From New International, Vol.2, No.1, January 1935, pp.1-3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
THERE IS A peculiar character to the contradictions of the Roosevelt administration that deserves more careful study than has yet been given. I do not refer to the central contradictions of a declining capitalism, present to a more or less acute extent everywhere. What interests me here, rather, are the distinctive features of the form these central contradictions are taking within the United States. It is easy enough, and indeed true enough, to say that “the Roosevelt program is in essence the program of monopoly capitalism”. Nevertheless, this is not particularly illuminating. The description applies equally well to the programs of most governments – including Fascist governments – in the late stages of capitalism. We must ask why the Roosevelt program takes the special forms we have seen and will see.
The Roosevelt contradictions come to light along a number of approaches. For example, the administration has been frequently attacked from the extreme Right – especially during the first year and a half – as “socialistic” or even “communistic”. These attacks cannot be merely dismissed as verbal smoke-screens laid down to fool the masses. They have been seriously made by reasonably intelligent critics. And there can be no doubt of the very real opposition to Roosevelt on the part of many leading bankers and industrialists. There must be, in the Roosevelt program, some basis for these attacks, however confused they may essentially be. Marxism cannot be content to answer political questions by a scornful shrug of doctrinary shoulders.
Parallel to these attacks have come others equally violent from certain quarters of the Left, calling Roosevelt a “Fascist”. Here, also, dismissal is not enough. In the Roosevelt program we must find the double foundation for these contradictory charges.
The personnel of the administration is a second striking expression of the contradictions. Roosevelt has drawn into the staff of the New Deal men whose political background varies to an extent that makes it extraordinary that they should form parts of a single organized administration. It is of course true that no Marxist is among them – naturally the real Left cannot be represented. However, the gap that separates the Tugwells or Wallaces from the arch-reactionary Johnsons or Ropers or Clay Williamses is wide and genuine. Moreover, none of these men is mere window-dressing. Each, and each type, has an active role to play.
The most open contradictions of all are to be found in the unprecedented contrast between the surface and the substance of the Roosevelt program. This contrast is always present in class society, but at no other time has it been so striking. The contrast is not merely between the promises and their fulfillment (this is to be always expected) but throughout, between intentions and results, between statutes and the enforcement of statutes, activities and the results of activities. The New Deal becomes an aggravated form of the Old Deal. Labor’s “charter of freedom” becomes the major strike-breaker. Plans to help the forgotten man oppress him further. Help for the “little man” in business strengthens monopoly. Codes to protect the consumer leave him more naked than before. Curbing the bankers finally completes the subordination of small banks to the financial center. A design for peace and cessation of imperialist aggression builds up the greatest military machine and the most intensive imperialist exploitation.
None of these matters is new to capitalism; all of them are found frequently enough at other times and in other places. It is the exaggerated character of the obvious contrasts that is peculiar to the Roosevelt administration.
The underlying explanation may be found in a double paradox. First: the Roosevelt administration, upon coming to power, was confronted simultaneously with the seemingly contradictory tasks of social democracy and the preparation for Fascism; or putting forward a social democratic program and actually laying the groundwork for a transition to Fascism. To put this in another way: psychologically and to some extent politically, the task of the administration was social democratic; whereas economically the preparation for Fascism was demanded. Or in still a third way: the United States, considered abstractly, from a merely “internal” point of view, was over-ready for social democratic developments; but considered actually, as an integrated part of the world system, it had to make the turn toward Fascism.
The second paradox is bound up with the first. In the case of neither of these tendencies – the social democratic and the Fascist – did the administration have the distinctive and appropriate social base; Roosevelt was neither a working class supported social democratic president, nor a middle class supported pre-Fascist. It is this that has made possible the reconciliation of the two terms of the first paradox. If the class lines of Roosevelt’s mass base were more clearly drawn, he could not have bridged the contradictions in his policies. He would have been much more definitely one thing or the other. But this is merely to say that the United States would have been another country at another time.
These two paradoxes require further elucidation to be meaningful.
There is, of course, no “normal” development of capitalism, except in broadest outline. The idea of a normal development is an abstraction, useful for analysis, but in the specific case of any given capitalist nation modified in a thousand ways by the peculiarities of local conditions. From this abstract point of view, the United States has diverged from the normal in not having had a large and strong labor movement, nor a social democratic movement of any importance during the years when these grew in Europe. The major reasons for this have been fairly adequately covered: the “fresh start” possible in the New World, which had no feudal aristocracy to shake off; the vast store of raw materials; the enormous internal frontier; the hegemony over much of two continents; etc. The war brought in an additional factor preserving the “abnormality” of the career of United States capitalism. Through the war the world market almost automatically opened up to United States industry on an unprecedented scale. Together with the financial manoeuvres involved – both in foreign loans and the internal installment system of buying – this laid the basis of the post-war “prosperity” on a relatively primitive competitive scheme, without the social democratic checks of a growingly sated capitalist economy.
But the war and post-war developments, while giving the last grandiose spurt to the “unique” career of United States capitalism, likewise eliminated the uniqueness, and destroyed forever the myth that the United States was a special case. The war plunged the United States headlong into the world maelstrom, not merely in that United States citizens died on the European battlefields, but much more fundamentally in that the United States economic and financial structures became irrevocably entangled with the world structure. What meaning could isolation have with a financial set-up leaning on something like twenty billions of foreign loans, and with the great United States corporations intertwined with enterprises in every country of the world? Thus the fate of United States capitalism became not merely ultimately but immediately bound up with the fate of world capitalism. At the same time, such internal factors as the chaotic over-expansion of capital equipment, the growing disproportion of income and ownership, the leaky banking system, the fantastic capital debt arrangements, were exaggerating the country’s economic instability.
Then the crisis began gradually to open United States eyes, a generation or so behind time. The masses began to realize more clearly that all was not well, that the chances of good wages and a rise in the world were not favorable enough to be worth taking. They began to wish for protection against predatory capital. Reform was necessary: reform of the bankers who had brought them to ruin, of advertizers who misled them, of governmental bodies that cheated them, of monopolies that exploited them. Control was necessary: of natural resources, of wasteful competition, of the monetary system, of agriculture. Security was necessary: from old-age, accident, above all from unemployment. Organization was necessary: of benevolent trade unions that could be successful in bargaining collectively with employers. Taxes were necessary: to soak the rich, re-distribute wealth, pay for reforms and new projects. State intervention was necessary: to plan the national economy, curb individualists, and work toward a more cooperative society. Public works were necessary: rehabilitation, roads, housing, government utilities, public services.
At the same time many capitalists saw more clearly that something had to be done to save the profit system from an entire disintegration.
Here, then, was the Roosevelt problem, and his program was the design to meet it. The half-felt mass demands for reform, security, control, public works, are – in spite of many backward glances and merely liberal elements – generally social democratic in character. The Roosevelt program had to give adequate psychological and some actual satisfaction to these.
But the iron demands of United States economy, bound to the world decline of capitalism, decreed that in actuality none of these demands could be met on a large scale, that the Roosevelt program must in fact prepare for the corporative society and a Fascist political structure.
Embodied, then, in the administration speeches, commission reports, even in the laws it passed, has been the curious, perverted, upside-down form of American social democracy. And this, moreover, is the only kind of social democracy the United States will know. For social democracy has no fresh role to play in the period of the rapid decline of capitalism, and there is little chance for a major genuine social democratic development in this country, in spite of the occasional quivers of life from the American Socialist party corpse. The large scale development of social democracy depends upon the ability to win concessions from capitalism, and upon a comparatively slow rate of social change. Neither of these conditions is present during the decline of capitalism.
And embodied, secondly, in the practises of the administration is the preparation for Fascism. Some of this has already been carried to considerable length. For example, the concentration of governmental power in the Executive. This is shown not merely by the great multiplication of functions carried on by governmental bodies dependent on the President, but even more strikingly by the increase of so-called “permissive legislation”, which is in effect the turning over by Congress to the Executive of the most cherished legislative powers (tariff, coinage, budgetary expenditures, public works, etc.). Again, there is the much more open intervention of government in business, the establishment of labor camps (C.C.C., forced relief work), more open and consistent state intervention in labor disputes, and closer government control over foreign exchange.
Naturally, however, words alone would not satisfy the mass discontent, and the administration has, here and there, had to insert even some social democratic substance. In all cases, however, these have been either of no basic importance, or have operated actually in the Fascist direction. It is well known by now how the raising of minimum hourly wages has decreased the earnings of the working class as a whole, by the advanced price level, by lowering the higher scales of wages, increasing the speed-up, and causing more part-time employment. The partial elimination of child labor in certain industries, unaccomplished by higher annual real wages, has done little more than to lower family incomes below the subsistence level. Some individual capitalists, it is true, have been inconvenienced, but the spectacular investigations have seldom led to indictments and never to important convictions or changes in the practises investigated (the Securities and Exchange Commission, for example, has even milder regulations than the New York Stock Exchange itself, after all the Pecora ballyhoo). The subsistence homestead projects are miserable flops. The home renovation program has amounted to nothing more than newspaper headlines. The Home Owners’ Loan Corporation has benefitted primarily the holders of doubtful mortgages, who now have their interest guaranteed by the government. The farmers – though chiefly the landlord and capitalist farmers – are the only considerable group (except for the finance-capitalists themselves) that has gained appreciably, and this amounts to very little in relation to the entire national economy (perhaps $500,000,000 after allowances for the rise in prices of manufactured goods).
To sustain popular feeling, the administration has had to rely chiefly on: (1) demagogic attacks on Tories: (2) the masterful handling of patronage by Farley; (3) vast promises for the future; (4) carefully located expenditures of government funds for public works, where these will do the most psychological good; (5) playing off of one group against the other by both promises and threats; (6) keeping taxes down in spite of the increased governmental expenditures (a proportionate rise in taxes would quickly alienate the middle classes); (7) big-time muck-raking investigations (banking. Stock Exchange, advertizing, munitions).
Such a procedure, of course, cannot go on forever. Government finances cannot stand it, for one thing. Nor can this particular brand of demagogy get across indefinitely – it stales. Roosevelt is undoubtedly aware of this. So is everyone else, and even the capitalist critics ask, “Will he turn definitely in the end to the Right or the Left?” Of course, in the end he can turn only to the Right (the turn consists only in being less ambiguously to the Right, not in any real alteration of direction). Declining capitalism is unable to offer the substance of his reforms, no matter how sincerely Roosevelt might will it. The turn, in fact, made its appearance in September 1934, and became clearer with the speech to the bankers’ convention, and the repudiation of the June interview that promised social reforms on a wide scale with the new Congress. But the old game still goes on. Roosevelt will do his best, must do his best, to maintain his present double role until after the 1916 election.
What, then, may be expected from the new Congress? In addition to the background already outlined, which will condition its activities, two further factors must be kept in mind. First, the relation of Roosevelt to his new Congress is almost the reverse of his relation to his first Congress. Then, at the beginning of his administration, by a sweeping popular overthrow, he had been placed in power on the crest of rising mass sentiment. He was the Great Leader whose duty it was to guide a timid Congress into the untried country of the New Deal – new at least in the real sense of being a new step in the advance of United States capitalism to its final collapse. Now, however, Roosevelt is two years removed from direct contact with mass sentiment. Moreover, his unfulfilled promises are drifting back home to roost – in the end, citizens take jobs, security, protection, seriously. It is the members of Congress who, just assembling from the tribulations of November’s elections, reflect more directly the mass sentiment. They come from localities demanding additional public works expenditures, more relief, bonus payments, changed labor legislation, mortgage moratoriums, inflation, or what not. Therefore Roosevelt, from having played the Great Leader, must now play the Great Brake; he must calm the wilder members of Congress, shunt aside and compromise “radical” demands, and in general make sure that no accidentally passed “Left” legislation hinder the fundamental “Right” direction.
Second, certain industrial and banking corporations have achieved a temporary relative stability during Roosevelt’s first two years, with a reasonable level of profits rolling in. These are consequently anxious to go back to the pre-1929 days, and to take their chances in rugged competition unconfused by the complex intricacies of the New Deal. Their wishes cannot be granted. The pre-1929 days have gone not to return. Individual capitalists have got to be taught that they must occasionally give up a few sweetmeats as individuals to preserve the basic interests of their class as a whole, and its position. And the state – in the days of monopoly capitalism most directly representative of the class as a whole – will be their teacher. However, their reactionary opposition is a useful weapon for Roosevelt both against difficult groups in Congress, and to build up favorable popular sentiment. As against them, Roosevelt can be very Left indeed, and can point to them as the bogeyman who will gobble up Congress and the masses if they don’t toe the line.
In general, then, we may be sure that, while the underlying socio-economic drift continues toward a Right solidification, the legislation actually passed by the new Congress will be on no basic question unambiguously one thing or the other. It cannot be openly reactionary without antagonizing the masses in a manner for which Roosevelt is not prepared; it cannot be in reality Left without injuring seriously the position of the bourgeoisie, which position demands now the steady movement to the Right.
I shall apply this general scheme to certain specific problems that will be before the New Congress.
As for “labor legislation”, the A.F. of L. and other labor groups are making a drive for legislation to outlaw company unions, enforce the majority principle, guarantee free union elections, etc. From the other side, the Chamber of Commerce, the National Association of Manufacturers, and others want in effect to make the company union the universal American form, and to eliminate all traces of the majority principle. Neither of these plans, however, is now possible. The first would immediately be blocked in the courts as unconstitutional. The American masses, politically immature and confused as they are, are not ready for the second, nor is there a Fascist apparatus to enforce it. Section 73 will indeed have to be “clarified”. But this will be done by the new Congress in an ingeniously ambiguous manner that will enable William Green to hail a victory for labor, will prompt a series of editorials in the New York Herald-Tribune protesting again the undermining of American liberties, and will leave the real issue of unionization to be fought out as it is being now – with independent vs. company unions decided by the relative militancy and determination of the workers involved. Coupled with this clarification of Section 73 will be a modified form of the Wagner Bill, setting up additional means for the peaceful arbitration of industrial disputes, and ironing out certain confusions of jurisdiction among the various labor boards: that is, providing new and more impressive means for labor bureaucrats to tangle up strikers, new ways of sabotaging strikes. The country is not yet ready, however, for compulsory arbitration.
The widespread sentiment for insurances of various kinds, unemployment, old age, sickness, accident, will issue this session in a hodgepodge Federal-State Unemployment Insurance Measure. Far from being a liberal or labor victory, however, this will be a distinct defeat. It will be placed some distance in the future to start operation, and will thus serve to divert present agitation from sounder insurance plans. More dangerous, it will serve further to divide the interests of employed and unemployed (since it will not apply to the now unemployed, even where and when it is put into effect); and it will act as an additional strike-breaker, since its provisions will permit interpretation by the courts to rule strikers as losing any insurance benefits under the law.
One of the bitterest fights in the new Congress will be over the bonus. A majority in both Houses is in favor of immediate payment. If such a measure passed, Roosevelt would be forced to veto it, and would have a hard time to prevent passage over his veto. However, Roosevelt does not want to veto legislation of this kind, supported as it is by a powerful organization of voters. It seems probable that administration forces will arrange a compromise measure providing cancellation of interest owed on present loans against bonus certificates, more liberal loan provisions, and perhaps full payment for veterans in extreme need or even a general system of installment payments.
The present NRA expires on June 16. Some interests wish to let it die altogether, but this is part of the vain wish to get back to ’29. Perhaps with a different name, probably still as an ostensibly “temporary” measure, the NRA principles will be extended. There will be changes, however, including the elimination of price – and production – control provisions in most codes except those governing industries making use of natural resources.
The subsidies to agriculture will have to continue, since withdrawing them would have disastrous political consequences for Roosevelt, consequences he is not now in a position to handle. Production control will continue prominent in tobacco, cotton, etc.; but the drought and government destruction have made this matter simpler in the grains and live stock.
The advocates of various forms of inflation will be active throughout the session. These will be partly balanced by the powerful sound-money lobbies of the bankers, the Chamber of Commerce, the American Liberty League, etc. In the end, however, the inflation question will have to be solved by further “permissive legislation”, providing a legislative base for further inflationary steps, but leaving the taking of them to Roosevelt’s discretion. Perhaps some moves toward re-monetization of silver will be taken by Congress itself, but these will be of minor importance. The proposed Government Central Bank will not get out of committee.
No great changes will be made in taxation. There will be a few increases in higher bracket income and inheritance, taxes and perhaps some form of taxation of excess corporate surpluses, both of these for publicity rather than revenue purposes. The special taxes expiring during the next six months (e.g., bank check, gasoline, telegraph, automobiles) will most of them be continued, and a few added. But Roosevelt is resolved to put off that evil day, nevertheless fast approaching, when the middle classes will be forced to feel the full weight of capitalist decline.
Munitions and war legislation will be played up for all they are worth. Some sort of “regulations” will no doubt be voted, and probably something along the lines of the “take the profits out of war” talk. But nationalization of the munitions industry is for the present out of the question. Beneath the ballyhoo, the real job of war preparation will go on; and whatever government regulation is voted will actually help prepare for the War Department’s mobilization scheme, already laid down in fundamentals sixteen years ago. The collapse of the Washington Treaty will be used to carry on the expansion programs of army and navy, especially in aviation and mechanization.
The Left guns of the President are going to concentrate on utilities and housing. Here he will continue the social democratic surface, and we may expect a message to Congress on each, a Fireside Talk, and the best products of the presidential publicity agents. Much noise and even increased governmental activities in these fields are to be expected. After all, it will take the government utility “yardsticks” some long time to threaten seriously the gigantic privately owned utilities plants; there are some projects (Boulder, Muscle Shoals, Grand Coulee) which are not in any event profitable for private enterprise; and, lastly, the utilities can richly take a jolt to their profits, for their protected rate position has enabled them to do better than corporations deserved during the crisis. In the power field, the administration can be a trifle socially-minded with no harm – indeed, with considerable aid – to the system.
As for housing, it is connected with the whole problem of public works, and these in turn with relief. Here, too, bitter struggles will be solved in the end by permissive legislation. The balanced budget plans of the White Sulphur Springs conference, stripping away public works and relief, would mean the loss of the 1936 elections for Roosevelt, and nationwide riots. The ten billion dollar annual program of the liberal planners would upset government credit, and the bankers. Therefore, the new formula will be used: fairly large appropriations through several agencies, but only a fraction of them mandatory, the rest left to presidential discretion. Presidential discretion will mean, à la Hopkins, enough dole and work relief to prevent too violent outbursts on the part of the unemployed, plus enough haphazard housing and other public works to assure an adequate amount of publicity. There will evidently be an effort to increase the proportion of work relief as against the dole. This cannot, however, be done on a really large scale, and the result will be chiefly to drop some hundreds of thousands from all relief during the various transfers back and forth.
This, then, is the general character of the probable (internal) legislation of the new Congress. Meanwhile, below the ambiguous parliamentary surface, the real issues of 1936 will be fought out. The real question – “Will the workers’ movement organize its forces fast enough to compensate for the consolidating lines of the Right, and will the relative weight of the working class be heavier at the end than at the beginning of 1931?” – will be decided not in Washington, but in the open field of the class struggle.
Last updated: 12.3.2005