The social system which runs the world – capitalism – cannot offer the human race a future. It is dragging us through an endless spiral of wars. It is poisoning the natural environment, leading to one catastrophe after another. It condemns millions to unemployment and poverty. And now, in the central countries of the system, it is telling us that it can no longer afford to support us after a lifetime of toil.

According to the bourgeoisie, China has become the new workshop of the world. The media are full of images of ‘Made in China’ shirts, trousers, shoes and other clothes arriving in Britain, Europe, or the USA. For the western bourgeoisies, it’s obviously necessary to put limits on this flood of Chinese textiles...

The last recession (2000-2001) dealt a serious blow to all the theoretical flights of fancy that had developed around the supposed "third industrial revolution" based on the micro-processor and new information technologies, just as the collapse on the stock exchange demolished all the blather about a new "ownership capitalism" where wage labourers were to become participating shareholders – the umpteenth version of the worn-out myth of "popular capitalism", whereby each worker is supposed to become a "proprietor" through the ownership of a few shares in "his" company.

In the last issue of World Revolution we published the first part of the report on the National Situation presented to the 16th Congress of WR in November last year. This examined the reasons for the increase in the rate of growth of GDP in recent years, concluding that it came from an increase in the absolute rate of exploitation of the working class and, in particular, from an extension of the working day through an increase in the rate of overtime, especially unpaid overtime. In the second part, published below, we go on to consider how the ruling class completes the task - once again at the expense of the working class.

Since the beginning of the year, several hundred thousand people have demonstrated in Russia against Government measures aimed at dismantling the existing benefits available to retired people, the sick, or certain state employees.

The bourgeois media can't hide the fact that around the world capitalism's economy continues to deteriorate. From the powerful economies of North America, Japan and Western Europe to the peripheral countries of the system, all the economic indicators used by the dominant class to measure the performance of its economy are showing signs of new levels of degradation of the world capitalist economy.

The world capitalist economy is openly in crisis. Japan, the US and now Germany are officially in recession. The economic indicators are in the red. In 2002, the rate of growth in the 30 OECD countries will not go above 1%. The optimistic assurances of the experts about the recovery being just around the corner look more and more like whistling in the dark.

The plunge into an open recession which will be still deeper than its predecessors - some are even talking of "depression" - is silencing the "experts’" talk about lasting economic growth. If the latter are to be believed, the domino collapse of the South-East Asian economies since summer 1997 should have been no more than a blip, without any great effect on the economies of the developed countries. Since then, a tidal wave has passed over countries from Russia to Brazil, from Venezuela to Japan, to strike the heart of the great capitalist powers: "the time has come for an agonising reappraisal". has come for an agonising reappraisal".

Eight years after his father, George W Bush has begun his term as president of the USA. His father promised us "peace and prosperity" after the disintegration first of the Eastern bloc, then of the USSR. The son inherits a situation of widespread war and poverty, which has proliferated and deepened throughout the 1990s. The state of the world is truly catastrophic, and this is not merely a temporary transition before the promised land prophesied by Bush Senior. All the signs are that capitalism is dragging humanity down into a vicious circle of bloody military conflicts on every continent, of increasing imperialist antagonisms especially between the great powers, a new and brutal aggravation of economic crisis and poverty, and a series of disasters of every kind. These three elements - war, economic decline, and the destruction of the planet - are making conditions ever more intolerable for today's generations, and are endangering the very survival of the generations to come. It is becoming ever clearer that capitalism is leading the human species to extinction.