Excerpts of the Statement of the Central Committee Meeting

The Central Committee of the PCP, meeting on October 27, 2008, analyzed the crisis of capitalism, its causes and effects, and its expression in Portugal. The Central Committee of the PCP identified the maneuvers and measures that, at the national and international level, are being undertaken to protect the interests of big capital. It pointed out the essential guidelines, which, in a break with the right-wing policy, can immediately address this situation. The Central Committee stressed the need to widen the protest and struggle of the workers and the people, to intensify the political intervention of the Party in the framework of the preparation of the XVIII Congress of the PCP.

1. The world is facing one of the most serious crises of the capitalist system, perhaps the greatest since the Great Depression launched by the 1929 Stock Exchange crash. Due to its depth, extension and dimension it can bring serious consequences to the workers and peoples around the world.

Forewarned by the mortgage crisis in the USA, expressed in the speculative bubble of the international financial and raw materials markets (food, energy, etc.), its impacts were quickly felt in the productive sphere and in the economic situation of several countries, placing the world on the doorstep of a world economic recession.

The Central Committee considers that this new crisis of the capitalist system reveals, as has been pointed out in consecutive Political Resolutions of the PCP’s Congresses, its structural and systemic nature.  The new crisis bears witness to the historic limits of capitalism and its exploitative, oppressive and destructive character. It confirms the validity of the fundamental theses of Marxism-Leninism on capitalism, its functioning and development.

The workers and the peoples of the world have before them the great demand of our times, the struggle for deep social, anti-monopoly, and liberatory economic changes, to overcome capitalism in a revolutionary way. The construction of socialism is the only, real and necessary answer to the profound crisis of the system.

2. The financial crises, like the one presently rocking the world, are an expression of the structural crisis of the capitalist system, inseparable from the contradictions and limits of the capitalist mode of production. This crisis, whose epicenter first appeared in capitalism’s dominant power, results from the contradiction between overproduction and overaccumulation of the means of production on one hand, and, on the other, by the contraction of the markets and levels of consumption due to the wage devaluations and abyssal asymmetry in earnings, aggravated by the reduction in public spending and limited solvency of numerous countries. The replacement of the wages of the workers and the income of the population – including pensions – by an incentive to credit in a spiral of debt, solely served to grant benefits to the holders of financial capital. It not only proved to be insufficient and temporary, but it became the central factor in the deepening of the crisis, aggravated by the debt of the states and small companies.

The financialization of the economy – the autonomization of the financial flows, where money is transformed into more money, with the development of speculative processes, bypassing the productive sphere, has been capitalism’s main answer to its structural crisis. As the expected average rates of profit were not  attained in the productive sphere – the profit rate’s downward trend was not reversed by the increase in the exploitation of workers and the enlargement of the world market following the end of the socialist camp – what resulted was the transfer of the created added value to the field of financial speculation and its centralization.

In these processes, the fundamental tools were the policies of free circulation of capital and the liberalization of the financial markets (for example, with the growth of off-shore money havens); the squeeze on public spending and investment under the excuse of budget deficits; the increasing exploitation of the work force, namely through the deregulation of labor relations and the privatization and deregulation of public services and of public untility companies essential to economic and social development (energy, telecommunications, water, etc.).

The financialization of the capitalist system of production also has an ideological goal, to try to conceal and misleadpeop0le about the material basis of economic production, thus alienating man as a transforming agent of his condition.

The recurrent financial crises, with different intensities but a growing international contagion, are thus a consequence of the progressive financialization of the world capitalist system and of the domination of the financial capital.

3. In an unstable international context, the crisis is liable to heighten new dangers to the workers and the peoples far beyond the economic sphere, as proven by history in previous periods.

Without a reversal in the policies that were at the root of the crisis, its effects will increase and persist.  Its expression and size in the productive sphere will mainly affect workers and the more disfavored strata, with outcomes like unemployment, drop in wages and pensions. It will lead to greater poverty, hunger, lack of housing and wosening conditions of health and hygiene.

In keeping with its own logic, capitalism generates, in times of economic growth, a polarization of wealth, and later on intensifies exploitation and its destructive effect in “bursts” of crisis. The ongoing global recession and its dimension in the North American economy will tend to accelerate and create new tensions at the international level. In this context US decline grows more obvious, particularly in the economic field. For the US, the present crisis can means a weakening of the instruments fundamental for its hegemony, namely the role of the dollar as the main world currency. A context where there is a trend towards the deepening of inter-imperialist contradictions and the emergence, with contradictory aspects, of new economic powers, together with a worsening of the militarization of international relations, heightens the risk of a breakout of severe conflicts.

Contradictions and conflicts will be aggravated by the shortage of raw materials – and consequently the growing dependence of the imperialist powers on peripheral states –  lead to disputes for the control of the main reserves of natural resources. The trend towards the diminution of the rate of replenishment of natural resources jeopardizes the subsistence of human life and heightens the destructive drift of the capitalist system.

The measures defined by the USA, Japan, the European Union and other countries, to face the crisis have as main goal the safeguard of capitalism, and are themselves the seeds for new crises. Measures meeting the needs of big capital, represent a transfer of vast financial means sucked from productive activity. Such measures draw earnings of the workers and public funds into the financial system, with consequences on public finances. Such measures limit credit to small enterprises, local government and public projects. They increase shortfalls in public investment and cause new cuts in social expenditure and payments. They  increase taxes and inflationary pressures. They increase unemployment and devalue wages and pensions. They cause greater the dependency and frailty of peripheral economies and poorer countries.

Although history does not repeat itself exactly, historical experience shows, and some signs so prove, that crises of this nature and dimension, can result in negative attitudes and concepts capable of encouraging social and political phenomena like resignation, racism, xenophobia, anti-communism, and authoritarian and antidemocratic practices, and even fascist-leaning practices by states. The organization and struggle by the workers and the peoples, a confident and determined intervention are essential to face these phenomena and the dangers deriving from them, to respond to the situation and open the way for the change that is needed.

4. The Central Committee of the PCP points out that the present crisis of capitalism is yet further evidence of characteristics intrinsic to its nature, like unequal development, and the anarchy and unsustainability of the process of production, where phases of expansion and growth, of increasingly lesser intensity and with longer periods of stagnation, are followed by phases of slowdown and increasingly more frequent, prolonged and destructive crises.
The intense propaganda, carried out by the social and political right-wing and social democratic forces and by the organizations of big capital, meant to justify the crisis due to alleged “excesses”, “greed” and corruption of some, aims to conceal the structural responsibility of the capitalist system.

In view of the defeat of the neoliberal theses in the context of the international financial earthquake – the failure of market regulation; resorting to the state to ensure the functioning of the financial sector; the slowing down and reversal of the supposedly unstoppable “economic growth” – the dominating political forces and big capital try not only to “justify” the crisis, but also to safeguard what they deem essential: high levels of exploitation, liberalization of world trade, free circulation of capital, continuation of speculation, capitalist concentration and accumulation.

As in other crises, they pretend to ignore their root causes, affirm the need to change the rules of regulation and supervision of the financial sector, to strengthen the authority and independence of regulatory bodies, their further development or even international institutionalization by new codes and norms of ethical conduct in the financial market. This is the same prescription that was put forward during the recent 2002 crisis, marked by the scandals of Enron, WorldCom and other big groups and corporations. They try maneuver to demarcate from neoliberalism, as if this doctrine were not the logical and consistent expression of capitalism in its present phase of imperialism. They feed the false idea of reformist “reregulation” of a Keynesian type. In fact, confirming the class nature of the system of power, those same class forces who use the state to increase exploitation of labor, privatize public services and hand over to capital everything that makes profit, use it now to save high finance and “socialize” the losses and thus continue to favor finance  capital.

And in this way, the measures taken will, above all, lead to a still greater accumulation of capital, to a movement of mergers and acquisitions, to the the resumption of speculative “dynamics,” and  the seesaw of the stock exchange, all needed to capture surplus value.

The great plans of guarantees to the financial sector, both in the US and in the European Union, have had little impact on the stabilization of the financial markets. The “nationalizations” under way do not mean any political option for real public control of the banks, but only a solution to stabilize important financial institutions, with the State assuming monstrous risks and losses, and later on hand them back to the financial capital, after their cleanup.

The Central Committee is alert to the nature of the measures which, in the framework of the preparation of the international summit set for November 15 in Washington, which will propose new steps to create renewed international mechanisms of regulation which, with a new face, aim to ensure the continuity of capitalism’s economic and financial domination. It is a summit that, everything suggests, will follow propaganda on a “re-foundation of capitalism,” using the states and capitalism’s international institutions as “guarantors” of the big economic and financial groups to consolidate monopolist capitalism in present conditions of capitalist globalization.

In the European Union, the crisis is used to consolidate a directorate of great powers aiming to impose its solutions on other countries, to settle their own contradictions and to position themselves in a possible rearrangement of the international financial system. The proposals to create a “economic government of the euro area” or of “sovereign funds” to support European big capital, try to profit from the crisis.  By instrumentalizing the idea of “more Europe to protect European economies,” they point towards furthering the neoliberal and federalist character of the European Union. They attempt to bypass the political stalemate caused by the rejection in Ireland of the Lisbon Treaty. They put forward the delusional idea that, in a framework of capitalist globalization, the European Union could, in the context of the crisis, have an economic and political role autonomous from the USA.

5. Capitalism cannot, in its essence, be reformed, humanized, or regulated. The Central Committee considers that any serious solution to the present crisis must mean postponement of its immediate effects and  the adoption of expedients which will not bring about new factors for future crises. It must get to the root causes. Straight away, these are the essential stabilization factors: basic social guarantees to the workers and the peoples most affected by the crisis; a quick and significant raise in the purchasing power of the working and popular masses (wages and pensions) as an essential factor to energize consumption and stimulate production; social ownership of the main means of production and state control of the financial system, in a framework of democratization and strengthening of the role of the States in the economies, together with the unfolding of policies to promote public investment and recover the social functions of the state.

These constitute central measures whose materialization has to be backed by vigorous mass movements, by organized struggle to reject the idea that those who suffer most from exploitation should pay the crisis. It is up to the workers and the peoples to determine the flow of events and the political, social and economic decisions.

The Central Committee stresses that it is the working class, the workers and the peoples, the communist and revolutionary parties and other progressive and anti-imperialist forces of the world, who will fight to prevent and curb all and every negative development, demanding better living conditions, democracy, cooperation and peace among peoples.

The situation in which the world finds itself embodies the central thesis expressed in the Theses (draft political resolution) of the XVIII Congress of the PCP, that great dangers coexist with great potential for a progressive and revolutionary development of the struggle. The importance of explanation and political intervention by the Communists on the causes, the effects and those responsible for the crisis, and the alternative path to the present economic and social system represents a necessary and urgent task.

The situation clearly shows the need to strengthen the Communist and revolutionary parties, closely linked to the workers and the masses, identified with their concrete problems, with their aspirations and claims. In this situation, it is imperative to have a common and converging action of the Communist and revolutionary parties and progressive forces of the world.

PCP, obeying its responsibilities to Portuguese workers and people and simultaneously assuming its character as an internationalist party, will do everything in its power to strengthen and stimulate the struggle, the political and ideological intervention of the international communist and revolutionary movement, which will meet shortly in the International Meeting of Communist and Workers’ Parties, in São Paulo, Brazil, on November 21 to 23.

Develop the struggle, strengthen the Party, affirm the alternative
The situation resulting from the worsening of the crisis of capitalism, its consequences on the national interests, the use that the economic and financial groups and the Government want to make to justify a new wave of attacks on the rights and the living conditions of the workers and the people, make it imperative to develop and intensify the mass struggle, defending these interests and rights and assuming as a goal the rupture with this right-wing policy and a new policy, a policy of the left for Portugal and  update the slogan “It is time to fight. It is time to change – Strengthen PCP”

The recent developments, the defeat of the political and ideological axis on which the world offensive of big capital relied during the last two decades, give a new topicality to the need to combat capitalism, prove the correctness of PCP’s analysis and action calls. They demand a redoubled determination to resist. They reaffirm confidence in PCP’s proposals and project: daily struggle for concrete and immediate goals, a break with right-wing politics, the demand for a Left alternative, and the realization of the goal of a new society.

There is a real alternative to the capitalist system. An alternative that is increasingly necessary, as the times we live in prove. To replace capitalism by a different social and economic system, at the service of the workers and the people – socialism – is set down by history and is a task of our times. The Portuguese Communist Party brings this in-depth alternative to these crises and to the crisis of capitalism.

To support the PCP, give more strength to PCP is, together with a wide development and strengthening of the mass struggle, is the most solid guarantee for a new course of development, justice and social progress.

For [the] April [1974 anti-fascist revolution], for Socialism, for a stronger Party, the preparation and holding of the XVIII Congress represents, even more in the present situation, a great answer to the issues of the times we live in and a powerful affirmation of the confidence in the struggle of the Portuguese workers and people, to open the way for the justice, social progress and national sovereignty that Portugal needs.

Lisbon, October 27, 2008