The “small capitalist tigers” of the world have lost their claws because of the international economic meltdown. The coalition government of Iceland, the Nordic country of 300,000 people, has collapsed after conservative Prime Minister Geir Haarde couldn’t reach a deal with his Social-Democratic coalition partners.
Iceland’s economy grew tremendously based on financial speculation. In October, its financial system collapsed under the weight of debt, leading to a currency crisis, rising unemployment and daily protests. The economy is forecast to shrink 9.6% this year. (BBC World News, 1/26).
According to a PLP’er who just returned from Iceland, some 10,000 people demonstrated on January 24. Protestors have been throwing snowballs and other objects at the politicians in parliament. Some youth have clashed with the cops.
CAPITALIST CRISIS HITS BALTIC COUNTRIES
The former Soviet Baltic republics have also been hit hard by the bosses’ crisis. In mid-January, the largest protest since Latvia broke from the Soviet Union saw 10,000 demonstrate in the capital city of Riga against government economic policies. Some angry demonstrators clashed with the cops and attacked government buildings while burning a police car. They repudiated the government’s tough anti-worker policies, including tax increases, instituted to cope with growing economic problems that have spurred rising unemployment. Latvia was once the fastest growing European Union economy until the financial bubble burst last year.
That same week, cops in Lithuania used tear gas and rubber-tipped bullets to disperse thousands of protesters outside the country’s parliament. The rally was called by trade unions to protest an austerity drive in which the center-right government is seeking to slash public-sector wages by up to 15% and raise the consumption tax.
Many workers in the former Soviet Republics had the illusion that free-market capitalism would surpass state capitalism which by then ruled the former Soviet Union. But most workers saw their standard of living drop, losing whatever social gains remained from the original communist-led Soviet Union. The only ones benefiting from free market-capitalism were the “oligarchs” who basically stole the wealth created by the working class.
Today, the capitalist meltdown and its drive for a new world war to re-divide the world are shattering illusions some workers might have had about the profit system. The task is to rebuild the communist movement, learning from the strengths and errors of past revolutions. There is no middle road for the international working class.