Lewis Corey

The Decline of American Capitalism


PART EIGHT
The Struggle for Power


CHAPTER XXIV
State Capitalism, Planning and Fascism


CAPITALIST production itself creates the objective basis of socialism, within the old class-economic relations. It comprises three factors: two economic and one class. The economic factors are the collective forms of production (both industrial and, increasingly, agricultural) and the abundance modern industry is capable of producing. The class factor is the industrial proletariat, a propertiless class in physical possession of production and the carrier of socialism. [1*]

The objective forms of socialism are everywhere apparent in the modern economy. Cooperative mass organization of labor within industry, collective corporate enterprise and its far-flung interests, separation of ownership and management and the collective performance of managerial functions by hired employees: all these are objective forms of socialism within the old relations of individual ownership and appropriation. This is emphasized by chain stores in distribution and large-scale farms in agriculture, whose collective forms of activity are undermining what were considered the impregnable strongholds of petty individual enterprise. Collective enterprise everywhere beats down the individual enterprise upon which rest the social relations of capitalist production.

The older and the newer economic relations of production are antagonistic, an objective clash between two social orders. This clash appears most clearly and tragically in the abundance, actual or potential, which is repressed because it threatens to abolish profit. Collective forms of production, and their accompanying technical-economic changes, result in an enormous increase in the productivity of labor and the creation of abundance. The abundance makes possible and necessary the collective or socialist distribution of goods, a socialization of consumption to correspond with the objective socialization of production. Capitalism rejects this possibility and necessity: they mean its own abolition.

For release of the forces of consumption, its socialization, requires expropriation of private ownership and replacement of production for profit with production for use: new social relations of production. This alone permits full utilization of the productive forces of society, their development unrestricted by class interests and the contradictions and antagonisms they create. Industry is integrated, managed as a whole, not as scattered parts disregarding and clashing with one another. Considerations of private interest or profit interfere neither with production nor consumption. Rational planning of industry is possible, with the exclusive aim of meeting community needs. The abundance of industry is released on an immensely enlarged scale. [2*]

As this means the abolition of capitalism, it is forcibly resisted by the dominant class interests. There is no mechanical, gradual, peaceful transition to a new social order. The objective clash of the old and the new becomes a struggle of classes, a struggle for power between the classes representing the old and the new.

The older relations of production are represented by the capitalist class, which rallies to itself all the elements of the old order. To maintain its ascendancy, the capitalist class must repress the forces of production and consumption and their onward movement toward socialism. This throws the whole of society into convulsions, accompanied by limitation of output, mass disemployment, and lower standards of living. It means economic and cultural decline and decay.

The newer relations of production are represented by the industrial proletariat, which rallies to itself all the elements of the new order. Its propertiless condition and collective forms of existence, and the class exploitation with which they are identified, thrust the proletariat into objective opposition to capitalism. Among the earliest conscious manifestations of this opposition is the trade-union struggle for improved working conditions and the imposition of minor controls upon the employer in the workshop. It becomes increasingly clearer, particularly as the pressure of capitalist decline weighs more heavily upon the proletariat (and its potential allies, the other exploited elements of society) that the class interests of the proletariat are realizable only by destruction of the older relations of production. This means socialism, of which the proletariat is the carrier: for the proletariat is the typical class creation of capitalist production, its propertiless condition deprives it, although in physical possession of production, of any property stake in the existing order, and its collective forms of existence are potential of the collectivism of socialism. But the proletariat cannot realize socialism without abolishing itself as a class and along with this the transitional state of the proletarian dictatorship: both are replaced by the community of integrally organized producers.

The struggle for power aims to get control of the state or to retain control. Like all states, the bourgeois state is an organ of class rule and suppression, under capitalist control, enmeshed in all the class-economic and exploiting relations of the existing order. No class gives up control of the state: it must be forcibly dispossessed. Wresting control of the state from the capitalist class makes it possible for the revolutionary proletariat to overthrow capitalism and suppress the old ruling class, to destroy the old social relations and create the new. The dominant capitalist interests use all means, of an increasingly forcible nature as the struggle sharpens, to retain control of the state for a twofold purpose: to suppress the proletariat and its allies in the struggle for power, and to augment the economic activity of the state, using collective economic means to prevent a complete breakdown of the outworn, decaying, wholly reactionary relations of capitalist production based upon individual ownership and appropriation.

Although its ideal was “that government is best which governs least,” capitalism constantly enlarges the scope and use of state power. In addition to suppressing the masses and carrying on war, those indispensables of the class society which is capitalism, the bourgeois state augments its intervention in purely economic affairs. More and more collective state action was required by the complex relations and problems arising out of capitalist expansion. The governments of most industrial nations began to “protect” the home market and newly developing industries. Such gigantic enterprises as the railroads called for state intervention in the form of financial aid or government ownership. Ownership came to include other enterprises for various reasons: their unprofitable character, lack of private capital, as a source of government revenue, in the interests of the economy as a whole, or for reasons of political expediency (as, e.g., municipal ownership of certain service enterprises). State intervention was often mandatory to “reconcile” or suppress, if necessary, conflicting capitalist interests, if their embittered clash threatened the class. The state intervened to “regulate” and “coordinate” the relations of monopoly capitalism: either by legislation adjusting monopolist combinations to one another and the whole of capitalism, as in the United States; or by promoting the formation of cartels, as in Germany. Imperialism meant increasing state intervention, including the purely economic, to promote capitalist expansion in world markets and the making of higher profits. Intervention was also demanded by the increasing complexity of world economic relations, for capitalist production thrust itself beyond national barriers. As individual enterprise was limited and collective enterprise began to predominate, as expansion in particular industries or in general slowed down, more state intervention was necessary, either government ownership or regulation, to sustain production and the accumulation of capital.

In the United States, which started with the most limited of governments and is still (in spite of developing state capitalism) considered free of the “statism”of benighted Europe, the reality is expressed in the defeat of the Jeffersonian idea of government by the Hamiltonian. Agrarian democrats objected to state aid for industry and finance, but not for agriculture and development of the public domain. The American Plan of the 1820’s urged legislation and public money to aid capitalist enterprise. Government built canals and aided commerce with other internal improvements. As industrial capitalism consolidated itself after the Civil War, state powers were enlarged. Class antagonisms became more acute and the state needed more repressive powers. Congress was absorbed by the tariff and the grants of public money to railroads. An economic foreign policy began to develop, for large-scale industry needed exports. It also needed the breaking down of state lines and concentration of power in the Federal government. From the 1880’s on, legislation concerned itself more and more with the trusts and railroads, with “reconciling” warring groups of capitalists, with government commissions to “regulate” the increasingly complex forms of economic activity and the class-economic antagonisms it created. During and after the 1900’s the economic or “dollar” diplomacy of imperialism flourished like the green bay tree. The Panama Canal, for which private enterprise clamored, was built by the public enterprise and money of the Federal government. Theodore Roosevelt proposed “administrative control” of industry by the President (anticipation of the NRA!), the merging of monopoly capitalism and the state. The Jeffersonian Woodrow Wilson realized his “new freedom” in the form of more state intervention in economic affairs. During the World War the government “went into business” with a vengeance; after the war, it gave increasing subsidies to shipping and aviation and “aid” to agriculture. Only social legislation and government ownership were neglected: in these fields “rugged individualism” insisted state intervention meant “the end” of the republic. “Statism” expressed itself in an enormous bureaucracy increasingly performing economic functions.

The term state capitalism was originally used to designate only the government ownership of economic enterprises. But its meaning is much wider and more significant. Government ownership is the least developed form of state intervention in industry, particularly in the United States, where, however, other forms of intervention are highly developed. State capitalism includes all forms of government intervention in economic activity to aid capitalism to overcome the contradictions and antagonisms which increasingly torment its being. The intervention is always within the relations of capitalist property and exploitation, of the subjection of labor to capital. It was necessary, in the epoch of the upswing of capitalism, primarily because the newer collective forms of production called for the more collective action of the state to “regulate” the increasingly complex and sensitive relations of industry. The collective action of state capitalism is still more necessary in the epoch of decline because a crisis of the capitalist system itself is engendered by the sharper clash between the newer collective forms of production and the older relations of individual ownership and appropriation. Both stages and all forms of state capitalism are animated by the necessity and use of the collective action of the state to “strengthen” capitalism and “compensate” the anarchy of production. (But this is, of course, of a limited and predatory nature, as the state is itself entangled in the class-economic relations involved in the anarchy of capitalist production.)

State capitalism had some progressive aspects in the epoch of capitalist upswing. It encouraged and permitted more rapid economic development. Petty-bourgeois and labor pressure forced the adoption of reforms: the minor concessions of social legislation to “placate” labor opposition, many economic measures in the interests of capitalism itself but bitterly opposed by the more stupidly reactionary forces. These aspects of state capitalism were greeted by many liberals and the reformist socialists as the progressive unfoldment of a new social order. In reality, the result was a strengthening of monopoly capitalism and imperialism, for the progressive measures were merely one small part of a development which consolidated the newer forms of capitalism and augmented the powers of its state.

Many liberals and the reformist socialists still consider state capitalism the progressive unfoldment of a new social order. The theory envisages an “organized capitalism” which leads from monopoly to state capitalism and socialism: the theory of a gradual “growing into” socialism on the basis of the capitalist state. If state capitalism, in the epoch of upswing, had some progressive aspects, it was because capitalist society was still capable of progress and had need of it to maintain itself. But monopoly state capitalism is wholly reactionary, for in the epoch of decline capitalism is capable only of reaction and has need of it to maintain itself.

State capitalism develops alongside of industrial and monopoly capitalism, not as a separate subsequent stage. Where, moreover, monopoly arose out of the underlying progressive integration of industry, monopoly state capitalism arises out of the reactionary necessity of preserving the decaying old relations of production and crushing the new. Production and consumption are repressed. Technological progress is limited if not rejected. Public money is wastefully poured into corporate industry. (The continuity of development in state capitalism appears in the fact that the Reconstruction Finance Corporation was created by the “reactionary” Hoover, not the “liberal” Roosevelt; by December 31, 1932, after eleven months’ operation, it had advanced $1,315 million to corporations, mainly banks and railroads.) [1] If Congress in the 1860’s-70’s poured public money into the private pockets of the railroad buccaneers, the country at least got railroads; now it gets a small measure of relief and a much larger measure of decline and decay. The tendency of monopoly state capitalism is more thoroughly to merge industry and the state, to make more direct the control of the state by monopoly capitalism. The Iron and Steel Institute was made the code authority under the NRA. “There is no mystery about this code,” said one magnate. “It just means that the steel industry is going to be run as it has always been run, only more so.” [2] According to the president of the United States Chamber of Commerce, the NRA makes industry “in some measure master of its own fate.” [3] But this is accomplished by the intervention of the state, whose powers and bureaucracy tend toward the monstrous and all-devouring. As economic decline is not overcome, an increasingly important aspect of the tighter amalgam of monopoly capitalism and the state becomes the preparation for imperialist aggression and war. This includes erecting more barriers around one’s own nation and breaking down the barriers of others: in France they call these efforts a form of “directed economy”! [4] Of this aspect of state capitalism, that sturdy old liberal, John A. Hobson, says:

“Staple industries will be organized with state assistance to operate as units of production and of marketing within an empire which shall be as self-sufficing as is practicable. Tariffs, subsidies, control of investment, joint industrial councils, and arbitration boards will be adapted to this end ... An isolated British Empire, were it economically feasible, would not be tolerated by other nations ... The discrimination now practiced against foreigners, the earmarking of imperial raw materials and markets for exclusive imperial use, are already arousing indignation in foreign trading circles accustomed to free access to these resources. Our empire possesses something like a monopoly of certain raw materials – tungsten, for example – which are essential to the efficiency of machine industry. It is inconceivable that foreign nations on the same level of industrial development as Britain should acquiesce in the proposed policy of imperial monopoly or discrimination.” [5]

Thus monopoly state capitalism is wholly reactionary. It means more deliberate and sharper aggression against the newer relations arising out of the collective forms of production and the international character of modern industry. The dominant class interests use a bastardized socialism to prevent the coming of socialism, to “stabilize” the disintegration of the old order. State capitalism is not a form of transition to socialism but the direct opposite. [3*] It is a form of the capitalist struggle to retain power.

As a necessary consequence of its reactionary nature, state capitalism develops measures for the “better” control of labor. Government intervenes more consistently, directly, and sharply in labor disputes: an old policy grows more teeth. The NRA began with “friendly” gestures to labor. It quickly became a means of preventing and “settling” strikes. It warned labor against strikes, sanctioned company unions, moved toward the liquidation of labor and government or “corporate” unions akin to fascism. This was the result after nearly one year, according to a liberal exponent of what the NRA “might” be:

“The position of organized labor is more uncertain and stands in greater jeopardy than at any time since the Recovery Act became law. Labor may be forced to accept compulsory arbitration within the NRA code machinery. Compulsory arbitration means the abrogation of the right to strike for any purpose ... How could it come to pass that a policy admittedly favorable to labor and the rights of collective bargaining could result in leaving those rights without effective safeguards? The trouble is, of course, that the Administration has had no firm labor policy. It has vacillated constantly and has abandoned one principle after another ... Early in his term of office, President Roosevelt declared that ‘there should be no discord and dispute – the workers of this country have rights under this law – no aggression is now necessary to obtain those rights.’ It is now quite clear not only that strikes are frequently necessary if labor is to gain its rights, but that the government cannot be expected to bargain for labor ... The indecision has already given reactionary industrialists too much support. They, too, want labor disputes brought under the jurisdiction of the NRA code machinery. Undoubtedly this will be the beginning of a concerted assault on organized labor unless the administration immediately asserts itself and backs up the rights of collective bargaining promised labor.” [6]

To attribute the reaction against labor to “indecision” and expect the government to back up labor, is a total misunderstanding of the class nature of both state capitalism and the state itself. They must act against labor. State capitalism proposes to save the old order. It tries to “unify” the nation and “balance” class-economic antagonisms (to “stabilize” capitalist breakdown and for purposes of imperialist aggression); the means adopted, because of the class nature of the state, are for it to merge with monopoly capitalism more tightly, subordinate all other classes, and “institutionalize” the subjection of labor. Formal democracy still prevails. So state capitalism may make minor concessions to labor, within the limits of capitalist decline, engage in maneuvers, give “legal” recognition to the rights of labor, speak of class collaboration. But the aim is increasingly to limit the concrete democratic rights of the workers: the right to organize and strike, to act as an independent class, to struggle for a new social order. This is done by government control of labor, creating a whole network of institutional arrangements (as in pre-Hitler Germany) for the compulsory settlement of industrial disputes and the limitation of independent labor action. The labor policy of state capitalism is an expression of the capitalist struggle to retain power – to prevent labor developing its own struggle to seize power.

State capitalism’s “recognition” of labor is restricted, tends to put unions under control of the state, is accompanied by “democratic” browbeating of labor’s representatives (who are easily and even willingly browbeaten, because only conservative labor leaders are recognized). This appeared clearly in a discussion between William Green, President of the American Federation of Labor, and General Hugh Johnson, NRA Administrator, at a session of “critics” where 2,000 businessmen were present:

GREEN: There must be a change in policy; minimum wages must be established through negotiation with employees, before the codes are approved.

JOHNSON [sharply]: Have you ever proposed that to me?

GREEN [hesitantly]: I think I did.

JOHNSON [more sharply]: I don’t remember it. Isn’t it a fact that all codes have been passed on by the Labor Advisory Board and most of them approved?

GREEN [flustered, backing down]: Well, I don’t want to get in a controversy over it, but if you said approved by the chairman of the Advisory Board I’d say you were right. What I meant was that, in the primary formation of codes, employers and NRA deputies met with no labor men present.

BUSINESSMEN’S CHORUS [belligerently]: No!

JOHNSON [peremptorily]: Each deputy has a labor advisor.

BUSINESSMEN’S CHORUS [delightedly]: That’s right.

GREEN [weakly]: He may be some man employed by the Labor Advisory Board, but we don’t regard him as speaking for labor.

BUSINESSMEN’S CHORUS [laughing uproariously]: Why not! [7]

The courage of the labor representative: “I don’t want to get in a controversy”! The contempt of General Johnson and the businessmen! This is class collaboration in action ...

The class purposes of state capitalism determine the character of the economic “planning” with which it is identified. The planning consists merely of more state intervention under the pressure of deepening contradictions and antagonisms, of artful dodges here and there to prevent the capitalist system from completely breaking down. The fundamental element of the planning of state capitalism is the “planned limitation” of output: it must be that, because the immediate form of expression of the danger which threatens the capitalist system is the abundance which modern industry is capable of creating. Yet this aspect of the problem is wholly overlooked by the most intelligent and persuasive of the liberal exponents of national planning:

“The true objective of planning is not stabilization at any static level, but regularized growth. It is the full utilization of our powers of production, which are continually growing, in order that our consumption may grow correspondingly. To this end the purchasing power of the masses must be maintained and must expand. Viewed from the other side, then, the objective is the progressive raising of the purchasing power and the standard of living of the people to the full extent which our powers of production make possible. Increased production and a raised standard of living must go hand in hand; neither end can be gained without the other.” [8]

“Neither end can be gained without the other.” Exactly. But it is extremely naive to expect capitalist planning to accept that as its “true” objective. It means the suicide of capitalism. For it is precisely the prevention of an upward moving balance between production and consumption, to save the rate of profit from falling disastrously, that causes the crisis and decline of capitalism.

State capitalism resorts to “planning” to save the old order, to prevent a collapse of capitalism. The liberal ballyhoo for planning urges it in the interest of higher standards of living, the stabilization of production and employment, and the elimination of cyclical depressions, arguing that otherwise capitalism will collapse. The approach is different but the purpose is the same: save capitalism. The liberal “planners” accept the fundamental relations of capitalist production. “Strangely enough,” observes one bourgeois economist, “though looking forward to a collectivist organization with ‘control from the top,’ such analyses are by way of showing how the capitalist system can be made to work under appropriate currency and investment controls.” [9] The liberal ballyhoo not only accepts capitalist relations but confuses the whole meaning of planning. Thus Dr. Charles A. Beard tries to prove that planning is capitalist and inherent in capitalism:

“Of inner necessity technology is rational and planful. The engineer must conform to the inexorable laws of force and mechanics ... As technology advances there will be a corresponding contraction of the spheres controlled by guesswork and rule-of-thumb procedure. This means, of course, a continuous expansion of the planned zone of economic activity ... Planning is already here; it is inherent in our technological civilization. It would have gone forward inexorably, even if the Russian Revolution had not borrowed it and dramatized it. [4*] ... Our giant industrial corporations, though harassed by politics, bear witness to the efficacy of large-scale planning.” [10]

Technological planning within the workshop is as old as machine industry. “Technology is rational and planful,” but capitalist production as a whole is economically irrational and socially unplanful. The most scientific planning within the workshop is accompanied by the anarchy of production in general. This is also true of large-scale planning within the corporation, which is limited and stultified by profit-making and monopoly abuses. The contradiction between technological-corporate planning and the socially unplanful character of the capitalist economy becomes another unsettling factor in capitalist production. The enormous development of American large-scale corporate planning in 1922-29 was accompanied by an upflare of unplanful economic warfare in the shape of the “new competition,” by a sharpening of the contradictions of accumulation, of the antagonistic movement of production and consumption, profits and wages, by an aggravation of the socially unplanful character of capitalist production which engendered the worst depression in American history. The conditions, limitations, and contradictions of technological-corporate planning embody the necessity and possibility of unified “national” or social planning of industry. But this, in turn, is an expression of the collective forms of production, of the incompatibility of the socialization of production with the relations of individual ownership and appropriation. Social planning is realizable only by releasing the newer collective forms from the fetters of the older relations, which means socialism. Hence technological-corporate planning cannot, under capitalism, develop into larger unified planning.

Planning is proposed to prevent cyclical depressions; but these are inherent in the relations of capitalist production, and the relations are retained by planning. The American War Industries Board is often cited to prove that “planning” may prevent depression. But the Board did nothing and could do nothing in that direction. It merely ascertained the economic war needs, decided what constituted “essential” and “non-essential” industries, determined allocation of raw materials and transportation, and controlled the prices of certain commodities. Profit-making was not interfered with: it was encouraged. The war provided an enormous and insatiable market, which paid largely with paper claims upon future generations, and postponed the coming of the cyclical crisis inherent in the accumulation of capital. But the crisis and depression appeared two years after the peace. State capitalism and its planning were most highly developed in pre-1929 Germany. But they sharpened instead of moderated the cyclical fluctuations:

“The two post-inflation cycles appear to have been most exceptional in their amplitudes of rise and fall, in the shortness of the first cycle and in the long phase of contraction of the second ... Partial control of the price system may have accelerated the cyclical movements of prices that were not regulated, and even of the physical volume of production and employment.” [11]

Cyclical disturbances are a condition of accumulation, interlocked with all the relations of capitalist production. But state capitalism merely intervenes piecemeal. The liberal planners either offer magic keys, “control” this or “plan” that; or, when their proposals are more comprehensive, they fight shy of the crucial issues. Ten points are basic in any program to abolish the economic maladjustments underlying cyclical disturbances:

  1. Maintain the balance between production and consumption on a progressively ascending scale.
  2. Control profits, i.e., determine the amount of the proceeds of industry needed to produce capital goods (equipment, construction, public improvements). [5*]
  3. Control prices, not in the sense of price-fixing or of stabilization, but to make the abundance of industry available to all and insure proportional economic development.
  4. Prevent disproportionate expansion or contraction in the different spheres of production, in order not to throw them out of gear with one another; this includes “balancing” industry and agriculture.
  5. Adjust, according to plan, the output of capital goods and consumption goods.
  6. Increase the consumer purchasing income of all functional groups on the basis of the increase in productivity and production; abolition, of course, of unemployment arising from technical-economic causes.
  7. Make the distribution of income more equal, which means releasing the forces of consumption.
  8. Abolish speculation of all kinds.
  9. Control investment, its amount and flow, according to plan and balanced economic needs.
  10. Control and planfully regulate all other phases of the national economy which might create disturbances, including foreign trade.

What this means, it is clear, is abolition of the social relations of capitalist production to insure creative planning and the ending of cyclical disturbances. For all the forces of maladjustment which must be controlled arise out of the production of surplus value, its realization as profit, and the conversion of profit into capital. Real planning means control of profits in the sense of eliminating them. Capitalism resists. The NRA has become an apparatus for making higher profits. In England capitalists (particularly the coal barons) prefer stagnation and decline to control of profits. In Germany and Italy capitalism resorted to fascism in defense of profits. So the liberal exponents of planning dodge the issue of control of profits and investment. Stuart Chase recognizes that control of investment is vital to planning, but admits that not much control can be imposed “without, one suspects, reaping a whirlwind,” and throws up his hands. He suggests “broadcasting” information on which industries are overbuilt or underbuilt, urges “more careful” allocation of bank loans, and piously insists that “stock values must not pitch up and down like a canoe on the heaving level of market quotations.” No more! He drives the point home:

“It will be a long day before a planning board can tell a man what he shall do with his surplus funds in this republic, but his sturdy individualism might not be outraged if there were an authority to tell him where his money had a chance of securing earning power over a term of years, and where it would be simply thrown away.” [12]

Thus “planning” comes to depend upon making investment more secure and profitable. Investors unite, rally to planning and make more money! Nothing is accomplished, in the sense of planned prevention of depression, by telling a man where his investments may be more secure and profitable. Cyclical disturbances are not caused by investors “throwing away” their money. In fact, in the welter of contradictions which is capitalism, unprofitable investment contributes to maintaining the balance between production and consumption by decreasing profits or wiping out capital claims but increasing consumer purchasing power.

There are four stages or types of economic planning, separate and distinct, although merging in one another. They are:

  1. Technical-economic planning within the workshop, either in an independent plant or in plants under the same corporate control. This, the most thorough planning under capitalism, is accompanied by cruelty to workers and is hampered by the profit system.
  2. Corporate planning, of which there are three forms. The first is planning within independent corporations: deciding relations among subsidiary plants, determining and assigning output, organizing the sale or purchase of commodities in far-flung markets, planning expansion in old or new fields. Another form is planning by the holding company in control of many subsidiary corporations. The third form is the planning involved in the relations of the banks to industry. All these forms of planning are limited by the conditions of their origin and development. Corporate planning is accompanied by the output of useless goods, excess plant capacity and competition, the ruthless struggle for profits, and the wastes of merchandising. The holding company is primarily an agency for the exploitation of subsidiaries. Banking houses “plan” the flow of capital on a profit-yielding basis, and upset the economic equilibrium by encouraging overinvestment and speculation. Finally, the most highly developed corporate planning is an aspect of monopoly capitalism, which has other aspects: intensified exploitation of labor, predatory control by the financial oligarchy, decline, imperialism, and war.
  3. National economic planning, all forms of which recognize the limitations of corporate planning. The state, in one way or another, intervenes to aid industry. It is aid, not planning; and it is the capitalist state and capitalist industry. National economic planning assumes different forms in different countries and in different stages of development. But it is always aid, never unified planning, it becomes all the more necessary the more highly developed is the corporate planning of monopoly capitalism, which is identified with economic decline and decay, forcing greater aid and intervention by the state. There is no attempt to plan the whole national economy, merely piecemeal aid to supplement private capitalist enterprise where its resources or powers are inadequate or it is in a desperate condition. The state cannot plan, for it is enmeshed in the social relations of capitalist production, and it acts to preserve those relations. Under the conditions of decline, when it becomes more desperately necessary to use collective state action to preserve the relations of individual ownership and appropriation, the planning of state capitalism includes limitation of output, the lowering of wages, and a planned offensive against labor. Capitalism uses a bastardized socialism to repress the productive forces of society, to oppress the working masses, to prevent the emergence and realization of socialism.
  4. Planned economy, the necessary accompaniment of the release of the collective forms and forces of production from their capitalist fetters, of socialism and communism. In a system of planned economy the emphasis is on the new social relations of production, the socialization of production and consumption. All phases of economic activity are under planful regulation and control, including the unity of industry and agriculture. Production is for use, not profit.

A planned economy is possible only after the state power is forcibly wrested from the dominant bourgeois class, only after the dictatorship of the proletariat has destroyed the old social relations of production and set in motion the creation of the new. Liberals insist “we should learn” from the planned economy of the Soviet Union, but they separate it from its class-political accompaniments: they want “democracy” and peaceful change, they object to dictatorship. But planned economy functions in the Soviet Union only because of the dictatorship of the proletariat, only because the dictatorship has overthrown capitalism, crushed the exploiters and prevents their reappearance, only because the dictatorship permits socialization of all economic activity. The liberals object and accept capitalism, which, of course, is sweet, reasonable, democratic (cf. exploitation, forcible suppression of strikes, denial of civil liberties, disemployment and all its terrible results, fascism and its suppression of the concrete democratic rights of the workers, imperialism, war). Liberals depend upon capitalism, have faith in capitalism, fly to the defense of capitalism in its moments of danger.

The economic argument for national planning is overwhelming. Capitalist industry is complex, dependent upon the balanced functioning of innumerable parts; production and distribution are collective and require collective control. These are the objective conditions of planning. But every major economic development has two aspects, the economic and the class-political, and they are inseparable. The class-political aspect of the objective socialization of production and the necessity of planning is the threat to the property relations of the dominant class interests. So the planning of state capitalism proceeds within the limits and purposes of capitalism.

In addition to planning, state capitalism ornaments itself with the plumes of reformism. The Roosevelt Administration pretentiously proposes a whole series of reforms – to realize nothing less than “security”! But when the NRA got into action they talked much about the reforms – unemployment and health insurance, better housing, old age pensions, higher wages. Nothing was done. So Roosevelt talked some more about them one year later. Rugged individualism scorned the reforms when capitalism was well; now it is sick, and they talk about them to impose upon the masses. But the conditioning factors of reform have changed. In the epoch of capitalist upswing, reforms were necessary and possible because of economic growth; under the conditions of capitalist decline, they are unnecessary and impossible. For reforms, with profits moving downward and mass discontent and consciousness moving upward, threaten capitalism economically and politically. Capitalism in decline reacts against reform, as it reacts against progress in general: it moves toward the abolition of reform and its achievements. The workers of Vienna were proud of their model dwellings, built by a socialist administration. This monument to reform was battered down by the cannon of the capitalist state in its efforts to crush the militant workers. The dwellings were patched up. But the workers were thrown out. The scum of reaction moved in. State capitalism limits reform to relief, represses the concrete democratic rights of the workers, and prepares their destruction by fascism. It took Mussolini several years to wipe out the workers’ gains; it took Hitler several months. Progress under fascism! The fascist overlords no longer speak of reform after they get in power; they speak of the necessity of lower standards of living, of the masses living on Ersatz, or substitute, products.

Both the planning and the reformism of state capitalism must fail. But that does not make socialism “inevitable” in the vulgar meaning of the term. Capitalism does not “grow into” socialism, it merely determines the necessary historical conditions, which provide the proletariat and its most conscious, revolutionary elements with the opportunity for creative action. State capitalism is not the transition to socialism but a reaction against it, which, if the revolutionary proletariat does not act, becomes a transition to fascism. No crisis of capitalism is hopeless, unless the proletariat makes it so. For capitalism can find a “way out” – in more oppression of the masses, in war, in decline, stagnation, and decay, for these do not matter to the bourgeoisie if it can cling to power. Socialism is inevitable in the long run: humanity will not forever endure the oppression and decay of capitalist decline, and socialism is the only alternative. But socialism is not inevitable in the short run, and this is decisive in the practical revolutionary politics and struggles of the workers. On this aspect of the problem Lenin, who combined a passion for scientific analysis of objective forces and possibilities with a passion for dynamic action, strategy, tactics, and will, said:

“Capitalism could (and very rightly) have been described as ‘historically worn out’ many decades ago, but this in no way removes the necessity of a very long and very hard struggle against capitalism at the present day ... The scale of the world’s history is not reckoned by decades. Ten or twenty years sooner or later – from the point of view of the world-historical scale – makes no difference; from the point of view of world history it is a trifle, which cannot be even approximately reckoned. But this is just why it is a crying theoretical mistake in questions of practical politics to refer to the world-historical scale.” [13]

The vulgar conception of the inevitability of socialism merely cloaks the reformist and opportunist refusal to struggle for the overthrow of capitalism. Only the revolutionary consciousness and action of the proletariat and the understanding, strategy, and tactics of its communist party make socialism inevitable. [6*]

Behind the vulgar conception of inevitability, in theory, is a failure to understand the differences between the proletarian and the bourgeois revolutions. Merely the similarities are stressed. (Although, suggestively, not the bourgeois use of revolutionary force and dictatorship.) The development of the forms of a new economic order, and its class carrier, transformed the old feudal order and thrust the new class into power with an almost mechanical inevitability. While this process goes on within capitalism, inevitably preparing the objective basis of socialism, there are some differences which profoundly affect strategy and tactics.

The bourgeoisie was a propertied class, the proletariat is non-propertied. From one angle, this means that, while the bourgeoisie merely replaced one form of property with another, the proletariat will abolish property and, consequently, class rule and exploitation. But property was a source of strength to the bourgeoisie, its lack a source of weakness to the proletariat. [7*]

The bourgeoisie owned the new forces of production, whose ownership piled up wealth and power for the new class. Even while it still maintained its political control, the nobility came to depend upon the economic power of the bourgeoisie, compelled to recognize and make concessions to new economic forces and their class representative. In “balancing” the conflicting interests of nobility and bourgeoisie, the absolute monarchy represented an increasingly ascendant bourgeois power. The new class might compromise with the nobility and the monarchy and yet accomplish its essential purpose, because the possession of the new form of property, which irresistibly became the dominant form, strengthened the bourgeoisie and weakened the feudal class.

Thus its ownership of the new forces of production almost automatically made the bourgeoisie the ruling class. But the non-propertied proletariat does not own the economic forces of the new social order. These are implicit in the collective character of industry, the basis of socialism, but industry itself is in the ownership of the capitalist class. Where, under the conditions of monopoly capitalism, ownership is separated from management, the managerial employees and small stockholders are overwhelmingly identified, economically and ideologically, with the dominant property and class interests. The proletariat is in physical possession of the means of production, the source of its revolutionary significance, vigor, and power, but the assertion of this possession is possible only by an ideological transformation and a revolutionary act.

There are other differences. The peasants, artisans, and wage-workers necessarily accepted the leadership of the revolutionary bourgeoisie in the struggle against feudalism; the revolutionary proletariat must carry on a whole campaign to win over or neutralize the farmers and elements of the middle class. Every revolutionary class must wage war on the cultural front. The university, science, technology, and learning were in general manifestations of bourgeois development, under bourgeois control, waging the bourgeois cultural struggle against the feudal order. But now all these forces, in their dominant institutional forms, are opposed to the proletariat; its revolutionary culture, while it includes many concrete achievements, is necessarily and mainly potential, a culture of revolutionary criticism and ideological struggle, interpreting, clarifying, projecting, capable of becoming dominant only after the revolution, where bourgeois culture measurably conquered while the old class-political forms were still in power.

The proletarian revolution, moreover, is much more fundamental than the bourgeois revolution. Where the one replaced older forms of property and exploitation with newer forms, the other annihilates all forms of private property and exploitation. There can be no compromise between capitalism and socialism. Compromise between feudalism and capitalism revealed their exploiting identity. Capitalism developed irresistibly in England in spite of the restoration of monarchy after the Puritan revolution. The nobility, whose make-up was transformed by the “new men” who rose to power as a result of the upsets created by bourgeois development, was enriched, particularly in England and Germany, by industrial exploitation of mineral resources on the great landed estates; some of the nobles were even pioneers of capitalist enterprise. An older class adapted itself to the rule of the new, was measurably absorbed into the new system. But capitalists cannot be absorbed into the new socialist order; hence there can be no compromise between socialism and capitalism. Capitalist resistance to socialism is necessarily more violent and enduring than feudal resistance to capitalism.

Proletarian organization, in a sense, corresponds to the bourgeois ownership of property. The proletariat, organized by the mechanism of capitalist production itself, imposes limitations upon the absolute sway of capital by means of organization. But labor organizations turn into fetters upon action for larger purposes, become entangled with the limited aims of the aristocracy of labor, are influenced by the economic, cultural, and political weight of the ruling class, develop the vested interests of a bureaucracy frightened of “disturbing” actions. The dialectics of the proletarian revolution indicate that an inescapable phase is the struggle against the limited aims and conservative leadership of the older organizations of labor, which is a struggle to transform quantity into quality. “Proletarian revolutions,” said Marx, “criticize themselves constantly; constantly interrupt themselves in their own course; come back to what seems to have been accomplished in order to start anew; scorn with cruel thoroughness the half measures, weaknesses, and meannesses of their first attempts; seem to throw down their adversary only in order to enable him to draw fresh strength from the earth, and again to rise up against them in more gigantic stature; constantly recoil in fear before the undefined monster magnitude of their own objects – until finally that situation is created which renders all retreat impossible, and the conditions themselves cry out: “Hic Rhodus, hic salta!” [14])

The proletariat must strike ruthlessly when the moment is favorable; otherwise its forces may break apart, temporarily but still disastrously, as capitalism is favored by the institutional weight of its economic, cultural, and political domination. For if the proletariat, where the conditions are favorable, does not seize power, if it compromises with capitalism instead of destroying it (as in Germany in 1919), there is an inevitable if temporary renewal and consolidation of capitalist supremacy. The proletariat is susceptible to the lures and wiles of reformism, prone to weaknesses and half measures, hampered by the conservatism of its organizations and their bureaucracy, which avoid and betray revolutionary struggle.

But the complicated conditions of proletarian revolution are offset by an increasing awareness of purposes and means, which becomes itself a social force. [8*] They are, moreover, dangerous only if they are not properly understood and evaluated. They are fatal to moderate socialism and laborism, because these movements are dominated by, instead of dominating, the complex class-economic relations, and reject the necessity of creative revolutionary action in favor of the reformism which inevitably merges into capitalism because of the economic, cultural, and political weight of the capitalist class. The complications of the proletarian revolution demand the creative initiative and awareness of Marxism. They demand a policy of inflexibility and no compromise on fundamental issues with the class enemy, of balancing immediates and ultimates, of an indissoluble unity of theory and practice. But at the same time the utmost flexibility is necessary in approaching the workers, of moving with them even when their actions are characterized by half-measures and weaknesses, of compromising on issues which do not involve fundamental objectives, of maneuvering in the midst of complex class relations, of combining the immediate needs and struggles of the workers with their larger class interests and purposes. These apparently contradictory but dialectically complementary factors impose the necessity of an inflexibly revolutionary and disciplined party of the most conscious and militant workers, a communist party which, precisely because it is inflexibly agreed on fundamental purposes and means, can flexibly approach the complex conditions under which the proletariat operates, be both participant in and vanguard of the struggle of the masses, until they rally to the party’s final revolutionary program and struggle for power.

Monopoly state capitalism cannot work. It merely tries to “stabilize” the conditions of capitalist decline, and makes things worse. The proletariat enlarges its action, becomes more aware of means and purposes, moves toward the revolutionary struggle for power. Capitalism answers with counter-revolution.

State capitalism is itself a struggle against the proletariat and its potential revolutionary action. But state capitalism still clings to formal democracy; the workers still possess, in spite of limitations and repression, the concrete democratic rights to organize and strike, openly to act independently as a class and to engage in the struggle for a new social order. As the economic and political crisis becomes more acute, the immediate and potential revolutionary action of the workers becomes more threatening. Capitalism reacts by destruction of the concrete democratic rights of the workers: destruction of the unions, of the right to strike, of the political organizations of labor. It is no longer merely a question of destroying the revolutionary, the communist vanguard of the working class. For the situation is so acute that revolution is on the order of the day; the conservative worker of to-day may become the revolutionary worker of to-morrow. So capitalism destroys all labor organizations, economic and political, attempts to deprive the working class of all possibility of initiative and independent action. This makes both necessary and possible a united labor struggle.

The immediate form of this struggle against the capitalist reaction, which grows out of the underlying conditions of state capitalism and increasingly becomes fascism, is a struggle to protect the concrete democratic rights of the workers, to preserve their organizations and class independence. Upon this issue the workers are mobilized and thrown into action against the capitalist offensive. But this struggle of the workers to protect their concrete democratic rights must go beyond its immediate purposes, must become a revolutionary struggle for power, for the workers’ rights are dangerous to capitalism in decline and must be destroyed. Out of the immediate defensive action arise the conditions and necessity of larger offensive action, of the final struggle to overthrow capitalism.

The ruling capitalist class is a small oligarchy. Its rule needs a social base in wider mass support. As the oppressive weight of monopoly state capitalism thrusts the working class on to more aggressive action, other classes are set in motion by their own oppression. The farmers and middle class revolt. Fascism is an attempt to use the petty-bourgeois masses (including the agrarian) as the upper bourgeoisie has always done, in other forms, to act as a counter-revolutionary mass force. But these are essentially plebeian masses, the decline of capitalism presses mercilessly upon them, and they are desperate. So fascism masks its purposes with anti-capitalist and radical phrases. But the moment it comes to power fascism reveals itself as the dictatorship of monopoly capitalism. All along fascism is financed and supported secretly by the big capitalists; now they step forward and take power, while the petty-bourgeois masses are assigned the rôle of butchers of the opposition.

The resort to fascism is an expression of capitalist desperation. The capitalists would prefer to rule by the old methods of bourgeois democracy, for while the fascists are their hirelings they demand payment and may go beyond “legitimate” purposes, become locusts devouring profits. But bourgeois democracy breaks down. Its concrete democratic rights offer the workers the opportunity for organization and action. The petty-bourgeois masses, the carriers of democracy and formerly held in leash by it, can now be made a mass support of capitalism only by the annihilation of democracy – precisely as capitalism now clings to power by reacting against all its progressive forces – only by diverting the petty-bourgeois from a struggle against capitalism to a struggle against democracy. This is an important symptom of capitalist decay. Another symptom is the degeneration of the ruling class itself, emphasized by its fascist mobilization of the scum of society, adventurers, gangsters, and degenerates, in a struggle against the new social order. For fascism draws to itself the worst social elements, it makes a cult of cruelty and reverts to Cæsarian barbarism.

From a class-political angle, fascism is distinguished by three main characteristics:

  1. Fascism suppresses the organizational and class independence of the workers. The “Charter of Labor” of Fascist Italy forces the workers into “unions” under complete control of the state, deprives the workers of the right of collective bargaining, prohibits strikes and other forms of independent class action. [15] So does Fascist Germany. But the Nazis have improved upon the technique of their Italian brethren. The only “unions” permitted are in isolated company plants, completely separated from the “unions” in other plants; and all labor relations, including the fixing of wages, are under control of the employer, the “leader” whose “honor” alone limits his actions. [16] Class collaboration!
  2. The petty-bourgeois masses, the social support of fascism, are used to secure power and are then increasingly thrust downward to the level of the workers. Italian fascism weighs heavily upon the petty-bourgeois masses. One of Hitler’s first acts after coming to power was to abolish independent middle class organizations. Testimony is that “the professional classes are poorer now than before,” and “the small bourgeoisie, formerly the most ardent Nazi supporters, are beginning to resent interference by the state in their private lives, while economically their position has not improved.” [17] In fact, it has become worse.
  3. A tighter amalgam of finance capital and the state, for purposes of aggression against the workers and petty-bourgeois masses and war against other nations. Fascism monstrously inflates nationalism.

Underlying these characteristics, and attempting to bind them together, is another: the creation of an ideology to replace the democratic ideology which was formerly the moral source of capitalist domination. This new ideology is a complete reaction against the old, rejecting progress and deifying reaction. It is an expression of the complete moral collapse of capitalism, one of the most important symptoms of a dying class.

Fascism is not a new economic system. Its whole economic policy is merely that of state capitalism, with one important difference: As state capitalism still clings to formal democracy, it must make concessions (as few as possible, of course) to other classes, to “balance” class interests. Fascism may disregard this necessity because it suppresses democracy and class independence. Contrary to its claims, fascism imposes fewer “controls” upon finance capital than state capitalism, because finance capital merges more completely into the state. Beyond this, fascism pursues the state capitalist policy of aiding private enterprise, of trying to overcome the multiplying contradictions and antagonisms of capitalist production by the collective economic action of the state, of trying to “freeze” the disintegration of capitalism. The “corporate state” is merely a disguise for reactionary state capitalism. Fascism cannot create a new economic order. For the petty-bourgeois masses do not represent a new order, but an older one which monopoly capitalism has destroyed; in so far as they are small producers, the petty bourgeois are entangled with the survivals of a mode of production which must completely disappear. Fascism, in fact, strengthens monopoly capitalism. The petty-bourgeois masses behind fascism accept the relations of private property, and these relations inevitably produce monopoly capitalist control. Fascism is merely the old order, only more so and without the progressive features which that order formerly possessed. It is capitalism brutal, reactionary, wholly predatory: capitalism clinging to power by revival of political forms and ideals which it once opposed with revolutionary vigor.

Once in power fascism ruthlessly disposes of the elements within itself which may have taken seriously its anti-capitalist and radical phrases. It combines openly with the old reactionary forces and the repressive apparatus of the state. More or less rapidly but surely, depending largely upon the movement of the cyclical and general crisis of capitalism, fascism loses its plebeian support in the petty-bourgeois masses, and becomes a military dictatorship. Bourgeois democracy provided a mass support because capitalism was on the upswing and by and large “delivered the goods.” Fascism cannot provide a real mass support because capitalism is in decline and no longer “delivers the goods.” But as its social support crumbles, including its promises and ideology, and fascism relies more openly upon mere military force, conditions ripen more quickly for a revolutionary upsurge of the masses.

Fascism, and many of its apologists agree, is a modern form of Cæsarism. What was Cæsarism? It was the expression of Roman decline, stagnation, and decay (which made conquest and rapine a philosophy and a way of life). Progressive class-economic forces were exhausted. The ruling class was decadent, unable to rule any longer by the old methods. No new revolutionary class appeared on the social scene. But Cæsarism operated in a society which was predominantly agricultural and static, where no class was capable of revolutionary struggle, and no new forms of production thrust insistently against the shell of old social relations (except the small beginnings of serfdom, a result of slave agriculture becoming increasingly unprofitable). The despairing masses turned to the other-worldly resignation of Christianity. Thus Cæsarism could long endure. But it eventually crashed. The Cæsarism of fascism operates in a dynamic society, where a new economic order presses insistently for release, and the revolutionary proletariat and Marxism are organizing, striving, acting. These forces can prevent the coming of fascism, with its threat to civilization itself. Fascism may temporarily suppress but cannot destroy them. It is another challenge to creative Marxism, to the communist awareness of purposes and means and its purposive application to new problems.

Footnotes

1*. The proletariat is the typical functional class created by capitalist industry. Small producers disappear. Industrial capitalists are replaced by financial capitalists who are wholly predatory and by multitudes of stockholders who perform no socially useful function. The increasing industrialization of agriculture undermines the class of farmers and points to the day when the farmer, as farmer, will disappear. Another typical creation are the technical, supervisory, and managerial employees in corporate industry. But they are not a class, merely functional groups which, now dependent upon capitalist masters, will merge into the working class under socialism.

2*. Edwin G. Nourse, America’s Capacity to Produce (1934), p.429, estimates that in 1929, by utilizing the 19% unused productive capacity and unused, or unemployed, labor, the national income might have been increased by $15,000 million; this, if equally distributed, meant adding $1,000, or over 50%, to the income of every one of 15,000,000 families receiving the lowest incomes – enough to save all of them from poverty. But the abundance industry is capable of creating, if freed of its capitalist fetters, is still greater. (1) Nourse’s estimate of unused capacity is an absolute minimum, and it is now, moreover, much larger. (2) Only a small part of industry was, and is, using the most efficient available equipment. (3) Equipment is capable of still greater efficiency by liberating and more planfully directing the technological application of science. (4) Abundance, or its purpose, fuller and more creative living, may be augmented by eliminating the capitalist production of useless, meretricious, and injurious products in favor of their opposites.

3*. Centralization of the means of production in the state by the dictatorship of the proletariat is not state capitalism. The class nature of the state is wholly different, capitalist ownership of industry and its class exploitation are abolished, and society moves onward to socialism and communism. State centralization of industry is, moreover, temporary, its duration depending primarily on the dictatorship’s economic heritage and the speed of socialist construction. Socialism means the utmost of economic decentralization within the limits of unified planning, eventually replacing the state with the community of the integrally organized producers.

4*. Dr. Beard drives home this point about planning: “There is nothing Russian about its origin. Indeed, planning of economy was anathema to the Bolsheviks until, facing the task of feeding enraged multitudes, they laid aside Marx, took up Frederick Winslow Taylor, and borrowed foreign technology to save their political skins.” But the liberal ballyhoo for planning arose out of two significant, contrasting facts: developing socialism in the Soviet Union, with its planned economy, and the most catastrophic depression in the history of capitalism, aggravating its decline and decay. Dr. Beard, moreover, cannot cite chapter and verse for his assertion that “planning of economy was anathema to the Bolsheviks,” which is equivalent to saying they rejected socialism. Lenin spoke of the social planning of production in 1916, before the Bolshevik conquest of power; the Soviet Union from the first began economic planning within the limits and requirements of the prevailing stage of the revolution, until the realization of a fully planned economy. Nor can Dr. Beard cite chapter and verse for the assertion that the Bolsheviks “laid Marx aside.” The Soviet’s planning an abandonment of Marx! Yet Marx, while bourgeois political economy was idealizing an unreal free competition, analyzed the increasing concentration and socialization of production and scientifically projected the planned economy of socialism. Where, moreover, is there any reference by Taylor to national economic planning? (Lenin accepted the scientific aspects of Taylorism but rejected its “refined cruelty of exploitation.”) It is simply malicious to say that the Bolsheviks “borrowed foreign technology.” The United States was once an agrarian nation: it borrowed foreign technology. Cultural borrowing is a universal phenomena. Does Dr. Beard imply that the Bolsheviks, before they began to borrow, expected to build socialism without modern technology? Or that socialism should scrap the prevailing technology and start from scratch? The historian here forgets historical continuity. Socialism develops out of capitalism, builds upon the technical-economic basis of capitalism, to which it imparts new purposes and higher forms.

5*. Profit disappears under socialism. This does not mean, of course, a disappearance of the production of machinery and apparatus, transportation equipment, and construction. But these economic factors cease being capital, which is merely a social relation yielding the power of exploitation, and become social wealth. What happens is that the creation of “capital” is transformed into a conscious social apportionment of the labor necessary to produce the machinery and apparatus, transportation equipment, and construction in accord with the needs and objectives of the planned economy. The process is stripped of all its exploiting relations, of all those antagonistic and contradictory aspects which produce social-economic disturbances and disguise the fact that capital goods come into being simply by assigning so much social labor to their production. “If we assume that society were not capitalist, but communist, then the money capital would be entirely eliminated and with it the disguises which it carries into transactions. The question is then simply reduced to the problem that society must calculate beforehand how much labor, means of production and means of subsistence it can utilize without injury for such lines of activity as, for instance, the building of railroads, which do not furnish any means of production or subsistence, or any useful thing, for a long time, a year or more, while they require labor and means of production and subsistence out of the annual social production. But in capitalist society, where social intelligence does not act until after the fact, great disturbances will and must occur under these circumstances.” Karl Marx, Capital, v.II, pp.361-62.

6*. “The socialist republic will not leap into existence out of the existing social loom, like a yard of calico is turned out by a Northrop loom. Nor will its only possible architect, the working class – that is, the wage-earner, or wage slave, the modern proletariat – figure in the process as a mechanical force moved mechanically. In other words, the world’s theatre of social evolution is not a Punch and Judy box, nor are the actors on that world’s stage manikins, operated with wires ... The socialist republic depends not upon material conditions only; it depends upon these – plus clearness of vision to assist the evolutionary process ... It depends, not upon a knowledge of scientific socialist economics and sociology alone. It depends upon that and, hand in hand with that, upon an accurate knowledge ... of what I may call the strategy and tactics of the movement.” Daniel De Leon, Two Pages From Roman History (1902), pp.7, 54, 88-89. In spite of much sectarianism and some practical and theoretical shortcomings, De Leon, whose Two Pages Lenin considered a masterpiece, was a great Marxist, creative in his approach to American problems. He stressed the role of a conscious, highly disciplined party as the spearhead of revolution, and waged ruthless war upon reformist socialism and opportunism. Although he did not originate the idea of industrial unionism as projecting the “government” of the new socialist order, he provided it with a thorough Marxist approach and application, insisting that Engels’ “administration of things,” after socialism abolished the state, could only be the community of integrally organized producers. While Lenin condemned the idea that the revolution depends upon organizing the workers 100% industrially under capitalism, he accepted industrial unionism as the basis of socialist society, “Left” Communism, An Infantile Disorder (1920), p.31: “Trade unions, very slowly and in the course of years, can and will develop into broader industrial rather than craft organizations (embracing whole industries and not merely crafts, trades, and professions). These industrial unions will, in their turn, lead to the abolition of division of labor between people, to the education, training, and preparation of workers who will be able to do everything:”

7*. “The distinctive mark of the bourgeoisie was the possession of the material means essential to its own economic system; on the contrary, the distinctive mark of the proletariat to-day is the being wholly stripped of all such material possession ... The sign, the symptom, the gauge of bourgeois ripeness was their ownership of the physical materials essential to their own economic system; the sign, on the contrary, of the proletariat is a total lack of all material economic power – a novel accompaniment to a revolutionary class. Does this difference establish a difference in kind between the proletariat and the old bourgeoisie as a revolutionary class? It does not. But it does establish a serious difference in the tactical quality of the two forces, a difference that imparted strength to the former revolutionary forces under fire, while it imparts weakness to the proletariat. There was nothing imaginable the feudal lord, for instance, could do to lure the bourgeois from the path marked out to it. Holding the economic power, capital, on which the feudal lords had become dependent, the bourgeois was safe under fire. All that was left to feudalism to maneuver with was titles. It might bestow these hollow honors, throwing them as sops to the leaders of the bourgeoisie ... The striking arm was bound to come down. Wealth imparts strength; strength self-reliance. Where this is coupled with class interests, whose development is hampered by social shells, the shell is bound to be broken through. The process is almost automatic. Differently with the proletariat. It is a force every atom of which has a stomach to fill, with wife and children with stomachs to fill, and, withal, a precarious ability to attend to such urgent needs. Cato the Elder said in his usual blunt way: ‘The belly has no ears.’ At times this circumstance may be a force, but it is only a fitful force. Poverty breeds lack of self-reliance. Material insecurity suggests temporary devices. Sops and lures become captivating baits. And the one and the other are in the power of the present ruling class to maneuver with. Obviously the difference I have been pointing out between the bourgeois and the present, the proletarian, revolutionary forces shows the bourgeois to have been sound, while the proletarian, incomparably more powerful by its numbers, to be afflicted with a certain weakness under fire, a weakness that, unless the requisite measures of counter-action be taken, must inevitably cause the course of history to be materially deflected.” De Leon, Two Pages From Roman History, pp.58-60.

8*. This subject is more fully discussed in Chapter XXVI, The American Revolution.



Notes

1. Moody’s Manual of Investments, Banks and Finance, 1933, pp.2, 666-70.

2. Editorial, New York Post, The New Deal and Steel, June 11, 1934.

3. H.I. Harriman, New York Times, June 25, 1933.

4. Ethel B. Dietrich, French Import Quotas, American Economic Review, December 1933, p.660.

5. John A. Hobson, “Recovery” in Great Britain, Nation, May 23, 1934, p.589.

6. Editorial, Will Roosevelt Back Up Labor, New Republic, May 9, 1934, p.351-52.

7. New York Times, March 6, 1934.

8. Subcommittee of the Committee on Unemployment and Industrial Stabilization of the National Progressive Conference, J.M. Clark, Chairman, Long Range Planning for the Regularization of Industry (1932), p.11.

9. Paul T. Homan, Economic Planning: the Proposals and the Literature, Quarterly Journal of Economics, November 1932, p.18.

10. Charles A. Beard, A “Five Year Plan” for America, Forum, July 1931, pp.1-2.

11. Carl T. Schmidt, German Business Cycles (1934), pp.266, 271.

12. Stuart Chase, Out of the Depression and After (1931), p.25.

13. V.I. Lenin, “Left” Communism, An Infantile Disorder (1920), p.38.

14. Karl Marx, The Eighteenth Brumaire of Louis Bonaparte, p.14.

15. Carmen Haider, Capital and Labor Under Fascism (1930), pp.99-101, 186-87.

16. New York Times, January 17, 1934.

17. New York Times, March 1, 1934; Report on The Political Structure of the Third Reich, by Mildred Wertheimer, New York Times, June 17, 1934.

 


Last updated on 29.9.2007