Statement of the International Committee of the Fourth International
Reposted below is the ICFI Statement published in the World Socialist Web Site on 13 August 2025.
The International Committee of the Fourth International welcomes with pride and enthusiasm the establishment of the Sosyalist Eşitlik Partisi – Dördüncü Enternasyonal (Socialist Equality Party – Fourth International) as the Turkish section of the World Party of Socialist Revolution.
The formation of the section of the ICFI in Turkey is an event of immense historical significance. Although it was on the island of Büyükada (Prinkipo) in 1933 that the call for the building of the Fourth International was issued, the establishment of the SEP marks the first time that a party has been formed in Turkey based on the internationalist program and principles of Trotskyism.
The establishment of the Turkish section is the outcome of an intense and systematic process of theoretical, historical and political clarification. The foundations for the formation of a Trotskyist party in Turkey were laid by the late comrade Halil Celik, who initiated political discussions with the International Committee. Halil’s contact with the ICFI and his commitment to building its Turkish section resulted from his conclusion, drawn from years of painful experience with various forms of Pabloite opportunism, that relentless political struggle against these tendencies was necessary.
In 2014 the ICFI formally endorsed the efforts of comrade Halil, who had begun the education of a group of young socialists in the history of the Fourth International, to establish a section in Turkey. In 2018 the Sosyalist Eşitlik Grubu (Socialist Equality Group) was formed.
Halil Celik (1961-2018)
Halil undertook the translation of major publications of the International Committee into Turkish. He wrote:
In a country where the working class and socialist movement in general have been dominated by Stalinism, Maoism and petty-bourgeois nationalist tendencies for decades, these books are of prime importance in developing socialist consciousness among workers and youth. Publications of the contemporary Marxist literature produced by the world Trotskyist movement in Turkish, we believe, will contribute to laying the theoretical and political foundation for the building of the Turkish section of the International Committee of the Fourth International (ICFI).
Despite his untimely death on December 31, 2018, Halil had by then recruited and educated a cadre of Sosyalist Eşitlik Grubu that was determined to carry forward the fight for Trotskyism.
In June 2022 the SEG submitted its application to join the ICFI. The resolution motivating the application stated:
The building of a revolutionary party in any country is possible only on the basis of an international perspective, program and party. The only solution to the major problems in Turkey, which is in a critical position in terms of global geopolitics and class struggle, is the international socialist revolution. The founding of the SEP (Turkey) will be an expression of the global expansion of the ICFI, the only political tendency that assumes the task of solving the great historical problems.
The International Committee accepted the application of the SEG. This posed before the Turkish comrades the challenge of elaborating the historical foundations and principles of the new section. As there had never been a Trotskyist party in Turkey, this required the most exacting political work. It demanded not only a thorough assimilation of the history of the Fourth International, but also an analysis and explanation of the complex political and strategic issues that confront the Trotskyist movement in Turkey.
While pursuing this theoretical work, contributing significantly to the editorial work of the World Socialist Web Site, and continuing their ambitious program of publishing critical works of the International Committee, the SEG undertook important political initiatives to expand the political presence of the ICFI. Of particular importance was the SEG’s organization, beginning in 2023, of annual meetings on the island of Büyükada to commemorate the life and work of Leon Trotsky.
In April 2025 the International Committee voted to approve the transformation of the SEG into the Sosyalist Eşitlik Partisi and its recognition as a section of the World Party of Socialist Revolution. This vote was taken following a careful review of the organization’s document, The Historical and International Foundations of the Socialist Equality Party (Turkey).
The Sosyalist Eşitlik Partisi – Dördüncü Enternasyonal held its founding congress in Istanbul on June 13-15, 2025. In addition to the historical document, the SEP also adopted a Statement of Principles and a constitution. In accordance with Turkish law, the Sosyalist Eşitlik Partisi – Dördüncü Enternasyonal was obligated to apply in Ankara for formal recognition as a party by the state. The official certification was received in August.
In a video statement announcing the formation of the SEP, posted on the World Socialist Web Site, its national chairman Ulaş Sevinç states:
The Sosyalist Eşitlik Partisi is unlike other political parties. We are part of the World Party of Socialist Revolution. We reject all forms of nationalism and fight for the international unity of workers, who have common interests and enemies worldwide. We reject petty-bourgeois identity politics, recognizing that the fundamental division in society is class-based.
All fundamental problems facing humanity are global problems stemming from the capitalist system. Since one cause of these problems is private ownership of the means of production and another is the division of the world into economically obsolete nation states, the solutions must also be international. The working class, as an international class, is the only social force capable of implementing these solutions. Rather than pursuing a “multipolar” capitalist world, the alternative to the nation-state system that leads to imperialist war and genocide is a federation of world workers’ states that will eliminate borders.
The ongoing genocide in Gaza is the most striking manifestation of the barbarism of the capitalist system and the decay of all parties defending it. As with other critical issues, it has become clear that the Palestinian question cannot be solved within the existing capitalist nation-state system. The same applies to the Kurdish question, which is an international issue. The only valid, progressive solution to these questions is a Socialist Federation of the Middle East, which will be established through the revolutionary mobilization of workers of all nationalities.
The Sosyalist Eşitlik Partisi unequivocally rejects the “lesser evil” policy and fights for the political independence of the working class. This means rejecting class-collaborationist “popular front” politics, which subordinate the working class to bourgeois parties and interests.
Regardless of their differences, all capitalist parties are in complete agreement on two fundamental issues: allegiance to imperialism and hostility toward the interests of the working class. For this reason, by their very nature, they cannot resolve any fundamental political issues, including the Kurdish question. They cannot establish a democratic regime, ensure social equality, or pursue an anti-imperialist foreign policy. As Leon Trotsky explained in his theory of permanent revolution, these tasks fall to the working class in the struggle for socialism. That is, the struggle for democracy is inextricably linked to the struggle for socialism.
The Sosyalist Eşitlik Partisi rejects the capitalist establishment parties and the pseudo-left parties that claim there is no alternative to collaborating with them. We call on workers and youth to build the Sosyalist Eşitlik Partisi as their own revolutionary party.
The Sosyalist Eşitlik Partisi is a “party of history.” Our party stands in the tradition of classical Marxism of Marx, Engels, Lenin, and Trotsky, as well as the tradition of the October Revolution of 1917. Since its founding in 1923, the Trotskyist movement has defended and developed this tradition against Stalinism, whose “national socialism” betrayed the revolution in the interests of the Kremlin bureaucracy’s “peaceful coexistence” with imperialism that led to the collapse of the USSR; against Social Democracy, whose reactionary program of reforming capitalism has failed; and against petty-bourgeois nationalism, which results inevitably in capitulation to imperialism and defeat.
The aim of the Sosyalist Eşitlik Partisi and the International Committee of the Fourth International, with which it is in political solidarity, is summed up in the following statement of Trotsky, founder of the Fourth International: “… the full material and spiritual liberation of the toilers and exploited through the socialist revolution.”
Join us in this struggle that determines the fate of all humanity. Visit sosyalistesitlikpartisi.org, review our documents, and join the party!
The foundation of the Socialist Equality Party in Turkey extends the work of the Trotskyist movement into a country that stands at a key strategic juncture of not only global geopolitics but also of the international class struggle. The massively powerful multi-national proletariat of Turkey is destined to play a gigantic role in the global struggle against capitalism and imperialism.
Moreover, the raising of the banner of Permanent Revolution by our comrades in Turkey will inspire a new generation of workers and the most principled elements among the youth and intellectuals in the “emerging” countries of the Middle East, Central Asia and Africa. The political bankruptcy of the national bourgeoisie—i.e., its subservience to imperialism and inability to satisfy either the democratic aspirations or social interests of the masses—is vindicating every day the insistence of the Fourth International that the future of humanity depends upon the socialist revolution and the transfer of power to the working class.
Long Live the Sosyalist Eşitlik Partisi!
Long Live the International Committee of the Fourth International!
Malaka Dewapriya’s film Bahuchithawadiya(The Undecided) is an ambitious but ultimately disoriented work that attempts to offer a portrait of the youth adrift in post-civil-war urban Sri Lanka. The film takes the form of a character study, which according to Director’s own introduction, “presents a reflection of the youth of this time, who are searching for easy ways to survive due to lack of job security and are immersed in the dream of escaping this country, using social media, smartphones, and iPhones to achieve their old dream, and making all connections their victims.”
Bahuchithawadiya. Image courtesy of film’s official facebook page.
The film has garnered attention for its experimental tone and portrayal of alienation among the impoverished unemployed – jobless or precariously employed and exploited in the gig economy – youth in Colombo. However, beneath its cinematic form, the film offers a bleak, superficial depiction of social decay and a disheartening and ultimately reactionary indictment of working-class and unemployed youth—not as victims of capitalism, but as the agents of their own moral downfall.
The protagonist, Sasitha (Kalana Gunasekara), is a delivery worker in Colombo, the industrial capital of the country. He is employed under precarious conditions by a miserly boss. With no prospects for economic or social mobility, Sasitha turns his attention to seducing women online—married, unmarried, older, younger—all in the hopes of securing a visa to a European country or gaining some financial benefit. His duplicity and exploitation of these women are portrayed not as unwilling and temporary predatory responses to a brutal economic system but as intrinsic and permanent features of his character. What emerges out of him is not a layered human being, but a cypher of cynicism and indecision. Herein lies one of the film’s most serious failings: the absence of any serious attempt to explain the portrayal of Sasitha’s behavior through the social forces and material conditions in which he lives.
Dewapriya has captured certain surface features of social life. The film presents a series of acidic behaviours—adultery, betrayal, cheating, exploitation, desperation—yet none are given sustained focus or examined in depth to reveal their underlying contradictions. As a result, the viewer is left with a collection of symptoms, rather than an understanding of the social reality that gives rise to them. This is not merely an aesthetic or artistic shortcoming, but a deeply ideological one. An artist does not simply replicate life; he is not a photographer. He bears the responsibility of discovering truth. By isolating Sasitha’s personal corruption from the real world that produces it and stands in contradiction to it, Bahuchithawadiya, despite its claims to realism, ultimately proves to be profoundly evasive and dishonest.
It is not enough to show that a character, representing “contemporary youth”, is indecisive, manipulative, and amoral. One must ask: why? What has shaped this poisonous character? What forces act upon him? Who is responsible for his life? Is his behaviour inevitable? Dewapriya seems uninterested in these questions. The result is a film that verges on character assassination. Sasitha is not portrayed as a victim of the capitalist system, nor as someone with even the faintest sense of resistance to its injustices. Instead, he appears as its willing accomplice—both seeking to benefit from its corruption and attempting, paradoxically, to escape its consequences. In the final analysis, he is shown not as someone shaped by a toxic social order, but as one of its architects. “The youth”, as we have known it, has ceased to be!
The viewer is invited to conclude that the crisis of contemporary youth lies in their own character: their indecision, their dishonesty, their lack of conviction. This is an old slander, repeated countless times by the middle class and its intellectual spokespersons, who recoil in fear at the sight of the impoverished, unemployed, and restless young. That this view should find cinematic expression in a country that in 2022 witnessed one of the most significant mass uprisings of youth in recent history is both telling and damning. Ultimately, the youth does not happen to find their class enemy.
The film’s final scene shows Sasitha mechanically resuming his practice of seducing women online, without the slightest remorse—even after having been caught red-handed in his previous deceptions. This serves as a conclusive testament that the filmmaker is less concerned with exploring the real social and psychological dynamics shaping youth behavior, and more intent on confirming a middle-class ideology that views oppressed youth as inherently selfish, untrustworthy, incorrigible, and erratic.
The film’s central concept—”Bahuchithawadiya”—suggests a permanent, innate condition of moral and psychological ambiguity. This is entirely ahistorical and unscientific. The youth of Sri Lanka are indecisive not because they are naturally cynical or morally bankrupt. They are uncertain because their lives are uncertain: jobless, underpaid, precariously housed, exploited. The labor market offers no security. Political parties offer no hope. Trade unions have betrayed them. Their so-called indecision is not a failing; it is a symptom of a broader social crisis.
Indeed, the idea that Sri Lankan youth are fundamentally morally degraded is refuted by events themselves. In 2022, tens of thousands of young people took to the streets in an unprecedented mass uprising, protesting the unbearable cost of living, fuel shortages, authoritarian repression, and the corruption of the ruling political establishment. This movement did not emerge suddenly from a generation lost in nihilism, but from a population forced to resist and confront the consequences of decades of neoliberal policy and imperialist subjugation.
To assert, as the film does, that youth have no direction because, in the backdrop of a predatory economy, they are inherently flawed, is to participate in a reactionary ideological project. Dewapriya offers the youth no future and no past. They are merely floating signifiers of decay, cynicism, and amorality. They are uninfluenced by any sense of resistance, struggle, solidarity, or political awakening. Even in Colombo, the epicenter of industry and protest, Sasitha never encounters a strike, a rally, or even a conversation that hints at collective resistance. There is not even a passing allusion to conscious class war measures–austerity, privatization, debt crises, or the militarization of public life following the end of the civil war—realities that are inescapable features of everyday life in the country. The working class —despite its overwhelming presence and historical importance—is nowhere to be found. Instead, we are shown a hermetically sealed world of urban apartments and transactional relationships, in which everyone is either a victimizer or a dupe.
Sasitha flicks through television channels airing religious sermons, astrology segments, and reality shows—programs ostensibly meant to shape the youth—but never news, politics, or protest. The enemy is distant, and the struggle is futile. This is no accident, but a deliberate artistic choice—one that lays bare the filmmaker’s class perspective.
Class struggle is the highest expression of both class resistance and solidarity—one that leaves no room for pettiness, selfishness, or moral cynicism. It imparts to working-class youth a profound sense of social responsibility, discipline, and empathy forged through collective struggle. To preserve the middle-class caricature of youth as aimless, self-serving, and unreliable, it becomes essential that they not be shown to be confrontated with class struggle. This is precisely the path the filmmaker has chosen: by omitting any encounter with collective resistance, the film ensures that its protagonist remains trapped within a framework that validates bourgeois prejudices rather than illuminating social truth.
Bahuchithawadiya shares a great deal with the postmodern cinema that has emerged internationally in recent decades—films that purport to critique society by depicting its filth and moral decay, but which in reality offer no understanding of why things are the way they are, and certainly no path forward. These are not works of art that cognize life in its fullness and movement—but snapshots of despair, stripped of causality and agency.
One would compare this to a film like Dharmasena Pathiraja’s Ahas Gauwa (1974), where the main character Wije is shaped by his encounters with the working class. That film ends not with resignation, but with the protagonist joining a trade union struggle, suggesting a transformation in consciousness. Or consider Boodee Keerthisena’s Mille Soya (2004), which, while also centered on the desire to migrate, does not present its characters as predators or cowards, but as desperate and conflicted individuals shaped by historical pressures. In these works, characters evolve, struggle, and relate to the social forces around them. They are alive in history. In today’s society, gripped by deep crisis, a heightened degree of class resistance is not only inevitable but increasingly evident.
Sasitha—so too his roommate—is not shown looking for work: he submits no job applications. He engages in no political talk at all. He has no interest in news. He speaks of migrating to Europe but takes no meaningful steps to do so. The film ends as it began: in stasis. This is not an artistic exploration of paralysis, but a refusal to engage with reality. Real young people in Sri Lanka today are not simply wallowing in nihilism. They are searching for work, forming relationships, joining protests, and trying to understand their place in a collapsing world. Dewapriya‘s Sasitha is not a representation of this generation; he is a libel against it.
Commenting on the depiction of unemployed youth in Take Me Somewhere Nice (2019), written and directed by Ena Sendijarević, David Walsh observes that the filmmaker “underestimates the extent to which the younger generation globally is still at sea, looking for a new orientation, for some stable, coherent political and moral reference point. Many young people, refugees or not, from the Balkans or not, are ‘in-between’ at present, disgusted by the existing set-up and not yet having found an alternative. This ‘in-between-ness’ is bound up with the ‘on-the-eve’ quality of the present moment.”
Walsh’s comment is equally applicable to Dewapriya and his approach in his film. Bahuchithawadiya captures the uncertainty of youth but fails to grasp the transitional, searching character of that uncertainty—its link to a broader historical moment in which masses of young people are questioning the existing order and beginning to look for alternatives.
Moreover, the film is an ideological fodder to the petty-bourgeois strata from which it emerges. It confirms their defeatist view that the poor and unemployed are to blame for their own fate, that they are lazy, treacherous, corrupt, and oversexed. It paints the working class not as the agent of social transformation, but as a cesspool of moral degradation. The youth are not portrayed sympathetically. In this way, the film serves the ideological needs of those who have no intention of challenging the status quo. This is the hallmark of postmodern pessimism—a worldview that substitutes irony for resistance and pathology for class analysis.
There are moments in the film that suggest Dewapriya is not without talent. A number of his previous “radio stories” confirm that he is a promising artist. He has a feel for visual composition, a sensitivity to language, and a certain flair for portraying claustrophobic urban life. But these gifts are, at this stage, limited by a worldview shaped by the narrow horizons of a disoriented middle-class layer, a worldview that remains unable to grasp the full social and historical dynamics confronting the working class youth.
A work of art does not need to be optimistic, but it must be truthful. It must seek to reveal the underlying forces that shape human behavior. An artist should not only cognize life, but should attempt to partially lift the veil of future. When he is dissatisfied with today’s reality, he has to see it through the prism of an ideal “tomorrow” and “show man in his ideal”.
As A.K. Voronsky wrote:
“The dream, yearning and longing for man drawn up to his full height has been and continues to be the foundation of the creative work of the best artists” (Art as the Cognition of Life, and the Contemporary World, 1923)
In this sense, art becomes a means of historical cognition. Bahuchithawadiya fails in this task. It is a film that flinches from the real struggles of our time and retreats into a cold, contemptuous portrait of human failure.
In the final analysis, Bahuchithawadiya is not a film about youth, but about the inability of a certain social layer to comprehend the youth—to see in them not just a mirror of society’s decay, but the potential for its renewal. That is the tragedy of this film.
We are posting here a brief obituary of Sri Lanka’s veteran actress Malini Fonseka, written by comrade Sanjaya Jayasekera and published on his personal website and social media on 25 May 2025. This articles was also published by the daily newspaper themorning.lk Here. Nearly six-decade of the cinematic career of actress Fonseka deserves a full and extended review.
Malini Fonseka
The demise of actress Malini Fonseka on May 24, 2025, marks the end of a cinematic epoch. She is undoubtedly the “Queen of Sinhala Cinema,” as she has been often referred to by millions of her fans, aged and young. Nearly six-decade of her career was not a simple arc of celebrity, but a deep and continuous cinematic identification with the lives of ordinary people, especially women, under the weight of history, patriarchy, backwardness and class oppression. In a country where cinema often struggles between the tides of commercialism, populism, nationalism and repression, Fonseka remained a moral and aesthetic lodestar, truthfully imbuing her characters with emotion, quiet resistance, and tragic insight.
To merely describe Fonseka as a beloved actress is to evade the seriousness of her contribution. She was an artist of social consciousness—her performances bore the weight of Sri Lanka’s post-independence traumas, its unfulfilled democratic promises, and the contradictions of a backward capitalist society pressing in from every side.
In Lester James Peries’ Nidhanaya (1972), one of the greatest Sri Lankan films ever made, Fonseka plays the innocent, ill-fated woman preyed upon by a man whose wealth and obsession lead to murder. Her character is not merely a victim but a mirror held up to a crumbling feudal order. Fonseka conveys, through silence and subtle gestures, a person slowly awakening to the forces arrayed against her. Her sacrifice is not just personal—it is metaphorically the death of innocence in a society entrapped by its own past.
In Beddegama (1980), based on Leonard Woolf’s The Village in the Jungle, Fonseka as Punchi Menika inhabits a world of colonial exploitation and rural destitution. This is not melodrama but precise, economical realism. Fonseka does not “perform” poverty and female endurance—she lives it. Her face, increasingly lined by anxiety and despair, communicates the pain of a society ground down by injustice, hunger and disease, made worse by the cruelty of an indifferent state.
Equally remarkable is her performance in Dharmasena Pathiraja’s Bambaru Avith (1978). In this film, Fonseka delivers one of her most restrained yet potent performances of the role of a young lady in a coastal village caught in the maelstrom of social disintegration and the predatory arrival of urban outsiders. Fonseka’s portrayal is marked by an acute sensitivity to the class tensions simmering beneath the film’s surface. Her role is not simply a symbol of rural innocence but a deeply aware, emotionally complex figure who senses the destruction bearing down on her community. In a film that critiques both the romanticization of village life and the corrosive effects of capitalist intrusion, Fonseka embodies the silent tragedy of a society being commodified. With minimal dialogue and subtle expressions, she gracefully communicates despair, resignation, and the quiet resistance of a woman rooted in her world but unable to halt its unraveling.
Bambaru Avith: Malini Fonseka with Vijaya Kumaratunga
In Akasa Kusum (2008), directed by Prasanna Vithanage, as Sandhya Rani, a faded film star confronting the ruins of her career and personal life, Fonseka embodies the alienation and disillusionment of an artist discarded by an industry that once idolized her, and without any social insurance. The film alludes to the stardom of Fonseka herself. Vithanage’s film, while ostensibly a character study, inadvertently exposes the broader social decay under capitalism, where cultural memory is short and individuals are reduced to commodities. Fonseka’s restrained yet deeply expressive performance underscores the tragedy of a woman whose labor and talent have been exploited, then abandoned—a microcosm of the artists’ precarious existence in a profit-driven system. The film’s critique of bleak nostalgia and the fleeting nature of fame resonates with the broader crisis of art under conditions where everything, including human creativity, is subordinated to the market. While Akasa Kusum does not explicitly engage with class struggle, Fonseka’s portrayal of Sandhya’s isolation and resilience speaks to the perseverance of ordinary people amid systemic indifference.
Fonseka’s performances in a wide range of other films—including Eya Dan Loku Lamayek (1977), Siripala Saha Ranmenika (1978), Ektamge (1980) and Yasa Isuru (1982) —as well as in teledramas such as Pitagamkarayo (1997), are etched into the collective memory of Sri Lankan audiences. In each of these roles, she brought to life women shaped by their social conditions, investing them with dignity, emotional depth, and a quiet intensity that transcended the screen. Whether portraying the struggles of urban motherhood, the constraints of poverty, caste and patriarchy, or the conflicted desires of village life, the veteran actress was able to truthfully reveal the deeper realities of the society around her.
Like several other leading actors of her generation, Fonseka was a significant historical product of her time. By the 1970s, Bollywood’s musical and melodramatic cinema exerted a powerful influence over Sri Lankan audiences, who flocked to theaters largely drawn by star appeal. Sinhala cinema, still emerging as a serious artistic medium, had to contend with the commercial dominance of Indian films. Fonseka’s rise to stardom was not merely a matter of charishma; her compelling screen presence, combined with the emotional depth and authenticity she brought to nearly every role, enabled her to capture the imagination of a broad audience. In doing so, she played a crucial role in affirming the cultural legitimacy and artistic potential of Sinhala-language cinema, as part of the world cinema.
Fonseka’s popularity, unmatched for decades, was not simply built on glamour but on the deep compassion she earned. For the oppressed, she did not offer escapism; she offered recognition and fight. Her status as “queen” is a title she earned from the sincere presentation of the struggles of those who loved her.
Her art reminds us of what cinema can be: a site of conscience, a record of the oppressed, and a spark of rebellion. She belongs to that rare tradition of film actors—like Smita Patil, Giulietta Masina, and Liv Ullmann—who made of their bodies and voices a battlefield of history.
In the later years of her life, Fonseka became associated with the bourgeois nationalist establishment, serving as a Member of Parliament from 2010 to 2015 under the government of then-President Mahinda Rajapaksa. While no political concessions can be made to her alignment with Sinhala nationalist politics, her profound contributions to cinema—rooted in social realism and the depiction of the oppressed—remain of enduring artistic and historical value. Her body of work deserves to be critically appreciated, drawn inspiration from and preserved as a significant part of both Sri Lankan and world cinema.
Malini Fonseka will be remembered not merely as a great actress, but as an artist of the oppressed masses. Her characters will continue to live, as all genuine art does, not only in memory but in the continuing struggles of those they represented.
The US federal debt [Photo: Federal Reserve Economic Database]
On Saturday, May 3, the International Committee of the Fourth International (ICFI) and the World Socialist Web Site (WSWS.org) held the annual International Online May Day Rally. The event took place at a critical juncture in international geopolitics, which determines life-and-death questions of the working class—who, in recent weeks and months, have demonstrated growing militancy in their struggles against the capitalist establishment. WSWS posted both the video and text of the opening speech delivered by WSWS International Editorial Board chairman David North today (May 05). We are reposting the video here and we invite the workers, youth, intellectuals and all those who want to defeat austerity, fascism, dictatorship, genocide, war and social retrogression to seriously study this speech and the other speeches, and resolutely decide to join the international Trotskyist movement and build the ICFI as the only revolutionary leadership of the international working class to fight for world socialism.
At first, it was just a quiet murmur in relatively isolated sections of the financial press. Today, however, the voices are growing louder: the US dollar could lose its role as the world’s global currency amid the breakdown of all the arrangements and mechanisms of the post-war period under the impact of the US economic war against the world initiated by President Trump.
A street money exchanger poses for a photo without showing his face as he counts U.S. dollars at Ferdowsi square, Tehran’s go-to venue for foreign currency exchange, in downtown Tehran, Iran, Saturday, April 5, 2025. [AP Photo/Vahid Salemi]
This week, the Financial Times (FT) ran a major article under the headline “Is the world losing faith in the almighty US dollar?” The answer was that it is.
The concern has been sparked by an unusual development in financial markets. Under “normal” conditions, financial disturbances bring about a rise in the dollar’s value as investors seek a safe haven and move to acquire US Treasury bonds.
But since so-called “liberation day,” when Trump unveiled his “reciprocal tariffs,” there has been a move out of US government debt, and the value of the dollar has fallen. The price of gold, a real store of value, as opposed to debt and credit, continues to reach record highs.
There was a slowing of this movement when Trump announced a 90-day pause on the reciprocal tariffs, which range between 30 and 50 percent for a wide range of countries, to allow for negotiations. But the question remains: What happens after the pause ends?
Whatever the immediate answer, one thing is certain: There will be no return to the status quo ante, with Trump warning that nobody “gets off the hook.” This week, talks took place between the administration and Japan in Washington. The Japanese trade representative returned home empty-handed.
The implications of the new situation were underscored in a comment by a leading FT columnist, Rana Foroohar, entitled “America the Unstable.”
Foroohar began by saying that her “takeaway” from the tariff chaos and fallout was that America, under Trump, has become an “emerging market.”
In previous periods of political and economic stress, US equities and the currency rose because of the “haven status” of the dollar.
“It didn’t seem to matter that all the things that had bolstered American companies from low rates to financial engineering to globalization itself were tapped out. US asset markets seemed impervious to the notion of the dollar-doomsday scenario that would send both the currency and asset prices tumbling. Trump has finally ended America’s exorbitant privilege.”
She concluded by saying that previously she would have ruled out the possibility that America could become the epicenter of an emerging market-style debt crisis, but “not anymore.”
Trump’s measures—the tariff hikes that will slow the economy and proposed tax cuts for corporations—will add trillions of dollars to what is increasingly being characterized as an “unsustainable” debt mountain, currently at $36 trillion and rising.
In a report issued earlier this month, George Saravelos, global head of foreign exchange research at Deutsche Bank, summed up the growing outlook in leading global financial circles.
“Despite President Trump’s reversal on tariffs, the damage to the USD has been done,” he wrote in a report. “The market is reassessing the structural attractiveness of the dollar as the world’s reserve currency and is undergoing a process of de-dollarization.”
However, the crisis is not merely a product of Trump’s actions. It has been long in the making—the outcome of a protracted decline in the economic position of the US.
Trump, as is now openly acknowledged, has taken an axe to the economic, trade, and financial mechanisms set in place after World War II, considering that they have contributed decisively to the weakening of the US.
Of course, Trump, for whom, like Henry Ford, “history is bunk,” never explains why they were put in place and why the US played the leading role in their establishment. It was very much, to invoke the phrase he so often uses in his rampages, due to concerns with “national security.”
The purpose of the post-war measures was to prevent the return to the conditions that had prevailed in the period between the wars, grounded not least on the understanding that this would lead to revolutionary struggles by the working class in the major capitalist countries, including in the US, which had seen enormous eruptions of class battles in the latter years of the 1930s.
The post-war economic order rested on three pillars—the establishment of the US dollar, backed by gold as the international currency, the reduction of tariffs and promotion of free trade to prevent the emergence of the trade and currency wars that had proved so disastrous in the 1930s, and the reconstruction of war-torn Europe under the Marshall Plan. All three were based on the strength and industrial power of the US economy.
Contrary to the claims of various bourgeois economists and not a few self-styled Marxists that the post-war economic capitalism boom which followed had refuted the Marxist analysis of the historically inevitable economic breakdown of the capitalist system, the post-war framework did not overcome its fundamental contradictions—above all, that between the world market and its division into rival nation-states and great powers.
And within the space of 25 years—a short period of time from the standpoint of history—these contradictions emerged. On August 15, 1971, President Nixon, in the face of a growing balance on trade and balance of payments deficit in the US, removed the gold backing from the US dollar—unilaterally abrogating the Bretton Woods Agreement of 1944.
It was a sign that the power of American capitalism, the basis of the post-war order, was starting to markedly weaken.
The scrapping of the Bretton Woods system ushered in a new global financial system. In the 1950s and 1960s, currencies had exchanged at fixed rates. Maintenance of those fixed rates and the prevention of currency wars required that finance and investment flows were subject to tight regulation.
But with the ending of the dollar-gold connection, currencies started to float freely, which meant that capital and financial controls had to be increasingly scrapped. A new international economic order developed based on credit creation and the free flow of money around the world.
The US dollar continued to function as the basis of the international financial system, but it underwent a major transformation. It was now a fiat currency, no longer backed by gold, that is, real value, but solely by the American state. A new global monetary order emerged.
As the FT article noted: “Despite Nixon’s severing the dollar’s link to gold in 1971, the greenback has remained at the center of the monetary universe. In fact, thanks to the dollar’s importance in the expanding and increasingly interconnected global financial system, its importance has only grown. Far from eroding the dollar’s importance, the Nixon shock entrenched it in many ways.”
The freeing of the dollar from the restrictions due to its being tied to gold and the concomitant government regulations aimed at maintaining a fixed exchange system unleashed finance from the constraints imposed on it under the previous regime, opening up vast new avenues for profit accumulation.
Increasingly, above all in the US economy, this gave rise to what has been called financialization, the accumulation of profit via speculative and parasitic methods.
The more these methods developed, the more regulations on finance capital introduced in response to the crisis of the 1930s were scrapped, culminating in the repeal of the last remaining piece of Depression-era legislation, the Glass-Steagall Act, by the Clinton administration in 1999.
In 1991, the liquidation of the Soviet Union by the Stalinist bureaucracy, coupled with the restoration of capitalism in China and the junking of national development policies by the bourgeois national regimes in the former colonies, opened up new profit opportunities through the globalization of production.
Eager to grasp them, the US called for the entry of China into the new world order. The Clinton administration pushed for its admission to the World Trade Organization, which was subsequently ratified by the US under the presidency of George W. Bush.
The US saw the cheaper labor of China as a profit gold mine and that within the new order, China would remain subordinate to it. But the capitalist economy has its own relentless logic, which operates behind the back of imperialist leaders, no matter how powerful.
The Chinese capitalist oligarchy, now confronted with the transformation of the country from a nation of peasants to one with hundreds of millions of workers, as well as an aspiring middle class, recognized it had to move up the value chain.
It could not simply function as the supplier of cheap consumer goods but had to expand production into more sophisticated commodities based on advanced technology if it was to sustain economic growth and maintain what it called “social stability.”
However, this development has posed an existential challenge to US hegemony. This was recognized by the Obama administration in 2011 when it launched its pivot to Asia. His trade representative Michael Froman wrote an article in Foreign Affairs in 2014 recognizing the weakened position of the US and that the global trading system had to be “revitalized” to allow it to play the leading role.
Such efforts, however, came to naught as the balance of trade and payments continued to widen. And the US government debt has continued to escalate at what is acknowledged as an “unsustainable” rate.
The US has only been able to continue on the debt path because of the dollar’s role as the global reserve currency. So long as investors, domestic and international, as well as other governments, kept money flowing into the debt market, the US imperialist state, with its vast military spending, has been able to continue to function.
Back in 2023, CNN and News commentator Fareed Zakaria set out this relationship.
“America’s politicians have gotten used to spending seemingly without any concerns about deficits—public debt has risen almost fivefold from roughly $6.5 trillion 20 years ago to $31.5 trillion today. The Fed has solved a series of financial crashes by massively expanding its balance sheet twelvefold, from around $730 billion 20 years ago to about $8.7 trillion today. All of this only works because of the dollar’s unique status. If that wanes, America will face a reckoning like none before.”
In the face of this crisis the view is being advanced in some circles that whatever the dollar’s travails, it will continue to operate as the world currency.
The FT article on the dollar crisis cites the remarks of Mark Sobel, a former Treasury official and now US chair of OMFIF, a financial think tank.
“The dollar’s dominance will remain in place for the foreseeable future because there are no viable alternatives,” he said. “I question whether Europe can get its act together, and China is not opening its capital account soon. So what’s the alternative? There just isn’t one.”
Sobel’s assertions about the inability of Europe and China to provide as alternative to the dollar are no doubt true.
But his analysis is incomplete because it is based on a faulty logic which ignores the lessons of historical experience. It rests on the assumption that since global trade and finance requires an international currency, the dollar must therefore continue to play that role because there is nothing to replace it.
However, the logic of the present situation is neither that the dollar’s role can continue nor that another national currency will replace it. Rather, it is that the world economy will increasingly fracture into rival trading, financial and currency blocs—a conflict of each against all—as it did between the two world wars with all the disastrous consequences that produced.
For all their irrationality and outright madness there is a logic to Trump’s policies. Every statement and executive order he imposes is justified on the basis of national security—that the present economic order has undermined the military capacity of the United States to fight wars, and this must be rectified at all costs.
The crisis of the dollar therefore signifies that the conditions for a new world war are rapidly developing in which for the US, China—the existential threat to its hegemony—is the chief target.
With tariffs set at 145 percent, and still more hikes to come, and restrictions imposed on the export of high-tech goods to China, the US has imposed a virtual economic blockade against Beijing. How long before that leads to outright military conflict? History suggests sooner rather than later.
The ruling classes in the US and internationally have no solution to the crisis of the capitalist system over which they preside. Everywhere their response to the breakdown is economic warfare, increased military spending and the evisceration of democratic rights through the imposition of fascist and authoritarian regimes.
The international working class is the sole social force which has the capacity to resolve the historic crisis of the capitalist system, exemplified so sharply in the crisis of the dollar, in a progressive manner. But for that power to be actualised it must take up and fight for the perspective of socialist revolution.
This article was originally published in the World Socialist Web Site on 18 April 2025 Here
