Source: New International, March 1945, pp. 40–45.
Transcription: Ted Crawford.
Proofreading: Einde O’Callaghan (April 2016).
The battle over reconversion is on, and it is following classic lines. The workers have not yet expressed themselves in any organized fashion and therefore the bourgeoisie is waging an all-out battle as to how the problem is to be settled (within the well-defined limits of bourgeois society). That is the significance of the conflict between Jones and Wallace.
The actual crisis is not here as yet. When, as in the crisis of 1932, the great masses of the people begin to react to a situation fast becoming intolerable, the bourgeoisie will subordinate its disagreements behind a leader who has a mass basis powerful enough to enable him to control the nation. Such a leader was Roosevelt in 1932. But bourgeois society has moved a long way since then. The Roosevelt New Deal was tried, failed, and now is dead. But the problem of 1932 has grown. The war has so accelerated the economic and political development of the country that the defeat of Germany may overnight precipitate the opening battle not in words but in deeds, not in Senate committees, but in sit-downs like Brewster’s and other mass action.
It is no mere reconversion to peace-time production as at the end of the last war. At the very beginning we have to establish the fundamental fact that under the misleading title of Reconversion is hidden, and very imperfectly, the economic and social future of the United States. The workers must know this, for the bourgeoisie has known it, since 1939 at least. In that year the National Resources Board reported to the President on the structure of the National Economy. At the very beginning of the report (p. 3) the authors uttered this solemn warning:
“The opportunity for a higher standard of living is so great, the social frustration from the failure to obtain it is so real, that other means will undoubtedly be sought if a democratic solution is not worked out. The time for finding such a solution is not unlimited.”
These gentlemen, knowing that a large official report was not likely to be read by the masses, discreetly but unmistakeably warned of social revolution:
“Moreover, as people become increasingly aware of the discrepancy between rich resources and poor results in living and as the ineffectiveness in the organization of resources becomes more clear, a sense of social frustration must develop and be reflected in justified social unrest and unavoidable friction. Individual frustration builds into social frustration. And social frustration is quite as likely to work itself out in socially destructive as in socially constructive ways.”
At the very end of the report, in fact in a very short chapter, devoted almost entirely to this topic and entitled Conclusion, the reporters revert once more to the problem with which they began:
“The serious failure to use these resources to the full is placing our democratic institutions in jeopardy. The maintenance of democracy requires that an adequate solution be found to the problem of keeping resources fully employed ...
“This is a problem so broad in its scope and so basic in its character that no simple solution is likely to be found in a day or in a year. If a democratic solution is to be worked out, it will be the product of many minds working through a period of years.”
It is obvious that, in 1939, they were not too certain that “a democratic solution” could be worked out, but that, a though the time was not unlimited, it was not too limited. Since then the contradictory elements which so scared them in 1939 have doubled and trebled themselves. In 1939 they could look back to a total production of 80 billions in 1929, a crash to 60 billions in 1932 and a return to the 1929 level in 1938 chiefly through government spending and preparation for war. Today in 1945, the annual production is approaching 200 billions. A fall from this to the old pre-war fluctuations would be the prelude to disaster. Furthermore, owing to the increase in technological development, the productive capacity per man hour, is far in advance of 1939. The problem therefore is much worse than it looks. What is infinitely more dangerous for them is that the great masses of the people, particularly the workers, have been indelibly educated by the achievements of the productive system and the social and political lessons of the war. That discrepancy between national resources and standards of living which the reporters of 1939 noticed is now the common experience of the workers. They will not stand for it a second time. That is the problem and there is no other problem. The bourgeoisie is not seeking a solution because its heart bleeds to see workers unemployed or living poorly. It seeks a solution because it knows that otherwise the workers will revolt. But if the workers will not tolerate mass unemployment, then the bourgeoisie equally will not tolerate social revolution. And to crush social revolution the bourgeoisie resorts to fascism. That is the background of the constant harping by the New Deal economists on the theme: “if a democratic solution is not worked out in time.”
Roosevelt, Wallace and the great mass of government politicians and bureaucrats do not want fascism. They know that fascism will sweep them and their political power and the administration boards into the dust-bin. But they know that that without the slightest hesitation big capital will exchange them for fascism if they lose the capacity to control the workers. To control the workers requires that the aforementioned discrepancy which has reached such frightening proportions must be closed. Hence today the frantic ones are the Roosevelt politicians, who may or may not worship big capital, but who know that their hides are at stake. That, so far, is the Reconversion problem, and to pose it in any other terms is to deceive not the bourgeoisie or the Roosevelt government but the workers.
Every responsible politician realizes that the opening battle, symbolized for the moment in the conflict between Wallace and Jones, is in reality a reflection of the struggle between the working-class and capitalist society. In his “State of the Nation” message to Congress (and having the Wallace recommendation to the Senate in mind), the President spoke plainly and directly to the capitalist class. “Our policy is, of course, to rely as much as possible on private enterprise to provide jobs.” Roosevelt is and always has been a pillar of capitalism, in the United States and all over the world. “But,” he continued “the American people will not accept mass unemployment or mere makeshift work.” On Saturday, January 27, Walter Lippmann, a reputable and sober bourgeois journalist, discussing the Wallace recommendation expressed himself with equal bluntness: “No one can doubt that the task must be undertaken; people who have seen that there can be overemployment in time of war will not tolerate underemployment in time of peace.” On the same Wallace question Eleanor Roosevelt has been equally plain. “We know, we people in the United States, that the world is facing new and unpredictable conditions ... at the same time we know that adherence to old and outmoded answers may lead to destruction.” We do not need to challenge the sincerity of Wallace. It does honor to the human race and advances his political career. But the milk of human kindness, faith, coverage, high wages, and decency, common or uncommon (see any editorial by PM, the Post or the Daily Worker) which flows so copiously front the lips of this Yankee Mahatma is not unseasoned with the vinegar of the class struggle. “We now must establish an economist bill of rights, not only out of common decency, but also to insure the preservation of our political freedoms.” Our political freedoms include the right of Henry Wallace to be Vice-President, Secretary of Commerce and, possibly, presidential candidate in 1948. “Let us not forget,” he adjured the Senate committee, “the painful lessons of the rise of fascism.”
These gentlemen know well that they are threatened from the right as well as from the left. “Let us remember,” he intones once more, “that political democracy is at best insecure and unstable without economic democracy.” Then he boldly unveils the overhanging nightmare: “Fascism thrives on domestic economic insecurity, as well as on lack of or divided resistance to external aggression. Fascism is not only an enemy from without, it is also potentially an enemy from within.” And with that admonitory outspokenness, verging continually from the belligerent to the lachrymose and back again, which is his special function in the Roosevelt bureaucracy, he draws the international implications of the employment question in the United States. Writing in the New Republic the week following his appearance before the Senate, he began his article with the following:
“Other nations look at the tremendous economic power of the United States, at the violent fluctuations in the American business cycle, at the previously demonstrated ineptitude of the American government in dealing with this problem, and, after seeing all this and looking toward the future, they shudder and pray. They pray for full employment in the United States, not because they love the United States, but because they know that without full employment there is world-wide trouble.”
This is no sham battle. All sections of the bourgeoisie understand the nature of the coming crisis. The question is what to do. Wallace has, or thinks he has, a solution without which “the American way of life” goes to an inescapable crash. But the decisive sections of the capitalist class believe that his proposed solution will ruin capitalism. This is the issue. Behind the struggle of personalities and political maneuvers are two distinct lines of economic thought. Wallace proposes that the government bureaucracy manage capitalism in the interests of capital and labor. His opponents claim that it cannot be done. If there is to be any management of capital, it must be done by capital in the interests of capitalist profit. More particularly they ask Wallace: tell us exactly what you propose to do.
In his prepared statement to the Senate committee, Wallace stated his master’s plan for sixty million jobs. As usual, the preservation of capitalism came first. The industrial plant required “will be privately owned, privately operated and privately financed, but the government will share with the private investor the unusual and abnormal financial risks which may be involved in getting started.”
What could be nicer? You make all the profits possible and we share only risks. But Bailey, the chairman of the Senate Committee, was not to be put off with election propaganda and slogans. He pinned Wallace down:
We spent on war last year 90,000,000,000, and expect to spend this year about 75 or 80 billion. Now that makes a certain sort of prosperity. That is prosperity based on borrowing.
“You say we can produce the same condition in the post-war world. How much do you contemplate we borrow or how much would you raise by taxation to do that?”
It was a simple question, but it raised the fundamental problem. Production for war serves capitalist purposes and makes capitalist profit. When this is over, how does Commerce Secretary Wallace propose to keep the system going to continue a level of production whose stain basis of consumption has been destroyed? To call a capitalist a reactionary is good but is not sufficient. If there was a capitalist means of continuing prosperity, with profits and full employment (miserable though the condition of the majority still is) the capitalist would not have to be urged to do it. All Bailey asked Wallace was: tell us how. Wallace could not answer. The best he could say was that excess savings, which people could not spend owing to curtailment of civilian production, would amount to $100,000,000,000 at the end of 1944.
Bailey came at him again and made the central problem still more clear:
“You stated that whenever our number of gainfully employed people, on wages as good as those existing now, should fall below fifty-seven million  the Government should take steps. But you didn’t say what steps. I would like to know what steps.”
Wallace replied that various types of public works should be in the blue-printing stage “so that you could promptly throw them in at that time.”
The Chairman: You say in your statement that you propose a reduction of taxation.
Wallace rambled again. Bailey pulled him back: It wasn’t taxation?
“Then I gather that your plans contemplate continually increasing the national debt instead of reducing the national debt?”
Wallace could evade no longer. He said:
“Senator, I think that would require a very careful presentation that cannot be made in full at this time.”
But he had just presented a statement filling some nine columns of the New York Times. Chairman Bailey, with confident irony, waltzed Wallace around:
“As I got it, when you get around to it, you expect we could pay the interest, by using a lot of stock to finance it.”
Wallace never got around to it. Instead he gave a perfect exemplification of what happens to a man who is seeking to reconcile irreconcilable interests:
“Senator, to some extent you are putting words in my mouth. Some of the words came out of my mouth undoubtedly ...”
He had indeed condemned himself out of his own mouth. Under fire he could only say that if we could have 170 billions worth of goods and services, the national debt would fare better than if we had less than 170 billion. To Bailey’s remorseless question: how, Wallace, after flopping around like a fish thrown up on shore, could only reply “if we have the plan, it will work out well.” A few seconds later Bailey said: “I have finished my questions.” It was no use wasting more time on this jack-in-the-box. As Bailey said before he cast his vote against Wallace: I shall not vote for anyone whose sole idea seems to be government borrowing and spending.
In his sketch of the American economy prefixed to the Living Thoughts edition of Capital, Trotsky wrote:
During 1938, which was a year of comparative economic revival, the national debt of the U.S. increased by two billion dollars past the thirty-eight billion dollar mark, or twelve billion dollars more than the highest point at the end of the World War. Early in 1939 it passed the forty billion dollar mark. And then what? ... The New Deal policy with its fictitious achievements and its very real increase in the national debt is unavoidably bound to culminate in ferocious capitalist reaction and a devastating explosion of imperialism.
Both the capitalist Senator and the revolutionary are seeing the same thing – the process of capitalist production. Each knows that all reconciliations and palliatives are temporary, that this is a struggle to be fought out to a finish, the system to be preserved or the system to be destroyed. In between is Wallace, deceiving not one single capitalist, unable to answer a single pertinent question, but devoted to capitalism and deluding the workers with his mirage of workers’ prosperity in capitalist decline.
It is not altogether disgusting but is also slightly amusing to see the bourgeois wise men breaking their wise heads against the stone wall of unemployment. Let us briefly re-state the Marxist position, best formulated by Marx in the chapter of Capital entitled: The General Law of Capitalist Accumulation. As always, no paraphrase can do service for Marx’s own words: “The greater the social wealth, the functioning capital, the extent and energy of its growth, and, therefore, also the absolute mass of the proletariat and the productiveness of its labor, the greater is the industrial reserve army. The same causes which develop the expansive power of capital, develop also the labor-power at its disposal. The relative mass of the industrial reserve-army increases therefore with the potential energy of wealth.” There, over seventy-five years ago, was expressed the crisis which has racked American capitalism for sixteen years and is setting the arena for what Philip Murray calls the “years of decision.” For Marx “This is the absolute general law of capitalist accumulation.”
The clash with the theories embodied in Wallace is irreconcilable. The capitalist cannot raise wages or create full employment simply because these are desirable things. As Marx says: “The industrial capitalist always has the world market before him, compares and must continually compare his own cost-prices with those of the whole world, not only with those of his home market.” < The capitalistic method of lowering costs is to increase constant capital, the mass of machinery, at the expense of the variable capital, the labor-force. The capitalist is constantly seeking by means of extended machinery to make fifty men do the work that 100 did previously. This law involves the whole national productive system. A motorcar is a commodity produced at a certain cost and selling at a certain price. But into it have gone the cost of other commodities, coal, steel, leather, etc. Thus it is impossible to distinguish where the cost of one commodity begins and the other ends. The system has to be seen as a whole, with every producer seeking to produce his own commodity as cheaply as possible. Given such a system, full employment is a patent absurdity; high wages for all is equally an absurdity. And when Wallace proposes to substitute for the eighty or ninety billion spent on war, high wages for all and public works, the capitalists refuse to have this muddle.
From the point of view of social development and human needs, the capitalistic necessity of unemployment and more or less subsistence wages is monstrous. But so are imperialist war and fascism – both equally necessary to preserve modern capitalism. But if, as Wallace insists, he wants to preserve private enterprise (capitalism), then certain conditions go with it, and you have to accept them, or abolish the system.
Does Wallace propose to increase wages so as to consume the eighty or ninety billions which were cheerfully consumed by capitalism for its own purposes? Then the cost of every commodity would swell to such proportions that only a steel wall of tariffs could keep out the cheaper goods of foreign countries? But the consequences of that no one knows better than Wallace himself. Speaking of the pre-1933 tariff he says: “I think it was the fundamental cause of the rise of Hitler, fundamental cause for the great deal of disturbances we have found in this land. I have felt that most deeply.” Whenever the Wallace type of politician feels something “most deeply,” we know he is solving by emotion what has proved insoluble by his intellect. For having felt the crisis of the world market most deeply he proposes in effect to cut America off from it on a still greater scale. If Wallace will not learn, then the workers must. The consumption of the masses in the capitalist system is limited by the necessities of capitalist production. To alter that you have to alter the system.
Wallace did not create his theory. It is now the doctrine of a majority of modern economists and the history of the theory will teach the workers much about its real value and their own role in economic theory. For a good hundred years, bourgeois political economists as a body refused to concern themselves with the specific question of unemployment. Ricardo, the greatest of them all, took up the question of the effect of machinery upon the workers only in a later edition of his Principles of Political Economy and Taxation, first published in 1817. For the decade following, the bourgeoisie discussed political economy in realistic terms, and, according to Marx, splendid tournaments were held. But in 1830 came the revolution in Paris and after that, bourgeois economic science rapidly eliminated from its various systems anything which would enlighten the workers as to the exploitative character of capitalist production and the transitory nature of the capitalist system. As one of them wrote three years ago: “The orthodox economists, on the whole, identified themselves with the system and assumed the role of its apologists, while Marx set himself to understand the working of capitalism in order to hasten its overthrow. Marx was conscious of his purposes. The economists in general were unconscious.” 
Conscious or unconscious, they had assumed the role of what Marx contemptuously called “hired servants of bourgeois society,” and that is precisely the same role they (and Wallace) are playing today. The great difference is that whereas up to 1929 they boosted capitalist society and defended it only from its theoretical critics, today they are defending it against the threat of workers’ revolution.
The bourgeoisie, let us note, did not depend upon economists to solve the crisis of 1929. Each bourgeois national group cut off as much international trade as possible and tried to solve the crisis at the expense of the workers and other capitalist nations. The more hard-pressed ones, like Germany, turned to Fascism, in order to crush the workers completely and get a flying start in the inevitable rush for imperialist war, i.e., the solution of the crisis by force. Britain and the U.S., richer than the rest, attempted to pacify the unemployed by doles and Government spending. It is at this period that the economists, terrified by fascism and the approach of the war, began seriously to deal with the terrible realities around them. But hired servants of the bourgeoisie they were and hired servants of the bourgeoisie they have remained. For these wise men did not say: how shall we solve the crisis of unemployment. They said something else. They said: how shall we preserve the capitalist system from this (to them) new monster which threatens it. The narrowness of the problem they set themselves ensured the futility of their various solutions.
Out of their excessive cerebration emerged one distinctive effort, written by a learned and respected Englishman, J.M. Keynes, and its very title is significant. It is called, The General Theory of Employment, Interest and Money. The workers had forced their way at last into the hitherto cushioned and carpeted floors of bourgeois economic science. If Marx were alive today, he could laugh uproariously.
We cannot here deal with the theoretical method (and substantial fallacies) of this epoch-making book. We have, however, to look at the purpose of the author and his conclusions. He is out to preserve capitalism. He says: “It is certain that the world [by the world he means the revolutionary workers – J.R.J.] will not much longer tolerate the unemployment which, apart from brief intervals of excitement, is associated – and in my opinion, inevitably associated – with the present-day capitalistic individualism.” So after a hundred years these gentlemen have learned Marx’s absolute general law of capitalist accumulation. The General Theory of Employment is but a bourgeois rephrasing of Marx’s particular theory of unemployment.
“But,” and here the hired servant (conscious or unconscious) speaks, “it may be possible by a right analysis of the problem to cure the disease whilst preserving efficiency and freedom.” By efficiency and freedom he means bourgeois democracy. What is his main analysis? It can be stated in one word. Underconsumption. The workers do not consume enough. Therefore the capitalists do not invest. We must therefore raise the worker’s consumption in order to induce the capitalist to invest. But here Bailey and Jesse Jones ask: how. And Keynes can do little better than Wallace. He says that the government must do it. But sitting in his study Keynes, who is no fool, cannot help seeing where this theory of his must lead. In his moderate British manner he, so anxious to save capitalism, shows quite clearly that what he is proposing may doom the system altogether. (Emphasis has been added so as to bring out clearly the more startling statements of Keynes, who is a trusted adviser and representative of the British Government.)
“I conceive, therefore, that a somewhat comprehensive socialization of investment will prove the only means of securing an approximation to full employment ...”
The government will have to handle all investment. He tries to soften the blow:
“But beyond this no obvious case is made out for a system of State Socialism which would embrace most of the economic life of the community. It is not the ownership of the instruments of production which it is important for the state to assume.”
That is comfort, even if bleak. But then he adds:
“If the state is able to determine the aggregate amount of resources devoted to augmenting the instruments and the basic rate of reward to those who own them, it will have accomplished what is necessary. Moreover, the necessary measures of socialization can be introduced gradually and without a break in the general traditions of society.”
The government will decide on investment and the government will decide what the interest and what the profit will be. (No wonder Jesse Jones is threatened with apoplexy!) In passing Keynes knocks down two long-standing pillars of capitalism. He declares that his system will mean the “euthanasia of the rentier,” in other words, the painless disappearance of all who live on bonds. Of the financier and the entrepreneur, he thinks that “they are so fond of their craft that their labor could be obtained much cheaper than at present.” He proposes to cut their profits down, for they just love to work. In other words, despite the substantial blows that Keynes does give to the orthodox economic school, he thinks fundamentally that it is the capitalist desire to put profits in his pocket which drives him to activity and not the imperative need of the system as an organism to gather in as much profit as possible, profit being the life-blood of its existence. No wonder that when Wallace comes before the Senate and hasn’t the guts to put these nonsensical theories openly, Bailey and Jesse Jones, spokesmen for capitalism, say “We will see you damned first.”
It is not only that they are defending their profit and property and bonds (from euthanasia). They are as willing to save capitalism as anybody else. They, however, will save it with democracy (including Wallace) or without. They are not concerned with a “democratic solution.” Capital comes first, not democracy. Meanwhile (with Fascism in reserve) they ask: how. And nobody, neither economist nor politician, can answer.
Professor Alvin H. Hansen is one of the foremost advocates of government spending, with a portfolio full of blueprints ready to “throw in.” He is special economic adviser to the Board of Governors of the Federal Reserve System, and this Board believes that the Government must above all balance its budget, i.e, it must not borrow continuously to provide employment. But Hansen is also economic advisor to the National Resources Planning Board which believes that for this purpose the national debt can be limitless. No wonder Wallace complained of words being put into his mouth, some of which, however, had come from there. Far ahead of the others, like Achilles in battle, is Abba P. Lerner, a militant disciple of Keynes. In and out of season, he calls upon the Government to save capitalism by what the calls Functional Finance, sometimes known as Compensatory Fiscal Action. Spend in times of depression and decrease spending in times of prosperity. As for the debt, the “sky is the limit.” In his pamphlet, Functional Finance, he accuses Hansen of being an “appeaser” who opened the gates to the enemy by craven-heartedly capitulating on limitless debt. But Father Keynes is a capitulator. Writing in the New Republic (June 29, 1940) Keynes himself says that deficit spending failed to produce full employment under Roosevelt because of the “gigantic powers of production,” of modern industry, and he confesses: “It appears to be politically impossible for a capitalist democracy to organize expenditure on the scale necessary to make the grand experiment which would prove my case ... except in war conditions.” (Quoted from Post-War Monetary Plans by John H. William, p. 80) So that for that at least the “democratic solution” is hopeless. We ask the workers to ponder over this.
Not Marx but the Brookings Institute in The New Philosophy of Public Debt has shattered some of the liberties which these gentlemen are taking with elementary, in fact very rudimentary laws of capitalist economics. If there was profit, then the private investor would invest and the politicians could be left to play their politics. But “non-revenue producing public works cannot cover their operating, maintenance and replacement costs or interest charges ... It is obvious that most types of public works are useful or enjoyable ... Similarly, expenditures for veterans, consumption, doles, interest and so forth – necessary though they may be – provide no continuing source of public revenues.” (p. 62) As Harold Moulton, the author, says a little later (about war expenditures): They simply represent deadweight charges against the rest of the economic system.” (p. 81) They are useful and enjoyable, but they produce no profit. Their cost, in production, is passed on to the capitalist commodity, and the national capitalism is thereby less fitted for the competitive struggle on the world-market both in loss of profit and cost of production. As for the more general consequences to the capitalist system, we need only re-quote Marx’s quotation in reply to a similar proposal made many decades ago. “Try to create a national credit institute, which shall advance means to propertyless talent and merit, without, however, knitting these borrowers by compulsion into a close solidarity in production and consumption ... In this way you will accomplish only what the private banks accomplish even now, that is, anarchy, a disproportion between production and consumption, the sudden ruin of one, and the sudden enrichment of another ...”  his plan was a national credit institute to help workers and poor capitalists. But the whole Marxist analysis goes to prove the fantastic character of these schemes, all of which, as Marx so insistently points out, ignore the capital-labor relation in the process of production. Keynes himself has no confidence in them and the Roosevelt crisis of 1937 shows in practice what they lead to.
Yet this is the type of economic thought that Wallace and the labor leaders are pumping into the workers as their salvation from the evils of capitalism in its death-agony. Why do they do it, the labor leaders in particular? It is because, consciously or unconsciously (that is for God and psychiatrists to decide) they identify themselves with the capitalist system and are terrified at the thought of what will face them if it is generally recognized by the workers that the system cannot solve the employment question. At all costs the workers must be kept quiet and hopeful. From beginning to end all this theorizing is directed at the workers.
If we want to see how extreme can be the ideas propagated by those whose main aim is to preserve capitalism from the gathering wrath of the working class, we can see it best in the Stalinist program. It is enunciated in Earl Browder’s Teheran. Browder, as every one else, diagnoses the malady accurately: “The central problem is represented by ... the eighty-five to ninety billion dollars of governmental war orders. With the end of the war, this market will suddenly and automatically disappear except to the degree that it is arbitrarily extended as a relief measure.” Now the Stalinists were at one time Marxists. They are not muddleheads. They know precisely what they are doing. Their fundamental policy is to be of service to American capital against the American workers. So Browder does not begin with the home market. He will expand the consumption by the foreign market. But, alas, as he himself says, “an examination of current estimates for America’s post-war trade reveals that the average is around four billions and the most optimistic: variants do not exceed six billion dollars per year.”
From here on Browder’s manner is as important as his matter. In fact both are of a piece. Browder’s base is Stalinist totalitarianism. His party is as totalitarian as it is possible to be in a democratic country. He therefore expresses himself in a manner similar to his political prototypes, Hitler and Stalin. If you read attentively the speeches of the totalitarian leaders, you will notice a certain realism bordering on cynicism. They state problems brutally. But reasonable solution they have none and therefore their promises to solve these problems are frequently comical, not to say ridiculous. However, as a counterpart to this absurdity there is a menacing ferocity which threatens all opponents who do not accept their comic-opera solutions. But whereas Stalin has real power over the Russian workers, this tin-pot totalitarian has no power over the American workers. For this reason and only for this reason his absurdity predominates over his ferocity. But both elements are present.
He has to find forty billions where all other economists have at most found six. He taps the billions off his typewriter as follows: Latin-America, six billions; Africa, six billions; Asia, twenty billions; Europe, six billions; Soviet Union, two billions. “Total new markets: $40,000,000,000.” There it is, as large as life, on p. 78.
So far the comedy. Now comes the totalitarian ferocity. If America proposed this, says Browder, “There is not a government in the capitalist or colonial world that would dare (my emphasis – J.R.J.) refuse or withdraw itself from such a partnership, once the United States made clear the benefits which would accrue to all concerned.” By this scheme in ten years Africa will have absorbed sixty billions of American capitalist development. How is not explained. If Browder had his way, no one would “dare” ask this question. He says so, and that is enough. Tomorrow is another day.
His proof is typical Hitler-Stalin logic. It is not difficult to prove, says he, that such a proposal is impossible (page 18). And indeed it is not. But if you do that, then you are in the embarrassing position of having proved that all hope of full employment in America after the war is an illusion, that our country is doomed to a catastrophic economic crisis ... In fact, that there is no hope except following the Soviet Union to “socialism.” But Browder begins from the premise that American capitalism must be preserved. So therefore it is as clear as day that forty billions of foreign trade per year is possible.
Now for the home market.
Browder has one magnificent plan. Produce the goods, let the rich buy them up “and simply destroy them.” This sounds like satire. It isn’t. That, he says, “would be politically very dangerous, almost as dangerous as permitting tens of millions to go without jobs, and would become the breeding ground for all sorts of social and political disorders.” God in his great heaven forbid any political disorders, so the great plan for increasing the home consumption by throwing forty billions into the sea every year must be cast aside. We must therefore raise wages. But one capitalist can’t do it, because the others will get an advantage. (Browder prefers not to see that one capitalist nation cannot do it either without drawing all sorts of consequences.) So the government, he says, will have to do it. But he brushes the problem aside. “It is not my purpose to attempt any detailed and complete answer... how to double the purchasing power of the main bulk of the population.” And on page 84 this menace to the American people shows where he really stands: “In the final analysis the American people cannot produce any more than they are able to consume.”
No American capitalist has yet dared to utter such ominous words, aimed at the workers. Behind the comicalities of Earl Browder’s “must and therefore can” economics lies a ruthlessness against the workers which he has learned from the totalitarian bureaucracy. Capitalism in America must be preserved. This is the decree of Stalin. And the Communist Party will preserve it if it means limiting production to what it is possible capitalistically to consume. The final proof of how conscious Browder is of what he is doing is his recognition that even the forty billions of foreign trade which, like Prospero, he conjured out of thin air, can only be paid for by returning goods, which can only be absorbed by home consumption. In other words, even with forty billions of foreign trade we would soon be back where we started. Browder shouts for Wallace but he knows as well as Bailey that Wallace’s plan has no basis in theory or in fact. Yet his very extravaganza is only a further proof that the absolute general law of capitalist accumulation is the production of an industrial reserve army of labor in direct proportion to the potentiality of the productive power. Upon that rock these planners will break their necks.
We have given in mere outline the elements of the great problem of our time as it presents itself today. This is only a beginning. When the London Times says that this Wallace-Jones debate will probably take its place with the Haynes-Webster debate and the Lincoln-Douglas debates, it is indubitably correct. In one form or another, this will be the economic and political axis of “the years of decision.” Old parties will break and new ones will be formed as the debate passes from the press and the political assemblies into the realities of the class struggle. The workers have to grasp clearly the fundamental issues at stake. For even today it is not only a debate. Wallace’s demagogy and his projected appointment are only one-half of Roosevelt’s strategy. The other half is to use this windy plan as a lever for binding the workers to the bureaucratic machinery of government. The Wallace appointment is part of the bait for a National Service Act. The Roosevelt plan demands the disciplining of the workers: Wallace talks but Roosevelt acts.
(In a succeeding issue of The New International we shall discuss the practical Marxian program which corresponds in our day to the fulfillment of the Marxian theoretical analysis.)
1. The Times report says 75 million, an obvious mistake.
2. (Capital, Vol. III, p. 396)
3. An Essay on Marxian Economies, by Joan Robinson, p. 2.
4. Capital, Vol. III, p. 7.
Last updated on 18 April 2016