147. In the 1960s, the postwar boom began to show clear signs of crisis. Europe and Japan emerged as economic rivals of American capitalism, and the US dollar came under increasing pressure. In 1966, a recession shook the world economy. In 1971, the US administration severed the link between gold and the dollar, thereby removing the ground from under the currency system that underpinned the postwar boom. In 1973, the world economy again fell into deep recession. The working class reacted to the deepening crisis with an international offensive that reached revolutionary dimensions (France 1968), shook the Stalinist regimes (Czechoslovakia 1969), forced the resignation of conservative governments (Great Britain 1974), led to the fall of dictatorships (Greece 1974, Portugal 1974, Spain 1975) and sealed the American defeat in Vietnam. In 1968, student revolts, attracting large sections of the younger generation, erupted in Germany, France, Italy, the US, Japan, Mexico and many other countries. The historic crisis of proletarian leadership remained, however, unresolved. The Stalinist, social democratic and trade union apparatuses disoriented and suppressed these mass struggles with the assistance of the Pabloite tendencies. They betrayed promising revolutionary opportunities and led them to defeat. The repercussions were particularly disastrous in Chile, where the government of the “Socialist” Allende, with the assistance of the Communist Party, prevented the working class from taking power until the military, led by General Augusto Pinochet, felt strong enough to take control of the situation. On September 11, 1973, Pinochet carried out a putsch, murdering thousands of workers as well as Allende himself. The inability of the working class to overcome the obstacles erected by its old organisations provided the bourgeoisie with the necessary time to stabilise and reorganise its fragile world order. Disappointment over the fact that the working class was not able to resolve the crisis in a revolutionary way was exploited by the bourgeoisie from 1975 onwards for its counter-offensive.

148. In Germany, the turning point in the class struggle was heralded by a strike of metalworkers in Baden-Württemberg in 1963. The strikers not only demanded higher wages, but also passed resolutions against the planned Emergency Laws. Employers reacted by locking out hundreds of thousands of workers for the first time since 1928. In the Ruhr district, miners mobilised against pit closures. The coalition of Christian Democrats and Liberals under Ludwig Erhard proved unable to impose budget cuts on the working class. In 1966, it was replaced by the Grand Coalition. For the first time since the end of the 1920s, the bourgeoisie felt compelled to include the Social Democrats in government in order to maintain control over the working class. Willy Brandt took over the office of foreign minister and vice-chancellor in a cabinet headed by Kurt Georg Kiesinger (CDU), a former Nazi Party member. The most important task of the Grand Coalition was to pass the Emergency Laws. In opposition to this, a broad extra-parliamentary movement emerged that coalesced, in 1967-1968, into a student revolt. In 1969, a wildcat strike wave erupted in the steel industry that temporarily got out of the control of the trade union bureaucracy.

149. The political elite reacted by replacing the Grand Coalition with the Small Coalition and placing Brandt at the head of government. The FDP, which had, until then, stood on the right of the political spectrum, switched sides, assuring the government of the necessary majority. The former SAP member Brandt brought the situation under control through far-reaching social concessions. Generous collective wage agreements were awarded to workers in both the private and public sectors. Young people “were brought off the streets” through a reform and education programme. The percentage of high school graduates rose from 5 percent of all young people in the 1960s, to 30 percent in the 1970s. The number of jobs for high school and college graduates at universities, research institutes, hospitals, schools, social institutions and public administration increased sharply. The influence of the SPD reached its peak in these years: in the 1972 federal election, it received 46 percent of the vote and had more than a million members. At the same time, Brandt ensured that those opposed to the bourgeois order were proscribed. The Radical Decree of 1972 placed restrictions on the employment of thousands of professionals in the public service on the basis of “doubts” as to their loyalty to “the free democratic basic order”. This exerted tremendous pressure to forswear anti-capitalist objectives and adapt to the status quo.

150. Brandt also provided an important service to the ruling elite in the area of foreign policy. He improved political and economic relations with Eastern Europe and terminated the blockade against East Germany. His Eastern Policy, which at first met with strong resistance in conservative circles, provided access to urgently required new markets in Eastern Europe and the Soviet Union, helping German business overcome the effects of the recession. Over the long term, the Eastern policy undermined the stability of the Eastern European regimes.

151. Against the backdrop of the class struggle offensive, the perspective of the International Committee found support in Germany. On September 18-19, 1971, a number of young workers and students founded the BSA in Hanover and were recognised by the International Committee as its German section. The resumption of the historical continuity of Trotskyism in Germany posed an enormous political and theoretical challenge. The betrayal of two mass parties, and the disasters that had resulted, had left deep traces in the consciousness of the German working class—as had the centrist inheritance of the USPD and SAP, the crimes of Stalinism, and the revival of Social-Democratic reformism. In addition, intellectual and cultural life was shaped by the anti-Marxist theories of the student movement. These challenges could not be resolved by tactical and organisational initiatives alone, no matter how correct these were in themselves. The building of a section of the International Committee in Germany required systematic programmatic, historical and theoretical work. Such a task was made more difficult by the growing opportunistic tendencies within the International Committee. The French Organisation Communiste Internationaliste (OCI) had already turned away from the fight against Pabloism in the 1960s, and broke with the International Committee in 1971. The British section, which, due to its history, enjoyed pre-eminent political authority, went the same way in the 1970s. These developments placed major obstacles in the BSA’s way, pushing it into an opportunist direction. The BSA resisted this pressure, but it was only the split with the WRP, in the winter of 1985-1986, that enabled it to comprehensively assimilate the theoretical and political inheritance of the Fourth International.