1. PERSPECTIVES FOR THE WORLD ECONOMY

Globalisation and imperialism

In the last few decades there has been a significant advance in the internationalisation of the economy. Capital has expanded into new geographical areas that were previously inaccessible to it, such as the ex-USSR and Eastern Europe. And the restoration of capitalism has advanced in China. This process, which was accompanied by “free market” triumphalism after the fall of “real socialism”, produced a new ideological vogue, which preached that through “globalisation” capital had in its own way overcome the contradictions of the imperialist period. Also it had overcome the rivalries between the major powers that in the 20th century led to two world wars, and the contradiction between the internationalisation of the productive forces and the nation states – at the expense of the latter.

If we compare imperialism’s configuration at the beginning of the 20th century with the current situation we can see the big changes that have taken place. These briefly have been as follows: a) that the large monopolies and corporations have increased their power enormously in the last thirty years through ever-increasing fusions and acquisitions – meaning greater concentration and centralisation of capital in most sectors of production; b) that they have conque-red new territorial markets and put new spheres of human activity under their domination in a process of general commodification that has also absorbed education, culture, pensions and medicine (to name just a few significant areas); c) that the dominant powers have tended to try to express the economic control that they exercise in the “global” market in supranational legal and political institutions; d) that this has led to a weakening of the “sovereignty” of nation states – although this varies in degree from country to country; e) that scientific and technical developments have sharpened the contradiction between increasingly socialised and complex production and the imposition of a measure enabling it to be valorised and traded; f) that there has been the development of a new global division of labour in which some (central) countries tend to concentrate the complex jobs and basic science, and another group (basically in Asia and particularly in China) the intensive exploitation of workers thanks to the strong development of manufacturing in the countries on the periphery – something without comparison in the 20th century. There is also another sector of the periphery that plays the role of provider of raw materials and has suffered a relative de-industrialisation, such as South America; and a fourth, of countries that essentially operate as reservoirs of labour that has been denied any chance of incorporation in the production process, such as much of Africa; g) the faster growth of world trade compared to world production, particularly in intra-company trade and due to the growing importance of foreign direct investment in the central and peripheral countries; h) the swelling of finance, which has created a truly globalised world market; i) lastly, and as a result of all of these changes, globally there has been a fall in the rate of value. The transnationals’ increased influence, particularly in the field of the production of tradable goods but increasingly in other areas of capital valorisation such as services, has tended towards the formation of global prices in more and more branches of the economy.

All of these elements mark a difference with “classical imperialism” – where the countries on the periphery of capitalism were integrated into the world economy as producers and suppliers of raw materials for the metropolitan centres. It is also a different situation from the early years of the boom in multinationals and their entry through subsidiaries into protected markets. What is new is that peripheral countries’ primary “specialisation” as raw-material producers has been combined with the integration of an important number of such nations into global manufacturing circuits administered by transnationals – a process made possible by the significant cheapening of transport and communication costs.

But these transformations – far from creating the homogeneous and harmonious economic space proclaimed by the proponents of “globalisation” or producing a “change in era” – have exacerbated the basic features of capitalism. There has been greater inequality in terms of the development of countries, regions and economic sectors. This has increased the contradiction between the social production of wealth and internationalisation of the productive forces on the one hand, and their appropriation by a small number of corporations and imperialists states on the other.

At the same time, the growing financial nature of the economy with the boom in speculative investments in the share and real-estate markets, publicdebt premiums, and others, has left exposed the parasitical nature of capitalism and considerably increased the economy’s volatility – as was seen during the spread of the 1997 crisis that spread from Asia to hit Russia, Brazil and Argentina.
Today production and world trade are directed by 500 industrial, banking and agricultural and food-industry super-monopolies, whose parent companies are in a handful of countries making up a select group of imperialist powers – such as the US, Germany, Ja-pan, France, Britain and Italy.

The US economy is still the biggest economy in the world, but its relative weight has decreased – with its economy falling from being 50% of gross world product at the end of the Second World War to 25% at present. Although its monopolies still lead the world table, they have lost ground to Japanese and Euro-pean transnationals.
Unlike the common-sense theory that assumes capitalist competition to be dead as a result of the formation of mega-corporations – centrally as a result of mergers and takeovers – the struggle to grab significant shares of the market has intensified. This has led to the creation of economic blocks involving the imperialist powers and their areas of influence. These include the North-American Free Trade Agreement between the US, Canada and Mexico; the Euro-pean Union; and the Asian ASEAN.
These economic blocks have confronted each other in small “trade wars” in the World Trade Organisation – in respect of agricultural subsidies, commercial airline standards and other issues. There they have defended the interests of their monopolies, caused summits to collapse and allowed important semi-colonial countries such as Brazil and India take advantage of their differences during negotiations.

Plundering the semi-colonies

During the 90s, the “Washington consensus” was imposed on the semi-colonial world. This was based on opening up economies to penetration by foreign capital and the deregulation of markets, privatisation of public services, commercialisation of human-activity areas (such as education, culture and medicine), and promoting ‘flexible’ employment – all of which strengthened imperialist plunder.

The picture was completed with the double burden of the oppressive debt and the deterioration in the exchange value of raw materials, which led to the impoverishment of large parts of the periphery.

Capital’s paid propagandists gave neo-liberalism a “modernising” role which would supposedly allow incorporating the semi-colonial countries into the “first world”. Quite the opposite has happened: the process of globalising industrial production and the incorporation into this process of some backwards countries has allowed the trans-national corporations to obtain extraordinary profits. This is as a result of the cheapening of the workforce and of the fact that to attract capital the governments of the peripheral countries have practically wiped out tax duties for capital, and social welfare and almost all legal regulations to defend environmental and quality standards.

The local bourgeoisies opted to turn themselves into junior partners of imperialist plunder. Keen-tosurrender governments wiped out national wealth and natural resources. The Menem government in Argentina went as far as handing over the country’s petrol reserves to the Spanish firm Repsol.

Millions of workers lost their jobs thanks to the privatisation and restructuring of firms. Latin America became the continent with the biggest social inequalities, which fuelled mass direct action in countries such as Argentina, Bolivia, Peru and Ecuador.

Contradictions of the capitalist restoration process in China and Russia and their full incorporation in the global capitalist economy

The fall of the Stalinist regimes in Eastern Europe and – even more – the disintegration of the USSR and the capitalist-restoration route followed by China have led to a geographic and social extension of capital’s reign across wide areas of the planet. This has extended the possibility of exploiting to hundreds of millions of new workers, as cheap labour. And it has increased the perspectives for the goods and services markets through access to millions of new consumers.

However, fundamentally it has sharpened competition between monopolies and imperialist powers to conquer new areas of influence, markets and raw materials, within the narrow framework of the world capitalist market. Thus while the European Union has tried to reaffirm its dominance in the Eastern Euro-pean states, making them its backyard, incorporating them into political Union, the United States has tried to have greater influence over these countries. This was shown by the support the super-power received from some of these, such as Poland, for the war on Iraq. Nevertheless these disputes are merely a foretaste of a bigger struggle to see who benefits strategically from restoration in the Russian and Chinese giants. This has been shown by the differences over raising the EU arms embargo against China – opposed by Washington – and the policy differences between the US and the EU – in particular Germany – with regards to Russia.

The dismantling of the planned economy in Russia has meant a brutal destruction of productive forces and an enormous economic, social and cultural step backwards. The predatory nature of privatisation has led to the emergence of a new layer of oligarchs – closely linked to the West. These appropriated natural resources such as gas and oil, and without capital to compete on the world market they thus transferred ownership of their shares to international oil capital
– particularly US capital. This has forced the confiscating of properties by the Russian state, which thus set itself up as arbitrator between international capital and the appropriation of Russian natural resources. Only after this action took place did the US government start up a propaganda campaign against the authoritarian nature of the Putin government – a nature that the US itself helped to consolidate during the previous decade – seeking to create openly pro-US imperialist forces inside Russia. This has taken place within the framework of an ever-greater loss of geo-political influence for the former superpower: not just in Eastern Europe and the Baltic states – which have recently become incorporated into NATO – but even in its own backyard. The most recent example was the Russian setback in Caucasia and Central Asia, after the uprising in Kyrgyzstan, which was taken advantage of by the US. The situation in the Ukraine after the triumph of the “orange revolution” is even more serious for Putin, due to the key role this country plays in Russia’s national security. The Russian prorestoration bureaucracy is paying the price of the pro-capitalist turn that Russian leaders – from Gorbachev to Putin – have been carrying out over the last twenty years. Their hope was to establish themselves as the new bourgeois class of a capitalist power by appealing to international capital to modernise its industrial and technological base. However this has led to the opposite: a loss of status for them in the international big league and a territorial disintegration that threatens the survival of the Russian federation itself. Its increasingly disastrous geopolitical results and the hostility of the population to market reforms, firstly, and US pressure, secondly, are eroding the base that sustains Putin’s Bonapartism. This situation has unleashed an alternative medium-term prospect: there will either be a big step forward for imperialist penetration in Russia itself – and the transformation of the country into a semi-colonial one, like Brazil – or the Russian working class will react, taking advantage of its ruling class’s weakness and the division between the different imperialist powers. This class will be able to prevent such an ominous perspective and reverse all of the disasters caused by capitalist restoration, putting into question the power of the pro-restoration bureaucracy and new rich.

China has benefited in a contradictory way from the “advantages of backwardness” –i.e., from its weaker industrial development and enormous reserve of cheap labour – and has experienced 9% growth for over a decade. This situation has led many to describe China as the “new power” of the 21st century, underestimating the consequences of the unequal and dependent nature of this development on its economic perspectives. Domestically, penetration by fo-reign capital has exacerbated an unsustainable inequality between the coastal areas – where investment is concentrated – and the areas where employment is dependent on the old bankrupt state factories or farms. Chinese development thus has an explosive and unilateral character whose consequences from a social point of view are deeper polarisation, concentration of wealth and protests caused by the dismantling of the still-dominant state industries and the agrarian crisis.

The long-term future growth of China and its successful integration into the world economy will depend on the health of world capitalism. For some time China has benefited far more than has been the case in other countries from its vast pool of cheap labour. It has also benefited from the tendency for the imperialist economies and multinationals to fight tooth and nail to lower costs to recover profitability after the crisis of the 70s – which was when the main eco-nomies’ profit rate began to fall. This tendency is still a reality of the world economy and has deepened as a result of over-investment in the 90s – not just in terms of quantity but also in terms of the new sectors involved (services). However, it is being counteracted by a counter-tendency emerging from the same capitalist restructuring and de-localisation process of the last few decades: a lack of markets for the levels of profits that the changes in the production process allow being valorised and realised.

The route taken, despite having recovered profitability, has led to a new narrowing of the world capitalist economy. This has led not to expansion – such as during the post-war boom – but a savage fight for markets. Out of this iron logic comes the never-ending quest for cheap-labour sources. This has been particularly beneficial to China – the “new capitalist miracle” – but puts a big question mark over the sustainability of this new global division of labour, unless one is content to believe the corporations’ baseless dream of China turning into a big consumer power. This is something that, due to reasons of an internal and external nature, is either unlikely to happen at all, or only at a pace that avoids potential economic cataclysms in the next decade or so. The West’s hope – that the Chinese market beco-mes not just a “large assembly plant for the world” but a new market enabling balance to be regained by the world economy (which has been maintained throughout these years due to the over-reaching growth of US consumption) – doesn’t stand up to the slightest test.

In other words, the geographical expansion of capital, as well as being a temporary solution for world capitalism in previous decades – particularly in the 90s – has meant an intensification of market-seeking inter-monopolist competition, which in the long and medium term will tend to worsen the capitalist crisis.

Imbalances in the world economy

The increased globalisation of the economy – which was one of the responses to the capital accumulation crisis that began in the 70s – shows itself in the strong volatility of world capitalism. Despite its appearance of invincibility, there have been in the last eleven years five regional crises affecting the central countries – although thanks to governmental and central-bank intervention they could be contained. This means a crisis has taken place every two years, or less if we include the 2001/02 US crisis. Such was the case with the 1994 “tequila” crisis – which sank US Treasury bonds and forced the Clinton government to perform a salvage operation – and the crisis that began in Asia in 1997 and spread to Russia in 1998, causing the country to default on its debt payments – which hit Wall Street hard, encouraging the US Federal Reserve Bank to bail out the LTCM investment fund to avoid its fall sparking an international financial crisis. In 1999 Brazil became the next victim, although it managed to ride the storm. Not so Argentina, which ended up in 2001 producing the biggest sovereign debt default in history. Lastly, after the plummeting of the “dot com” shares, the US economy went into recession – which despite being small, as a result of the measures adopted, saw the biggest bankruptcies and business frauds in history, such as with Enron and WorldCom. All of these elements show that – despite the increased capital expansion into new geographical and other areas in recent decades – the global economy has not achieved lasting stability.

It is within such a framework that we should see the strong recovery of the world economy in 2003-04, driven by US consumption and Chinese investment. The unequal nature of this recovery, from which the US has benefited, while the major EU countries are suffering stagnation with almost zero perspectives for growth, is another expression of the deep imbalances in the world economy.

The United States’s recovery since the 2000-02 recession has been based essentially on three elements: 1) a rise in defence expenditure linked to the militarist policy of the Bush administration; 2) a spectacular lowering of taxes for the richer sectors of US society; and 3) a very low interest-rate level, that has enabled the domestic market to be sustained, with realestate investment being particularly promoted.

Nevertheless, these policies, while they have allowed economic dynamism to be maintained and the business climate to be improved, have deepened the imbalances of the world economy – particularly that of the US: the world’s strongest economy.
Firstly, the lowering in taxes has led to a new national deficit being produced. Secondly, sustaining consumer demand has led to an unprecedented level of debt for US households and a drastic reduction in the national savings rate. Lastly, the US trade-balance deficit reached in mid-2004 a record figure of $665,000 million: 5.7% of GDP. Never in world history has there been financing of a deficit of this magnitude, which has meant that the US absorbs over 80% of available savings globally. At the same time, this deficit must indicate a structural deterioration of the US’s manu-facturing base, an indicator sensitive to loss of competitiveness in key sectors – which is one of the clearest signs of US hegemonic decline.

At enormous domestic cost, the US economy continues to act as a final consumer –attracting exports particularly from Asia and to a lesser extent Europe. Meanwhile, the Asian central banks are buying up reserves worth millions of dollars. By investing their savings in US treasury bonds and other financial as-sets they are thus financing the US trade deficit. The process produces a vicious circle by which countries that export to the United States are subsidising the low interest rates maintained by the Federal Reserve, encouraging debt among US consumers so that they keep buying imported goods from China or Japan.

In this context there is an increased probability of financial turbulence. A drastic turn by the Federal Reserve towards a more restrictive policy, or the mere announcement that an Asian central bank has decided to convert part of its reserves from dollars into euros could spark panic in the markets. A severe financial crisis could put into question the role of the dollar as the international reserve currency. This shows the relative precariousness of US growth and puts into question the long-term sustainability of the imbalanced functioning of the world economy.

The medium-term perspectives are thus of greater economic tensions. And such would take place just at a time in which the worsening of political relations between the major powers has put a question mark over the effectiveness of international coordination measures. These played a really important role in re-establishing temporary capitalist equilibrium after the 70s crisis.

Bearing in mind that the weak growth of domestic demand in Europe and Japan prevents them from acting as an alternative to the US, world economic perspectives could be bleak in the event of a serious change in the US economy.

2. THE IRAQ WAR, THE US OFFENSIVE AND GROWING IMPERIALIST TENSIONS

The attacks on the twin towers and the Pentagon on 11th September 2001 showed the vulnerability of the US to the outside and accelerated the aggressive direction of the Bush government’s foreign policy. The loss of consensus allowing it to dominate its allies and friends has led the US to resort to increasing levels of coercion, which is reflected in its unilateralism and a growing militarist tendency in the international political field.

US strategy aims to drastically transform the inter-national relations and institutions that have formed the cornerstone of the post-war new world order. This is in order for it to create the necessary conditions for US world dominance to be re-affirmed over the follo-wing decades.

During Bush’s first presidency, this strategy was expressed mostly in terms of the “war on terror” and the “pre-emptive strike”, while his second mandate adopted a discourse centred on “spreading democra-cy and freedom” against “tyrants”. The latter produ-ced a policy that combined the use of military might with democratic reaction as the way to impose “regime change”.

The basis of US unilateralism

The United States’s “unilateralism” has deep economic roots. So called “globalisation” – which meant a leap in terms of imperialist penetration in the periphery by means of the deregulation of markets, privatisations and the exploitation of cheap labour – unleashed US capital’s most predatory tendencies and created a social base favouring a return to the most barbarous forms of imperialism. Bush’s first government and his re-election are a clear expression of these sectors. His aggressive foreign policy was accompanied domestically by a brutal rolling back of important conquests achieved by years of struggle by the US proletariat and masses.

During Bush’s first presidency, the employers took advantage of the recession and the 9-11 attacks to carry out sackings and increase the flexibilisation of job conditions – to the point that even economic recovery was not matched by a significant reduction in unemployment. His second presidency announced a qualitative step forward in privatising health and social-insurance systems – aiming to save millions of dollars for the state at the expense of social welfare, and promoting private pension funds and other private services.

The current administration’s strategy is to try and legitimise, naturalise and consolidate on these advances. This involves deepening and extending the change not just in the socio-economic area but also in the political and cultural, rooting out all traces of egalitarianism, and promoting an unprecedented attack on democratic freedoms – strengthening the cabinet’s authority, and control over the three branches of state power, by the most right-wing elements of the political establishment. Bush’s new discourse, as well as its strong religious tone, aims to build an “ownership society”.

In synthesis, if Fordism, Americanism and Wilsonism were the programmes of a rising US capitalism – in order to establish its hegemony over labour domestically (and after the Second World War consolidate itself as a hegemonic power, shaping the institutions of the world order in its image) – the current offensive is more like its opposite. So the weakening of “multilateralism” in foreign policy has been accompanied by the attempt at destroying and replacing the elements of “persuasion” that made possible the cooption and submission of the working class in boom periods. These are being replaced by a new combination involving a growing authoritarianism and/or Bonapartism and a strengthening of traditional moral values. It is a genuine product of the crisis and decline of US capitalism.

Inter-imperialist rivalries

This policy by the United States of pursuing its national interest so openly, of trying to gain strategic advantage in order to maintain its global hegemony, is the main source of tension that has riddled the international system since the build up to the Iraq war. This has produced a rivalry between the imperialist powers that has been without precedent in the last few decades. With the “communist threat” out of the way – after the fall of the Yalta Order – US dominance stopped being an automatic requirement for the maintenance of the world status quo. This led to an in-crease in competition and different policies between the imperialist powers. The “threat of Islamic terrorism” has not been enough in itself to pull the rest of the Western world behind the US, as it must be taken into account that the European powers have other systems of alliances, relations and commercial interests in the Middle East that are different to those of the US.

The clearest sign of this has been the growing rivalry between Europe and the US which has deepened in the last four years and reached its peak with the opposition by France and Germany, accompanied by Russia, to the war on Iraq.
US unilateralism is at the heart of this increase in inter-imperialist tension, as its decision to impose its interests regardless of the circumstances threatens the vital interests of other powers.

The European Union project clearly responds to the need to counterbalance US military might and improve the perspectives for European capital on the international playing field. However, US policy in Iraq caused a serious division between the EU powers. While France and Germany led the opposition, showing they advocated a more multilateral order administered by institutions such as the UN, Britain made clear its strategic choice of being an ally of the United States. It was followed in this by Italy and Spain; and key Eastern European countries such as Poland were dragged along too. The list of differences bet-ween the US and Europe is long and varied: the Iraq war and the current relationship with the Iraqi government; the treatment of prisoners in Guantánamo; the policy to be applied regarding the Palestinian-Israeli conflict (beyond giving support to the Abbas government); the approach to take regarding nuclear proliferation in Iran and North Korea; whether to maintain the weapons embargo over China; the Cuba embargo; whether NATO should remain the central structure to discuss relations between the US and the EU; the Galileo system versus the GPS system for satellite-navigation systems; the urgency of climate change and the Kyoto agreement; support for the In-ternational Criminal Court; mutual complaints (and threats of sanctions) regarding industrial subsidies; genetically modified seeds; rivalry between Boeing and Airbus; and, last but not least, the growth of the Euro as a potential global reserve currency.

Does this mean that the EU has become a progressive alternative pole to the US – as some sectors of the anti-globalisation movement that defend the creation of an anti-hegemonic front between the countries of the periphery and the EU against the US would claim? Not at all: the EU and the US share significant interests. They agree on maintaining the stability of the world capitalist system; they are united in the face of growing demands by countries in the periphery when negotiations involving imperialist powers take place in the World Trade Organisation.

This interest in preventing any triumph by the oppressed against imperialism is what explains the times when there is a relative strengthening of ties and cooperation over issues such as the “orange revolution” in the Ukraine or the joint pressure put on Syria for its withdrawal from Lebanon.

Nevertheless, the profound differences that came out into the open over the Iraq war have persisted – as they are not the result of merely the conjuncture but a strategic dispute involving different economic, social, political and military elements. Within such a framework, the EU project’s advance has suffered a serious blow after the rejection of its Constitution by France and Holland. The Franco-German bloc – the engine of European construction – has entered a critical phase: divided over the constitution and with its leaders in electoral free fall. It will take a long time to rebuild their “irreplaceable” alliance. The chaos that the European Union is going through is shown by the fall of the euro – demonstrating the nervousness of the financial markets faced with the unsure political direction of the “old continent”. The future expansion of the EU, such as the incorporation of Turkey, remains in limbo; while it is likely that tougher conditions will be applied to the newly incorporated countries of Eastern Europe – such as the Czech Republic or Poland. Faced with such a scenario, new divisions and clashes may arise between the European countries, which will defend their interests more fiercely – as with the future discussion on the EC budget. This may lead to gaps emerging. In other words, the growing division between the states and, particularly, the categorical rejection by the population to the offensive that the advance of the EU entails, in the short term puts a limit on the development of Europe as a counter-hegemonic pole.

The Iraq test

US unilateralism and the resort to militarism as the way of imposing control are up against their first serious trial in the policy towards Iraq – whose out-come cannot be predicted.

The war on Iraq had as its aim to transform the country into a platform for imperialist might in the Middle East which would allow the region’s political map to be re-drawn. This would strengthen the position of the US and its ally Israel at the expense of the region’s semi-colonial bourgeoisie and regimes that object to automatic alignments with the US – such as the Syrians.

Concentrated in the Middle East are the world’s main oil reserves, which represent the main source of crude oil for the EU – which is on good terms with regimes such as Iran, a country that the US considers to be in the “axis of evil”. Thus, US re-positioning in the region represents a direct threat to competing power interests, fundamentally those of Europe and Russia.

The US went to war practically on its own, challenging historic allies and almost completely ignoring an unprecedented anti-Americanism that produced mobilisations of millions of people against US policy and President Bush.

Although the US troops won a quick military victory against Saddam Hussein’s regime – which disintegrated almost without a fight – the occupation of Iraq proved to be a more complicated venture than envisaged by its Pentagon planners and the neo-conservatives, the ideologues of “regime change”.

The US offensive has deepened the profound anti-US feeling in the region. In Iraq the attempt at establishing a puppet government for imperialism has led to the emergence of armed resistance. This has a wide social base in the Sunni section of the Iraqi people which is geographically concentrated in the centre of the country – particularly in Baghdad and Fallujah.

Despite having the strongest army in the world, the United States has not managed to smash the resistance, which continues plaguing its troops and increasing its number of losses. The most critical moment for imperialism was when it had to tackle two uprisings – in the cities of Fallujah and Najaf (led by the Shia cleric Al Sadr) – in April 2004. After that was over, the US started to implement complex political engineering to establish a still-unformed Iraqi government. In order to get to this and the elections, collaboration by Shia leaders – and in particular Ali Al-Sistani – was essential.

The US benefits from the Iraqi resistance’s handicap that until now it has remained confined to the Sunni region and has not managed to generalise into a mass national-liberation movement expressing rejection of military occupation and the struggle to expel foreign troops and against their local collaborators.

Until now the result of the US operation in Iraq has been provisional. The Middle East remains an area of political instability within the framework of a mass anti-Americanism. This is despite Bush having re-launched a political offensive in the region after the Iraqi elections were held on 30th January 2005 and his victory in the presidential elections (despite the low level of domestic popularity for the Iraq war). In this offensive he adopted the discourse of democratic reaction to move towards a resolution of the Palestinian conflict and strengthen Syria’s international isolation.
The situation in Lebanon shows the deep polarisation produced by US policy. Such a polarisation generally follows the religious and ethnic lines of division in the region and the sides that fought each other in fifteen years of civil war. The country has literally been split in two between a sector led by a proimperialist and Israel-friendly opposition – which is mainly Maronite Christian, Sunni and Druze – and another mainly Shia, led by Hezbollah, which seeks to resist the imperialist offensive and could fuel action by other anti-US forces in the Palestinian territories and Iran and Iraq.

The United States still has to wrestle militarily in a counter-insurgency campaign with a guerrilla movement that is far weaker from a weapons point of view but with a serious social base which it can depend on for local military and intelligence collaboration. This could mean that other similar forces in the region and beyond that which are taking on US military could be encouraged to apply the irregularresistance model.

The occupation of Iraq has also revealed the military limitations of the biggest world power. The permanence of roughly 150,000 soldiers in Iraq, alongside continued missions and military bases in large parts of the world – from Western Europe to Japan and Afghanistan – is stretching the available troop capacity as the US army eliminated compulsory conscription after the Vietnam defeat and now is made up of professional and reservist soldiers.

It is true that the US offensive could not be sustained exclusively by means of military intervention – which would lead to a kind of “permanent war” of police operations in all parts of the world. Nevertheless it is also true that the policy of democratic reaction expressed in the rhetoric of “regime change” and “democratic reforms” would not be effective without US military might.

The weak coalition that went to war with the United States suffered some serious blows. The alliance with Bush has cost British prime minister Tony Blair the most significant crisis of his period in government. Spain left the coalition after the Madrid bombings on 11th March 2004 – which led to the defeat of the Aznar government and the victory of the PSOE. The Berlusconi government – another Bush ally – has come up against serious difficulties in maintaining support for the war after US soldiers shot at the vehicle that carried a journalist who had been taken hostage and freed – severely injuring her and killing the Italian secret serviceman that had freed her.

The Middle Eastern puzzle is still far from being resolved. US intervention is seeking to increase the pace of profound change aimed at strengthening the position of the US and Israel, realigning countries that have historic links with Europe, obtaining new local agents to take on the role of wiping out mass resistan-ce and disarming its most radical organisations. This is the idea behind the agreements between Mahmoud Abbas’s new Palestinian leadership and Ariel Sharon to liquidate the Palestinian national struggle, the at-tempt in Iraq to form a national government with the way of promoting “regime change”. The growing turcapacity to reconstruct a repressive apparatus able to bulence across the region shows that the Middle East tackle the resistance, or the support to mobilisations will be one of the conflict zones where the US’s ability driven by the pro-imperialist wing of local elites as a to dominate will continue to be put to the test.