The world economic crisis, claimed to be over by some quarters, was admitted to be serious even by the International Monetary Fund. Even global capitalist leaders warned that it could develop towards a general depression. Many were looking back at the great depression of 1929, in order to understand the unfolding events. The threat of collapse of the US financial system and with it an unprecedented financial crisis in the capitalist world, was a frightful scenario for the ordinary masses; because finance is at the helm of the modern capitalist system. We were told by the pundits of neo liberalism that lesser the intervention of the state better it would be for the economic growth. Furthermore, it was emphasized that with the new knowledge in micro economics, the market could be made fair, free and progressive. But having preached all that, during the acute crisis period, the same pundits of neo liberalism supported state interventions to rescue capitalist production. It was proved again that the modern state with all its democratic strapping remains an instrument of class struggle. Just as much capitalism advocated the leaders of small nations to privatize both industry and agriculture, when it is necessary it will compel the big business to move towards sate capitalism as way out of economic crisis. Thus Global capitalism used state power as an instrument in hand to control and supervise.
After the Second World War the developed world was dominated by social democracy with welfare state. Workers were happy with the gains in social welfare. In fact many believed that state intervention and social welfare will gradually leads to socialism. It was reincarnation of Bernstein vision of gradual transfer. What Keynes proposed for the survival of capitalism was reinterpreted as a way forward for socialism. There was a parallel political change in the South among the developing counties. There was a wave of populism lead by liberal nationalist leaders. Nikruma, Nasser, Nehru, Benbela, Bandaranayke etc. dominated the non aligned movement. They all claimed to be socialist of one kind or the other. Castro was at the extreme end with the support of Soviet block. But crisis of capitalism changed all this and we were made to realize that exploitation and plunder remains the main theme of capitalism. Neo liberalism displaced the social democracy and welfare state in the developed world. In the developing world the change was much more painful. Populist politics produced worst type of humbugs and corrupt leaders. People were made leaderless as left parties came to defend the collapsing populism. Terrorist politics was a by product of this political crisis. Both the JVP and the LTTE have a common origin in this political scenario.
People are still searching for populist leaders of the kind that existed in the time of capitalist expansion. In this country name boards such as SLFP and TULF are attractive as these were associated of politics of the common man. However the changes within these parties become evident only when they come to power. We can see the quality of leadership of the SLFP in Mahinda regime. Instead of populist politics we witness unprecedented corruption and fraud. Those who are looking for nationalism, Social welfare and humanism within this decaying populist party, are in for a great surprise. It is not only in this country but also in the entire developing world masses are pushed into misery by the decadent populist parties. What is clear from this observation is that national populism is not an answer to the ills of neo liberalism. Reality is that populism was a by product of capitalist expansion when social democracy dominated the developed world. With the demise of capitalist expansion in the developed world, old populist parties have become agents of corruption and plunder. The left has to device new tactics and new slogans to give a leadership to the suffering masses. The VV, the protest of the opposition, arose to cater to the needs of this new situation.