The Second Stage of the General Crisis of Capitalism began with the Second World War and continued to deepen for about a decade after the War due to massive devastation of the economies of the major imperialist powers – Britain, France, Germany, Italy, Japan– during the War. Further, as pointed out by Stalin, the disintegration of the single, all-embracing world market was the most important economic sequel of the Second World War. The sphere of exploitation of the world’s resources by the major capitalist countries had actually contracted and the General Crisis continued to deepen further due to decolonisation and the inability of the imperialists to exploit and loot the Third World at their will and pleasure. were yet to recover from ruins of the War and get out of their deep revolutionary crisis.

The revolutionary upsurge of anti-imperialist, anti-colonial struggles in the colonial and semi-colonial countries of Asia , Africa and Latin America continued. A popular movement in Persia (Iran), brought Dr. Muhammad Mussadiq to power who immediately in 1951 nationalised the western oil companies. This brought about his overthrow by a coup in 1953 organised by the Anglo-American secret services – the first of the coups used by the imperialists which soon became an important weapon of control of governments by imperialism in the period of neo-colonialism. In 1952 a ‘Free Officers’ coup brought Nasser to power though Britain and France tried unsuccessfully to overthrow him with the help of Israel in the Suez war of 1956. Iraq set up its own government in1958.

Many of the national liberation movements in the 50s had to engage in guerrilla warfare to achieve their aims. It was during this period that the Vietnamese, Laotian and Cambodian people under the leadership of the communist party were waging their armed struggle against the French. Similarly the Algerian people had to fight a bitter armed liberation struggle from 1954 to 1962 before the French were finally forced to leave. Armed guerrilla struggle was also waged in Malaya, Kenya and Cyprus against the British. However it was the Cuban Revolution of 1st January, 1959 which overthrew the corrupt US puppet dictator Batista and challenged the world superpower directly. Militarily the Cuban armed struggle was not so large or long drawn out (1956-58) but being so close to the United States it was taken by their ruling classes as a direct challenge to their hegemony. The struggle’s main leaders, Fidel Castro and Che Guevara, were not communists, and the Cuban Communist Party was even for some time opposed to them, but it was their opposition to the US that convinced them to declare themselves as communists over a year after the success of the revolution. The success of the Cuban Revolution had an impact throughout the world and particularly in Latin America as it proved that it was possible to challenge the imperialist power who lorded over the whole American continent and had become the world’s first superpower.

The Korean war of this period was another struggle symbolising the crisis and desperation of US imperialism. The US imperialists deployed the full strength of their armed forces to attempt to crush the communist revolution there and take over the Democratic People’s Republic of Korea, as well as enter north-east China. After four years of war (1950-53) in which three to four million were estimated to have been killed and where fifty thousand US soldiers died, the communist revolution in the North remained undefeated. The South however remained in the hands of a regime propped up by the US. The war was crucial as it was the first post-World War II war to prove that the new super power despite its tremendous economic and military strength was a paper tiger in the face of a people’s struggle. Communist China played a crucial role by sending the Chinese People’s Volunteers to help the Korean people to beat back the US army.

Immediately after the establishment of the Chinese Peoples’ Republic, Mao visited the USSR for two months, during which, after detailed discussions with Stalin, various treaties of historic significance were signed. It was also during this period that the international communist movement recognised the significance of the Chinese path of revolution, for the colonies and semi-colonies. In the 27 January, 1950, editorial of For a Lasting Peace, For a People’s Democracy, the organ of the Cominform, it was stated, "The path taken by the Chinese people.. is the path that should be taken by the people of many colonial and dependent countries in their struggle for national independence and people’s democracy.

"The experience of the victorious national-liberation struggle of the Chinese people teaches that the working class must unite with all classes, parties, groups and organisations willing to fight the imperialists and their hirelings and to form a broad, nation-wide united front, headed by the working class and its vanguard– the communist party,...

Thus, the universal applicability of Marxist-Leninist theory developed by Mao – i.e. Maoism – was recognised, and began to become the guideline for genuine revolutionaries throughout the world, particularly in the colonies and semi-colonies. At the same time China started the historic task of putting a backward semi-feudal, semi-colonial society on the road to socialism. Under Mao’s guidance, the policy of ‘three years for preparation and ten years for planned economic construction’, was adopted and significant successes were achieved in the initial period.

By the mid-1950s all the major imperialist powers overcame the problem of shortages and stabilised themselves with the help of the American imperialists. After reaching the pre-war levels by the mid-1950s, their economies began to expand rapidly for the next decade and-a-half finally plunging into a prolonged world economic crisis from the early 1970s. The output of manufactures quadrupled between the early 1950s and the early 1970s and world trade in manufactures grew tenfold. The total energy consumption also shot up, where as in the case of the US it actually tripled between 1950 and 1973. Some major causes for this long post-war expansion were; the rebuilding of the war-ravaged economies of West Europe and Japan, major wars in Korea and Indo-China along with the emergence of peace-time permanent economies, new Third World markets, new industries, and major state intervention in the economy. The nature of the expansion however was such as to sharply increase the disparity between the rich and poor countries. The expansion however reached its saturation point by the early 1970s; the US economy in fact started going into recession from the late 60s itself with a sharp fall in the rate of profit; the gold-dollar based Bretton Woods international financial system collapsed in 1971; commodity prices boomed in 1972-73 and finally the oil prices were drastically raised in 1973 throwing the economy of world imperialism into severe crisis. The shock was so great that the so-called ‘developed market economies’ in just one year dropped 10% in industrial production and 13% in international trade. They were thrown into a lengthy spell of stagnation from which they have yet to show signs of recovering. The lengthy years of post war expansion were however more than matched in the earlier period by the socialist countries. In fact in the fifties the Soviet Union’s economy grew at a rate of 5.7% which was far higher than any Western country. Even the other socialist economies grew at a rapid pace. However this rate started falling after the process of restoration of capitalism started. The USSR rate of growth then fell to 5.2% in the 1960s and 3.7% in the first half of the 1970s.

In 1953, after the death of Stalin, a revisionist clique led by Khruschev, performed a coup, and took over the controls of the CPSU, then the leading party of the international proletariat. They threw out or killed the revolutionaries in the party, started the process of restoration of capitalism in the first land of socialism and proceeded to develop ties with the imperialist camp, particularly U.S. imperialism. By 1956, after securing firm control over the CPSU, they, at the 20th Congress of the CPSU, started spreading their revisionist poison among other communist parties. They simultaneously attacked the so-called Stalin personality cult and introduced their revisionist theory of the three peacefuls– peaceful transition, peaceful coexistence and peaceful competition.

The majority of the leaderships of the communist parties of the world backed the revisionist Khruschevite line. Many prominent leaders and parties, had already started taking the revisionist line in their own countries. Browder in the USA had already put forward theories of collaboration between socialism and capitalism and moved out of the international communist movement ; Thorez, the former Third International leader from France, who became enamoured with the bourgeoisie following the period in the anti-fascist front, had in the post-war years taken national chauvinist positions towards the peoples of the French colonies and become a lackey of the French imperialist bourgeoisie ; Togliatti of Italy, another major Third International leader, had wanted to ‘reform’ and ‘restructure’ capitalism into socialism through ‘structural reforms’ through the bourgeois parliament ; the Communist Party of India leadership had already changed their tactical line to recognise the peaceful path. Thus these revisionist forces, who had not been sufficiently criticised and defeated in the earlier period, quite happily jumped on to the Khruschevite bandwagon. Where however such parties tried in any serious manner to implement ‘peaceful transition’ through the electoral system and where such efforts sufficiently threatened the social order, they were eliminated through military coups and savage repression, as in Brazil (1964), Indonesia (1965), and Chile (1973). Among the newly formed People’s Democracies, the League of Communists of Yugoslavia, led by Tito, had already, from 1948, started on the revisionist road and broken off from the socialist camp. Most of the remaining leaderships aligned with Khruschev. Within the socialist camp it was only the CPC and the Albanian Party of Labour who identified and recognised Khruschevite revisionism and made a valiant and determined defence of Marxism-Leninism.

The CPC, under Mao’s guidance was in the vanguard of this struggle. Within two months of the 20th CPSU Congress the CPC published an article ‘On the Historical Experience of the Dictatorship of the Proletariat’, which upheld Stalin as an outstanding Marxist-Leninist. This was followed by another article in December 1956, More on the Historical Experience of the Dictatorship of the Proletariat, which insisted that the socialist camp should clearly demarcate who are its friends and enemies. This was combined with a seven year long attempt to struggle with and defeat the Khruschevite revisionist line within party forums, particularly at the meetings of 60 fraternal parties in1957 and of 81 fraternal parties in 1960, and at meetings with the CPSU leadership. This struggle, which came out in the open in 1963 and continued through 1964, came to be known as the Great Debate. It was not only a principled and comprehensive struggle against modern revisionism and the rallying point for all proletarian revolutionary forces throughout the world. It was also a scientific development of Marxism-Leninism, which gave the international communist movement its revolutionary general line for that period. It was through the Great Debate that Mao advanced the science of Marxism-Leninism by providing the answers to the most significant questions before the international proletariat– the fundamental contradictions in the world, who are friends and enemies, the aims of the movement, and the path for achieving the victory of World Socialist Revolution. These formulations were mainly contained in the famous June 14th Letter of the CPC to the CPSU giving its proposal regarding a general line for the international communist movement. Subsequent to the letter of June 14th,1963, the CPC brought out nine comments outlining and elaborating the revolutionary position on various issues– neo-colonialism, war and peace, peaceful existence, Yugoslavia, Khruschev’s revisionism and the historical lessons to be drawn therefrom. It was through the Great Debate that Maoism gained further acceptance as the guiding ideology of the revolutionary sections of the international proletariat.

At this time Mao initiated a deep study of economic theory to find the answers to the questions of socialist economic construction. In a sense he was continuing the work left unfinished by Stalin. In the last years of his life, Stalin had initiated the writing of a text book of Political Economy, with the particular aim of explaining the character and functioning of the economic laws under socialism. He had given the broad theoretical framework for it in his important work, Economic Problems of Socialism in the USSR, and had targeted it to be completed in 1953. It had however remained unfinished and it was only after his death that the book was published, in the mid-fifties, during the Khruschevite period. Since this book was of central importance to the understanding to the process of socialist construction then underway in China and also crucial to the fight against modern revisionism and the capitalist roaders, Mao recommended the study of Stalin’s work as well as the Soviet political economy textbook.

This major process of study and debate and Mao’s intense personal involvement in it led to a further development in the understanding regarding the political economy of socialism. This was centralised in Mao’s writings linking the experience of Soviet and Chinese socialist construction and the concepts in the Soviet books. They were later brought out as a book, Critique of Soviet Economics. This book bridged the major gap in Marxist theory with regards to the understanding of the objective laws of socialism. It corrected some of the erroneous conceptions of Stalin regarding the role of the superstructure, of politics, of the masses, of his mistrust of the peasantry, and concerning the need to find a way to make the transition from collective to public ownership. It presented the whole development of socialism as a dialectical process, as a process of development of contradictions, as a process of classes and class struggle. This conceptual leap in the understanding of socialist construction had a tremendous impact on the formulation and implementation of socialist plans and policies in China. It also, during the Cultural Revolution, led to the formulation of a textbook on the Political Economy of Socialism, which in a systematic manner, formulated and incorporated the developments of Mao in the science of Marxist political economy.

The Cultural Revolution – a great leap in Marxist theory and practice – was a major source of inspiration too for revolutionaries throughout the world. During the Great Debate many revolutionary forces had gathered around the revolutionary line of the CPC led by Mao, but it was mainly during the Cultural Revolution that these forces throughout the world came to accept that it was Maoism that could provide the answers to the problems of World Socialist Revolution. This was embodied in the resolution of the Ninth Congress of the CPC in 1969, which made the assertion that "Mao Thought is Marxism-Leninism of the era in which imperialism is heading for total collapse and socialism is advancing to world-wide victory." It was during this period that revolutionary parties, on the ideological basis of Marxism-Leninism-Maoism, were established in almost all countries of the world.

Mao’s analysis of the international situation also began being proved in practice. On the one hand, the Soviet Union, after the restoration of capitalism, had moved on to establishing imperialist relations of exploitation and oppression in various parts of the world. It became a super power competing with the USA for world hegemony. At the same time imperialism, from 1973, entered a period of severe intensification of its general crisis. On the other hand, as Mao had unequivocally stated, the countries of Asia, Africa and Latin America, became increasingly the storm centres of world revolution. Numerous national liberation movements in these countries took to the path of armed struggle under the influence of Maoism. Communist revolutionaries too, for long paralysed by the revisionist trends in the international communist movement, took to the path of protracted people’s war. This was all in consonance with Mao’s understanding that ‘countries want independence, nations want freedom, people want revolution.’

Thus the development of Marxism-Leninism to a new stage– Maoism– was an event of tremendous significance in world history. It prevented the annihilation of the international communist movement from one of the most serious attacks of the bourgeoisie– the modern revisionists. It provided the path for the proletariat and oppressed peoples of the world. It also provided the international proletariat with the theoretical and practical weapons to fight against the restoration of capitalism and thus even face the situation when all its socialist bases in the world were lost.

The late 60s – the period of the GPCR and the establishment of Maoism as a new stage of Marxism-Leninism – was a period of revolutionary ferment in many parts of the world. The revolutionary war in Indo-China was dealing severe blows to the tremendous military might of the US imperialists. Simultaneously revolutionaries breaking away from the hold of the modern revisionists launched armed struggles under the guidance of Maoism in many parts of the Third World during this period – the ongoing armed struggles in the Philippines and India are a continuation since then. National liberation struggles waging guerrilla war were also raging in various parts as well as armed struggles under Guevarist ideology in parts of Latin America.

The influence of the Indo-China war and these movements in the Third World as well as the GPCR was one of the major factors for the vast out-break of students and anti-war movements throughout the capitalist world at the end of the sixties. The Paris student revolt of May 1968 was the most significant but only one of a wave of student revolt ranging from the USA and Mexico to Italy and even to Poland, Czechoslovakia and Yugoslavia. It also had its impact on student movements in various parts of the Third World.

At the same time the anti-Vietnam war protests started picking up in the USA and other parts of the world with massive peace movements against war and the nuclear arms race in major cities of Europe. The US imperialists were effectively isolated as not even one of their allies agreed to send troops to fight in Vietnam. The effect of these movements were so great that when the US sent in aeroplanes and arms to aid Israel in the Yom Kippur war of 1973 not a single of the West European imperialist powers except Portugal – then in the last year of the pre-war fascist, Salazar – were even ready to give landing and refuelling facilities to the Americans.

Following the students movement there was also a major growth of struggles of the industrial working class in the West European countries particularly Italy and France, though largely on economic demands. The long period of economic expansion had raised the productivity of labour but had reduced the share of the working class in total income. Huge waves of strikes with major wage demands often paralysed entire economies of the imperialist countries.

The mid-70s saw the final overthrow of many long standing colonial regimes after long guerrilla wars. Thus the US and their puppets were thrown out of Vietnam, Cambodia and Laos in1975. In Africa the republics of Mozambique, Angola, Ethiopia, Congo, and Benin were formed in this period, particularly after the breakdown of the Portuguese colonial empire, after the overthrow of Salazar in a coup in April 1974. However most of these countries were taken over by puppets or satellites of the new imperialism - Soviet social imperialism. A prominent exception was Cambodia (Kampuchea), where genuine communist revolutionaries - the Khmer Rouge - remained independent until invaded in 1978 by Vietnam on the behest of the Soviet imperialists.

In the period after the attack on Stalin by Khruschev at the 20th CPSU Congress in 1956 there was some confusion in various communist parties of the West which gave rise to new theories trying to reinterprete Marxism. Groups by the name of New Left arose first in France in the late fifties and later in Britain and other countries. In Britain their literature mainly appeared in the New Review and the University and Left Review, which later merged into the New Left Review. Lacking a clear and common orientation, the common characteristic of this New Left trend was a criticism of Stalin without clearly identifying with either the Soviet or Chinese positions in the Great Debate. This broad categorisation of views however gained in popularity after the growth in Latin American movements attempting to follow the model of the Cuban Revolution and further in the wake of the world-wide upsurge of student movements in the late 60s.

The peculiarities of the Cuban Revolution gave rise to theories upholding it as the example suited to Latin American conditions. An attempt was made on the basis of the Cuban experience to even revise some basic Marxist-Leninist formulations. This was done by the Revolution’s leaders - Fidel Castro and Che Guevara, but also quite considerably by Regis Debray, a Frenchman who tried to formulate a theory of revolution for Latin America.

This conception was further theorised by Debray to the sphere of the relation of the people’s army and the party. He felt that the subordination of the military to the political was inappropriate for Latin America where the Communist Parties had not been able to take root and develop in the same way as in Russia and China. He theorised that the ‘staggering novelty’ of the Cuban Revolution was that it introduced the guerrilla force as the party in embryo. He believed the people’s army to be the nucleus of the party and not vice versa. The guerrilla force was to be the political vanguard’s initial form and from its development a real party could rise. Central to this process was the concept of the guerrilla ‘foco’ (focus) where the guerrilla squad was the central focus of all forms of organisation and elevated above all else. Debray contrasted with the Vietnamese experience says that unlike there where the military pyramid of the liberation forces was built from the base up, in Latin America it would be built from the apex down. Many of the concepts propagated by Guevara and theorised by Debray ran counter to the basic Marxist understanding of revolution. They were based on an understanding that dedicated, well organised and militarised heroes can make history and belittled the role of the masses in the revolution. In contrast to Mao’s principle that the guerrillas relation with the masses is like fish with water, Debray formulated three golden rules ‘constant vigilance, constant mistrust, constant mobility.’ Further the analysis concentrated only on the military aspect without attempting to understand the political context of the class forces at the time of the Cuban Revolution or later in Latin America. It thus could not arrive at the correct conclusions regarding the central issue of the friends and enemies of the revolution, the question of the united front and the leadership of the revolution. In the aftermath of the Cuban Revolution many guerrilla struggles along Guevarist lines were attempted in other Latin American countries but most met with failure. Guevara himself died while fighting in one such guerrilla war in Bolivia. One of the most prominent of these movements which continues to this day is the armed struggle led by the Armed Forces of the Colombian Revolution (FARC). The theories of Guevara and Debray which neglected the leading role of the working class, also gained prominence during the upsurge of students’ movements in the late sixties as they seemed to prove the importance of non-class categories and the revolutionary potential of the students and youth as compared to the working class and the peasantry.

Another group of theorists who in this period gained some prominence while attempting to revise basic Marxist theory were the ‘dependency’ theorists in the field of political economy. Prominent among them were André Gunder Frank, Emmanuel Aligerhi and Samir Amin. They saw the source of exploitation not in production but in distribution and in what they defined as ‘unequal exchange’; they abandoned the categories of imperialism and colonies and semi-colonies and instead talked of the ‘centre’ and ‘periphery’ of world capitalism; they did not accept that imperialism tended to preserve pre-capitalist relations in the colonial countries but instead analysed that capitalist relations had developed in the ‘dependent’ capitalisms of the periphery.

After the death of Mao in1976, the capitalist roaders who had remained in the party staged a coup under the leadership of the arch revisionist Deng Tsiao-ping and took over the control of the party under the nominal leadership of Hua Kuo-feng, a so-called centrist. As Mao had often taught, with political control going over to the hands of the revisionists the socialist base had gone out of the hands of the proletariat. At the same time the leadership of the Albanian Party of Labour switched over to an opportunist line attacking Maoism and projecting Mao as a petty bourgeois revolutionary. Though the Khmer Rouge continued to hold power in Kampuchea they were waging a constant struggle against the internal and external enemies of the Revolution and were yet to emerge from the economic ravages of war and consolidate their rule when they were defeated by the Soviet backed Vietnamese Army. Thus there was no country anywhere in the world where the proletariat had consolidated its hold on state power and could play the role of a socialist base for the international proletariat.

Thus this fifth period (1949-76) was a period when the subjective forces of World Socialist Revolution faced unprecedented losses. The international proletariat which had established a mighty socialist camp at the start of this period, had to face the loss of its last socialist base – China – by the end of this period. Though the imperialist system from 1974 was again in the throes of a new and extremely deep economic crisis, the subjective forces of the international proletariat had been substantially weakened and were therefore unable to take sufficient advantage of the imperialist crisis.