Source: Fourth International, Vol.2 No.3, March 1941, pp.90-93.
(William F. Warde was a pseudonym of George Novack.)
Transcription/Editing/HTML Markup: 2006 by Einde O’Callaghan.
Public Domain: George Novack Internet Archive 2006; This work is completely free. In any reproduction, we ask that you cite this Internet address and the publishing information above.
For a long time it seemed to the lofty plutocrats of the United States that they could escape embroilment in Europe’s and Asia’s wars and get others to fight for them. This era of pacifist illusions and pretentions is now as dead as William Jennings Bryan. Despite all their wealth and advantages, their continental security and resources, the capitalist rulers of the United States could find no better solution for their difficulties than their Japanese, German, English, French and Italian counterparts. They, too, have been obliged to militarize the nation in preparation for waging war in all corners of the globe. Imperialist capitalism can maintain itself today only by the most bloody, brutal, barbarous methods. The supreme law of monopoly capitalism is: rule the planet’ ‘or perish!
The entry of the United States into the inter-imperialist combat opens a new chapter in the history of American imperialism – the most crucial in its career. The First World. War, it is now obvious, was a dress-rehearsal for the star role American imperialism is destined to enact in the Second World War. The interval between wars was only a period of preparation for the present titanic struggle for the repartition of the world. By its intervention in the war American imperialism aims at dictating, not only to its imperialist enemies but also to the peoples of the world, the conditions under which they may live, work, and be exploited. This is the real, the ultimate war aim of the Roosevelt government.
We have time and again insisted that the United States has not been drawn into this dance of death through any chance combination of historical circumstances or by any such secondary factors as the rise of Hitlerism or the fall of France. The driving force behind the war party comes from the permanent crisis within our social system engendered by the monopolist forces of American capitalism. So long as big business controls the economy and government of our country, intervention in the war was absolutely inescapable.
It is no secret that the economy of the United States has been in a chronic crisis since 1929 and that this condition is something new in our history. The editors of the New York Times, whose devotion to the capitalist system is unquestionable, wrote last month:
“So far as actual production was concerned, previous depressions had run only a year or two; the depression of 1929 has continued to drag along in America.”
In proof they cited the following statistics on the rate of industrial expansion during the past four decades compiled by the National Bureau of Economic Research.
“From 1899 to 1909 factory output increased at the rate of 4.7 per cent a year. From 1909 to 1919 the rate of increase was 3.4 per cent a year. From 1919 to 1929 it was 5.1 per cent a year. From 1929 to 1937, however, the rate of increase fell to 0.4 per cent; and if 1929 is taken as the terminal year, the rate of annual change was a falling off of 0.1 per cent.”
These figures provide the most objective test of the achievements of Roosevelt’s regime, since the national productive forces and the extent of their output form the material basis for progress in all other spheres. Roosevelt promised that his New Deal policies supplemented by Hull’s trade-pacts would restore American economy to its former flourishing condition. The President did not, and could not, make good. His reform measures and alphabetic agencies, his billions of expenditures, his cajoling of capital could not hoist American industry back to 1929 levels; nor did the few reciprocal trade-pacts negotiated by Hull expand foreign trade to 1929 dimensions.
When the economy took another alarming nose-dive toward the end of 1937, the policy of internal reform finally demonstrated its insufficiency. The debacle of the New Deal was soon followed by a similar breakdown of the pacifist foreign policy in the face of the approaching imperialist dogfight.
The bankruptcy of Roosevelt’s original policies in the economic and political spheres at home and abroad led him to seek new ways of solving the chronic crisis of American capitalism. Only one road was left open to him: a military adventure along the lines charted by the vital requirements of the big business and banking interests of North America.
As in all highly developed capitalist countries, only two decisive social forces exist in the United States: the capitalist class and the wage workers. At the head of the capitalist class stand the monopolists. At the head of the proletariat stand the trade unions, who lead the rest of the masses behind them.
Roosevelt the reformer hoped that he would reconcile the conflicting claims of these opposing classes. He wished to be the impartial and benevolent arbiter of their differences and dispense justice to all.
In working out this policy of class compromise Roosevelt was forced to lean now on the one class and now on the other. This gave his regime a two-faced character: one side, the side of social reform, reflected the concessions made to the masses under pressure of their demands upon the government. The other side was turned toward their millionaire masters.
The early part of Roosevelt’s administration which coincided with the first stormy upsurge of the labor movement represented the peak of the masses’ influence upon Roosevelt’s regime. The people’s power was at no time decisive. Whether the disbursement of federal funds or the settlement of an important strike was at issue, the monopolists who operated upon the administration behind the scene had the last word. They fixed the limits of the New Deal’s activities, curbing Roosevelt whenever he threatened to exceed the concessions they would make.
Nevertheless Roosevelt’s policies were not completely and directly determined by the monopolists, who would have preferred a more docile and pliable President; one, like Hoover, who would give nothing to the people and everything to the plutocrats. Big business was especially irked by the inability of heavy industry to respond to the emergency treatments of Roosevelt and Hull and, like all rich cantankerous patients, blamed the doctors for failing to cure them.
Roosevelt, however, couldn’t inject new vitality into heavy industry by purely internal and peaceful means. The tremendous productive forces and resources controlled by the monopolists needed the whole world for their expansion. But our monopolists encountered abroad the same restrictions upon their activities that their own state imposed upon foreign competition. The growing German and Japanese expansionism began to crowd out American monopolists from the world markets, threatening to place heavy industry on more reduced rations.
The purely economic and diplomatic measures taken by Roosevelt and Hull could not counteract this menace. Where physics and plasters couldn’t effect a cure old-time physicians used to resort to blood-letting. The quack-doctors of capitalism have no more scientific remedy for the ills of their system. Throughout the thirties, bourgeois economists and politicians scanned the horizon for the new industry which would reinvigorate American economy. Their search culminated in the rediscovery of the world’s oldest industry: war.
In the long run economic necessities override the strongest political powers. Roosevelt had hoped to bridle the big business interests and make them accept his liberal program of reforms. It has now turned out that Wall Street has harnessed Washington to its war chariot. The War Deal is the supreme expression of the deepening crisis of American monopoly capitalism.
Roosevelt’s War Deal has already proved more successful than his New Deal in jacking up industry. Last year for the first time industrial operations surpassed 1929. Here are the Federal Reserve Board’s indices of industrial production for three key years.
|
|
1929 |
1937 |
1940 |
|
Highest Monthly Rate |
114 |
|
136 |
|---|---|---|---|
|
Yearly Average |
110 |
113 |
122 |
The 1940 average topped 1939 by 12 per cent; 1937 by 8 per cent; and 1929 by 11 per cent.
The January Bulletin of the National City Bank estimates that new all-time peaks have been registered in production of iron and steel, machine-tools, electrical equipment, aircraft, aluminum, cotton and rayon goods, rubber products, chemicals and electric power. Steel production outstripped the previous record year of 1929 by 4,417,201 tons, or seven per cent, and is at present operating close to capacity of output.
The influence of the war upon economy is also sharply manifested in foreign trade. US exports bounded upward in 1940, totalling $4,021,564,000, the highest since 1929. One need not look further for the motive force behind the alliance with England and the hostility toward Germany than the facts that the vast bulk of our exports now goes to the British Empire and that Hitler’s conquests have cut Continental Europe’s purchases from us to an insignificant percentage. The expansion of American exports by $843,000,000 over 1939 was made possible by the enormous increases in purchases by the British Empire, which more than compensated for the loss of other markets. The British Empire now takes nearly two-thirds of America’s exports, the United Kingdom alone taking one-third.
The increasing anxiety over South America, the tender concern for China, the turn toward the Far East? Last year the South American countries bought $156,000,000 more American goods than the year before; China, $22,000,000 more; Japan $5,000,000 more. Meanwhile this country increased its imports from Latin America by $102,000,000 and from Asia by $281,000,000.
The economic impact of the war is likewise reflected in the change in the character of our exports and imports. Aircraft (including parts and accessories) became for the first time the principal American import item. The foreign sales of such military materials as raw cotton, iron and steel, non-ferrous metals, machinery, chemicals, explosives and firearms shot upward. Rubber, tin, copper, bauxite, nickel, manganese and other raw materials vital for military purposes were imported in record quantities. From the British Empire came rubber, tin, nickel, and raw wool to help pay for airplanes and steel; from China came tungsten, raw silk, and tin; from the Dutch East Indies came rubber and tin.
Out of such tangible stuffs, and not out of democratic dreams and humanitarian considerations, are the war plans of US imperialism being fabricated.
How foolish do the isolationists of all categories appear in the light of these figures! The foundations of American economy are being radically reconstructed by the war and adapted to fit the needs of the military machine. The ill-assorted company of pacifist preachers, provincial politicians, Thomas Socialists and Stalinists who pretend that they can prevail against these economic forces pulling the United States into war deceive themselves and what is far worse, deceive those workers who listen to them. Only the overthrow of capitalist imperialism and its replacement by a workers’ government can put an end to this reactionary war. There is no other way out for the workers.
In an address at Atlantic City on February 25th, Philip Murray, CIO President, cited the following figures:
|
Corporation |
1940 Earnings |
No. Employees |
Net Profit |
|
General Motors |
$195.500,000 |
200,000 |
$ 977 |
|---|---|---|---|
|
American Tel. & Tel. |
137,200,000 |
260,000 |
528 |
|
Standard Oil of New Jersey |
110,000,000 |
55,000 |
2,000 |
|
US Steel |
102,180,000 |
260,000 |
420 |
|
Du Pont |
99,900,000 |
45,000 |
2,220 |
|
General Electric |
55,000,000 |
65,000 |
826 |
Many of these corporations are making more profits per employee than the average annual wage of their own employees! Bethlehem Steel earned over $12 a share last year; open-shop Douglas aircraft over $18 per share, after generous provisions for depreciation, surplus, and executive’s salaries. According to a New York Times report of January 27th, 44 industrial corporations show 1940 net earnings 25.6 per cent above those of 1929.
In addition to these superprofits, the big corporations are being enriched more directly by a bountiful government and War Department. There is hardly a company listed on the Stock Exchanges which is not expanding its plants, adding new properties, or undertaking extensive operations entirely at government expense. Chrysler is building tank plants; Du Pont, explosives; General Motors, airplane engines; Douglas, aircraft factories; Packard, Ford, Studebaker, Buick, engines; Hudson, guns, torpedo parts, and ammunitions, etc. All these productive facilities are paid for by the people and then owned or operated for the exclusive benefit of private corporate interests.
The present war-boom is, however, far more spotty and one-sided than any previous industrial rise in our history. It is largely confined to heavy industry and within these limits to the topmost strata. Many of the smaller industrial companies are given little or no contracts by the government. According to Philip Murray, one corporation, presumably Bethlehem, has government business on its books that it could not hope to execute within three and a half years, although there were at least fifty small steel companies that could take these jobs and produce goods of the same quality with dispatch. Murray added that he was told by a government official that 12,000 industrial plants were capable of producing goods essential to the war and that two months ago 30 per cent of these were “enjoying the benefits” of government contracts while 70 per cent were without government business.
The big corporations are also favored at the expense of their smaller competitors by the allotment of priorities of essential materials, such as aluminum and magnesium. These allotments are designated and controlled by dollar-a-year-men at Washington who, in many cases, were yesterday leading officers of these very companies and expect to return to them after the war.
Murray declared he had talked with some of “the most outstanding industrialists in the United States within the last few weeks” and had suggested “that there should be taken from these enormous profits some money that should be given to their employees in the way of wage increases.”
“Unfortunately,” he added, “the attitude of American industry today is one of absolute, positive refusal to make wage concessions of any description. They contend that if the wage structure is improved and men and women are given more money that it might result in something they call inflation.
“So they suggest, these leaders of American industry, very bluntly, very boldly, that nothing should be done in the United States of America during the period of national defense to improve living standards or to increase wages and that at the same time nothing should be done in the United States by government, labor or industry to disturb the profit-making opportunities of American industry.”
Murray would like to obtain wages in friendly conferences with “enlightened” employers or through the pressure of a friendly government upon recalcitrant bosses, instead of through independent strike action on the part of the workers themselves. But this last has proved to be the best and most practical method for extracting concessions from the employers, as the steel workers at Lackawanna, the auto workers in Flint, and the Vultee aircraft workers can testify.
No branch of American economy has been so hard hit by the war as agriculture. World War I lifted American agriculture to new heights; World War II is dragging it down to utter ruin.
Agriculture has suffered almost complete loss of its export markets. Continental Europe now buys nothing from us. Great Britain is using her money and credit to buy munitions instead of food.
Exports of wheat in 1938-39 amounted to 107,000,000 bushels. This year the best estimate is that wheat exports will not exceed 20,000,000 bushels.
Last year we exported 6,000,000 bales of cotton: the top estimate for this year is 1,500,000.
Tobacco growers have lost export markets for 250,000,000 pounds; hog producers have lost markets for 75,000,000 pounds of pork and 140,000,000 pounds of lard; fruit growers will not sell abroad this year 10,000,000 bushels of apples and 3,000,000 boxes of oranges that were normal export quotas before the war.
Roosevelt’s henchmen are exploiting this situation to win over the farmers to the war. Assistant Secretary of State Acheson told the National Farm Institute at Des Moines on February 21st that
“... the prospect of having to sell our surpluses in a Europe which is under the domination of a buyers’ monopoly maintained by a foreign dictatorship is one which farmers in this hemisphere cannot face with equanimity... with foreign markets closed or controlled the farmer would find that the domestic market which has been going forward for the past eight years would be reversed.”
The Southern Senators, ringleaders of the war faction in Congress, want to rescue agriculture by crushing all competition by military force.
As the War Deal continues to unfold, it must produce even more serious consequences for economy. The recent raise of the federal debt limit from 49 to 65 billions is only the first rung on a ladder of debt, which will mount, like Jack’s beanstalk, to the skies. The war program already calls for an outlay of 28.5 billion dollars. Treasury officials estimate that the new debt limit will have been reached by the end of the next fiscal year. Their estimate is far too optimistic. The government will be compelled this year, as it was last, to step up appropriations to hitherto inconceivable totals. The War Deal is piling up a national debt of intolerable proportions upon the backs of the American people.
This burden will be felt most keenly in heavier taxes, further curtailment of relief and other social services and price inflation. The entry of the government into all markets as the biggest buyer together with the feverish competition of industries for raw materials and available supplies keeps pushing up prices of all commodities. The vast purchases by government agents of food, clothing, medicines, supplies of all kinds involves higher prices for these necessities of life to the ordinary consumer. The average working class family is already finding it harder to make both ends meet. The American people are being forced to forego, not only butter for guns, but autos for tanks, new housing for army encampments, less consumers’ goods for more destroyers.
Although a certain percentage of the unemployed is being reabsorbed into expanding industry, the ever-increasing efficiency and technological improvements of industry set limits upon their number. In this respect a different situation prevails in heavy industry today than in the last war. According to the National Industrial Conference Board, from 1916 to 1919 output per man hour fell from 157 to 136 (1900 used as base of 100), owing to the lower level of technology and the greater use of unskilled labor. In the two decades between wars, output per man hour rose steadily, reaching 325 in 1939 and an estimated 335 in 1940.
According to the latest census of manufactures, six per cent less wage-workers produced a three per cent larger volume of goods in 1939 than in 1929. This tremendous rise in the productivity of labor works against expansion of the labor force, on the one hand, and accounts for the colossal profits reaped by the trusts on the other. This can be clearly seen in the steel industry where the building of continuous strip sheet mills has thrown and kept whole communities, like Newcastle, Pa., out of employment.
While heavy industry expects the boom to last for the duration of the war, agriculture faces further restrictions upon its markets. The spread of the war and the complete involvement of the United States will cut off more foreign markets; inflation will curtail its domestic market.
The gross unevenness of the war-boom and the seriousness of the world crisis produce weaknesses in all parts of our economy and introduce uncertainty in its directing circles. The approaching conflict with Japan, for example, will eliminate our second largest foreign market. The drastic reorganization of American economy now in full swing is making our economy so lop-sided and top-heavy that it lacks the stability to withstand many more severe shocks.
The surprisingly low prices of shares on the stock exchanges despite record earnings signifies that the greatest capitalists themselves lack confidence in the ability of their system to overcome the shocks in store for it or to endure much more damage. The plutocrats thereby display in reality far less faith in the firmness of American and world capitalism than many ex-radicals. The defeatist attitude of the money masters toward their own economy should inspire the revolutionary workers with fresh confidence in their endeavors to replace this decaying system with a healthy new socialist society.
Last updated on: 17.8.2008