do so given by the people through the ballot box.

Shamefully, it has pledged to allow the ABCC to continue Howard’s dirty work until 2010.

There is now clearly a case for making the ABCC a target of a revitalized YR@W.

The post below shows, with great clarity, why this is not just a matter for workers in the building and construction industry.

Innocent bystander seized by Howard's "Gestapo"

I'm the innocent bystander
Somehow I got stuck
Between the rock and a hard place
And I'm down on my luck

Warren Zevon’s 1978 song Lawyers, Guns and Money was an innocent bystander’s lament and plea for help.

And one unlucky academic from the University of Melbourne has emerged as the innocent bystander in the Australian Building and Construction Commission’s campaign to destroy the Construction, Forestry, Mining and Energy Union (CFMEU).

A little over three months ago, the man was walking past a Melbourne building site when he witnessed a confrontation between a building manager and a CFMEU official.

The CFMEU states that the manager had tried to intervene in an off-site meeting of the workers, and that although he and the union official pushed and shoved each other, no blows were exchanged and no charges have been laid against either man by police.

The zealots from Howard’s ABCC saw it as another opportunity to bash the CFMEU, and decided that the innocent bystander might be the key to their case.

Somehow or other, they identified him and hauled him in for interrogation.

Now, this is a bloke who just happened to be in the wrong place at the wrong time, at least as far as his rights as a citizen are concerned.

Under the powers vested in the ABCC by Howard, IB (as we’ll call the innocent bystander) could not decline the “invitation” to attend the interview (penalty: 6 months jail), could not decline to answer questions from his interrogators (penalty: 6 months jail), could not tell anyone - even his wife - that he had been interrogated (penalty: 6 months jail) and could not ask friends to send a lawyer (let alone Zevon's guns and money) to be present during the interrogation.

Its like a scenario out of a movie about the Gestapo in WW2!

The capitalist press - usually no friend of the worker – has introduced its reports on IB’s story as follows: He was an innocent witness to a minor scuffle, but was interrogated for hours. The law forbids him from telling his story, and we cannot name him nor show his face. This is happening in Australia…(Sydney Morning Herald, December 15, 2007)

So who is IB? Well, IB is potentially you and potentially me - and will be for as long as we allow this ghost of fascism past, the ABCC, to continue the now-departed Howard Government’s crusade against building and construction workers.

It is in all of our interests that Rudd and Co be forced by a reinvigorated Your Rights at Work campaign to muzzle the ABCC.

In fact, it should be disbanded now!

Tuesday, December 18, 2007

Democratic Socialism is Capitalism Part 7

The following is my translation of Part Seven of Wu Bing's polemic against the revisionist views of Xie Tao, according to which China should accelerate the restoration of capitalism through the adoption of a social democratic system. Earlier instalments will be found throughout this blog.


Shamelessly tampering with and distorting the fundamentals of Marxist theory.

Writing off the differences between Marxism and revisionism is one of the established tricks of old and new revisionism. This is the case with Xie Tao’s “Preface”. The “Preface” suggests that “Isn’t the major theoretical fault since the policy of opening and reform that we haven’t clearly distinguished what is Marxism? What is revisionism? Where exactly is the legitimacy of Marxism?” What, then, is revisionism? He answers himself thus: “Lenin, Stalin and Mao Zedong are the biggest revisionists”, Bernstein is not revisionism, so “we must restore the reputation of (Bernstein’s) revisionism.” And what, then, is Marxism? He says: “Marx and Engels in their later years were democratic socialists, they were the originators of the ‘peaceful transition to socialism’, and democratic socialism is legitimate Marxism”, and besides, we have “the explanation of persuasive historical textual research”. That is, democratic socialism and revisionism are “legitimate” Marxism! Mr Xie Tao is really cracking a very big international joke!

In relation to Mr Xie Tao’s so-called “explanation of persuasive historical textual research”, in addition to the several distortions already discussed by me, and his tampering with the basic theories of Marx and Engels, he has also engaged in underhanded methods in the following couple of places:

(1) Mr Xie Tao’s article says: “In the Third Volume of Capital, Marx points out that ‘In stock companies the function (of management – Trans.) is divorced from capital ownership; hence also labour is also entirely divorced from ownership of means of production and surplus-labour’….in this way, capitalism has completed the peaceful transition to socialism. The third volume of Capital has overthrown the conclusions of the first volume of Capital, and there is no longer any need to “blow up” the “shell” of capitalism. In Marx’s mind, Manchester capitalism (primitive capitalism) had been destroyed. After that, capitalism under a pounding from Capital becomes socialised. The third volume of Capital is the final conclusion by Marx and Engels of several dozens of years of research into capitalism, and ten years of editing and revision by Engels, and was published the year before Engels’ death in June 1894. After Marx passed away in 1883, Engels continued to lead the international working class movement for a period of 12 years, and founded the Second International in 1889. Engels specifically instructed the German Social Democratic Party to wage a legal struggle, and emphasised the significance to the international working class movement of the German Social Democratic Party gaining success in the elections: ‘One can conceive that the old society may develop peacefully into the new one in countries where the representatives of the people concentrate all power in their hands, where, if one has the support of the majority of the people, one can do as one sees fit in a constitutional way: in democratic republics such as France and the U.S.A., in monarchies such as Britain’ (Complete Works of Marx and Engels Vol 22 p. 273).”

In this short passage of Mr Xie Tao’s, it is obvious that he tampers with and distorts the original works of Marx and Engels (see right). We will analyse the specifics of this below.

(One) In the twelve years between the death of Marx and his own passing, did Engels, besides “editing and revising” Capital and “establishing the Second International”, only “specifically instruct the German Social Democratic Party to wage a legal struggle, and emphasised the significance to the international working class movement of the German Social Democratic Party gaining success in the elections”? Obviously this is to disparage and distort Engels. The actual situation is that in the twelve years since the death of Marx, whilst at the same time as completing Capital and other scientific works, he invested an enormous amount of energy in continuing to lead the working classes of various countries to carry out the revolutionary struggle for the overthrow of capitalism; in the process of founding the Second International, he waged an uncompromising struggle against every form of opportunism, and particularly the right opportunism that advocated “peaceful transition”. As for the “instruction” on “legal struggle” and “emphasising” parliamentary “success in the elections”, this is only one form of the proletarian revolutionary struggle advocated by Engels, and its objective is not “peaceful evolution” but the destruction of the old state apparatus and the gaining of the final victory of the revolution. At this precise time, (after 1871 capitalism entered a so-called peaceful period), Engels led the working class and the communists to use this form of parliamentary “legal struggle” to expose the enemy, educate the people and prepare their strength. This was correct and also brought about great results. However, Engels never “emphasised” any “legal struggle” or “peaceful evolution” as the main method or means of struggle for the liberation of the working class, and his consistent emphasis was still on violent revolution. This is completely borne out in the writings and correspondence of Engels during the twelve years after the death of Marx. For example, on Dec 8, 1889, Engels wrote to Gerson Trier that “If the proletariat did not undertake violent revolution, then it would be impossible for it to win its own political rule, and that is the only door to the new society” (Selected Works of Marx and Engels Vol 4, 1995 ed., p. 685).

(Two) Mr Xie Tao distorts the quotation he has used from Engels to mean that he “abandoned” violent revolution and advocated “peaceful transition to socialism”, but he has cut off the beginning and the end of the quote and taken it out of context so that it is subjective conjecture. This passage of Engels’ is from Vol 3 of Capital, called “A Critique of the Draft Social Democratic Programme of 1891” (also known as the “Social Democratic Party Erfurt Program”) Part 2, “Political Demands”. In order to have a thorough understanding and grasp of Engels’ passage, we may as well complete this passage by including what Mr Xie Tao has left out, as follows:

“It is an obvious absurdity to wish ‘to transform all the instruments of labour into common property’ on the basis of this constitution and the system of small states sanctioned by it, on the basis of the ‘union’ between Prussia and Reuss-Greiz-Schleiz-Lobenstein, in which one has as many square miles as the other has square inches.

“To touch on that is dangerous, however. Nevertheless, somehow or other, the thing has to be attacked. How necessary this is shown precisely at the present time by opportunism, which is gaining ground in a large section of the Social-Democratic press. Fearing a renewal of the Anti-Socialist Law, or recalling all manner of over-hasty pronouncements made during the reign of that law, they now want the party to find the present legal order in Germany adequate for putting through all party demands by peaceful means. These are attempts to convince oneself and the party that ‘present-day society is developing towards socialism’ without asking oneself whether it does not thereby just as necessarily outgrow the old social order and whether it will not have to burst this old shell by force, as a crab breaks its shell, and also whether in Germany, in addition, it will not have to smash the fetters of the still semi-absolutist, and moreover indescribably confused political order. One can conceive that the old society may develop peacefully into the new one in countries where the representatives of the people concentrate all power in their hands, where, if one has the support of the majority of the people, one can do as one sees fit in a constitutional way: in democratic republics such as France and the U.S.A., in monarchies such as Britain, where the imminent abdication of the dynasty in return for financial compensation is discussed in the press daily and where this dynasty is powerless against the people. But in Germany where the government is almost omnipotent and the Reichstag and all other representative bodies have no real power, to advocate such a thing in Germany, when, moreover, there is no need to do so, means removing the fig-leaf from absolutism and becoming oneself a screen for its nakedness.”

In the section that follows this, Engels points out: “But the fact that in Germany it is not permitted to advance even a republican party programme openly, proves how totally mistaken is the belief that a republic, and not only a republic, but also communist society, can be established in a cosy, peaceful way.”

I believe that these passages of Engels’ certainly do not mean the “retention of the capitalist mode of production”, and that even less do they mean he has gone against the shared ideas he advocated with Marx about the universal law of the proletarian revolution smashing the old state machinery by going through a violent revolution and the consistent implementation of the dictatorship of the proletariat. Nor can Mr Xie Tao be helped out by grasping the straw of the phrase that “the old society may develop peacefully into the new one… in democratic republics such as France and the U.S.A., in monarchies such as Britain”. This passage is just one way in which Engels engages in indirect refutation. I believe that this sentence of Engels is a kind of assumption, and its premise is “concentrate all power in their hands” and “the support of the majority of the people”. My understanding of this premise is firstly, the basic question of the revolution is that of political power; secondly, this political power can only be obtained through violent revolution; thirdly, it is impossible for “peaceful transition to socialism” in Germany which does not possess the conditions in the US and France, which are already “democratic republics”.

Then, can the “democratic republics” of the US and France undergo “peaceful transition to socialism” or not? They cannot either. We can find this answer in a letter by Engels. On the same day, June 29 1891, that he completed “A Critique of the Draft Social Democratic Programme of 1891”, he wrote to Kautsky (right) fiercely criticising the Draft. We can see from the letter that, owing to the restrictions of time, Engels has only responded roughly to some of the provisions. Engels said: “I mean at first to try rewriting the preamble in rather more succinct form but want of time prevented my doing so, besides which I thought it more important to point out the shortcomings, some avoidable, others not, of the political part, as this would provide me with an opportunity to lash out at the conciliatory opportunism of the Vorw√§rts and the clean-devout-joyous-free ‘ingrowing’ of the old canker ‘into socialist society’. I have since heard of your proposal that there should be a new preamble; so much the better.” (Complete Works of Marx and Engels, Vol 38, p. 119; Vol 22 p. 698, footnote 230). According to the way it is put in this letter, and precisely this part, Engels was impelled to fiercely attack this promotion of the theory of “peaceful ‘transition’ to socialism”. This proves beyond doubt that Mr Xie Tao is deliberately distorting the ideology of Engels.

(Three) An additional point. About the content of the “Political demands” section of the article “A Critique of the Draft Social Democratic Programme of 1891”. Engels provided an exposition of three problems: (1) on republics; (2) national questions and questions of state structure; (3) the issue of local self-government. In relation to republics. Engels pointed out that the program does not dare demand the establishment of a democratic republic, that it fears the renewal of the “Anti-Socialist Law”. Therefore “It lacks precisely what should have been said” (Complete Works of Marx and Engels, Vol 22 p. 272) and the servants of the German Social Democratic Party do not understand the great significance of the establishment of a democratic republic to the class struggle of the proletariat and to the struggle for obtaining socialism. According to them, under the conditions of the German monarchy the proletariat can achieve its own aims, but this is obviously a fantasy. Engels said: “If one thing is certain it is that our party and the working class can only come to power under the form of a democratic republic” (ibid. p. 272). Engels believed that if the leaders of the German Social Democratic Party did not dare raise the demand for a republic, in an attempt to curry favour with the Junker landlord class, and did not even dare put in the wild fantasy of “republicanism” to their program under the conditions of Germany, but advocated “peaceful change” to socialism, then this is just deceptive talk. Only then does Engels raise the pointed criticism: “They strive hard to make the party believe…” Avoiding the basic demand for the dictatorship of the proletariat is another major flaw of the Draft Program. This shows that the German Party leaders only sought temporary successes and gave up the long-term interests of the proletariat. Engels severely criticised them, saying: “This forgetting of the great, the principal considerations for the momentary interests of the day, this struggling and striving for the success of the moment regardless of later consequences, this sacrifice of the future of the movement for its present, may be ‘honestly’ meant, but it is and remains opportunism, and ‘honest’ opportunism is perhaps the most dangerous of all!” (ibid. p. 274).

(Four) Another additional point. In the year before his death, on March 6, 1894, Engels wrote to Paul LaFargue (right), with this important question in mind: “From the point of view of the proletariat, the difference between the republic and the monarchy resides merely in that the republic is a ready made political form for the future implementation of proletarian political power” (Selected Works of Marx and Engels Vol 4, p. 734, 1995 ed.). See also Engels’ letter of the same year on January 25 to Borgius in which he earnestly warned him in relation to Marx’s “The 18th Brumaire” and his own “Anti-Duhring” and “Ludwig Feuerbach and the End of Classical German Philosophy”, “Please do not weigh each word in the above too carefully, but keep the connection in mind” (Selected Works of Marx and Engels Vol 4, p. 734).

(Five) In “A Critique of the Draft Social Democratic Programme of 1891”, we can see that Engels’ thinking on violent revolution had not changed in the slightest. The situation at that time was as follows: With the deepening of the German domestic class struggle, and the development of contradictions within the ruling class, a majority in the German parliament overturned the 12 year old “Emergency Decree”. In the parliamentary elections of February 20, 1894 the Social Democratic Party won 35 seats. On March 20 Bismarck was voted out. His reactionary policy of high-handedly suppressing the labour movement was totally bankrupt. This was a tremendous victory for the heroic struggle, for more than 10 years, of the German working class under the leadership of Marx and Engels. After the repeal of the “Emergency Decree”, the ruling class implemented some improvements to the law as a concession to the working class so as to deceive the eyes and ears of the workers, to divide the army of the proletariat, and to shore up their own political status by means of easing class contradictions. In this situation, the German Party gave rise to two erroneous tendencies. One was the “Youth Guard” which, under the rhetoric of the ‘left’, advocated a semi-anarchistic strategic viewpoint of opposing parliamentary struggle and opposing the use of its legal status to carry out agitation and propaganda and to organise the work. The “Youth Guard” crudely distorted the strategic principles of Marxism, rejected any legal struggle and carried out anarchistic activities which risked being divorced from the masses and put forward nonsense about the principles of their activity being the same as Engels’. In relation to this, Engels severely condemned “this shameful behaviour” of the “Youth Guard”, pointing out that their theory was certainly not “Marxism”, and that their strategy was to undermine the entire strategic cause of the Party. Another erroneous tendency of the German Party, and its most dangerous and most serious tendency, was the rampant right opportunism of Vollmar and Auer. They thought that the abolition of the “Emergency Decree” is “genuine friendship towards the workers”. They advocate the Junker bourgeois government’s ability to act in accordance with the best interests of all the people, and that so long as socialism conducts education campaigns for more votes and more seats, then they can “peacefully” implement socialism. They assert that society’s future is the result of “consistently peaceful development”. Not only have these right opportunist views within the German Party not been responded to nor criticised, on the contrary, they even have the support of the leadership of the Party, and even W. Liebknecht in public discussion has often talked about peace. In order to guard the Marxist proletarian revolution and the revolutionary principle of the dictatorship of the proletariat, in order to support the revolutionary direction of the international workers movement, Engels waged a sharp struggle against the German Party’s inner-Party opportunism, and during 1891 launched three big “bombs” against Right opportunism: (1) In January, despite the obstruction of the leaders of the German Party, Engels published Marx’s “Critique of the Gotha program” that had lain buried for six years. This gave the whole party an understanding of Marx’s criticism throughout the ‘70s of the essence and significance of the theories of Lassalle and ensured knowledge of Marxist violent revolution, the dictatorship of the proletariat and the basic theories and viewpoints of socialism and communism. (2) In March, Engels wrote the preface to “The Civil War in France”, summarising the lessons and experience of the Paris Commune, and once again expounded on the need for the proletariat to seize power through violence and destroy the old state apparatus, establish the revolutionary path of the dictatorship of the proletariat and profoundly criticised the opportunist viewpoint of the superstition of capitalist parliamentary democracy. In the preface, Engels emphasized: “Of late, the Social-Democratic philistine has once more been filled with wholesale terror at the words: Dictatorship of the Proletariat. Well and good, gentlemen, do you want to know what this dictatorship looks like? Look at the Paris Commune. That was the Dictatorship of the Proletariat.” (3) In June, Engels wrote “A Critique of the Draft Social Democratic Programme of 1891”. From this political background, we can fully conclude that the so-called “peaceful transition to socialism” is a shameless distortion of Engels by old and new opportunism.

(Six) Listening to Lenin’s exposition on this question will also help us to distinguish between right and wrong. In Part 4 of Chapter One of “The State and Revolution” published by Lenin in 1918 (see p. 1 in Lenin's handwriting, right), entitled “The ‘Withering Away’ of the State and Violent Revolution”, he provided a penetrating elaboration on the question of “republics” in the Britain, the US and other countries. Lenin continued: “The words, ‘to smash the bureaucratic-military machine,’ briefly express the principal lesson of Marxism regarding the tasks of the proletariat during a revolution in relation to the state. And it is precisely this lesson that has been not only completely forgotten, but positively distorted by the prevailing, Kautskyite, ‘interpretation’ of Marxism! As for Marx’s reference to The Eighteenth Brumaire, we have quoted the corresponding passage in full above. It is interesting to note, in particular, two points in the above-quoted argument of Marx. First, he confines his conclusion to the continent. This was understandable in 1871, when England was still a model of a purely capitalist country, but without a militarist clique and, to a considerable degree, without a bureaucracy. Hence, Marx excluded England, where a revolution, even a people’s revolution, then seemed possible, and indeed was possible, without the preliminary condition of destroying the ‘ready-made state machinery’. Today, in 1917, in the epoch of the first great imperialist war, this qualification made by Marx is no longer valid. Both England and America, the biggest and the last representatives – in the whole world – of Anglo-Saxon ‘liberty’, in the sense that they had no militarist cliques and bureaucracy, have today completely sunk into the all-European filth, bloody morass of bureaucratic-military institutions which subordinate everything to themselves and trample everything underfoot. Today, in England and America, too, ‘the preliminary condition for every real people’s revolution’ is the smashing, the destruction of the ‘ready-made state machinery’ (perfected in those countries between 1914 and 1917, up to the ‘European’, general imperialist standard).” (State and Revolution, Chinese ed. p. 34-35)

If we study conscientiously and deeply understand the original works of Marx and Engels, and pay attention to their core ideology and “general connections”, we will conclude that class struggle, violent revolution and the proletarian dictatorship are all foundations of the complete theory of Marx and Engels. Thus, Marxism has long waged a struggle against every shade of opportunism on this matter of principle and has provided us with a thorough appreciation that the victory of Marxist theory has left the enemy with no choice but to disguise themselves as Marxists. However, these anti-Marxists, no matter how they try to disguise themselves, can never get away with it. Under the “sunlight” of the classic works of Marxism these anti-Marxist clowns fail one after another. Mr Xie Tao, who would like to follow in the negative historical footsteps of these characters, will probably also be unable to escape defeat of this kind.

(2) Mr Xie Tao also makes an “insinuation” about Engels’ “Introduction to The Class Struggles in France”. He says that this article by Engels is his “final revision and reconsideration of Marx’s entire theoretical system”, at the same time quoting several sections of speeches by Engels: “But
we, too, have been shown to be wrong by history, which has revealed our point of view of that time to have been an illusion. It has done even more: it has not merely destroyed our error of that time, it had also completely transformed the conditions under which the proletariat has to fight. The mode of struggle of 1848 (Mr Xie Tao notes that this refers to the violent revolution spoken of in the Communist Manifesto) is today obsolete from every point of view, and this is a point which deserves closer examination on this occasion…. (History) has made it clear that the state of economic development on the Continent at that time was not, by a long way, ripe for the removal of capitalist production; … once and for all how impossible it was, in 1848, to win social reconstruction by a simple surprise attack…For here, too, the conditions of the struggle had essentially changed. Rebellion in the old style, the street fight with barricades, which up to 1848 gave everywhere the final decision, was to a considerable extent obsolete. If we say that the conditions for carrying out struggles between nations have already changed, then so have the conditions for carrying out the class struggle also, in the same way, changed. The era of carrying out sudden attacks via the conscious minority leading the unconscious majority in revolution has already passed. With this successful utilization of universal suffrage, an entirely new mode of proletarian struggle came into force, and this quickly developed further. It was found that the state institutions, in which the rule of the bourgeoisie is organized, offer still further opportunities for the working class to fight these very state institutions. They took part in elections to individual diets, to municipal councils and to industrial courts; they contested every post against the bourgeoisie in the occupation of which a sufficient part of the proletariat had its say. And so it happened that the bourgeoisie and the government came to be much more afraid of the legal than of the illegal action of the workers' party, of the results of elections than of those of rebellion… In the Latin countries, also, it is being more and more recognized that the old tactics must be revised. Everywhere [the unprepared onslaught has gone into the background, everywhere] the German example of utilizing the suffrage, of winning all posts accessible to us, has been imitated.” (Complete Works of Marx and Engels, Vol 22, pp 595-7, 603, 607).

He thinks the phrase used by Engels, “we, too, have been shown to be wrong by history”, is pointing out that the violent revolution spoken of in the Communist Manifesto is also wrong. This is another example of a drowning man clutching at straws!

(One) We know that the 1848 revolution erupted just after the publication of the Communist Manifesto (see right). This revolution was the first great test of Marxism. Marx and Engels gave it their enthusiastic support and highly praised it for “causing the first major struggle between the two opposing classes of contemporary society.” After the defeat of this French revolution, Marx and Engels thoroughly summarised the experiences of this violent revolution, and published a series of works including the “Introduction” of which Mr Xie Tao speaks. In these works, Marx and Engels mercilessly counter-attacked the reactionary clique’s slanders, criticised the reformism of the bourgeoisie and petty-bourgeoisie, and emphatically expounded the theories of the proletarian revolution and the dictatorship of the proletariat.

Mr Xie Tao quotes this section from page 597 of Vol 22 of the Complete Works of Marx and Engels: “(History) has made it clear that the state of economic development on the Continent at that time was not, by a long way, ripe for the removal of capitalist production; … once and for all how impossible it was, in 1848, to win social reconstruction by a simple surprise attack…For here, too, the conditions of the struggle had essentially changed. Rebellion in the old style, the street fight with barricades, which up to 1848 gave everywhere the final decision, was to a considerable extent obsolete.” But this is incomplete. Before this, Engels said: “They appeared applicable, also, to the struggles of the proletariat for its emancipation; all the more applicable, since in 1848 there were few people who had any idea at all of the direction in which this emancipation was to be sought. The proletarian masses themselves, even in Paris, after the victory, were still absolutely in the dark as to the path to be taken. And yet the movement was there, instinctive, spontaneous, irrepressible. Was not this just the situation in which a revolution had to succeed, led certainly by a minority, but this time not in the interests of the minority, but in the real interests of the majority?” After the passage quoted by Mr Xie Tao, Engels added “It was believed that the militant proletariat had been finally buried with the Paris Commune. But, completely to the contrary, it dates its most powerful advance from the Commune and the Franco-German war” (ibid. p. 600).

Mr Xie Tao quotes p. 607 of Vol 22 of the Complete Works of Marx and Engels: “If we say that the conditions for carrying out struggles between nations have already changed, then so have the conditions for carrying out the class struggle also, in the same way, changed.” After this passage, Engels also says: “Where it is a question of a complete transformation of the social organization, the masses themselves must also be in it, must themselves already have grasped what is at stake, what they are going in for [with body and soul]. The history of the last fifty years has taught us that.”

When we read the complete article, we can come to completely the opposite conclusion to that of Mr Xie Tao, exactly the same as that of Engels, erased by Mr Xie Tao, namely that “the militant proletariat… dates its most powerful advance from the Commune and the Franco-German war.”

If there is no understanding of the necessity for violent revolution there will be no understanding of “the direction” and “the path to be taken”, “in which this emancipation was to be sought”, and this “direction” and “path” – this is Engels’ real “final words”!

What also reveals a plot here is that, in order to achieve his mean goal of deceiving the people, Mr Xie Tao unexpectedly uses passages with different meanings from different pages, like putting together some hors d’oeuvres, and in this way making a new combination, completely tampering with the continuity and the intension of the original article. However, this is also good, bad things can also turn into good things. This performance of Mr Xie Tao can allow people to even better understand his deceitful tricks and countenance.

(Two) Mr Xie Tao is particularly interested in the remark by Engels that “we, too, have been shown to be wrong by history”, however, this remark in no way negates the 1848 revolution, even less does it negate the violent revolution of the proletariat, rather it was a new understanding and summary by Engels of the character of the revolution of this bourgeois democratic revolution. On this point, prior to the “we, too, have been shown to be wrong by history” comment he wrote, there is a large discussion: “When the February Revolution broke out, we all of us, as far as our conception of the conditions and the course of revolutionary movements was concerned, were under the spell of previous historical experience, namely, that of France. It was, indeed, the latter which had dominated the whole of European history since 1789, and from which now once again the signal had gone forth for general revolutionary change. It was therefore natural and unavoidable that our conceptions of the nature and the path of the "social" revolution proclaimed in Paris in February 1848, of the revolution of the proletariat, were strongly colored by memories of the models of 1789-1830. Moreover, when the Paris upheaval found its echo in the victorious insurrections in Vienna, Milan and Berlin; when the whole of Europe right up to the Russian frontier was swept into the movement; when in Paris the first great battle for power between the proletariat and the bourgeoisie was joined; when the very victory of their class so shook the bourgeoisie of all countries that they fled back into the arms of the monarchist-feudal reaction which had just been overthrown—for us under the circumstances of the time, there could be no doubt that the great decisive struggle had broken out, that it would have to be fought out in a single, long and changeful period of revolution, but that it could only end with the final victory of the proletariat.”

“After the defeats of 1849 we in no way shared the illusions of the vulgar democracy grouped around the would-be provisional governments in partibus. This vulgar democracy reckoned on a speedy and finally decisive victory of the "people" over the "usurpers"; we looked to a long struggle, after the removal of the "usurpers," between the antagonistic elements concealed within this "people" itself. Vulgar democracy expected a renewed outbreak from day to day; we declared as early as autumn 1850 that at least the first chapter of the revolutionary period was closed and that nothing further was to be expected until the outbreak of a new world crisis. For this reason we were excommunicated; as traitors to the revolution, by the very people who later, almost without exception, have made their peace with Bismarck—so far as Bismarck found them worth the trouble.” (Complete Works of Marx and Engels, Vol 22, pp. 594-595)

My understanding of the core meaning of this passage by Engels is that, on the one hand, it affirmed the tremendous contribution and profound significance of the 1849 revolution, whilst on the other hand, it reconsidered this revolution as not preparing the proletariat for the seizure of political power and the eradication of the conditions of capitalism, and that at the same time, this was a quite optimistic estimation.

This theory of Engels was certainly not only put forward in the Introduction, it can also be seen in the preceding years 1890-1893, in the couple of “Introductions” that Engels wrote for the Communist Manifesto. In order to correctly understand this “shown to be wrong” phrase, we might as well review them. On May 1, 1890 Engels said in the Introduction to the German edition, “Thus, to a certain extent, the history of the Manifesto reflects the history of the modern working-class movement since 1848. At present, it is doubtless the most widely circulated, the most international product of all socialist literature, the common programme of many millions of workers of all countries from Siberia to California.” On February 10, 1892, in the Preface to the Polish edition, Engels said “The Revolution of 1848, which under the banner of the proletariat, after all, merely let the proletarian fighters do the work of the bourgeoisie, also secured the independence of Italy, Germany and Hungary…” On February 1, 1893, in the Preface to the Italian edition, Engels said “…as Karl Marx used to say, because the men who suppressed the Revolution of 1848 were, nevertheless, its testamentary executors in spite of themselves. Everywhere that revolution was the work of the working class; it was the latter that built the barricades and paid with its lifeblood. Only the Paris workers, in overthrowing the government, had the very definite intention of overthrowing the bourgeois regime. But conscious though they were of the fatal antagonism existing between their own class and the bourgeoisie, still, neither the economic progress of the country nor the intellectual development of the mass of French workers had as yet reached the stage which would have made a social reconstruction possible. In the final analysis, therefore, the fruits of the revolution were reaped by the capitalist class. In the other countries, in Italy, in Germany, in Austria, the workers, from the very outset, did nothing but raise the bourgeoisie to power. But in any country the rule of the bourgeoisie is impossible without national independence Therefore, the Revolution of 1848 had to bring in its train the unity and autonomy of the nations that had lacked them up to then: Italy, Germany, Hungary, Poland will follow in turn. Thus, if the Revolution of 1848 was not a socialist revolution, it paved the way, prepared the ground for the latter. Through the impetus given to large-scaled industry in all countries, the bourgeois regime during the last forty-five years has everywhere created a numerous, concentrated and powerful proletariat. It has thus raised, to use the language of the Manifesto, its own grave-diggers… Just imagine joint international action by the Italian, Hungarian, German, Polish and Russian workers under the political conditions preceding 1848! The battles fought in 1848 were thus not fought in vain. Nor have the forty-five years separating us from that revolutionary epoch passed to no purpose. The fruits are ripening, and all I wish is that the publication of this Italian translation may augur as well for the victory of the Italian proletariat as the publication of the original did for the international revolution.”

I have quoted from the Prefaces to the different language editions of the Manifesto written by Engels in his later years to show that the core thought on the violent revolution, and the basic principles established in the Communist Manifesto did not undergo any change. Mr Xie Tao’s claim that these Prefaces by Engels “were a final revision of the complete theory of Marxism” etc, is just complete rubbish!

(Three) From Engels’ letter to Richard Fischer (March 8, 1895) we can understand the background and the situation of the struggle at the time this introduction was written. We may be able to deepen our understanding of the essence of the spirit of this introduction through this letter.

This introduction was written between February 14 1895 and March 6 1895. It was only two days after completing this draft, on March 8, 1895, that Engels wrote the letter to Richard Fischer. This letter is basically clear on the differences between certain leaders of the German Party and the intentions behind the preface written by Engels.

When this introduction was published, the executive committee of the German Social Democratic Party firmly requested that Engels water down the tone of excessive revolution, to make it more discrete; the reason advanced by Fischer at that time: the Imperial Congress was discussing the prevention of the draft of the political reform, and the internal situation was very tense. At the insistence of the Executive Committee, Engels had to make several deletions from the Introduction and change some of its formulations, and in his view the Introduction “suffered some injury” (Complete Works of Marx and Engels, Vol. 38, p. 766, note 508). In relation to this, Engels wrote in the letter: “I’ve considered your concerns as far as possible, and although I completely understand, nevertheless I still cannot understand – until at least half-way through your discussion – where your concerns come from. However, I cannot tolerate you swearing loyalty to absolute observance of the law, even to those laws that have already been illegally drawn up, in short, however, in the end it’s the policy of the right side of the face having been slapped, then delivering one to the left side. (I’m not sure I’ve got that last bit right – Trans.) That’s good, in Vorwarts sometimes people who in the past enthusiastically propagated revolution deny it, and moreover will possibly propagate it again in the future. But I don’t believe we can imitate this matter. I believe that there is definitely no advantage if you propagate absolute renunciation of violent behaviour. No-one would believe this, nor is there any political party in any nation that has gone this far, to renounce the right to take up arms against illegal actions. I must also conclude, that I am definitely unable to ruin my reputation in front of the foreign readers – the French, English, Swiss, Austrian, Italians and so on – of my writings. Therefore, I accept your suggestions for revision with the exception of the following points: 1, on p. 9 of the galley proofs where it is currently written in relation to the populace: ‘They should understand what the actions that they take are.’ (In Engels’ draft manuscript this section is written like this: “Where it is a question of a complete transformation of the social organisation, the masses themselves must also be in on it, must themselves already have grasped what is at stake, what they are fighting for, body and soul.” – see The Complete Works of Marx and Engels Vol. 22 p. 607, editor’s note). 2, Completely erase the words about the attack. (The Executive Committee members suggested altering the sentence as follows: “…everywhere the unprepared launching of an attack has been relegated to the background.” –see The Complete Works of Marx and Engels Vol. 22 p. 607, editor’s note). Their suggestion (the Executive Committee members suggested altering the sentence as follows: “…everywhere the call for the unprepared launching of an attack has been relegated to the background.” - see The Complete Works of Marx and Engels Vol. 22 p. 607, editor’s note) is in fact mistaken. The French, the Italians and others utilise the call for an attack, only not very earnestly, that’s all. 3, On p. 10 of the galley proofs: ‘The Social Democratic Party’s change, it’s destiny now decided by…’ you want to remove the word “now”, and this is also a tactic to make a temporary change permanent and to make a relative significance into an absolute significance. I cannot do this, in order to spare myself eternal humiliation. Therefore I refuse to write anything to the contrary….” (The Complete Works of Marx and Engels, Vol 39, p. 401).

From this letter, we can see how firm Engels was on the principle of violent revolution.

(Four) Speaking nonsense, Mr Xie Tao declares: “The Third Volume of Capital has overthrown the First Volume”, Marx and Engels’ summary of the lessons of revolutionary experience, acknowledgement of the aftermath of the mistakes of 1848, retention of the capitalist mode of production, and their peaceful transition to capitalism really is the greatest achievement of Capital, is the real subject of Marxism, and really is legitimate Marxism. This legitimacy is called democratic socialism.”

From the facts and the analysis above, we see that the ideology of “force as the midwife of every old society pregnant with a new one” runs through from Vol 1 of Capital to Vol 4. Xie Tao’s words are absolutely groundless nonsense!

Tampering with, fabricating, twisting and revising Marxist theory is the age-old method of old and new opportunism. In The State and Revolution, Lenin (right) exposed opportunism when it despicably distorted Engels on “the ‘withering away’ of the State” and “violent revolution”, and indignantly denounced them: “Engel's words regarding the ‘withering away’ of the state are so widely known, they are often quoted, and so clearly reveal the essence of the customary adaptation of Marxism to opportunism…” Lenin pointed out: “It is safe to say that of this argument of Engels', which is so remarkably rich in ideas, only one point has become an integral part of socialist thought among modern socialist parties, namely, that according to Marx that state ‘withers away’ — as distinct from the anarchist doctrine of the ‘abolition’ of the state. To prune Marxism to such an extent means reducing it to opportunism, for this ‘interpretation’ only leaves a vague notion of a slow, even, gradual change, of absence of leaps and storms, of absence of revolution. The current, widespread, popular, if one may say so, conception of the ‘withering away’ of the state undoubtedly means obscuring, if not repudiating, revolution.” “Such an ‘interpretation’, however, is the crudest distortion of Marxism, advantageous only to the bourgeoisie. In point of theory, it is based on disregard for the most important circumstances and considerations indicated in, say, Engels' ‘summary’ argument we have just quoted in full.” “How can this panegyric on violent revolution, which Engels insistently brought to the attention of the German Social-Democrats between 1878 and 1894, i.e., right up to the time of his death, be combined with the theory of the ‘withering away’ of the state to form a single theory?” (Lenin, The State and Revolution, pp. 15-16, 19, 53.)

(3) At the same time as he twists and slanders Engels, Mr Xie Tao dissolutely twists and slanders the ideals of communism. Talking nonsense, he says “In his later years, Engels gave up the so-called ‘highest ideals’ of communism”, “had no great goal of ‘communism’ whatever, this was something put forward by the founders of Marxism in their early years but abandoned in their later years.”. He said: “Engels said ‘Why, we have no final goal. We are evolutionaries, we have no intention of dictating definitive laws to mankind. Prejudices instead of detailed organisation of the society of the future? You will find no trace of that amongst us.’” (Complete Works of Marx and Engels Vol 22, pp. 628-629). Talking rubbish, he says this is Engels denying the design for “the pattern of a future society”, namely communism, written when he was young in “Principles of Communism”. Mr Xie Tao quotes these words of Engels, words spoken in an interview with a reporter from the French newspaper Le Figaro, when the German Social Democratic Party was taking part in the elections. From this discussion between Engels and the reporter, I cannot see any “abandonment” of the ideals of communism by Engels. We can look at this from three different sides. (1) These sentences of Engels are passages in a probing by Engels and the reporter of questions related to the probability of success by members of the German Social Democratic Party’s participation in the parliamentary elections, and in the preface to this discussion and in other questions use three isolated symbols to force them apart. The reporter asked: "Will the socialist party have candidates in all the constituencies?" Engels: "Yes, we shall have candidates in all 400 constituencies. It is important to us that we should muster our forces.” The reporter asked: "And what is your final goal as German socialists?" Thereupon, Engels spoke those words. In this way, the two things link up, and it’s very obvious, no matter whether asking a question or answering, it is the “final goal” of this election that is being discussed, and not the so-called “ultimate” goal of “abandoning communism” by Engels as understood by Mr Xie Tao. (2) In addition, following straight on from this writing to which Mr Xie Tao directs us, Engels says: “We shall be satisfied when we have placed the means of production in the hands of the community, and we fully realise that this is quite impossible with the present monarchist and federalist government." Straight after Engels finished his explanation, the reporter continued: “I permit myself to observe that the day when the German socialists will be in a position to put their theories into practice still seems a long way off to me.” This was refuted by Engels: “‘Not as far as you think,’ replied Mr. Engels. ‘For me the time is approaching when our party will be called upon to take over the government. Towards the end of the century you may perhaps see this event come about.’” Here, the meaning of Engels’ two sentences “when we have placed the means of production in the hands of the community” and “when our party will be called upon to take over the government” is very clear, namely, to change the system of private ownership to public ownership, and change the state of the dictatorship of the bourgeoisie into the state of the dictatorship of the proletariat; however, these kinds of changes under the conditions of the dictatorship of the bourgeoisie “are impossible”. Public ownership is one of the main characteristics of socialism, and socialism is recognised as the initial stage of communism. In these two sentences Engels had already cleverly told the reporter interviewing him of the ultimate goal of the proletarian revolution and the realisation of communism. (3) There is also one kind of situation here that needs analysis, namely, the question of the degree of accuracy of the notes taken by the reporter from Le Figaro. In the seven days following this “discussion” (on May 11, 1893) and the four days after its publication in Le Figaro (May 13, 1893), that is, May 17, 1893, in “A Letter to Friedrich Adolphus Sorge” talking about the German parliamentary elections and the interview published in Le Figaro, Engels said “You can see my views in relation to the German situation from the “Interview” enclosed with this letter. Just like any interview, some methods of expression get distorted, and the general narrative has some flaws, but the general idea is correctly conveyed.” (Complete Works of Marx and Engels, Vol 39, p. 71 and Vol 22 p. 771 note 530). Said like this, might not the reported words of Engels that “we have no ultimate goal” be just such a “distortion”? Should we not just take the “general idea” of Engels’ interview alone as being correct? I believe we should.

In addition to distorting these quotes by Engels, Mr Xie Tao also borrows a few words from the old signboard of revisionism. For example, he said: Brezhnev once said to his own younger brother “Any communism is just empty talk for the masses.” Mr Xie Tao also said that the ultimate goal of communism has “evolved” from the idea of the Christian heaven, and is its “modern version”, “communism has become the banner of utopianism”. “When Bernstein advocated making solid improvements to society, seeking practical improvements in the welfare of the workers and when he proposed that ‘the ultimate goal is not worth mentioning, the movement is everything’, he definitely became the enemy of Lenin who held high the banner of communism.” He attacks and slanders the socialist system as “comforting the people by using the happy lifestyle of a future communist paradise and calling on them to endure hunger, poverty and misery, a fantasy of socialism used to deceive the people. This should all stop.”

Is it communism that “fools the people” or is it the trumpeting of democratic socialism by Mr Xie Tao that “fools the people”? As we often say, one speaks according to one’s social class! Just like Jiao Da of the Jia household in Hong Lou Meng (A Dream of Red Mansions is a classic Chinese novel and Jiao Da was a servant who fell in love with one of the ‘ladies’ of the household – Trans.) who could not love Miss Lin, and nor could she him, neither can the Chinese working class and labouring people love that democratic socialism of his, and by the same token, neither can the capitalist class and imperialism love socialism.

As for Mr Xie Tao wanting socialism to “stop”, this is however just wanting capitalism to “take the stage”, that’s all. Whether or not capitalism can “take” the “stage” depends on the situation of the struggle between two social classes. However, there is one point that I firmly believe, that even if the bourgeoisie prevails for a while in our country it won’t last long, and that no matter how much people like Xie Tao distort and slander the Marxist ideology of violent revolution, or how deeply it takes roots in people’s minds, if this capitalist class of yours really does take the “stage”, then it will never silence the principles of the Paris Commune nor will the iron fist of the proletarian revolution turn to vegetarianism! Because wherever there is oppression, wherever there is exploitation, there will be struggle. It was that way in the past, it’s like that now, and it will remain so in the future.

Monday, December 17, 2007

Australia must leave both Iraq and Afghanistan

The Rudd Government has committed itself to announcing a timeline for the withdrawal of Australian troops from the illegal war in Iraq.

They have a mandate to do this from the Australian people who had all along opposed this US-led invasion and occupation of a sovereign nation.

However, Rudd is intent on “staying in Afghanistan for the long haul”, as he told reporters on December 17. Rudd has urged NATO to put more troops and weapons into Afghanistan, backing Defence Minister Joel Fitzgibbon, who said on the weekend that NATO was "winning the battles and not the war".

On the question of Afghanistan, the Australian public is somewhat uncertain.

Many believe that there does need to be a “war on terror”, and that the place to fight it is in Afghanistan where Osama bin Laden and his Al Qaeda leadership are apparently based.

Others regard Afghan President Karzai as a legitimate authority, and see his invitation to NATO and other troops to assist in the eradication of the Taliban as reasonable.

Hence there needs to be more work done to explain to the public that Australia’s participation in the NATO campaign in Afghanistan is wrong, and that only the Afghani people can be the masters of their own liberation.

The Revolutionary Association for the Women of Afghanistan released a statement on December 10 that analyses the imperialist presence in Afghanistan and the reactionary feudalist forces represented by both the Karzai Government and the Taliban.

RAWA speakers have toured Australia on several occasions, pleading with us to support their fight against fundamentalism and for the independence of their country.

Imperialism has never been a vehicle for the independence of small nations.

Foreign troops must be withdrawn from Afghanistan and full support provided to anti-fundamentalist and socially progressive persons and organisations.

What follows is the text of the statement released by RAWA on December 10, 2007 to mark Universal Human Rights Day:

The US and Her Fundamentalist Stooges arethe Main Human Rights Violators in Afghanistan

The US and her allies tried to legitimize their military occupation of Afghanistan under the banner of “bringing freedom and democracy for Afghan people”. But as we have experienced in the past three decades, in regard to the fate of our people, the US government first of all considers her own political and economic interests and has empowered and equipped the most traitorous, anti-democratic, misogynist and corrupt fundamentalist gangs in Afghanistan.

In the past few years, for a thousand times the lies of US claims in the so-called “War on terror” were uncovered. By relying on the criminal bands of the Northern Alliance, the US made a game of values like democracy, human rights, women’s rights etc. thus disgracing our mournful nation. The US created a government from those people responsible for massacres in Pul-e-Charkhi, Dasht-e-Chamtala, Kapisa, Karala, Dasht-e-Lieli, 65,000 Kabulis and tens of mass graves across the country. Now the US tries to include infamous killers like Mullah Omer and Gulbuddin Hekmatyar into the government, which will be another big hypocrisy in the “war against terror”.

The reinstatement of the Northern Alliance to power crushed the hopes of our people for freedom and prosperity into desperation and proved that for the Bush administration, defeating terrorism so that our people can be happy, have no significance at all. The US administration plays a funny anti-Taliban game and pretends that a super power is unable to defeat a small, marginalized and medieval-minded gang which is actually her own product. But our people found by experience in the past few years that the US doesn’t want to defeat the Taliban and Al-Qaeda, because then they will have no excuse to stay in Afghanistan and work towards the realization of its economical, political and strategic interests in the region.

After about seven years, there is no peace, human rights, democracy and reconstruction in Afghanistan. On the contrary, the destitution and suffering of our people has doubled everyday. Our people, and even our unfortunate children, fall victim to the Jehadis’ infighting (Baghlan incident - see photo on right), the Taliban’s untargeted blasts and the US/NATO’s non-stop bombardments. The Northern Alliance blood-suckers, who are part of Karzai’s team and have key government posts, continue to be the main and the most serious obstacle towards the establishment of peace and democracy in Afghanistan. The existence of tens of illegal private security companies run by these mafia bands are enough to realize their sinister intentions and the danger they pose.

Human rights violations, crime, and corruption have reached their peak, so much so that Mr. Karzai is forced to make friendly pleas to the ministers and members of the parliament, asking them to “keep some limits”! Accusations about women being raped in prisons were so numerous that even a pro-warlord woman in the parliament had no choice but to acknowledge them.

Rabbani, Khalili, Massoud, Sayyaf, Fahim, Ismael and other criminals for the sake of being “ISI” and “VEVAK” agents could become “leaders” in the early 90’s, invited their god-father General Hamid Gul of ISI to become their army chief. But today they raise anti-Pakistan slogans to hide their corruption and wrong-doings. In this act they even go further and abuse Pakistani people. But they never talk about the dirty act of Pakistan in creating fundamentalist bands and imposing them on our people. More importantly, they keep silent about the wider, more devastating and more active meddling of the brutal Iranian regime in Afghanistan through its cultural and media agents. Pro-Iranian regime politicians and intellectuals are as much traitorous to democracy and human rights as the intellectuals and politicians who, from an ethnocentric and reactionary point of view, call the barbarism and terror of Taliban a “national armed resistance,” and shamelessly defend them.

The Revolutionary Association of the Women of Afghanistan (RAWA) has announced a number of times that when the legislative, administrative and judicial bodies are ruled by drug-lords and warlords or their Talibi, Gulbudini, Parchami and Khalqi accomplices, they will never do anything positive for our deprived people. Rather these bodies will act as a mechanism to continue the ongoing crime, drug-trade and looting by these mafia bands to become richer.

If the US government replaces Karzai with a new puppet, even if he is not from among the Jehadi criminals, it will be just a deception of our people and an attempt to put the responsibilities of today’s tragedies on the shoulders of a single person. Such a move will have no positive outcome for our nation. Only a president who rely on people and come to power through a fair election, free from any kind of dependence or dealings with the fundamentalists, would be ideal for Afghan people.

Instead of defeating Al-Qaeda, Taliban and Gulbuddini terrorists and disarming the Northern Alliance, the foreign troops are creating confusion among the people of the world. We believe that if these troops leave Afghanistan, our people will not feel any kind of vacuum but rather will become more free and come out of their current puzzlement and doubts. In such a situation, they will face the Taliban and Northern Alliance without their “national” mask, and rise to fight with these terrorist enemies. Neither the US nor any other power wants to release Afghan people from the fetters of the fundamentalists. Afghanistan’s freedom can be achieved by Afghan people themselves. Relying on one enemy to defeat another is a wrong policy which has just tightened the grip of the Northern Alliance and their masters on the neck of our nation.

By publishing the book “Some Documents of the Bloody and Traitorous Jehadi Years”, RAWA has taken another small step in unmasking and prosecuting the war criminals of the past three decades. But we will not stop here. In the face of continuous threats by the terrorists sitting in the parliament and the government, we will not be intimidated and despite the passivity and compromises of intellectuals in this regard, we are determined that with the help of justice-loving people and organizations of Afghanistan and around the world, will work to push the war criminals into a court of justice and reclaim billions of dollars worth of national assets from them. Only then the eyes of our grief-stricken people may no longer burn endlessly for justice and democracy.

Revolutionary Association of the Women of Afghanistan (RAWA)
December 10, 2007

Sunday, December 16, 2007

78th Anniversary: The murder of Norman Brown at Rothbury

December 16 marks the 78th anniversary of the death by state violence of Norman Brown, a coal miner on the New South Wales coalfields at Rothbury.

The coal bosses were determined to enforce a reduction in coal miners’ wages, and had locked out 10,000 men from the coalfields when they refused to cop this attack on their wages. (See here for a recent film on this event, and the following link for a synopsis: )

The lockout was to last 16 months.

On Monday, 16 December, 1929, New South Wales Premier Bavin sent armed police into the coal mines to protect scabs sent to do the work of honest men.

At Rothbury that day, there were between five and six thousand pickets outside the mine.
The following account is taken from The Builders’ Labourers’ Song Book (p. 93-96):
At 5.45 am the miners crossed the perimeter fence and the police opened fire.

On page 1 of the Melbourne Herald of the 16th December the following headlines were splashed across the page:

“One miner killed and nine injured in mine clashes.”
“Police open fire on massed pickets at Rothbury mine.”
“Nine constables hurt in serious rioting.”
“Reinforcements rushed from Sydney.”

The facts of the police attack are told by R. Gollan in his book “The Coalminers of New South Wales”.

“As the pickets who had marched on Rothbury during the night, with apparently no concerted plan other than to demonstrate and threaten the ‘Scabs’, approached the boundary fence, police opened fire and launched baton charges. One young man, Norman Brown, was killed and many others wounded, how many it is impossible to tell, as the wounded were hurriedly got away in case their wounds were used in evidence against them. The events of Rothbury stirred the Labor movement to its depths. Meetings throughout the country denounced the brutality of the Government. For example, a meeting at Lithgow referred to ‘cold blooded murder of our comrades by the Police of the Bavin Government’.”

Newspaper articles of the time reported on the people that were known to be injured. Mr Booth, an M.L.A. who saw the incident was reported as saying in the Herald on 17 December “Norman Brown, the man who was killed, was about sixty-five yards from the fence when the bullet struck him. He had been sitting down, talking to a girlfriend and was just getting up when he was hit Woods who was seriously wounded in the throat, was shot from a distance of fifteen feet.”

The New South Wales Northern District President of the union said: “As we got through the fence, police seemed to come through every bush and began to fell men right and left with their batons. They had us channelled into two lines by the three lines of wagons.

“The mounted police came through. and were merciless in their attacks. An old chap of about seventy years of age was batoned to his knees. Then the guns came out and there was a dozen men lying prostrate in no time….my recollection is that there were several bursts of firing, and each time the men would retreat and, when there was a lull, move back to the fence. The whole affair must have gone on for about four hours. There were strong rumours that the police had machine guns and steam hoses ready to be used if necessary. I was close to Wally Woods when he was shot in the throat - quite deliberately.”

Norman Brown, who was twenty-eight years old, was shot in the stomach. He died on the way to hospital.
There are several songs that commemorate the events at Rothbury when the armed forces of the state were called out by the coal mine bosses to savage the miners.

They can be seen at the Union Songs website here.

Dorothy Hewett, a member of the Communist Party and a noted Australian playwright and poet, wrote the following song:

Ballad of Norman Brown

A song by Dorothy Hewett©Dorothy Hewett 1962

There was a very simple man,
Honest and quiet, yet he became
The mate of every working man,
And every miner knows his name.


Oh Norman Brown, oh Norman Brown
The murderin' coppers they shot him down,
They shot him down in Rothbury town,
A working man called Norman Brown.

"An honest man," the parson said,
And dropped the clods upon his head,
But honest man or not, he's dead
And that's the end of Norman Brown.

Coal bosses wiped their hands and sighed,
"It is a pity that he died."
It will inflame the countryside,
And all because of Norman Brown.

At pit-top meetings and on strike
In every little mining town,
When miners march for bread and rights
There marches honest Norman Brown.

He thunders at the pit-top strike,
His voice is in the women's tears,
With banner carried shoulder-high
He's singing down the struggling years.

A miner's pick is in his hand,
His song is shouted through the and,
A land that's free and broad and brown,
The land that bred us Norman Brown.

Last chorus

Oh Norman Brown, oh Norman Brown,
The murderin' coppers they shot him down.
They shot him down in Rothbury town,
To live forever ... Norman Brown.

Thursday, December 13, 2007

Sub-prime crisis a house of cards waiting to collapse

US President George W. Bush recently announced a “Mortgage Rescue Plan” in an effort to stave off the further development of a major financial crisis that began with the US sub-prime mortgage market.

This is the market which typically involves those on low wages or with poor credit ratings (the latter based on an analysis of their ability to meet loan repayments).

These are by and large the same persons from whom surplus value is taken as they engage in work that is social in nature. Rather than that surplus value, taken from the people, going back into services or investments for the benefit of the people (ie socialism), it is taken as profits by the tiny handful of owners and managers of the means of production (ie capitalism) .

The squeeze is always on the workers to lower their cost to the employers so that the latter can extract even greater profits. Capital, by its nature, must constantly seek to reproduce its own value over and over again.

It can do this by investing in new productive capacity, and it can do this by investing in other capital for which there is a guaranteed rate of return.

The private equity buyout is a relatively new form of the latter: a small amount of private capital is used to obtain a loan which enables a publicly listed company to be bought out and “taken private”. The loan is transferred to, and becomes a debt liability for, the bought out company, not for the buyer which took out the loan. An asset stripping regime is implemented as quickly as possible, and the bought out company then resold, with its debt, at a great profit for its private equity purchasers.

Similarly, debt generated through personal loans to working people can be bundled up and sold by one loan institution to another: from a finance company to a bank, from one bank to another, and so on. Each time the debt is sold on (the buyer hopes to gain a source of income through repayments on the loans in the package) a profit is made through no productive utilization of the capital value of the loans, and their artificially-inflated value continues to be a burden on the original borrowers who are finding their own cost of living (food, petrol, various taxes and charges etc) is making it harder and harder for them to meet their loan repayments.

The onsale of the debt incurred by working people with a limited or diminishing capacity to service the debt creates a veritable house of cards, or because it involves people, a wavering human pyramid, which is highly vulnerable at its foundations. If one card at the bottom of the house falls, or one person in the human pyramid collapses under the strain, then there is a flow-on effect to the whole structure.

And this is what has prompted Bush’s “rescue package”. The sub-prime mortgage crisis has not only exposed the working class borrowers to foreclosure and sale of their loan-purchased property, but it also makes vulnerable some very large financial institutions whose greed for growth and profit has them currently at the end of a feeding frenzy of financial gluttons - the last holders of a debt parcel in an international game of “pass the parcel”. In this game, more and more of the debt, in larger and larger parcels, is passed to (purchased by) bigger and bigger financial institutions.

It is their interests that are being protected, indeed that of their whole system, by the Bush Mortgage Rescue plan.

In a country where some people, tele-evangelists for example, market their worship, the most blindly religious are those who worship the market.

Blinded, Samson demolished the temple of the Philistines, pulling down its two central pillars, in a conscious act against his oppressors.

If the sub-prime mortgage crisis develops any further, it may well be a case of the temple of capitalism being brought down by its own blind adherents and supporters, the oppressors themselves.


The article that follows is from the website of the Communist Party of Canada (Marxist-Leninist):

Dark World of International Usury
U.S. Economic Crisis and the Mortgage Rescue Plan
- K.C. Adams -
President Bush and his Treasury Secretary Henry Paulson announced a Mortgage Rescue Plan December 6. The plan was characterized as a response to the crisis of home foreclosures and falling house prices that is sweeping the U.S., especially in California, Florida, Michigan, Pennsylvania, Nevada and Ohio.

This year, falling house prices have diminished existing home equity by over $1-trillion. Home foreclosures have hit an all-time high in the third quarter. The Mortgage Bankers Association said the percentage of mortgages entering the foreclosure process reached 0.78 per cent during the July-to-September period surpassing the previous high of 0.65 per cent set in the second quarter. The percentage of homeowners who have fallen behind on their mortgage payments climbed to 5.59 per cent in the third quarter -- the highest level since 1986. The percentage of subprime mortgages in foreclosure reached a record of 4.72 per cent, a percentage poised to increase dramatically as more introductory "teaser" interest rates reset higher.

The mortgage crisis is one aspect of a gathering economic storm leading inexorably towards a recession, which emerges from the trend towards relative and absolute impoverishment of the U.S. working class. The neo-liberal anti-social agenda is exerting unrelenting downward pressure on the U.S. standard of living, resulting in the inability of more and more people to pay for the necessities of life including their mortgage or rent, and failure to keep up with their car, credit card and student loan payments. Neo-liberalism allows to flourish the full destructive consequences of the basic contradiction within the U.S. capitalist economy between its aim to protect and expand private wealth as much and as fast as possible (mainly in the form of capital) and in so doing restrict the claims of the working class on the added-value it produces and distributes, and limit the social programs on which the people depend.

The U.S. state and political system are firmly under the control of the most powerful monopolies and are incapable of renewing themselves or the economy. Their response to every crisis is failure, war and repression. This mortgage plan is yet another example of the ruling elite failing to address the real underlying economic problems and contradictions. Only the working class armed with its own advanced consciousness and independent political program can save the U.S. from a looming economic, political, military and social disaster.

Mortgage Rescue Plan

The U.S. economic plan is typical in its origin. The executive branch through the Treasury Department acts as a coordinator for the most powerful owners of monopoly capital. The plan is essentially under the private control of those monopolies directly involved and does not include any government restrictions on finance capital. It merely shifts a small amount of the burden of the crisis for a short time from one area to another without addressing the reality that something that is not produced cannot be consumed. High real estate prices, which were deliberately inflated by monopoly capital, do not reflect intrinsic value and when houses or other real estate are realised at high prices money must be taken from elsewhere in the socialized economy. The same holds true for the parasitical interest payments and fees paid on the inflated mortgages. The chickens are coming home to roost and this plan is a pathetic smokescreen clouding the scale of the problem and the ramifications for the entire U.S. socialized economy and many institutional investors worldwide.

Treasury Secretary Paulson, who is unelected as are most members of the U.S. Cabinet, made this very clear in his remarks. (Paulson's brief remarks are analyzed in another article.) Mr. Paulson is the former CEO of Goldman Sachs one of the world's largest centres of finance capital, which is currently mired in losses of billions of dollars of unrecoverable outstanding loans.

It should be remembered that when it comes to matters of high finance including the dark world of international usury, elected officials play a very limited role. For example the U.S. Federal Reserve, which is a private consortium of the most powerful U.S. financial institutions, plays a distinctly state role issuing U.S. currency, lending newly issued money to private banks, setting interest rates and directing U.S. imperialism's campaign for worldwide dollar hegemony.

The voluntary plan put together by the Treasury Department and certain of the most powerful monopolies sets guidelines to identify qualified homeowners who would be eligible to avoid having their subprime mortgages reset at a higher interest rate.

The Treasury Department issued the following guidelines:

- Plan to focus on subprime, first-lien, adjustable-rate mortgages, and particularly once-popular 2/28 and 3/27 loans. Under such plans, mortgage rates were fixed only for the first two or three years of a 30-year loan.
- Loans originating between January 1, 2005, and July 31, 2007, whose interest rates will reset for the first time between January 1, 2008, and July 31, 2010, would be eligible for a five-year interest-rate freeze.
- Only owner-occupied homes would qualify for a rate freeze.
- The plan is not binding on all mortgage industry players, but would stand as a set of best-practices and guiding principles.
- Some plan provisions might be applicable to troubled prime and Alt-A loans, though not second liens.
- Plan says target borrowers should be contacted about the program four months prior to the date their interest rates are set to be increased.
- Borrowers must be making timely payments at present and not have missed two months of mortgage payments in the previous year to qualify for a rate freeze.
- Eligible borrowers cannot have a loan-to-value ratio of more than 97 percent and must be facing an interest rate spike, typically 10 percent or greater.
- Mortgage servicers will help borrowers refinance in a way that avoids costly pre-payment penalties for abandoning the loan early.
- The program identifies three general classes of troubled borrowers according to their ability to pay, two of which potentially would be eligible for relief:

1) Strong borrowers facing a rate-reset. They will be shepherded into conventional, fixed-rate mortgages, such as those available under the Federal Housing Administration.

2) Borrowers who may be eligible for a rate freeze. A formula comparing a borrower's current credit score with a score assessed at loan origination will help determine whether a borrower can get a "fast-track" rate freeze.
Borrowers with credit scores of less than 660 that have not increased by 10 percent or more since the origination of the mortgage will be fast-tracked for a modification.
Borrowers whose credit scores have climbed may still qualify for a freeze if they meet other tests.

3) Struggling borrowers who are deemed not able to afford even a modified loan. They would face foreclosure.
Secretary Paulson explained why a collective approach was necessary: "The current system for working out those problem loans would not be sufficient to handle the anticipated 1.8 million owner-occupied subprime mortgage resets that will occur in 2008 and 2009." Economists estimate however that the plan would only affect some portion of the less difficult cases about 10-12 per cent of all subprime Adjustable Rate Mortgage resets. It would exclude those who are delinquent on their payments -- about 22 percent of all subprime borrowers, according to First American Loan Performance. Among those not qualified are borrowers whose introductory rates expire before January 1, 2008. This excludes around $57 billion in subprime loans scheduled to be reset at higher rates in the final three months of this year.

Mortgage companies could also exclude borrowers who they conclude are making enough money to afford higher monthly payments. Barclays Capital, extrapolating from a similar program recently unveiled in California, estimates that only about 12 per cent of all subprime borrowers or 240,000 homeowners would get any relief.

Comments in the monopoly-controlled mass media reveal disagreement within the capitalist class regarding the plan:

"The critical component of President Bush's program will be what he provides to move worthy homeowners into long-term fixed rate mortgages . What is needed is a mechanism to provide permanent financing -- fixed-rate, long-term mortgages." - Peter Morici, U. of Md.

"Without question, the Bush administration's mortgage rescue plan will exacerbate, not alleviate, the problems in the housing market. As the plan will sharply reduce the ability of new buyers to make purchases, it really amounts to a stay of execution and not a pardon . The result [of the plan] will be additional downward pressure on home prices, despite the fact that in the short term fewer homes will be sold in foreclosure than what might have been without the rescue plan." - Peter D. Schiff, Euro Pacific Capital

"One thing should be clear at the outset: investors in these assets (securitized mortgages such as Asset Backed Commercial Paper) will be much better off (i.e. the value of their claims will be higher than otherwise) with this proposal rather than the alternative of letting millions of homeowners default on their mortgages." - Nouriel Roubini (Wall Street Journal)

"Some analysts say that more than a third of all subprime borrowers could have qualified for cheaper conventional loans at the outset." - Associated Press

"At least one thing is clear about President Bush's plan to help people trapped by the mortgage meltdown: it is an industry-led plan, not a government bailout. Although Mr. Bush unveiled the plan at the White House on Thursday, its terms were set by the mortgage industry and Wall Street firms. The effort is voluntary and it leaves plenty of wiggle room for lenders. Moreover, it would affect only a small number of subprime borrowers. The plan was the target of criticism from consumer advocates who said its scope was too narrow, and from investment firms, who said it went too far. Others warned that the plan, by letting some stretched homeowners off the hook, could encourage more reckless borrowing in the future. Investors typically lose 40 percent or 50 percent on homes that go into foreclosure, and the cost of shielding borrowers from a big jump in rates can be much less than that.

"The Mortgage Bankers Association reported that the number of new foreclosure proceedings hit an all-time record in the third quarter, and that the delinquency rate on mortgages climbed to the highest level since 1986.

"Tom Deutsch, deputy director of the American Securitization Forum, which represented investment funds in the negotiations, made it clear that any rate freeze would be strictly voluntary and based on what investors decided was in their self-interest.

"This is not a government bailout program," Mr. Deutsch said. "This is an industry-led framework for providing the best market standards and practices. There is no mandate here.

"'This grossly inadequate plan is likely to harm the president's desire to close the minority homeownership gap and create an ownership society,' said Robert Gnaizda, general counsel for the Greenlining Institute.

"Some Wall Street analysts were equally unenthusiastic. 'This plan only really amounts to a set of recommendations for lenders that is sure to meet some resistance from investors' in the mortgage-backed securities, wrote Paul Ashworth, an economist at Capitol Economics.

"'Why would anybody in his right financial mind agree to a five-year price freeze, especially when we're staring in the face of possible inflation?' asked Roger Kirby, managing partner at Kirby McInerney, which has represented investors in class-action lawsuits over securities. 'Mr. Paulson has overestimated the generosity of people on Wall Street.'" (Excerpts from On Mortgage Relief, Who Gains the Most? New York Times)

"Just as the U.S. President was unveiling details on Thursday of a five-year mortgage rate freeze, Standard & Poor's Corp. issued a grim warning about the plan's impact on the bonds at the root of the continuing credit crunch. The freeze, S&P said, could leave bondholders much more exposed to losses from the mortgages that go into default. While keeping a lid on rates may lower the risk of mortgage defaults, there will also likely be a matching reduction in the 'cushion' built into securities, known as 'excess spread,' the rating agency pointed out. Critics also worried that a freeze is only a temporary fix, putting off the inevitable day of reckoning for borrowers and lenders alike. 'Freezing adjustable mortgages at teaser rates will only push the problem to the next president,' said Peter Morici, a business professor at the University of Maryland." (Excerpts from Globe and Mail December 6)

(Sources include The Wall Street Journal, New York Times, Reuters, AP, Globe and Mail and Financial Times)