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Albert Glotzer

The Trend of the Economic Crisis

(February 1931)

From The Militant, Vol. IV No. 3, 1 February 1931, p. 5.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The year 1930 closed with indications of a prolongation of the crisis in American capitalism and the further unloading of the burden of this crisis upon the shoulders of the working class. This condition exists despite the repeated forecasts of the economists and business leaders to the effect that the revival would begin during the latter part of last year.

The months of November and December 1930 witnessed increasing declines in business activity and a growth of unemployment. December closed with an index figure of 75.7 for “business activity,” which marked a drop of two-tenths points from the November figure of 75.9. The significance of this figure, is that it is the lowest point reached since March 1908. These figures represent a survey of the basic and most important industries, numbering ten in all. Of the ten types, automobile and bituminous coal production alone, show an upward curve. But the rise of automobile and bituminous coal production is purely seasonal.

The month of January 1931, one in which a rise is to be expected because of its spring preparatory character, shows an unshifting position. Indices of steel and pig iron production dropped sharply during the first two weeks of the month. In addition new orders in steel are far below the expectations of the economists in spite of the expected seasonal rise and the advance in automobile production. Other factors pointing to the continuation of the crisis exist in the decline of freight loadings and the decrease in electric power production. It is with the above indications in mind that Benjamin Baker, editor of the Annalist, is prompted to remark in the issue of January 16, 1931, that “it may be that the comparative stability of the business index for the last two months of 1930 indicates that the bottom of the current depression has been fully reached, but it is not easy to be confident on this point.”

The irresistible force of the crisis has effectively answered the myth of unending prosperity and the super-power of American capitalism. The object of capitalism at this stage is to strive to emerge from the present crisis in a comparatively short period of time. Reams of paper are written to convey this propaganda to the masses of workers in order to quiet the growing dissatisfaction.

If past experiences are to be considered in evaluating the length of time that it will take to reach a stage of “normalcy”, then it is within reason to expect that an economic revival will not take place for at least another year and a half. In the table below, which appeared in the Annalist of January 16th (1930 review issue) figures appear showing the lowest point reached in the business index during past crises and the number of months required in reaching “normalcy.”


Bottom of


Length of
Recovery to
Nor’l (Mos.)

February 1885



June 1894



November 1896



March 1908



November 1914



March 1921



It will be noticed that the average length of recovery totalled almost 15 months. However, with the exception of March 1921, the figures speak of a period of the ascent of world capitalism. In the first crisis following the world war, and taking place in the period of the world decline of capitalism the greatest number of months required for a revival was reached. With the month of December closing at the lowest point, reached in twenty-two years and 6.3 points below the first post-war crisis of 1921, in addition to the factor of a decaying system, it is evident that a revival is a long way off.

In the field of foreign trade a decline of $2,737,780,000 from 1929 was recorded. The total exports declined 25 per cent, in value, and 20 percent, in quantity. European exports dropped 20 percent, below 1929, while the decline in areas exclusive of Europe declined 30 percent.

The coming year will witness the attempt of American capitalism to issue from the crisis by a two-fold policy of increased aggression in the field of foreign tirade and a continuation of the offensive against the American working-class. This is inevitable with the contraction of the world and home market and the growing competition of the imperialist powers in efforts to issue out of their difficulties. The tendencies in this direction are long existent; they are an integral part of imperialist capitalism, but in the present period of a [line missing] within the strongest imperialist country in the world, they will be accentuated many times. Already the United States is making aggressive efforts to defeat the British Empire in the struggle for winning the Latin American market. The same type of penetration is to be observed with regards to the Orient. The Young Plan, the War Debts, and similar instances of attempts at economic domination point to the efforts made in putting Europe completely on rations.

The efforts to emerge from the crisis by dominating the world market more completely can have nothing but catastrophic results for capitalism. In the struggle for supremacy the United States will meet terrific resistance from the other capitalist powers and vice-versa. We are living today in a period of the decline of world capitalism, a period which Lenin described as one of “wars and revolution”. Therefore the struggles for domination of the world market can have no other effect but that of weakening capitalism still further and preparing its eventual destruction. At home the burden of the crisis rests entirely upon the shoulders of the working class. Capitalism has proved again that it cannot and will not provide for the working class.

Every crisis in capitalism finds the working class suffering the burdens of such crises. The Standard Statistics Corporation estimates that during the first nine months of 1930 dividends increased more than a billion dollars over the year 1929. while wages during this same period declined over $8,800,000,000. The Annalist figures point to a drop in factory employment 81.2 for December as against 82.1 for November. It is also recorded that factory payrolls are at the lowest point since April 1922, declining to 72.2 for December from the November index of 73.5. The estimated decrease in wages for the entire year of 1930 is placed at a billion dollars a month! The whole tendency is toward further rationalization.

U.S. capitalism is making efforts to overcome the crisis by increasing the exploitation of the workers. This will be accompanied by continued unemployment, increase of the working hours, and nationwide wage-cuts. The table below taken from Labor’s News is illuminating in regards to the tendencies toward wide-spread wage-cutting.










Wage Increases








Wage Decreases








The above figures represent the number of business organizations that instituted either wage increases or wage cuts. The growing wage-cuts are easily obtained. The ratio of this table shows that for every 15 workers that receive wage increases. 85 workers experience wage cuts. Of additional importance is the fact that the granting of wage-increases was confined in the main to the organized workers, while the great mass of unskilled and unorganized workers suffered heavy losses.

In consideration of past experience, and the added difficulties, of a moribund capitalism the end of the crisis is far to seek. The effects of the policy of American capitalism can have but a two-fold effect. It will, on the one hand, accelerate the antagonisms of world imperialism and the struggles of the working class at home. The American working class has a long way to go to reach the stage of class consciousness, and a will to struggle. But that it is on that road and will continue to travel it, is indisputable. The coming year will witness no appreciable improvement in the present crisis. But the burden of that crisis will be placed more heavily upon the backs of not only the American working class but the world proletariat as well.

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