The economic and political situation in New Zealand is inseparable from that which faces the capitalist world as a whole. International recession and reaction is matched by internal recession and reaction. Muldoon may cry "victory" over a fractional decline in the rate of inflation. It is, however, rather like a bubonic plague sufferer admiring the removal of a pimple on his chin. The fatal disease is untouched.

Capitalism is in a state of crisis which reflects its decay as a world system. Sixty years ago, Lenin, in his famous pamphlet "Imperialism the Highest Stage of Capitalism," showed the basis for this decay in the fact that the old laissez-faire capitalism in the biggest, developed capitalist countries had given way to modern monopoly capitalism, imperialism; that imperialism was a system of world plunder by the monopolists of a few big capitalist states, a system which, far from doing away with great power rivalries, economic crises, and class and national oppression, only intensified them to a point where it created conditions for the transition to socialism on a world scale and was therefore "the eve of revolution."

In some parts of the world this transition has already taken place, and flourishing socialist states have been created in China and Albania. In others, notably Russia, after a successful socialist revolution, a restoration of capitalism has taken place and a new imperialism exists, social imperialism (socialism in words, imperialism in deeds.) A new ruling bourgeoisie has arisen there, a class of bureaucrats and managers. Despite this retrogression, the general world trend id still towards the further decay and fall of imperialism. In Mao Tsetung's well known phrase, "Revolution is the main trend in the world today."