For years, the bourgeoisie has pointed to the Asian "tigers," as well as a few countries in Latin America, as models of how capitalism could expand and lead to the "emergence" of some of these countries out of underdevelopment, out of the semicolonial world. For a while, relatively fast economic expansion and the growth of a sizable middle class gave the appearance that political stability and economic growth were a possibility, though for millions of workers and peasants the "miracle" remained a nightmare.

But the plunge in Asian currencies and stocks over the last two months shows the lie in this. So did the 1994 crash of the Mexican peso, the shock waves it sent through Argentina, and the current economic crisis shaping up in Brazil. No Third World country can or will develop today into an economically advanced industrial power with the class structure of the United States, Canada, the countries of Western Europe, Japan, Australia, or New Zealand. No new centers of world finance capital are going to emerge.

This isn't the fault of bad economic policies by the Bank of Thailand and other such institutions. It's a function of the normal workings of the imperialist system - the highest, and final, stage of capitalism.

The foundation of capitalism is reaping profits from exploitation of labor. Each boss is driven to keep expanding these profits. But for more than two decades now the capitalist rulers worldwide have faced a growing crisis in their ability to accomplish this goal.

A 1988 resolution adopted by the Socialist Workers Party, titled "What the 1987 Stock Market Crash Foretold" and published in issue no. 10 of the Marxist magazine New International, explained the underlying cause of this. "The falling average rate of industrial profit accruing to the ruling capitalist families in the imperialist countries lies behind the evolution of the economic factors that make the initiation of a worldwide depression inevitable in the coming years," it said. "As a result of this fall, starting as early as the mid-1960s in Britain and as late as the mid- 1970s in Japan, a crisis of decelerating capital accumulation has been deepening throughout the major world capitalist economies." In the United States, for example, the after-tax profit rate on investment in factories and machinery dropped from an average of 8 percent in the mid- 1960s to just over 4 percent in 1988. That trend has continued since.

The cumulative consequences of this decline in profit rates that the SWP resolution pointed to include: Intensified interimperialist competition; overproduction of goods capitalists can sell profitably and the resulting excess productive capacity; declining capital investment in capacity-increasing plants and equipment; speculative binges in the stock markets and debt explosion; increased bank and business failures; the devastation of semicolonial countries; farm crises in the imperialist countries; declining real wages and accelerating speedup; and rising unemployment.

As a result of intensified price competition, the capitalist rulers have faced growing deflationary pressures in recent years, with many prices falling. The entire capitalist system has been mired in depression conditions since the opening of this decade.

In July, the Producer Price Index in the United States, which measures wholesale prices, dropped for the seventh month in the row - unprecedented in the 50-year history of the index. This is a sign that a deflationary explosion - with values of consumer products, real estate, and other assets dropping, while at the same time factories are shut, production curbed, and millions are laid off - may not be far off. Few human beings alive today have lived, or can imagine from experience the horrible implications of such a development. The last time was the late 1920s.

The deflationary trends are behind the stagnation in labor productivity that has fueled a debate among the rulers in the imperialist countries over the viability of their "Wall Street miracle."

In their attempt shore up their profit rates, the employers need to squeeze much more out of working people, both in semicolonial world and imperialist countries. They force workers to work faster, more hours, and with less pay. Millions of toilers feel the results of this drive on their bodies. Carpel tunnel, damaged backs, and other injuries are the price for producing more for the boss.

So why is "labor productivity" stagnating as recently released figures by the U.S. Bureau of Labor Statistics show? Washington and other capitalist powers measure productivity as the revenue from sales of what workers produce per hour, not as the actual number of shirts workers sew or cars they assemble per hour. Deflation means that the revenue capitalists get from selling what we produce remain the same or drop, even though workers bust their hump to increase output.

Capitalist investors forced the devaluation of the Thai currency, which triggered the current crisis, because they weren't getting what they wanted in higher productivity and profits. Now they will use the bludgeon of austerity to try to force changes that intensify further the exploitation of labor.

But the rulers confront a real obstacle they cannot get around: the working class. From the wave of protest strikes against antilabor laws in south Korea at the start of this year, to the upsurge that has set back the austerity plans of Argentine president Carlos Menem, to the recent strike by UPS workers in the United States, labor resistance to the implications of the looming capitalist economic catastrophe is slowly but surely mounting. As Cuban president Fidel Castro aptly put it in a speech to the 17th congress of the Central Organization of Cuban Workers last year, "the exploiters are starting to get afraid again. They're afraid of social upheaval, afraid of social explosions, afraid of chaos." They are becoming afraid of the toilers' resolve to resist.

As they participate in this resistance, socialist workers point to the fundamental question involved: the root of the problem is the wages system itself, it's capitalism. It has to be overthrown. It can't be reformed. Socialists seek ways to unite the working class around demands such as jobs for all, cancellation of the foreign debt of third world countries, international working-class solidarity, and support for the struggle for land of toilers in the countryside. And at the same time they work to build the kind of political parties that can lead the toilers to take power, replace the capitalist regime with a workers and farmers government, and open the door to transforming society and creating new men and women in the process.  
 
 
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