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Labor Action, 28 October 1946


Leon Trotsky

On: “Marxism In Our Time”

(April 1939)


From Labor Action, Vol. 10 No. 43, 28 October 1946, p. 5.
Transcribed & marked up by Einde O’Callaghan for ETOL.


The following excerpt is taken from a forthcoming pamphlet by Leon Trotsky entitled Marxism and Our Times. This pamphlet is being published by the Workers Party and will be ready for sale in about two weeks. Originally, Trotsky’s essay appeared as an introduction to Karl Marx, a volume in the Living Thoughts Library issued by Longman, Green. It was written in the late thirties and related to the problems of United States capitalism, the New Deal and the particular problems of the society in which we live. The section we reprint here is devoted to a particular aspect of American economy which has acute relevance to the problems of our times.Editor


Competition and Monopoly

Relations amongst capitalists, who exploit the workers, are determined by competition, which for long endures as the mainspring of capitalist progress. Large enterprises enjoy technical, financial, organizational, economic and, last but not least, political advantages over small enterprises. The greater amount of capital, being able to exploit a greater number of workers, inevitably emerges victorious out of a contest. Such is the unalterable basis of the concentration and centralization process of capital.

While stimulating the progressive development of technique, competition gradually consumes, not only the intermediary layers, but itself as well. Over the corpses and the semi-corpses of small and middling capitalists, emerges an ever-decreasing number of ever more powerful capitalist overlords. Thus, out of “honest,” “democratic,” “progressive” competition grows irrevocably “harmful,” “parasitic,” “reactionary” monopoly. Its Sway began to assert itself in the ’eighties of the past century, assuming definite shape at the turn of the present century. Now the victory of monopoly is openly acknowledged by the most official representatives of bourgeois society. Competition as a restraining influence, complains the former Attorney-General of the United States, Mr. Homer S. Cummings, is being gradually displaced and, in large fields, remains only “as a shadowy reminder of conditions that once existed.” Yet when in the course of his prognosis Marx had first deduced monopoly from the inherent tendencies of capitalism, the bourgeois world had looked upon competition as an eternal law of nature.

The elimination of competition by monopoly marks the beginning of the disintegration of capitalist society. Competition was the creative mainspring of capitalism and the historical justification of the capitalist. By the same token the elimination of competition marks the transformation of stockholders into social parasites. Competition had to have certain liberties, a liberal atmosphere, a regime of democracy, of commercial cosmopolitanism. Monopoly needs as authoritative a government as possible, tariff walls, “its own” sources of raw materials and arenas of marketing (colonies). The last word in the disintegration of monopolistic capital is Fascism.

Concentration of Wealth and the Growth of Class Contradictions

Capitalists and their advocates try in every way to hide the real extent of the concentration of wealth from the eyes of the people as well as from the eyes of the tax collector. In defiance of the obvious, the bourgeois press is still attempting to maintain the illusion of a “democratic” distribution of capitalist investment. The New York Times, in refutation of the Marxists, points out that there are from three to five million separate employers of labor. Joint-stock companies, it is true, represent greater concentration of capital than three to five million separate employers, yet the United States does have “half a million corporations.” This sort of trifling with lump sums and average figures is resorted to, not in order to disclose, but in order to hide things as they are.

From the beginning of the war until 1923 the number of plants and factories in the United States fell from index figure 100 to 98.7, while the mass of industrial production rose from 100 to 156.3. During the years of sensational prosperity (1923–1929), when it seemed that everybody was getting rich, the number of establishments fell from 100 to 93.8, while production rose from 100 to 113. Yet the concentration of business establishments, bound by their ponderous material bodies, is far behind the concentration of their souls, i.e., ownership. In 1929 the United States did actually have more than 300,000 corporations, as the New York Times correctly observes. It is only necessary to add that 200 of these, i.e., 0.07 per cent of the entire number, directly controlled 49.2 per cent of the assets of all the corporations, four years later that ratio had already risen to 56 per cent while during the years of Roosevelt’s administration, it has undoubtedly risen still higher. Inside these 200 leading corporations the actual domination belongs to a small minority. A Senate committee found out in February 1937 that for the past twenty years the decisions of twelve of the very largest corporations have been tantamount to directives for the greater part of American industry. The number of chairmen of the boards of these corporations is about the same as the number of members in the cabinet of the President of the United States, the executive branch of the republic’s government. But these chairmen of the boards are immeasurably more powerful than the cabinet members.

The same processes may be observed in the banking and insurance systems. Five of the largest insurance companies in the United States have absorbed not only the other companies but even many banks. The total number of banks is reduced, chiefly in the form of so-called “mergers,” essentially by being absorbed. The extent of the turnover grows rapidly. Above the banks rises the oligarchy of super-banks. Bank capital merges with industrial capital into financial super-capital. Supposing that the concentration of industry and banks were to proceed at the same rate as during the last quarter of a century – as a matter of fact, the tempo of concentration is on the increase – in the course of the • impending quarter century the monopolists will have garnered unto themselves the entire economy of the country, without leaving over so much as the widow’s mite.

The statistics of the United States are here resorted to only because they are more exact and more striking. Essentially the process of concentration is international in character. Throughout the various stages of capitalism, through phases of conjunctural cycles, through all the political regimes, through peaceful periods as well as through periods of armed conflicts, the process of the concentration of all the great fortunes into an ever-decreasing number of hands has gone on and will continue without end. During the years of the Great War, when the nations were bleeding to death, when the very bodies politic of the bourgeoisie lay crushed under the weight of national debts, when fiscal systems rolled into the abyss, dragging the middle classes after them, the monopolists were coining unprecedented profits out of the blood and muck. The most powerful companies of the United States increased their assets during the years of the war two, three, four and more times and swelled their dividends to 300, 400, 900 and more per cent.

In 1840, eight years before the publication by Marx and Engels of the Manifesto of the Communist Party, the famous French writer Alexis de Tocqueville wrote in his book on Democracy in America: “Great wealth tends to disappear, the number of small fortunes to increase.” That thought has been reiterated innumerable times, at first with reference to the United States, later with references to those other young democracies, Australia and New Zealand. Of course, de Tocqueville’s view was already erroneous in his own day. Still, real concentration of wealth began only after the American Civil War, on the eve of which de Tocqueville died. At the beginning of the present century two percent of the population of the United States already owned more than half of the entire wealth of the country; in 1929 the same two per cent owned three-fifths of the national wealth. At the same time 36,000 wealthy families had as great an income as 11,000,000 middling and poor families. During the crisis of 1929–1933 monopolistic establishments had no need to appeal to public charity; on the contrary, they rose higher than ever above the general decline of national economy. During the ensuing rickety industrial revival on the yeast-cakes of the New Deal the monopolists again skimmed a lot of heavy cream. The number of the unemployed decreased at best from 20,000,000 to 10,000,000; at the same time the upper crust of capitalist society – no more than 6,000 adults – garnered fantastic dividends; this is what Solicitor General Robert H. Jackson proved with figures during his tenure as Anti-Trust Assistant Attorney-General.

Ferdinand Lundberg who, for all his scholarly conscientiousness, is a rather conservative economist, wrote in his book, which created quite a stir: “The United States is owned and dominated today by a hierarchy of sixty of the richest families, buttressed by no more than ninety families of lesser wealth.” To these might be added a third tier of perhaps three hundred and fifty other families, with incomes in excess of a hundred thousand dollars a year. The predominant position there belongs to the first group of sixty families, who dominate not only the market but all the levers of government. They are the real government, “the government of money in a dollar democracy.”

Thus, the abstract concept, “monopolistic capital” is filled in for us with flesh and blood. What it means is that a handful of families, bound by ties of kinship and common interest into an exclusive capitalist oligarchy, dispose of the economic and political fortunes of a great nation. One must perforce admit that the Marxist law of concentration has worked out famously!

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