M. Philips Price

Book Reviews

Is Capitalism Recovering?


Source: The Labour Monthly, Vol. 2 February, 1922 No. 2, pp. 188-191 (1,421 words)
Transcriptionp: Ted Crawford
HTML Markup: Brian Reid
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Die Neue Etappe. By Leo Trotsky.
German translation in Verlag Kommunistische Internationale
Carl Hoym, Hamburg.


It is fortunate that Trotsky was for a few weeks last summer released from his administrative work in one of the great departments, which he has so successfully controlled. For it gave him an opportunity to return for a short time at least to the work in which he was engaged before the war, namely, scientifically studying world economic developments and interpreting them from the Marxian standpoint. The above booklet, which has appeared in Russian and now in German, contains the material which formed the basis of his report to the Third World Congress of the Third International on the world economic situation. Its object is, as its title implies, to review the stages through which capitalist production passed between 1917 and 1921, and to take stock of the work of organising the proletarian forces of the world in its struggle against Capitalism.

During last year it was evident to all careful observers that the revolutionary wing of the world Labour movement would need to re-examine its strategic position in the war against Capitalism. The stormy years of 1918 and 1919 had gone; citizen armies, fed on promises of “new worlds after the war,” had been safely demobilised and “reliable” forces had replaced them; revolutionary workers’ councils had been dissolved in Germany; Kapp’s generals had been put in their places, but Stinnes ruled on the ruins of the “socialisation commission”; the Russian Red Army, victorious over Denikin and Koltchak, had been beaten back from Warsaw; the movement of the Italian proletariat had collapsed, and despairing revolts, which had broken out in Middle Germany in March, 1921, had been ruthlessly suppressed. Capitalism, defeated in Russia, had more than held its own in the rest of the world. That was the situation which prompted Trotsky to make this masterly review of opposing forces in the temporary lull in the battle; which followed the introduction of the new economic policy in Russia and the signing of the Trade Agreement with England and Germany.

A review of this sort was particularly necessary for the Communist parties throughout the world; for the period which closed with 1921 has given the Centrist school among the Continental Marxists, who follow the Vienna International, the opportunity to proclaim the bankruptcy of the tactics and theory of the Communist International, which, as was alleged, had prophesied the immediate world revolution and built up its policy on these vain hopes. “But,” says Trotsky, “when we spoke of Revolution as the successor to the World War, we were and are still concerned not with prophesying the date of the eclipse of Capitalism, but with using the results of the war for accelerating the process of the Revolution.”

In this booklet Trotsky adopts quite a different style from that of his anti-Kautsky book on “Terrorism.” Here he is less the brilliant pamphleteer knight, tilting with the pen at the height of the struggle, and is more the scientific analyst of statistics and data, which he ably marshals to prove his theories. He is here, in fact, the Russian Keynes, who tells not 80 per cent. of the truth, because it would not be respectable to tell the remaining 20 per cent., but 100 per cent. of it.

What are the facts, as Trotsky presents them? The belligerent States in the late war have lost one-third of their national wealth; Germany, Austria, Russia and the Balkans well over half of theirs, France about half, and England less. “The fictitious capital—paper obligations, loans and banknotes—which remain, form reminiscences of destroyed wealth and hopes of new. But they are only hopes, not real wealth. The Frenchmanís hopes are to liquidate this paper in the blood and sweat of the German. Capitalism is not restoring its means of production, but living on itself.”

Trotsky answers the Centrist economists, who say that the boom of 1919-20 and the depression of 1921 is one of the cycles of trade, normal to the capitalist system, by producing curves of the world trade, coal and iron production from 1783 to 1920. Here one sees at a glance that modern industrial Capitalism since its birth has experienced two kinds of cycles. Roughly every nine years the curve rises and falls, but these minor curves are all part of much greater curves, which indicate the real pulse of capitalist economy. From 1783 to about 1810 the volume of world trade rose, then fell to 1825, but the fall was less than the rise, and a general improvement over this period was observable. After 1825 began the uninterrupted growth of Capitalism, and, but for a small break in 1848, which was, as Trotsky shows, the year of the revolutions which removed the last restrictions on industrial expansion, this continued up to 1873. Stagnation followed until the beginning of the century, and then an unprecedented boom, which showed that Capitalism had reached a stage in which it was competing for world monopoly of raw material resources. This was the real cause of the world war, which has been followed by a catastrophic fall in the curve of world trade. The major curve, says Trotsky, is now on the down grade. True, this curve may be broken now and then by periods of boom. But the booms will always be shorter and the depressions will always be longer, and the net result will be a fall in volume of trade and production. Thus, in 1919 the boom was artificial, produced by the Governments of Europe, who, in terror of the revolutionary wave, created fictitious wealth by inflating currencies, subsidising bread prices, spreading broadcast unemployment doles. In Germany, especially, this boom was of an entirely unproductive nature, because it took the form of smuggling abroad, at knock-out prices, part of the national wealth. The Centrist economists, like Hilferding and Otto Bauer, do not, says Trotsky, realise that these post-war booms of the capitalist system are not signs of strength at all. The rises in the curves are signs of fever, and not of strength, for they are not accompanied by a rise in the productive power of Capitalism, which is steadily on the decline. And here is the difference between the Centrist and Communist view of the present world economic situation. The Centrist sees the little curves and judges the pulse of Capitalism by this alone. The Communist sees the larger curve and notes the slow decline.

Only under one condition does Trotsky admit that the Centrist view may prove correct, and that is, if the capitalist system succeeds in establishing an economic equilibrium on the basis of the present decreased production and trade turnover. That would, of course, mean that the unemployed all over the world would become permanently unemployed and would die out. Europe would become partly depopulated and be reduced to self-sufficing agrarian communities. England and America, also with greatly reduced population, would have to reorganise their great industrial machines on quite different bases. Then indeed would Capitalism be stabilised again. Then the Centrist theory would triumph over its rival, and over the bones of starved humanity. But—and this is the main theme of the second part of Trotsky's booklet—this calamity can only take place if the subjective human factor fails to arrest the objective economic decay, if it fails to form the kernel of the new Socialist society. The task of creating this subjective factor, of preparing the mass psychology to resist this cold-blooded solution of the problem of civilisation, is reserved for the Communist parties of the world. By rigidly fighting the fatalism and quietism of the Centrists, this mass psychology may be created. But—and here Trotsky hits out hard at the Extreme Left, with its infantile diseases—the Communist parties must fight with equal severity the adventurous elements, who, failing to understand, like the Centrists, the long, wearisome process of the decline of Capitalism, try by partial revolts and guerrilla tactics to assault the citadel of Capitalism. This element was responsible for the March action in Middle Germany—an act of despair, which brought nothing but loss to the proletariat. Both the Extreme Left and the Centrists, says Trotsky, see the small curves of fictitious boom and do not see that it is set within a great curve of real decline. The revolutionary adventurer jumps to his conclusion of despair. The Centrist jumps to his, and promptly falls to sleep.

M.P.P.