Stalinism: It's Origin and Future. Andy Blunden 1993

The Aftermath of the Second World War

At the beginning of the Second World War, Europe was dominated by fascism. The workers' movements in Britain and the US had been crushed and demoralised during the depression. All the leaders of the Russian Revolution had been murdered and the USSR was held in the iron grip of Stalin. The national liberation movements in the Far East had been brutally suppressed.

Nevertheless, the revolutionaries of the time anticipated that the Second World War would make way for an unprecedented upsurge of revolutionary struggle.

Despite the criminal misleadership of Stalin, the mighty Red Army and the Soviet working class saved Europe from fascism, and at the end of the war half of Europe was occupied by the Red Army. The economies of the entire capitalist world outside of the USA were in a state of disintegration and the masses of Europe and the colonial world were in rebellion.

The situation was indeed ripe for world socialist revolution! Between 1944 and 1948, there were working class or anti-imperialist uprisings in Albania, Algeria, Bulgaria, Burma, China, Czechoslovakia, Egypt, France, Greece, Hungary, Germany, India, Indonesia, Iran, Italy, Korea, Malaya, Palestine, Poland, Rumania, Syria, Thailand, Vietnam and Yugoslavia and powerful movements of the working class in countries like Britain and Australia.

How did the leadership of the USSR respond to this situation? What was their perspective? And how did events actually unfold?

From the time Hitler tore up the non-aggression pact with Stalin and invaded the USSR, Stalin was committed to a policy of combining military might with collaboration and peaceful co-existence with 'democratic imperialism'. Loyally adapting themselves to the diplomatic requirements of the Soviet Union, the Communist Parties in the democratic imperialist countries became 'respectable'.

The alliance between the capitalist governments and their domesticated Communist Parties rested on the strategic alliance cemented at the Potsdam and Yalta Conferences in which the world was divided into two domains, and the USA and the USSR each agreed not to interfere in the other’s 'legitimate affairs'.

The post-war revolutionary upsurge was contained on the basis of this agreement between the USSR and imperialism and the pre-eminent military and economic position of the USA among the capitalist powers.

Stalinism did not have a perspective of leading wars of national liberation struggles in the countries such as China and Vietnam where the Communist Parties held the leading position in the national liberation movements. Nor was it the perspective of the Communist Parties in the old capitalist countries to make socialist revolution. This was part of the deal which was intended to guarantee the security of the USSR.

What was the perspective of Stalin in relation to the countries left under its control? It was not to impose 'socialism', but the Menshevik one of forming a bloc with 'all progressive forces' for a peaceful transition through capitalism - 'People’s Democracy'.

The paradox of the post-World War Two period is summed up in the opening words of the Transitional Program of 1938:

'The world situation as a whole is chiefly characterised by a historical crisis of the leadership of the proletariat. ... the chief obstacle in the path of transforming the pre-revolutionary into the revolutionary state is the opportunist character of proletarian leadership'.[67]

In the course of the war the combined repression of Stalinism and fascism had virtually eliminated revolutionary Marxism in the USSR and Europe and it remained marginalised in Britain, the Americas and most of Asia. The Trotskyist perspective of a post-war revolutionary upsurge was confirmed but perversely, for socialist revolution is impossible without a Marxist party capable of leading the revolution.

I: Sell-Out of the Century

At a series of Conferences in Teheran, Moscow, Yalta and Potsdam between November 1943 and August 1945, the 'Big Three'[68] carved up the world between the Soviet Union and the West. Churchill recorded the proceedings at Moscow in October 1944 in his diary:

'The moment was apt for business, so I said “Let us settle about our affairs in the Balkans. Your armies are in Rumania and Bulgaria. We have interests, missions and agents there. Don’t let us get at cross-purposes in small ways. So far as Britain and Russia are concerned, how would it do for you to have ninety per cent predominance in Rumania, for us to have ninety per cent of the say in Greece, and go fifty-fifty about Yugoslavia?” While this was being translated I wrote out on a half a sheet of paper:

RumaniaRussia 90%The others 10%
GreeceGreat Britain 90%Russia 10%
(in accord with USA)
BulgariaRussia 75%The others 25%

'I pushed this across to Stalin, who had by then heard the translation. There was a slight pause. Then he took his blue pencil and made a large tick upon it, and passed it back to us. It was all settled in no more time than it takes to set down, ... After this there was a long silence. The pencilled paper lay in the centre of the table. At length I said, “might it not be thought rather cynical if it seemed we had disposed of these issues, so fateful to millions of people, in such an off-hand manner? Let us burn the paper”. “No, you keep it” said Stalin'.[69]

This agreement between Stalin and the leaders of imperialism extended not just to the countries named in Churchill’s note, but across the entire globe. The events which followed the end of the war can therefore only be understood in the light of this agreement made before the war had ended.

The Aftermath of the War

In November 1945, in defiance of an agreement by Stalin that King Peter would be restored in Yugoslavia, Tito declared a People’s Republic.

During the War, Stalin established relations with the 'Royal government-in-exile' and promised the British that King Peter would be restored. In line with the promises made to the British, Stalin instructed Tito to form a Popular Front with bourgeois parties. But the 800,000-strong partisan army led by the Yugoslavian CP was waging a civil war against not only 40 divisions of the German army, but the Royalists and the bourgeois organisations who were collaborating with the Nazis! The 'progressive sections of the bourgeoisie' with whom Tito was supposed to be forming a Popular Front did not exist.

In Tito’s words:

'from the first day of the struggle against the occupying forces we had to begin creating a new people’s government instead of the old government ... which under the occupation had for the most part placed itself at the service of the Germans and the Italians ... the Comintern warned us not to forget that an anti-fascist war was being waged and that it was a mistake to found new organs of government. What did this mean? What would have happened if we had accepted these instructions? It would have meant suicide. We should never have been able even to launch the uprising, we should have been unable to mobilise the majority of the people if we had not offered them a clear prospect of a new, happier and more equitable Yugoslavia rising out of that terrible war ... during this period [the Comintern] was negotiating with the Royal Yugoslav Government In Exile'.[70]

In October 1943, Tito sent a telegram to the 'Big Three' conference in Moscow warning that 'we acknowledge neither the Yugoslav government in exile nor the King abroad, because for two and a half years they have supported the traitor Draza Mihailoic ... we shall not allow them to return to Yugoslavia because that would mean civil war'.

By the end of the war, People’s Committees were in control of the country. Stalin had agreed with the Allies however, that King Peter and his government-in-exile in London, would be included in the government. In the post-war election, Tito was elected President with a 90 per cent vote.

After the failure of a short-lived attempt to form a coalition government with bourgeois elements, a rapid process of nationalisation was implemented in 1945.

The nationalisation of the property of former Nazi collaborators and enemy nationals painlessly brought 80% of industry into state ownership. Land was distributed to the peasants, who made up 93% of the population. There was very little collectivisation of agriculture, which remained in private hands. Despite the fact that their Soviet teachers were advocating capitalism for Yugoslavia, the Yugoslavs emulated Stalin’s model of a centrally planned economy.

Tito’s reluctant defiance of Stalin was forced upon him by the People’s Committee movement which had won the overwhelming support of the masses in the fight against fascism. For this 'crime', Tito was threatened and slandered by Stalin and in June 1948 the Yugoslav CP was expelled from the Cominform.[71] It was only after 1948 that Tito began to develop ideas of “market socialism” and workers' co-operatives.

The Baltic states (Estonia, Latvia and Lithuania) had been a part of the Tsarist Empire and were retained under the 'democratic' government of Kerensky. They had enjoyed national independence only from 1920 after their liberation from Poland by the Red Army until August 1939, when Stalin and Hitler carved up Poland and the Red Army occupied the Baltic States. In 1945 they were simply annexed into the Soviet Union.[72]

In Bulgaria, the masses rose up in advance of the liberating Soviet army. At the end of 1944, soldiers set up soldiers' soviets, refused to recognise rank, dismissed officers who opposed them, removed local government officials and raised red flags everywhere. The Russians insisted that the removed officers and officials be reinstated and that the soldiers recognise the authority of The Fatherland Front Government being set up by the Russians as a popular front between themselves and Bulgarian bourgeois elements. For its part, the Bulgarian Communist Party solemnly declared that there would be a return to the status quo and no nationalisation. In March 1945, Stalin declared: 'We are building a democratic country based on private property and private initiative'.

The Polish Communist Party had been dissolved by Stalin in 1938, but once the War began the need for the support of the Polish working class became obvious, and a group of Polish communists was parachuted into Poland in December 1941. Most of these were arrested or killed, but in November 1943 Wladyslaw Gomulka, who had remained in Poland after 1939, became the Secretary of the PPR.

In late 1943, Gomulka organised a National Council of the Homeland, intended to be the nucleus of a broad 'democratic front'. The Socialists and the Peasants' Party declined to join however. But the National Council received Soviet support and organised the Polish First Army, numbering 80,000 soldiers and fought their way westwards with the Soviet armies. In January 1945, Stalin formally recognised the Committee of National Liberation as the legitimate Polish government.

Five years of Nazi occupation had left Poland physically and socially shattered. One Pole in five had perished as a direct result of the war. The Polish bourgeoisie and middle classes had not collaborated with the Nazis, but they had been virtually destroyed by fascist repression. Nearly 40 per cent of the national wealth had been destroyed. Half the public transport, 60 per cent of the schools and 60 per cent of all postal and telephone equipment had gone. Half the doctors and lawyers in Poland had been murdered, and 40 per cent of the university professors.

Despite the devastation of the War, the Polish workers had maintained their resistance to the Nazi occupation from beginning to end, and there was now an impatience for real change. A land reform in September 1944 broke up the large estates and distributed six million hectares of land to small farmers. All industrial enterprises employing more than fifty workers were nationalised, so that by late 1946, the state sector accounted for 91 per cent of industrial production. Reconstruction went ahead rapidly, living standards began to recover, and by 1946, the PPR membership reached 235,000.

The Red Army entered Hungary in September 1944, after a battle in which 50 per cent of Hungary’s soldiers perished. The masses rose up everywhere against the hated fascist Horty regime.

A Provisional government was set up by the Red Army in Debrecen in December 1944, and Budapest laid under siege until falling on 18 January 1945. With massive uprisings against the capitalists and landowners throughout the country, sweeping land reforms were carried out by Interior Minister Imre Nagy. Nagy was a popular figure in Hungary, and regarded as a moderate.

The conception behind the land reforms was the abolition of feudalism in the countryside. There was no intention to carry forward towards nationalisation of industry.

Elections were held in November 1945. Rather than boosting the popularity of the Communists, the land reforms gave an enormous boost to the Smallholders' Party (57%), which won a majority over the Hungarian United Workers Party[73] (the Communist Party and the Social Democrats each getting 16%)

In May 1946, the Communist Party of Czechoslovakia, which had led the anti-fascist resistance and had the support of the great majority of the working class, won a commanding position in parliamentary elections. CP leader Klement Gottwald headed a coalition government, and Soviet troops were withdrawn.

King Michael of Rumania took the throne in August 1944 as the Red Army reached the frontier. He was retained in power by the Stalinists with the promise of a continuation of capitalism. For three years after the entry of the Red Army, Rumania was ruled by a coalition between the Stalinists and extreme right-wing elements including Nazi collaborators and wealthy bankers.

The aim of Soviet policy was to secure Eastern Europe militarily. While national Communist leaders in Poland or Yugoslavia, for instance, had aspirations to build socialism in their countries, Soviet policy had no such aim. The greater the degree of independence of the local Communist Party, the bolder the socialist policy favoured by the local communists. In Yugoslavia, Czechoslovakia or Poland the only force capable of saving capitalism was Stalin. Otherwise, with a policy of land distribution rather than collectivisation for the peasants, social revolution was a 'lay down misère' in any of the European countries not occupied by the Western Allies.

In Hungary, Bulgaria, Rumania and the area of Germany under Soviet occupation the capitalists had in the main collaborated with the Nazis and now faced the vengeance of masses. In these countries the Stalinist armies facilitated the reconstruction of capitalism.

While continuing to suppress any independent political or social organisation, the 'liberators' systematically milked these countries for their own needs, either in the form of 'reparations' (especially Hungary and Rumania), or simply by means of unequal contracts. The economies of the occupied countries were also tied into trading relations with the Soviet economy. In particular, the USSR needed the industrial produce of Czechoslovakia and Poland.

The Impact of the War on the Soviet Union

The War had had a devastating effect on the Soviet Union. For three and a half years the war had been fought on its territory, and the Soviet Union fought under a criminally incompetent leadership. 1,700 towns and 70,000 villages had been totally destroyed, twenty-one million people were killed, and over a million people were deported to the interior on Stalin’s order. Even by 1950, the USSR still had only 90 per cent of its pre-war population and the birth rate was declining.

The bureaucratic centralist structure of the economy had been accentuated during the war, despite the absence of the basic infrastructure necessary for the successful operation of a centrally planned economy over its vast territories. Under these conditions, military command backed by military forms of compulsion made the bureaucratic fiction an institution in the Soviet Union. Totally unrealistic plans would be drawn up at the top based on Stalin’s idiosyncratic schemas, and passed down the line. Finding the plans unworkable, but facing severe penalties for failure, subordinates obediently reported fulfilment. Lie built upon lie.

All the nations of the USSR had mobilised for war to repulse imminent annihilation at the hands of the Fascist armies. No appeal to internationalism or socialist principles was necessary. After the War, Stalin abandoned any reference to internationalism or socialist ideas. The US maintained the threat of nuclear annihilation, so good old-fashioned chauvinism could be relied upon to deflect criticism from the leadership. A comprehensive system of uniforms, medals and ranks was introduced for all government officials, with a corresponding graduation in privileges from dire poverty for the workers up to dachas in the Crimea for top officials.

The deeply conservative turn in Stalinist politics was reflected in a new family law introduced in 1944. This law removed the recognition previously afforded to de facto marriages, revived the notion of illegitimacy of children, made divorce even more difficult and expensive, further restricted the conditions under which abortion was legal, and introduced rewards for bearing large numbers of children. The schools and official media vigorously propagated moral standards which had more in common with Victorian England than Revolutionary Russia.

Whole generations of young men had been obliterated by the War, and to a much greater extent than in the West, women moved into 'non-traditional' jobs in order to fill the gap. This was not matched however by an easing of the burden of domestic labour or in the patriarchal structure of the family. Consequently, the formal equality of women under Soviet law simply imposed a double burden.

Despite the enormity of the suffering which had been visited upon the people of the Soviet Union, the USSR had emerged from the War as victors and occupied half of Europe. Despite the fact that Stalin was at least equally responsible for the extent of Soviet casualties as was Hitler, Stalin remained firmly in control of the Party, the State and the country. Stalin’s regime of terror continued unabated. National minorities, Soviet prisoners of war and even soldiers who had penetrated enemy lines were special targets for repression. If there was to be a renewal of workers struggle, the impetus for this was not going to come from within the Soviet Union.

Only a handful of individuals of the old Opposition survived from the pre-war period in the labour camps. Even there resistance continued. In the Vorkuta region of Siberia where most of the oppositionists laboured in the mines, there were strikes against cruel working conditions and marking important anniversaries. These struggles continued up until 1956, but no news of them reached the outside world. The only other centre of opposition to Stalin in the Soviet Union during this period was amongst the children of “enemies of the people” who had been brought up in the labour camps. Two youth groups, ITL (Lenin’s True Work) and the Lenin Group carried on the defence of Bolshevism against Stalin, but they were small and marginalised. In a revolt by the secret Democratic Movement of the North of Russia in the Vorkuta camp in 1948, 2,000 prisoners seized their guards' weapons and took to the Urals, but they were crushed. The Ukrainian Partisan Army carried on guerrilla warfare against Stalinism into the early 1950s.[74] They were reputed to be social democrats politically.

Stalin’s perspective at the end of the war was based on the promises given to Churchill and Roosevelt. Stalin had no interest in making revolution in Europe. On the contrary, everything was based on a pact intended to eliminate any possible threat to the USSR and the Western powers from social revolutions in Europe and elsewhere.

This view was not shared, of course, by the workers of Europe, nor by any genuine workers leader in Europe. However, the Stalinist policy of resurrecting capitalism was enthusiastically embraced by the Communist Party leaders in Western Europe.

Stalinist policy in the West

Stalin had promised to assist in the reconstruction of capitalism in Western Europe and the Communist Parties of these countries faithfully fulfilled Stalin’s promise.

In the summer of 1943, Allied troops advanced through Italy from the South, large areas of the country fell to the CP-led partisans and the working class in the Nazi-occupied North was in revolt. Mussolini’s regime collapsed. Where could the Italian ruling class find a suitably democratic government? A coalition was formed including the former King of Italy and the fascist General Badoglio. Even the Allied powers withheld recognition from this government. However, the USSR and Italy exchanged ambassadors in March 1944, opening the way for the expeditious return from Moscow of the leader of the Italian Communist Party Palmiro Togliatti.

Togliatti wrote:

'Among officers in the Army and Navy, the Catholic bourgeoisie, monarchist circles, industrialists and intelligentsia, and in the fascist party, there is a growing number of those who realise the necessity for Italy to break with Germany before it is too late.' [75]

In April 1944, Togliatti became Minister for Justice in the National Unity Government, providing the Italian ruling class with their much-needed 'left' support. One of Togliatti’s first tasks was to negotiate the new Concordat with the Vatican.

Likewise, in France the Communist Party was favourably placed in the leadership of the Resistance when the Vichy-Nazi regime fell. French Stalinist André Marty explained their policy:

'Placing the interests of the French nation above everything else, the French Communists are closely collaborating with those who, poisoned by a decade of Hitler propaganda, have dealt France a heavy blow by persecuting the Communists ... for the past three years the French Communist Party has been tirelessly agitating for a united national front that the French Communists are now co-operating with General de Gaulle.

'Thus the Communist Party of France now supports General Delattre de Trassigny who but yesterday was faithful to Vichy ...'[76]

In September 1944, a Provisional government was formed under General de Gaulle, and two Stalinists, Billoux and Tillon, served in the Cabinet. Maurice Thorez, French CP leader returned from Moscow in November 1944 and proclaimed:

'Make war, create a great French army: work like blazes, rapidly rebuild industry. One state, one army, one police force'.

The Resistance units were dissolved and all arms collected.

In the October 1945 election the French Communist Party and Socialist Party polled between them more than 50% of the votes. De Gaulle was not slow to recognise the value of the Stalinists in helping rebuild French capitalism. Stalinists were given Cabinet portfolios for National Economy, Production, Labour and Defence. Maurice Thorez was appointed one of the three Vice-Presidents of France. Not only did the Stalinist Ministers work to suppress union militancy and boost production, but when war broke out in Vietnam against their comrades in the Viet Minh, all the French Stalinist Minsters supported French imperialism. Thorez counter-signed the order to bomb Haiphong. It was not until May 1947 that the Stalinists left the government.

In countries like Britain, the US and Australia which had not been occupied, there was a huge upsurge of militancy after the war. Workers returned from the holocaust of World War Two battle-hardened and determined that they were not going to return to selling bootlaces on the street corner. Workers not only sought to take advantage of the post-war upturn to improve conditions but also wanted to settle accounts with employers who had dealt so mercilessly with them during the Depression and the War.

In the immediate post-war period, Stalin’s line was for continuing the class collaboration of the war period in the interests of establishing peaceful relations with the capitalist world. The 'popular front' policy of the Communist Parties in the capitalist countries was applied in the service of Stalin’s strategic agreement with imperialism to suppress the independent mobilisation of the working class in exchange for a 'free hand' in the countries occupied by the Red Army.

In Britain the CP was calling for a 'national government':

'These is a wide and growing readiness to recognise the necessity of national unity in the crucial coming years and full recognition of the sincerity and genuineness of Mr Churchill’s concern for it ...'

and actively campaigned against a Labour government:

'If the Labour Party desires to win public confidence, it will resist the sorry quibbling of those who want to undermine the great agreement between Churchill, Roosevelt and Stalin ...' [77]

Ignoring the advice of the CP, the working class swept Churchill aside and elected a Labour Party government.

The CPGB then portrayed the Atlee government as representing the 'transition to socialism', condemned the Tories they had shortly before been defending as 'the half brother of fascism' and enthusiastically worked to dampen down class struggle.

'the trade unionists must recognise the fact that they are operating in a controlled economy, which is being steered by a labour government. They will have to consider the bearing of any wage policy which they put forward on the entire economic policy that the government is pursuing'. [78]

The post-war upsurge in Australia was bringing the workers into headlong confrontation with the Chifley ALP government. Their loyal support for the war effort had left CP with members in leading positions in all the most important unions and with three members on the ACTU Executive. They were unable and increasingly unwilling to hold back a growing strike movement.

Between 25 and 40 per cent of union membership was controlled by the CPA, concentrated in the most militant unions. As a result, CPA members appeared more and more in the front line of major strikes and demonstrations. The CPA led 84% of strikes during the first two years after the war. Consequently, the CPA increasingly became the target of government repression.

Without any deliberate effort on the part of the CPA leadership, it found itself in conflict with the reactionary policies of the Chifley government. This position sharply contradicted Stalin’s international perspective and the orientation of the other Western Communist Parties at the time. In an uncharacteristic display of independence, in 1948 the CPA leadership actually criticised the British CP, who were after all only following Stalin’s line in bolstering the British Labour government.[79]

This 'ultra-left' period in CPA history was not as aberrant as it might appear. Many national Communist Parties were finding themselves to the left of Stalin at this time.

In Greece, the guerilla army led by the Communist Party, ELAS (National People’s Army of Liberation), had led the resistance to Nazi occupation during the War. Inspired by the success of Tito’s partisan army in Yugoslavia, ELAS held two-thirds of the country in February 1945, when Stalin pressured them into a truce with the Royalists.

In October 1946, in defiance of Stalin’s instructions, Greek Communist Party leader Markos Vafiades launched a campaign to win control of the whole country, and received support from neighbouring Yugoslavia, Albania and Bulgaria.

Despite the presence of British troops and aid from the US, the Royalists were not expected to last more than six months.

Despite the 'Sell-Out of the Century', the US was feeling extremely threatened by the situation in Europe. Stalin had promised to keep Europe safe for capitalism, but things seemed to be getting out of control. Was Stalin capable of delivering his promise? The majority of workers' leaders reflected the revolutionary mood of the masses. Many Communist Parties (certainly not including those of Western Europe for instance) thought that their perspective should be to set up copies of the USSR. Stalin thought otherwise. Stalin succeeded in averting a post-war world socialist revolution, but the world was still far from “safe for capitalism”.

II: The “Truman Doctrine”

Citing the dire situation in Greece, the inability of the British to cope with the situation and alleged breaches of the Yalta Agreements in Rumania, Poland and Bulgaria, US President Harry Truman launched the 'Cold War'. Truman had terminated aid to the Soviet Union and the other Allies under the Lend Lease program in August 1945. He now decided to break irrevocably from the alliance with Stalin formed during the war, and enunciated the “Truman Doctrine”.

In his speech on 12 March 1947, President Truman posed the policy in terms of the need to provide aid to the governments of Greece and Turkey, but the speech contained the clear implication that Truman was proposing a new global role for the United States. A British Foreign Office official commented that the request for $400m of aid for Greece “was made to seem hardly less than a declaration of war on the Soviet Union”.[80]

'It must be the policy of the United States to support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures ... primarily through economic and financial aid ... But we cannot allow changes in the status quo in violation of the Charter of the United Nations by such methods as coercion, or by such subterfuges as political infiltration. ...

'The free peoples of the world look to us for support in maintaining their freedoms. If we falter in our leadership, we may endanger the peace of the world - and we shall surely endanger the welfare of our own nation'.[81]

The Truman Doctrine had two main elements: (1) providing massive economic and military support to “friendly” governments in every part of the world, while economically isolating the USSR, and (2) building a massive arsenal while making all-out covert war against the workers' movement.

It marked the recognition by imperialism that Stalin was unable to deliver the promise made at Yalta, to leave the areas outside of Red Army occupation safe for capitalism. In the short term, it meant military intervention in the civil war in Greece, and soon after in Korea. Most importantly, it meant massive economic aid to western Europe while isolating the USSR, China and Eastern Europe behind an 'iron curtain'. [82]

The full scale of what was required to save capitalism was made clear when US Secretary of State George Marshall announced the Marshall Plan to Congress on June 5 1947. In this speech, Marshall showed a clear understanding of the crisis facing Europe:

'The breakdown of the business structure of Europe during the war was complete. ... The farmer has always produced the foodstuffs to exchange with the city dweller for the other necessities of life. This division of labour is the basis of modern civilisation. At the present time it is threatened with breakdown. The town and city industries are not producing adequate goods to exchange with the food-producing farmer. ... He, therefore, has withdrawn many fields from crop cultivation [etc] So the governments are forced to use their foreign money and credits to procure these necessities abroad. ... This process exhausts funds which are urgently needed for reconstruction ... The modern system of the division of labour upon which the exchange of products is based is in danger of breaking down.

'The truth of the matter is that Europe’s requirements for the next three or four years of foreign food and other essential products - principally from America - are so much greater than her present ability to pay that she must have substantial help or face economic, social and political deterioration of a very grave character.

'The remedy lies in breaking the vicious circle ..' [83]

In July 1947, a Conference was convened in Paris, and all European countries were invited to send a representative to discuss the Plan and pick up their share. All the Eastern European countries were invited to send a representative, but as Jan Masaryk, the Czech Foreign Minister put it:

'the Americans will be very happy to bribe both us and the Poles into loosening our bonds with the Russians. ... The offer of credits to us is quite genuine; I am less sure about the Rumanians and the Yugoslavs. But as for the credits for Russia, that is the biggest piece of eyewash in the whole scheme. Do you see Truman and Congress forking out billions to Enemy Number One, communist Russia, from whom we all have to be saved?' [84]

At that time 50 per cent of Polish trade was with the West, and 70 per cent in the case of Czechoslovakia. Russia was told that if they wanted to be part of the Plan, then they would be contributors, not recipients, and all the Eastern bloc countries withdrew under Soviet pressure.

At this time there was a sharp turn in the relations between the USSR and the USA. It dawned on Stalin that Truman was not going to help in the reconstruction of the USSR, that the USSR was not going to get any Marshall aid. The USA would help in the reconstruction of Europe only to the extent that the beneficiaries politically aligned themselves with the USA and cut relations with the USSR. With or without Eastern Europe, the Soviet Union was to be blockaded.

The architect of the Cold War strategy, George Kennan, proposed the policy in a paper written for the Secretary of the Navy, James Forrestal, in late 1946, in this way:

'... we have in Russia today a population which is physically and spiritually tired ... There are limits to the physical and nervous strength of people themselves. These limits are absolute ones and are binding even for the cruellest dictatorship. ... [thus the USSR could be] sensitive to contrary force ... and flexible in its reaction to political realities. [Thus the US should commit itself to] longterm, patient but firm and vigilant containment of Russian expansive tendencies ... [through] the adroit and vigilant application of counterforce at a series of constantly shifting geographical and political points.' [85]

Under the Marshall Plan the US provided 'friendly' governments in Europe with $17,000 million in investment between 1948 and 1952 and succeeded in stimulating the reconstruction of capitalism. The COMECON countries, even more war-devastated than Western Europe, were to get none of this aid and all trade between the two halves of Europe ceased.

The post-war reconstruction of capitalism rested on two pillars: (1) The pre-eminent strength of one capitalist power - the USA, and (2) The support of Stalinism and Social-democracy.

The US had come through the Second World War actually strengthened economically. The overwhelming majority of the world’s economic capacity was in the USA. Three-quarters of the world’s gold reserves were owned by the USA. The economic fabric of its capitalist competitors had been devastated. While this situation threatened the very existence of capitalism, it also created the basis for a planned reorganisation of world capitalism.

The economic arrangements that were to provide the basis for the reconstruction of capitalism after the war had been put in place even before the war was over. At the Bretton Woods Conference in July 1944, 28 governments had participated in the founding of the World Bank and the International Monetary Fund.

Totally failing to foresee the hostile stance that imperialism would take towards the USSR as soon as its usefulness in the war against Nazi Germany was over, the British Stalinist leader, Harry Pollitt had welcomed the establishment of the IMF in these words:

'... a new political framework exists for a future economic co-operation [between the capitalist world and the Soviet Union]. ... the conference at Bretton Woods not only represents significant agreement on monetary policy, which will greatly facilitate world trade, but the proposal to create an International Bank to be used where private investment is not available strikes a blow at those people who try to use economic crises and the distress of the people to feather their own nests'.[86]

Through the World Bank and the IMF the United States underwrote the budget deficits of all the main capitalist nations in the post-war period. On the basis of the USA’s supreme economic position the US was authorised to print however many dollars were required to fund post-war expansion. The Gold Standard of pre-war years was replaced by linking the US dollar to gold at $35 per oz., thus allowing dollar-credits to be used to massively expand the medium of international exchange so as to enable an expansion of trade and post-war reconstruction.

These policies were necessary to avoid a head-on confrontation with the working class at a time when revolutionary situations existed in many countries, and a return to the conditions of the 1930s would have triggered a chain of socialist revolutions. The US rescue of European capitalism was possible only because of the treacherous sell-out of Stalin at the end of the War.

US imperialism understood the character of USSR and the crisis facing capitalism better than Stalin.

The Cold War policy did not contradict the accord established with Stalin at Yalta and Potsdam, but complemented it. Yalta and Potsdam gave imperialism the opportunity to pacify the working class within its own sphere of influence, and do so with the cooperation of the Communist Parties. Imperialism did not have the capacity to wage a war against the USSR, but they were confident that with Stalin’s cooperation they could strangle the USSR economically.

Undeterred by Truman’s declaration of Cold War, Stalin willingly cooperated in the establishment of an imperialist base in the Middle East, supporting the establishment of Israel as a Jewish State. In speaking to the United Nations in November 1947, the Soviet Ambassador specifically supported the proposal that the new state should be Jewish, rather than the non-racial secular state proposed by a minority of UN delegations.

Victory lay within the grasp of ELAS in Greece. But the $400m worth of military aid to the Greek Royalists with which Truman had launched the 'Cold War' was probably not necessary. Stalin’s pact had already sealed the fate of Greece. While the Stalinist methods of ELAS leader General Markos Vafiades and the premature decision by Party leader Nicos Zachariades to abandon guerilla methods in favour of conventional warfare contributed to the defeat of ELAS, Stalin left nothing to chance, and had Vafiades expelled as an "agent of British intelligence and Tito" and exiled. The withdrawal of support from neighbouring Yugoslavia after the break between Tito and Stalin, denying sanctuary to ELAS forces, made the defeat of the Greek Communist Party inevitable. After a prolonged and bitter civil war, ELAS was defeated. [See Interview].

Along with the extremely reactionary Royalist government now in power in Greece and the reactionary US puppets in Turkey and elsewhere across the Middle East, US domination of Britain, France, Holland and Belgium extended to their colonial possessions, and its own “back-yard” of militarist regimes in Latin America, the US had military bases in Japan, Italy, South Korea, China, Egypt, Iran, Turkey, Greece, Austria, Germany and the Arctic.

The Effects of the Marshall Plan

The provision of truly massive US credits to 'friendly' governments in Europe succeeded in allowing these countries to avoid the dire crisis which Eastern Europe had had to deal with.

The Keynesian economic policy of 'controlled inflation' was instituted to maintain stable growth and low unemployment. These conditions were used to facilitate the introduction of social welfare policies. These varied from country to country: in Britain, the National Health Service; in Australia, the public housing program, and national enterprises such as Telecom and TAA; in Europe, comprehensive social welfare policies. In the US, Truman’s “Fair Deal” program was blocked by the Republican Congress, but the Eisenhower administration subsequently introduced a system of social security.

The use of Marshall aid to pacify the working class was quite explicit. Following the announcement of the Marshall Plan, Communist Party members were excluded from the government in both Italy and France. The World Bank announced a loan to France a few hours after the sacking of the CP members from Cabinet in May 1947, making it crystal clear that Europe had to choose between having Communists in the government or receiving Marshall Aid.

The conservative parties in Europe made sure that the point was clearly understood by the voters. An election was called in Italy just as the first aid convoys set off for Europe, and the Christian Democrats increased their vote to 50%, while the Popular Front parties declined to 30%. French governments moved further and further to the right.

The Communist Parties in France and Italy combated this policy with a militant strike policy, but they had already blown their chance. With the policies of economic reconstruction and increased social services based on massive amounts of aid from the US, allowed the European bourgeoisie to successfully avoid a confrontation with the working class, and severely contain the influence of the Communist Parties.

The US approached the problem of Germany in the same way: 'the political direction which 66 million Germans went might have a decisive effect on European future' said US State Department official in Germany Robert Murphy. British Labour Foreign Secretary Ernest Bevin was told in no uncertain terms that if Britain wanted Marshall Aid, then he should back off with his ideas of “socialism” for Germany. In fact the entire political system in Germany was reconstructed according to US requirements. In June 1947, the Military Governor of the British occupation zone, General Robertson, established the German Zonal Trade Union Federation, and British trade union officials assisted in organising sixteen unions.

The same attention was paid to reconstructing the Japanese economy, and ensuring that the powerful Japanese Communist Party was marginalised by means of massive US bribery.

This counter-attack by US imperialism was devastatingly effective in undermining support for the Communist Parties in the West. The countries which remained within the Soviet bloc faced enormous economic problems.

It is important to recognise that the War and these dramatic measures taken after the War, set off a qualitative development in the world productive forces. This development was made possible under capitalism only because of the treacherous sell-out of Stalin at the end of the War. To some extent these changes were to be a mere postponement of the crisis, but to a significant extent there was also an irreversible and qualitative change in the productive forces.

These changes were extensive and intensive.

Extensive Changes in the World Market

By the turn of the century, capitalism had already outgrown the confines of nation states. Large corporations spanning across many industries, integrated and controlled by finance capital, spanned across the entire world. These corporations carved up markets, sources of raw material and cheap labour.

The redivision of the world market, based upon the supremacy of the United States opened the way for a more extensive penetration of imperialism into new markets away from the declining colonial powers. This extension was facilitated by world-wide financial and political instruments of unprecedented magnitude.

The post-war boom stimulated under these arrangements temporarily laid aside the paralysis into which capitalism had fallen in the 1930s. The Bretton Woods arrangements, the booming US economy, the Marshall Plan, the post-war reconstruction and the splurge of public sector investment made to pacify the working class all contributed to a development of the productive forces in a world market and a world-wide division of labour that far transcended anything that was previously conceivable under capitalism.

The policies of unlimited expansion of credit which was used to finance the post-war reconstruction had lit a time bomb for capitalism however. The whole basis of the international monetary system was undermined. The US also sowed the seeds for the loss of its hegemony, and the growth of powerful competitors in Europe and Asia. The price for postponing a confrontation with the working class would be paid twenty years later, when the link between the dollar and gold burst under the pressure of the unlimited expansion of credit allowed over the preceding two decades.

Nevertheless, the post-war monetary policies were absolutely necessary for capitalism to survive this most dangerous period.

For their part, the Stalinists welcomed these arrangements, which they saw as an integral part of the collaboration initiated by the 'Big Three':

'The conference at Bretton Woods not only represents significant agreement on monetary policy, which will greatly facilitate world trade, but the proposal to create an International Bank to be used where private investment is not available strikes a blow at those who try to use economic crises and the distress of the people to feather their own nests'. [87]

Intensive Changes in the World Market

A number of factors combined to stimulate an intensive development in capitalist relations. In part these changes resulted from developments in the productive forces, in part from pressures on the rate of profit and in part from the development of new public sector industries. This development is the socialisation of women’s labour.

Lynn Beaton [88] was the first to explode the myth that women were simply the “reserve army of labour” for capitalism; that after the war, women had simply dropped out of the labour-force and back into domestic labour. This myth was created by bourgeois propaganda which said that women ought to go back to their husbands. In fact, women did give up the “male” jobs they had secured during the war, but large numbers of them found employment elsewhere. These new “women’s” jobs were created by industries which were coming out of the changes taking place in the nature of women’s domestic labour.

Put another way, the commodity relation was breaking up the last bastion of bonded labour, the family. A whole range of new industries, including the new social services of the 'welfare state' and the 'white goods' industries, were springing up. Labour formerly done outside the economy within the family was socialised. That is, instead of being done as unpaid labour on behalf of family members, it was done by women either in private firms and sold back to them (manufacture of washing machines, for instance), or done in public sector enterprises and provided as a social service (health services, for instance).

This intensification of capitalist exploitation provided the basis for a further development of the productive forces under capitalism.