Chapter X — The Soul of America and the Future of Humanity

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The Dictatorship of Big Business

“All governments are more or less combinations against the people. . .and as rulers have no more virtue than the ruled. . . the power of government can only be kept within its constituted bounds by the display of a power equal to itself, the collected sentiment of the people.” (Benjamin Franklin, in a Philadelphia Aurora editorial 1794.)

Human consciousness always lags behind the march of history. Tradition, habit and routine weighs heavily on the minds of men and women and it is always comforting to look back to a supposedly happier past. Mythology is a powerful force and not only in religion. Ideas can persist long after the material causes that gave birth to them have disappeared.

Nowadays, nothing is left of the old democratic and egalitarian America of which de Tocqueville wrote. Yet in the United States today many people still believe that it is possible to get rich by working hard, and that the old “frontier spirit” can still triumph over adversity. This is pure mythology, but it is in the interests of those who rule America to foster the myth. In the United States and on a world scale, we see a huge and growing gap between rich and poor. The class divide, which according to the official theories should have disappeared long ago, or at least been reduced to insignificance, has reached unheard of proportions. It does not diminish, but rather increases in times of economic boom. Today, the richest 20 percent of Americans own half the country’s wealth, while the poorest 20 percent own barely 4 percent.

In that epoch-making document The Communist Manifesto, Marx and Engels predicted that free competition would inevitably end in monopoly. For a long time the official economists tried to deny that the concentration of capital predicted by Marx had taken place. Particularly in the last two decades they insisted that the tendency would be in the opposite direction, that is, towards small enterprises, in which the small businessman would come into his own. They even coined a phrase: “small is beautiful”.

How absurdly inappropriate these words sound now! The process of the concentration of capital has everywhere reached unheard-of levels. The whole of world trade is now dominated by no more than 200 giant companies – most of them based in the U.S.A., where this process has gone furthest of all. Today, the lives and destinies of millions of Americans are in the hands of a tiny handful of corporations, which in turn are in practice run by tiny handfuls of super-rich executives. The sole purpose of this new caste of robber barons is to enrich themselves, and to increase the power of their respective companies. The interests of the vast majority of U.S. citizens are of little interest to them, while those of the inhabitants of the rest of the globe are of no interest at all.
In his recent best seller Stupid White Men, Michael Moore gives some very telling facts about the world we now live in:

“From 1979 until now, the richest 1 percent in the country have seen their wages increase by 157 percent; those of you in the bottom 20 percent are actually making $100 less a year (adjusted for inflation) than you were at the dawn of the Reagan era.

“The world’s richest two hundred companies have seen their profits grow by 362.4 percent since 1983; their combined sales are now higher than the combined gross domestic product of all but ten nations on earth.

“In the most recent year for which there are figures, forty-four of the top eighty-two companies in the United States did not pay the standard rate of 35 percent in taxes that corporations are expected to pay. In fact, 17 percent of them paid NO taxes at all – and seven of those, including General Motors, played the tax code like a harp, juggling business expenses and tax credits until the government actually owed them millions of dollars!

“Another 1,279 corporations with assets of $250 million or more also paid NO taxes and reported ‘no income’ for 1995 (the most recent year for which statistics were available).” (Michael Moore, Stupid White Men, pp. 52-3.)

These ladies and gentlemen (for there are quite a few females among them now) are the real rulers of America. The famous democracy of which de Tocqueville wrote has become just a cover for the dictatorship of the big corporations. It really matters little who the people of America elect into the White House or Capitol Hill, since all the important decisions are taken behind closed doors by these tiny, unrepresentative cliques that are in practice responsible only to themselves.

The vested interests of this ruling stratum are backed up by the most powerful military machine in history. It claims the right to intervene everywhere, to topple legally-elected governments, to launch wars and civil wars, to bomb and destroy supposedly sovereign states, without let or hindrance. Is it any wonder why this America has earned the hatred of millions of people throughout the world? This is really not hard to understand. Yet this is not the real America, or the real people of America who fought British imperialism to win their freedom and then fought a Civil War to extend that freedom (at least on paper) to the black slaves.

Illusions die hard. To many Americans, the U.S.A. despite everything remains the land of the brave and the home of the free. They cannot understand why it is that the U.S.A. is so unloved by the rest of the world. Yet slowly but surely a realization is dawning that all is not well with America. A recent survey by Business Week revealed that seventy four percent of Americans thought that big business had too much power over their lives. The rest of this interesting survey also showed that beneath the surface of calm and contentment, there is a growing feeling of dissatisfaction with the present state of affairs. The massive demonstrations that began five years ago in Seattle served notice on the ruling class of the U.S.A. that something is beginning to stir. This is just the beginning.

Growing Discontent

“The spirit of resistance to government is so valuable on certain occasions, that I wish it always to be kept alive. It will often be exercised when wrong, but better so than not to be exercised at all. I like a little rebellion now and then”. (Thomas Jefferson, letter to Abigail Adams, 1787.)

The long years of economic upswing that followed the Second World War cut across the revolutionary movement that was developing in the 1930s in the United States and to some extent blunted the class consciousness of the proletariat. But now the world crisis of capitalism is affecting the U.S.A. in a serious way. Millions are threatened with closures and sackings. This represents a fundamental change. The U.S.A. has not experienced sustained unemployment at the 2000 level since the 1960s. The rate of unemployment now stands at around 5.4 percent with no improvement in sight. The economy must create 150,000 new job positions each month just to keep pace with the growing workforce, yet most months it does not achieve even this paltry figure. Moreover, workers who have lost their jobs have had more trouble finding new ones. A recent article in The New York Times (November 28, 2002) pointed out that the proportion of those who have been out of work for more than 27 weeks is very high:

“Now, about 800,000 more workers have been out of work for six months or longer, compared with the number in 2000. That is why extending unemployment benefits is so important.

“In addition, the number of part-time workers who would like full-time work has risen by one million. And the increase in the labor force has slowed markedly because many more people have stopped looking for jobs. They do not show up in the unemployment data. In the recessions of the early 1980s and 1990s, the labor force grew far more rapidly, pushing up the unemployment rate.”

The boom of the 1990s meant a certain amelioration for many workers and “middle class” people and fabulous fortunes for a small minority. Even at this time the rich gained much more than the poor, whose position improved far more slowly. But since the recession that began four years ago, family incomes are once again falling across the board (even during the so-called recovery). And they are falling most rapidly for those in the bottom 20 or 30 percent. Inequality is increasing, and the contrast between the fat cats at the top and the “have-nots” at the bottom is more glaring than ever.

The wealthy find ways of avoiding the payment of taxes, and the burden of taxation falls heavily on the shoulders of the “middle class” and the working poor. A good example of this is the estate tax, which is overwhelmingly, a tax on the wealthy. In 1999, only the top two percent of estates paid any tax at all. Paul Krugman in an article in The New York Times (October 20, 2002.) with the significant title “The Class Wars: The End of Middle Class America”, writes:

“Income inequality in America has now returned to the levels of the 1920s. Inherited wealth doesn’t yet play a big part in our society, but given time – and the repeal of the estate tax – we will grow ourselves a hereditary elite just as set apart from the concerns of ordinary Americans [...] And the new elite, like the old, will have enormous political power.”

Even those who still retain their jobs are unhappy. They have little confidence in the future. Nobody feels secure any more. There is a new volatility and a mood of criticism and discontent at all levels. There is a huge and growing alienation between the people of America and those who rule their lives. And a growing number of Americans are becoming aware of this state of affairs and are dissatisfied with it. Maybe they do not know exactly what they want, but they certainly know what they do not want. The sense of alienation is reflected in the large number of people who do not vote in elections.

There is a groundswell of discontent that comes from the very heart of America. Millions of ordinary men and women are unhappy with the kind of lives they are leading: the long hours, the remorseless pressure, the dictatorial attitudes of management, the chronic insecurity. These moods are beginning to affect even the formerly affluent layers of the working “middle class”. And even at a higher level, there are those who are beginning to question the values of a society where the laws of the jungle are held up as a model: dog-eat-dog! Each man for himself and let the devil take the hindmost! Is this what life in the 21st century is really all about?

A few years ago, economist J. K. Galbraith wrote a book called The Policy of Contentment, in which he issued a warning to America:

“Recession and depression made worse by long-run economic desuetude, the danger implicit in an autonomous military power and growing unrest in the urban slums caused by worsening deprivation and hopelessness have been cited as separate prospects. All could in fact, come together. A deep recession could cause stronger discontent in the areas of urban disaster in the aftermath of some military misadventure in which, in the nature of the modern armed forces, the unfortunate were disproportionately engaged.” (J. K. Galbraith, The Policy of Contentment, pp. 172-3.)

So far, America has avoided the kind of deep recession predicted by Galbraith. But postponement does not signify avoidance. The present rally of the U.S. economy, based as it is on consumption and debt rather than productive investment, may not be long-lasting and may well be just the prelude to an even steeper fall. In any case, the future of the capitalist economy, both in the U.S.A. and on a world scale has a sombre aspect. New shocks are inevitable, with unforeseen consequences.

The point is that nobody can control the forces that have been unleashed on a global scale over the past ten or twenty years. The fundamental contradictions of capitalism have not been abolished, as some American economists have claimed, but only reproduced on a far vaster scale than ever before. There is no law that says that these market forces will achieve some kind of automatic equilibrium. On the contrary, the anarchic, unplanned character of capitalism must manifest itself in the most tremendous convulsions. Globalization will manifest itself as a global crisis of capitalism – in fact, it is already doing so. George Soros, who is certainly no Marxist but is an expert on the workings of world market, has pointed out that the market does not operate like a pendulum but rather like a wrecking ball – demolishing anything that gets in its way. We have already seen the results of this wrecking ball in the economic meltdown of Argentina. It will not be the last case.

The Rotten Heart of Corporate America

The Enron scandal, and the tidal wave of corporate scandals that followed it, completely exposed the lie that the market economy is the most efficient system, the best way to avoid bureaucracy and corruption, and that it is somehow “more democratic” and allows more people a say on how things are run. The fact of the matter is that inside the big corporations in the U.S.A. corruption is rife, tyranny reigns, and the jobs, lives and pensions of millions are in the hands of powerful and despotic minorities of super-rich executives.

It is entirely untrue that the present system works well because it rewards efficiency. There is precious little reward for the vast majority of American workers who are obliged to work long hours under remorseless pressure to earn enough for their families’ needs. All too often, they have to take two or three jobs to make ends meet – while others languish on the unemployment line or fall off the social radar as they are no longer even counted as “looking for work”. In the last twenty years, productivity in the U.S.A. has been hugely increased and vast profits have been made out of squeezing the U.S. workforce. The working week has been lengthened inexorably from 40 to over 50 hours on average. People are feeling the strain. It is undermining their physical and mental health and ruining their family life. This is increasingly the case, not only with blue-collar workers but also with professional people and lower management. What keeps them going is not free choice or incentive to “get on”, but relentless pressure to get results (i.e. profits for the bosses), and fear of losing their jobs and homes.

On the other hand, it is equally untrue that the top executives of the big corporations are guided by the principle of greater rewards for greater results. On the contrary, over the past decades, the CEOs have consistently rewarded themselves with the most staggering sums of money, bearing no relation to performance or productivity. Vast fortunes have been made, and are still being made, by people who do next to nothing (and sometimes nothing at all). Even in the present recession, when company profits are falling and workers are sacked or told to make sacrifices, the fat cats continue to plunder the wealth of America in the most shameless manner.

Quite apart from their huge salaries – which are quite unrelated to performance – the CEOs receive a wide range of perks, amounting to corruption on a grand scale. The best example is the notorious system of stock options. Thus, although AOL-Time-Warner executives were “punished” by the non-payment of bonuses, they nevertheless received stock options valued at around $40 million a head. Many American workers would be very pleased to receive such “punishment” during a recession, or for that matter even during a boom.

There is also a wide range of perks that do not appear in the normal surveys of bosses’ earnings. Coca-Cola demands that both its boss and his wife always travel in the company’s jet – a privilege that cost the company $103, 898 last year alone. At AOL Time Warner, Gerald Levin and Richard Parkins, his appointed successor, each got $97,500 in “financial services” (for “tax return preparation and financial planning”, the company explained – whatever that might mean). True, some of them have now taken “pay cuts”. What do these “cuts” consist of? Stanford Weill, the chief executive of Citigroup, took an 83 percent pay cut recently, which left the poor fellow with a miserable $36.1 million. The Economist (6/4/02) commented:

“One worry is that executive pay has risen to such heights that the bad times look rather like the good times used to: the median total compensation in the Mercer survey [a recent survey of 100 big companies by William M. Mercer and the Wall Street Journal] was still $2.16 million. Nor has pay fallen by nearly as much as profits have done. The total compensation of chief executives is down by 2.9 percent on a year ago, but after-tax profits fell by nearly 50 percent last year among the companies included in the S&P 500. Some components of bosses’ pay such as basic salaries actually rose healthily on the back of this dreadful performance.”

The Economist continues:

“Some of the financial services that American companies offer to their top chaps would put regular banks out of business. Compaq, a computer maker, has agreed to forgive a $5 million (!) loan it extended to its boss, Michael Capellas, and is providing him with a new loan to help with the tax bill. Bernie Ebbers, the chief executive of WorldCom, a troubled telecom firm, borrowed a princely $341m. From his employer, on which he is paying a little over 2 percent on interest.”

When they are employed, these executives, responsible in reality to nobody, enrich themselves shamelessly out of the profits that are the unpaid wages of the working class. It is a condemnation of the system that when layoffs are announced, the value of the stock invariably goes up. When a worker is sacked (which these people rarely are) or retires, they receive a very meager compensation – if they get anything at all. But these ladies and gentlemen continue to act like leeches even when they are formally retired.

“On top of his pension, worth around $9 million a year, Jack Welch, the retired boss of General Electric, is ‘required’ under the terms of his contract to consult with the company for the rest of his life, for which he will charge a daily [yes, that’s right, daily] rate of $17,000.” (Ibid.)

What exactly this “consultation” consists of is not mentioned. But the general picture is pretty clear. What we have here is not the picture of the go-getting, self-made American entrepreneur, so assiduously cultivated by the advocates of capitalism, but the exact opposite. This is a picture of unqualified and unrestrained plunder of the American economy by a tiny, unrepresentative and above all, unproductive corporate drones. Comfortably installed in their shiny glass towers, utterly remote from the workforce and the American people, at the head of vast and servile corporate bureaucracies, they quietly determine the fate of millions, both in the U.S.A. and on a global scale. This is the real face of corporate America and the reality of the so-called free market economy. Enron was just the tip of a very large, ugly and dangerous iceberg.

In case anyone thinks that this is just Marxist exaggeration and alarmism, let us leave the last word to that champion of the free market economy, The Economist, which we have already quoted. It predicts that on present trends, “by 2021 there will emerge a big American company where the boss is paid more than the firm’s entire sales. If that is market forces at work, then market forces had better be ignored.”

Socialism and Democracy

The idea that socialism and democracy are somehow incompatible is yet another falsehood. On this question, the defenders of capitalism behave like a squid that defends itself by squirting a large quantity of ink to confuse its enemy. The fact of the matter is this: that the democracy in the U.S.A. is a cover for the dictatorship of a handful of powerful corporations run by tiny cliques of non-elected and irresponsible people. The latter do not only own and control the wealth of America. They also control its press, television and all other means of moulding and conditioning public opinion. While in theory there are two parties, everyone knows that the difference between the Democrans and Republicrats is minimal.

Stalinist Russia was a one-party dictatorship (something that neither Marx nor Lenin ever advocated). America boasts a pluralistic democracy. In this democracy everyone can say what they want (well, almost), as long as the banks and big corporations decide what happen. Elections take place regularly, but in fact the electorate have no real choice. Both Democrats and Republicans stand for the interests of big business. There is no real difference between them: what small differences used to exist in the past have all but disappeared. In order to get elected at all, one has to be either a billionaire, or else have access to vast sums of money. And as the proverb goes: “He who pays the piper calls the tune”. The Enron scandal merely confirmed what everyone already knew: that the great majority of senators and congressmen and women are in the pockets of big business. No wonder millions of U.S. citizens feel disenfranchised and do not bother to vote.

Marxists stand for democracy. But we advocate a genuine democracy, not a fraudulent caricature. And the first condition for the introduction of democracy in the U.S.A. is the overthrow of the dictatorship of big business. The power of the big banks and corporations must be broken, and the commanding heights of the economy nationalized, under the democratic control and administration of the workers themselves. There would be plenty of scope for personal initiative!

The talents of the engineers, managers, scientists and technicians would play a crucial role in a socialist planned economy. Once private profit was no longer the overriding principle, the way would be open for an unprecedented boom in inventions, innovations of all kinds. Above all, the men and women on the shop floor would be encouraged to participate in discussions and debates on how to improve working practices and conditions. In this way, everyone would have a stake in the running of society. Decision-making would no longer be the privilege of a few wealthy executives, but the common property of all Americans.

In what way does this idea contradict the traditional and dearly held American ideals of democracy and individual rights? It does not contradict them at all, but reaffirms them and takes them to a qualitatively higher level. In fact, at the moment there is really very little scope for the free development of the individual in the U.S.A. of the giant corporations. None of the important decisions affecting the lives of the people are taken by the people. They are not even being taken on Capitol Hill, but by unseen individuals behind locked doors on Wall Street, in the Pentagon, the State Department, and above all in the boardrooms of the giant corporations that really rule the U.S.A.

The Future of Democracy

“This country, with its institutions, belongs to the people who inhabit it. Whenever they shall grow weary of the existing government, they can exercise their constitutional right of amending it, or their revolutionary right to dismember or overthrow it.” (Abraham Lincoln, April 4, 1861.)

The celebrated American sociologist C. Wright Mills coined the phrase “the military industrial complex” to describe the union between big business, government and the military that runs the U.S.A. today. The modern American state is a vast bureaucratic monster that exists not to serve the people but to lord it over them in the interests of the big companies that really rule America. When Thomas Jefferson was made the first Secretary of State, he had just five employees to man his office. Now the state bureaucracy numbers a huge army of hundreds of thousands of bureaucrats. Though they talk incessantly about “cutting government down to size”, all administrations have added to this monster, increasing its size and power constantly, at tremendous cost to the economy. “Cheap government” has become a hollow phrase from the distant past. In present-day America, the bureaucratic monster of big business is indissolubly linked to the bureaucratic monster of the state. That is what the Military-Industrial Complex means.

Most people in the U.S.A. nowadays take democracy for granted. But this is a dangerous misconception. The history of the United States shows that the common people have always had to struggle to win even the most elementary rights, and that democracy is a very fragile plant. Whenever the ruling oligarchy feels itself challenged it immediately takes steps to limit or even cancel those hard-won democratic rights enshrined in the Constitution and the Bill of Rights. It should be added that the Constitution itself has a number of defects from a strictly democratic standpoint. The powers given to the President are truly immense. Section One of Article Two says simply: “The executive power shall be vested in a President of the United States of America.” The President is commander in chief of the armed forces. He has powers to make treaties with the concurrence of the Senate and to make appointments of public officials and employees.

Theoretically, the powers of the executive are limited by a complicated system of checks and balances. But the fact is that the powers of the President have never been used to their full extent. They are important reserve powers that, under certain conditions could be used to carry through a legal coup and institute a Presidential dictatorship (i.e., the possibility of a socialist majority in Congress that wanted to nationalize the big corporations). This possibility is never considered because it has never been seen, but it is a real danger.

In any situation deemed by the ruling elite to constitute a national emergency it would be possible for the President, with the connivance of a majority of Congress, to virtually set aside the Constitution, vote unlimited authority to the President, and adjourn sine die. This may seem unlikely, but if we look at the recent trends we can see an increasing tendency to encroach upon the democratic rights of American citizens and grant ever-greater power to the state and its organs of repression. Some even say that the Constitution itself has already been turned into a dead letter.

Real power lies in the hands of a tiny number of boards of directors of the big corporations and banks. These faceless men and women are, in practice, elected by nobody and responsible to nobody. Yet they wield more real power than millions of ordinary Americans. With billions of dollars to play with, they can, and do, buy congressmen and women, judges, lawyers, newspaper editors, parties and Presidents. They decide what you can read, hear on the radio or see on television. Their psychology is that of Commodore Vanderbilt: “Law? What law? Hain’t I got the Power?”

What is the attitude of Marxists to democracy? In the first place, we stand for the defense of all the democratic conquests that were won through the struggle of the working class in the past. The working class needs freedom to develop its organizations: the unions, shop stewards committees and all the other things that represent the embryo of a new society within the womb of the old. We need the maximum freedom of speech, of assembly, and of the press; freedom to strike, demonstrate and agitate in favor of socialism. We must therefore fight any attempt by the dictatorship of big business to cancel or restrict any of these rights. We will make use of every democratic channel; that is open to us to put our case before the people.

We will fight for the creation of a mass party of labor that will fight for the interests of the working class and all oppressed people, and will stand for the nationalization of the big corporations under workers’ control and management. Once we have broken the stranglehold of the Democrats over the unions, it will be possible to fight and win elections in a cause that will inspire millions of people with hope. The working class, together with the small farmers, the unemployed, and other non-exploitative sections of society, constitute the decisive majority of the population, will respond enthusiastically, once they see they have a real alternative. It is entirely possible that a Labor Party could win a majority. But in that case, we have to ask ourselves how the big banks and corporations that really run America would react.

All history shows that no ruling class has ever given up its power, wealth and privileges without a fight, and that has normally meant a fight with no holds barred. We must be prepared to deal with a slaveholders’ rebellion in the same way that Abraham Lincoln did. Therefore, while accepting the need to fight to win the majority through elections, we understand that in the last analysis the decisive conflict will be fought outside Congress: in the streets and factories, in the farms, schools and universities.

The power of the American working class is colossal. Not a light bulb shines, not a telephone rings, not a wheel turns without the kind permission of the workers. This is potentially such a tremendous power that no force can resist it, as long as the working class is organized, mobilized and united in the struggle to change society. The resistance of the present day slaveholders can be swiftly overcome and reduced to nothing, on one condition: that the workers are determined to fight to the end.

Is Bureaucracy Inevitable?

It is frequently asserted that private ownership is superior to nationalized enterprises because it permits private initiative. But in practice, the big corporations that dominate the U.S. economy are extremely bureaucratic, inefficient and corrupt. They do not allow much room for initiative – at least as far as the big majority of the workforce is concerned. They are fundamentally undemocratic, being run by a handful of super-rich executives whose main aim in life is to make themselves even more wealthy.

The general public good is of no concern to such individuals, except inasmuch as bad publicity may harm sales, and therefore profits. The solution to this problem, however, is not to act in the public interest, but to pay for the services of a slick public relations department which is used to present the company’s image in the most favorable light –that is to say, to mislead and deceive the public. The case of Enron is an excellent example of the reality of U.S. corporate practice. It should be noted that this company was so closely connected with the U.S. government at the highest levels that it proved almost impossible to investigate its activities and even now the whole truth has not come out. And there are many more Enrons which have not yet been exposed.

No less an authority than the classical bourgeois economist Adam Smith already warned of the dangers of monopoly, when he wrote:

“The directors of such [joint-stock] companies [.] being the managers rather of other people’s money than of their own, it cannot be well expected that they should watch over it with the same anxious vigilance with which the partners in a private company frequently watch over their own [.] Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company.” (Adam Smith, Wealth of Nations, part 3, p. 112.)

The solution to this problem cannot be a return to the era of small businesses, as some people advocate. That period has been relegated to history and will not return. The modern capitalist economy is entirely dominated by big monopolies, and nothing can reverse that tendency. Anyone who doubts this has only to examine the history of anti-trust legislation in the U.S.A. There have been laws against monopolies for a very long time, yet their practical effect has been negligible. Witness the recent tussle between Bill Gates and the Federal authorities. No one doubts that Mr. Gates has created the world’s biggest monopoly, and that this is harming the progress of technology in a most vital area. Yet in practice, it is proving impossible to reverse the position.

Since it is not possible to halt the inevitable tendency towards monopolization, there remains only one alternative: to bring these giant corporations – which are at present responsible to nobody but themselves – under democratic control. But here we come up against an insurmountable difficulty. It is not possible to control what you do not own. The answer is very clear: in order to control the monopolies, it is necessary to take them out of private hands altogether –that is, to nationalize them. Only then would it be possible to ensure that the key points of the economy are the servants of society, not its master.

But would this not create the danger of a bureaucracy, as existed in Stalinist Russia? This seems to be a very serious objection, but actually it is not. The bureaucratic degeneration of the Russian revolution was not the result of nationalization, but of the isolation of the revolution under conditions of frightful backwardness. It should not be forgotten that in 1917 Russia was an extremely backward semi-feudal country. Out of a total population of 150 million, there were only four million industrial workers. In a remarkably short space of time, the nationalized planned economy transformed Russia from a backward country like Pakistan is today into the second most powerful nation on earth. For several decades the U.S.S.R. achieved economic results that have never been equalled by any other country. Nor should we forget the fact that its economy suffered the most terrible devastation in the Second World War when 27 million Soviet citizens perished.

It is not possible to understand what happened in the Soviet Union without considering these facts. Nor is it reasonable to draw an analogy between the fate of the nationalized planned economy in backward Russia and the prospects for a socialist planned economy in the United States. Bureaucracy is a product of economic and cultural backwardness. It is not difficult to prove this. If one considers the state of affairs in those countries which are sometimes referred to as the “Third World” – the states of Africa, Asia and Latin America, then it immediately becomes obvious that bureaucracy is a feature common to every single one of them – whether the means of production are nationalized or not (and even in the advanced capitalist countries it is to be seen).

It is possible to draw a graph showing that the degree of bureaucratization of a given society is in inverse proportion to the level of its economic and cultural development. The same is true of phenomena like corruption, inefficiency and red tape that are usually connected with bureaucracy. Society tends to free itself of these things to the degree that it lifts itself out of a low level of economic and technological development, and raises the cultural level of the population.

Of course, where a bureaucracy becomes an entrenched ruling caste as happened in Russia after the death of Lenin, it can hang onto its power and privileges even when the level of economic and cultural development renders it entirely superfluous. But in that case, the bureaucracy will suffocate and destroy the nationalized planned economy – which is precisely what occurred in the Soviet Union. But that is exactly the point. The existence of the bureaucracy in Russia was not only not the product of the nationalized planned economy, but was in complete antagonism to it. Trotsky explained that a nationalized planned economy requires democracy as the human body requires oxygen.

Without democracy and the control and administration of society by the working class, the planned economy eventually seized up, clogged and obstructed by the suffocating control of the bureaucracy.

What About Russia?

Ah, but the Soviet Union collapsed. Doesn’t that prove that socialism has failed? Yes, the Soviet Union collapsed after decades of bureaucratic and totalitarian rule, which completely negated the regime of workers’ democracy established in 1917. As early as 1936, Leon Trotsky predicted that the Stalinist bureaucracy that usurped power after Lenin’s death, would not be satisfied with its legal and illegal privileges, but would inevitably strive to replace the nationalized planned economy by privately owned monopolies. The capitalist counter-revolution in Russia, however, offers no way forward to the peoples of the former U.S.S.R.. It has been accompanied by a horrific collapse of the Russian economy, living standards and culture, as Trotsky predicted. If there is a country in the world where capitalism stands condemned, that country is Russia.

The prolongation of senile capitalism threatens the future of human culture, civilization, democracy, perhaps even the survival of humanity itself. The world is crying out for a fundamental social and economic transformation. The only hope for humanity consists in the radical abolition of capitalism and the establishment of a harmonious system of production and distribution based on the common ownership of the means of production under democratic workers’ control and administration.

The enormous potential of a nationalized planned economy was demonstrated by the Soviet Union, before, during and in the first 25 years after the Second World War. Despite all the efforts of the bourgeoisie and its hired prostitutes to deny it, the fact is that the U.S.S.R. (and later China) showed that it is possible to run an economy without private capitalists, bankers, speculators and landlords, and that such an economy can obtain spectacular results.
The future socialist planned economy of the U.S.A. will not be based on backwardness, as was the regime established by the Bolshevik Party of Lenin and Trotsky in November 1917. It will be as different from Russia as computer science is from the wooden plough. American socialism from the very beginning will draw on the colossal advances of industry, science and technology, which will become the servants of human needs, not the slaves of the profit motive. Once the vast productive capacity of the U.S.A. is organized on the basis of a rational plan, the sky will be the limit.

This is not just a theoretical assertion. It has already been proved in practice, and not only in Russia. As we have seen, during the Second World War, when elements of a planned economy and state control were introduced in the U.S.A., the economy grew rapidly and unemployment all but disappeared. That gives us just a glimpse of the tremendous potential that a socialist planned economy in America would unleash. Of course, this was not socialism. The basic levers of the economy remained in the hands of private capitalists. Real planning is not possible under capitalism. And the nationalized industries were run by bureaucrats. But despite these limitations, even these elements of a planned economy gave serious results for a time.

The elements of planning, even on a capitalist basis, gave better results than the free-for-all of the market economy. Just imagine the results that would be possible in a real socialist planned economy in which the benefits of a central plan would be combined with the democratic control and administration of the working people themselves. On the basis of a modern, technologically advanced economy, rational planning will spur production to an unprecedented level.

The Soul of America

In the first part of Reason in Revolt, a reference is made to the contradiction between the marvellous advances of science and the extraordinary lag in human consciousness. This contradiction is particularly striking in the United States. In the country that has done more than any other to advance the cause of science in the past period, the overwhelming majority of people in the U.S.A. believe in god, or are religious in some way. Thirty six percent of Americans think the Bible is the literal world of god, and half believe that America enjoys divine protection. After September 11, 78 percent thought that the influence of religion on public life was growing. Books on the apocalypse became best sellers. This situation is quite different to that of most European countries, where organized religion is dying on its feet (although there is still plenty of superstition and mysticism around).

Strangely enough, the Founding Fathers were not at all religious. These true sons of the 18th century Enlightenment expressed themselves in the most scathing terms about religion in general and Christianity in particular. Founding Fathers George Washington & John Adams, in a diplomatic message to Malta, wrote: “The United States is in no way founded upon the Christian religion.” John Adams, in a letter to Thomas Jefferson, went even further when he wrote: “This would be the best of all possible worlds, if there were no religion in it.”

Thomas Jefferson, in 1814, commented: “In every country and in every age, the priest has been hostile to liberty. He is always in alliance with the despot, abetting his abuses in return for protection to his own.” And the same Thomas Jefferson wrote in 1823:

“The day will come when the mystical generation of Jesus by the Supreme Being as his father, in the womb of a virgin, will be classed with the fable of the generation of Minerva in the brain of Jupiter.”

He added: “I do not find in orthodox Christianity one redeeming feature.”

Things were no better with Abraham Lincoln, who was also openly irreligious: “The Bible is not my book, and Christianity is not my religion,” he said. “I could never give assent to the long, complicated statements of Christian dogma.” These views were the natural outcome of the rationalist philosophy that represented the most advanced philosophical ideas of the 18th century Enlightenment. The rejection of religion was always the first step towards a rational view of nature and society. It was the beginning of all modern progress, the basis of both the American and the French revolutions. And it was equally the starting point for the development of modern science and technology, the true foundation for America’s greatness. Nowadays the degree of scientific and technological advance in the U.S.A. is unequalled by any other country. Here we have a tantalizing glimpse of the future – the staggering potential of human development. But we also see a contradiction. Side by side with the most advanced ideas we see the persistence of ideas that have been handed down, unchanged, from a remote and barbarous past.

The reason for the persistence of religious belief is that men and women feel that their lives are under the control of strange unseen forces. They do not feel in control of their own destinies, as really free human beings should. And in fact, our lives really are determined by forces not under our control. The wild swings of “market forces” on a world scale determine whether millions of people will have a job or not. The equally wild gyrations of the stock markets can ruin millions of families in a matter of days or even hours. There is a general instability and volatility throughout the world that expresses itself in unending wars, terrorist outrages and other barbarities. This creates a general climate of fear and uncertainty. It is what is called the new world order.

In its period of ascent, capitalism based itself on rationalism. That is just what is expressed in the ideas of the Founding Fathers reproduced above. In general, when a particular socio-economic system is in a state of collapse, its decline is expressed in a general crisis of morality, the family, beliefs and so on. The ideology of the ruling elite becomes increasingly decrepit, its values rotten. People no longer believe in the old ways and the old “ideals” are met with scepticism and irony. Eventually a new set of ideals emerge and a new ideology that reflects the standpoint of the rising revolutionary class. In the 18th century that was the bourgeoisie, which generally adopted a rationalist standpoint. In the 21st century, it is the working class, which must stand on the basis of scientific socialism – Marxism.

In general, when society enters – as capitalism has undoubtedly entered – into a phase of terminal decline, one can react in one of two ways. One response is to turn inwards, try to escape from a horrific reality by closing all the doors and windows and shutting one’s eyes to what is happening in the world outside. The problem with this is that the world outside has an uncomfortable way of intruding into the life of even the most private persons. Sooner or later it will come knocking at your door, and usually at a most uncivilized hour. There is really no escape.

The second way is to look reality squarely in the face, to try to understand it and thus prepare to change it. Hegel said long ago that true freedom is the recognition of necessity, that is to say, if we want to change the circumstances in which we live, we must first understand them. Marxism provides us with a wonderful tool to help us to grasp the nature of the world we live in and to make us understand where we have come from and where we are going to. Unlike religion, which offers the consolation of a vision of future happiness and fulfilment beyond the grave, Marxism directs our eyes, not to heaven, but to the present life and helps us to understand the apparently mysterious forces that determine our fate.

Since Reason in Revolt first appeared, there have been a number of other spectacular advances in science – notably the mapping of the human genome. These results have completely demolished the positions of genetic determinism that we criticized in Reason in Revolt. It has also cut the ground from under the feet of the racist “theories” put forward by certain writers in the U.S.A. who attempted to enlist the service of genetics to peddle their reactionary pseudo-scientific “theories”, that black people are genetically predisposed to ignorance and poverty. They have also dealt a mortal blow to the nonsense of the Creationists who want to reject Darwinism in favor of the first chapters of Genesis, and impose this on American schools.

For many Americans, Marxism is a closed book because it is seen as anti-religious. After all, did Marx not describe religion as the “opium of the people”? As a matter of fact, just before these famous words, Marx wrote: “Religious distress is at the same time the expression of real distress and the protest against real distress.” In essence, religion is an expression of a desire for a better world and a belief that there must be something more to life than the vale of tears through which we pass in the all-too-brief interval from cradle to grave.

Many people are discontented with their lives. It is not just a question of material poverty – although that exists in the U.S.A. as in all other countries. It is also a question of spiritual poverty: the emptiness of people’s lives, the mind-deadening routine of work that is just so many hours out of one’s life; the alienation that divides men and women from each other; the absence of human relations and solidarity that is deliberately fostered in a society that proudly proclaims the laws of the jungle and the so-called survival of the fittest (read: wealthiest); the mind-numbing banality of a commercialized “culture”. In this kind of world the question we should be asking ourselves is not: “is there a life after death” but rather “is there a life before death?”

The capitalist system is a monstrously oppressive and inhuman system, which means untold misery, disease, oppression and death for millions of people in the world. It is surely the duty of any humane person to support the fight against such a system. However, in order to fight effectively, it is necessary to work out a serious program, policy and perspective that can guarantee success. We believe that only Marxism (scientific socialism) provides such a perspective.

The problem a Marxist has with religion is basically this: We believe that men and women should fight to transform their lives and to create a genuinely human society which would permit the human race to lift itself up to its true stature. We believe that human beings have only one life, and should dedicate themselves to making this life beautiful and self-fulfilling. If you like, we are fighting for a paradise on this earth, because we do not think there is any other.

Although from a philosophical point of view, Marxism is incompatible with religion, it goes without saying that we are opposed to any idea of prohibiting or repressing religion. We stand for the complete freedom of the individual to hold any religious belief, or none at all. What we do say is that there should be a strict separation between church and state. The churches must not be supported directly or indirectly by taxes or exemption therefrom, nor should religion be taught in state schools. If people want religion, they should maintain their churches exclusively through the contributions of the congregation and preach their doctrines in their own time.

To the degree that men and women are able to take control of their lives and develop themselves as free human beings, I believe that interest in religion – that is, the search for consolation in an afterlife – will decline naturally of itself. Of course, you may disagree with this prediction. Time will tell which of us is right. In the meantime, disagreements on such matters should not prevent all honest Christians from joining hands with the Marxists in the struggle for a new and better world.

Religion and Revolution

Christianity itself began as a revolutionary movement about 2000 years ago when the early Christians organized a mass movement of the poorest and most downtrodden sections of society. It is not an accident that the Romans accused the Christians of being a movement of slaves and women. The early Christians were also communists, as you will know from the Acts of the Apostles. Christ himself worked among the poor and dispossessed and frequently attacked the rich. He said that it is easier for a camel to pass through the eye of a needle than a rich man to enter the Kingdom of God. There are many such expressions in the Bible.

The communism of the early Christians is also shown by the fact that in their communities all wealth was held in common. Anyone who wished to join had first to give up all his or her worldly goods. Of course, this communism had a somewhat naive and primitive character. This is no reflection on the men and women of that time, who were very courageous people who were not afraid to sacrifice their lives in the struggle against the monstrous Roman slave state. But the real achievement of communism (that is, a classless society) was impossible at that time because the material conditions for it were absent.

Marx and Engels for the first time gave communism a scientific character. They explained that the real emancipation of the masses depends on the level of development of the productive forces (industry, agriculture, science and technology) which will create the necessary conditions for a general reduction of the working day and access to culture for all, as the only way of transforming the way people think and behave towards each other.

The material conditions at the time of early Christianity were not sufficiently advanced to permit such a development, and therefore the communism of the early Christians remained on a primitive level – the level of consumption (the sharing out of food, clothes, etc.) and not real communism which is based on the collective ownership of the means of production.

However, the revolutionary traditions of early Christianity bear absolutely no relation to the present situation. Ever since the 4th Century AD, when the Christian movement was hijacked by the state and turned into an instrument of the oppressors, the Christian Church has been on the side of the rich and powerful against the poor and oppressed. Today the main churches are extremely wealthy institutions, closely linked to big business. The Vatican owns a big bank and possesses enormous wealth and power, the Church of England is the biggest landowner in Britain, and so on.

Politically, the churches have systematically backed reaction. Catholic priests blessed the armies of Franco in their campaign to crush the Spanish workers and peasants. The Pope in effect backed Hitler and Mussolini. Finally, in the U.S.A. today, the religious right, backed by millions of dollars, is conducting a campaign in favour of all manner of reactionary causes. It has at its disposal television and radio stations, where religious charlatans make a fortune by playing on people’s fear and superstition.

The Kingdom of God may be reserved for the poor, but these ladies and gentlemen have ensured for themselves a very comfortable life on this earth. Jesus’ first act on entering Jerusalem was to drive the moneychangers out of the Temple. But those who presume to speak in his name almost always take the side of the rich and powerful against the poor and oppressed of this earth. They are often the most fervent advocates of welfare cuts and other policies directed against the most defenceless sections of society, such as single parents. Christ defended the woman taken in adultery, but the latter-day Pharisees line up to stone the poor and defenceless.

For such “religious” people, we have nothing but contempt. But for those honest Christians who wish to join us in the fight to change society, we extend a warm and fraternal welcome. We may disagree about philosophy, but we can agree that the present society is unworthy of humanity and ought to be changed. And we know that many devoted and self-sacrificing class fighters in the U.S.A. are practicing Christians. This has always been the case, as we see from the following extract from The Jungle, that great socialist novel by Upton Sinclair:

“‘I am not defending the Vatican,’ exclaimed Lucas vehemently. ‘I am defending the word of God – which is one long cry of the human spirit for deliverance from the sway of oppression. Take the twenty-fourth chapter of the Book of Job, which I am accustomed to quote in my addresses as ‘the Bible upon the Beef trust’; or take the words of Isaiah – or of the Master Himself. Not the elegant prince of our debauched and vicious art, not the jewelled idol of our society churches – but the Jesus of the awful reality, the man of sorrow and pain, the outcast, despised of the world, who had nowhere to lay His head - ‘“‘I will grant you Jesus,’ interrupted the other.

“Well then,’ cried Lucas, ‘and why should Jesus have nothing to do with His Church –why should His words His life be of no authority among those who profess to adore Him? Here is a man who was the world’s first revolutionist, the true founder of the socialist movement; a man whose whole being was one flame of hatred for wealth, and all that wealth stands for – for the pride of and the luxury of wealth, and the tyranny of wealth; who was Himself a beggar and a tramp, a man of the people, an associate of saloon-keepers and women of the town; who again and again, in the most explicit language, denounced wealth and the holding of wealth: ‘Lay not up for yourselves treasures on earth!” “Sell that ye have and give alms!” – “Blessed are ye poor, for yours is the kingdom of heaven!” – “Woe unto you that are rich, for ye have received your consolation!” – “Verily, I say unto you, that a rich man shall hardly enter into the kingdom of heaven!” Who denounced in unmeasured terms the exploiters of His own time: “Woe unto you, scribes and Pharisees, hypocrites!” – “Woe unto you also, you lawyers!” – “Ye serpents, ye generation of vipers, how can ye escape the damnation of hell?” Who drove out the businessmen and brokers from the temple with a whip!’ Who was crucified – think of it – for an incendiary and a disturber of the social order! And this man they have made into the high priest of property and smug respectability, a divine sanction of all the horrors and abominations of modern commercial civilization! Jewelled images are made of Him, sensual priests burn incense to Him, and modern pirates of industry bring their dollars, wrung from the toil of helpless women and children, and build temples to Him, and sit in cushioned seats and listen to His teachings expounded by doctors of dusty divinity.”

The voice of revolt of the oppressed against injustice and oppression has spoken in this kind of language for at least 2,000 years. What is important is not the language but the meaning. What is important is not the form but the content. The original message of the Christian movement 2,000 years ago was both revolutionary and communist. As has been explained, nobody could be a Christian unless they first gave up all their worldly wealth, renounced private property and embraced the doctrine of the universal brotherhood (and sisterhood) and equality of all. That revolutionary message was restated by the left wing of the Puritans in the 16th and 17th centuries. It has resurfaced many times since, as an expression of the instinctive revolutionism of the masses.

Marxism takes as its starting point this instinctive revolutionism but gives it a scientific and rounded-out expression.

Our first task is to unite to put an end to the dictatorship of Capital that keeps the human race in a state of slavery. Socialism will permit the free development of human beings, without the constraint of material needs. As far as the future of religion is concerned, one can say the following: socialism, being based upon full human freedom, will never try to prohibit people from thinking and believing in any way they choose. People should be allowed to hold any religious beliefs they wish – or none at all.

As we have already pointed out above, religion must, of course, be completely separated from the state. Those who wish to practice religion must pay for it out of their own pockets. And there is no place at all for religion in the schools. Once we have established a genuinely free society in which men and women take control of their own lives and destinies, in which they are able to develop to the full all their physical and mental abilities and relate to each other in a really human manner, we believe there will be no room left for the superstitions of the past, and these will gradually disappear.

You do not agree? Well, that is your right. But first of all, let us agree to combine all our forces in a mighty movement dedicated to driving the moneychangers out of the temple, or rather, out of our homes, streets and workplaces. Let us cleanse this society of all oppression, exploitation and injustice. Then we can let the future take care of itself.

The Philosophy of the Future

Marxism is a philosophy, but it is quite unlike other philosophies. Dialectical materialism is both a powerful methodological tool to understand the workings of nature, thought and human society and a guide to action. As the young Marx put it: “philosophers have only interpreted the world in various ways – the point is, however, to change it.”

Now, it may be that you are quite happy with the world in which we live, and do not wish to change it. In that case, you may find this essay educational, or at least entertaining. But you will not have understood it, basically because we will be talking mutually unintelligible languages. However, if ever there was a time when Americans should be seriously re-examining their view of the world and their place in it, that time is now. And in order to obtain a rational insight into this world an understanding of Marxist philosophy is of great importance.

The most essential feature of dialectical materialism is its dynamic character. It sees the world as an ever-changing process, driven by internal contradictions, in which sooner or later things change into their opposite. Moreover, the line of development is not a smooth, linear process, but a line that is periodically interrupted by sudden leaps, explosions that transform quantity into quality. This is an accurate picture of both processes we see in nature and in the process of social development we call history.

Most people imagine that the kind of world into which they are born is something fixed and immutable. They rarely question its values, its morality, its religion, its political and state institutions. This mental inertia, reinforced by the dead weight of tradition, customs, habit and routine, is a powerful cement that permits a given socio-economic order to continue to exist long after it has lost its rational basis. In the U.S.A., perhaps more than any other country in the world, this inertia exercises a major role and prevents people from realizing what is happening to them.

In actual fact, societies are not immutable. The whole of history teaches us that. Socio-economic systems, like individual men and women, are born, mature, reach a high point in their development, and then at a certain point enter into a phase of decline and decay. When a form of society ceases to play a progressive role (which, in the last analysis, is that point where it is unable to develop the productive forces as it did in the past), people can feel it. It manifests itself in all manner of ways – not only in the economic field. The old morality begins to break down. There is a crisis of the family and personal relations, a growing lack of solidarity and social cohesion, a rise of crime and violence. People no longer believe in the old religions and turn in the direction of mysticism, superstition and exotic sects. We have seen these things many times in history, and we are seeing the same things now – even in the U.S.A.

We are living at a time when many people have begun to ask questions about the world in which they live, and to ask questions is never a bad thing. The terrible events of September 11, 2001 have caused many Americans to think seriously about matters in which they previously showed little interest. They have suddenly realized that all is not well with the world, and that America is deeply involved in a worldwide crisis from which no one can escape, and in which no-one is safe. The destruction of the twin towers cast a dark shadow over America. For a time, Bush and the most reactionary wing of the ruling class have had things all their own way. But this situation will not last forever. Sooner or later the thick fog of propaganda and lies will dissipate and people will become aware of the real state of affairs both in the U.S.A. and on a world scale.

Although many people feel in their innermost being that something is going badly wrong, they find no logical explanation for it. That is not surprising. The entire way in which they have been taught to think from their earliest years conditions them to reject any suggestion that there is something fundamentally wrong with the society in which they live. They will close their eyes and try to avoid drawing uncomfortable conclusions for as long as they can.

This is quite natural. It is very hard for people to question the beliefs they have been brought up with. But sooner or later, events catch up with them – cataclysmic events that compel them to re-think many things that they previously took for granted. And when such a moment arrives, the same people who stubbornly refused to consider new ideas, will eagerly examine what only yesterday they regarded as heresies, and find in them the explanations and alternatives for which they were searching.

Today, Marxism is seen as such a heresy. Every hand is raised against it. It is said to have no basis, to have failed, to be out of date. But if this is really the case, then why do the apologists of capitalism still persist in attacking it? Surely, if it is so dead and irrelevant, they should just ignore it. The power of Marxist ideas is precisely that they – and they alone – can provide a coherent, rigorous, and, yes, scientific explanation of the most important phenomena of the world in which we live.

It is a matter of great regret that so many people, especially in the U.S.A., have the same attitude towards Marxism as the representatives of the Roman Catholic Church had towards Galileo’s telescope. When Galileo begged them to look with their own eyes and examine the evidence, they stubbornly refused to do so. They just “knew” that Galileo was wrong, and that was that. In the same way, many people “just know” that Marxism is wrong, and do not see any reason to investigate the matter any further. But if Marxism is wrong, by studying it, you will be more firmly convinced of its erroneousness. You have nothing to lose, and will have added to your store of knowledge. But the author of these lines is firmly convinced that if more people only took the trouble to read the original works of Marx, Engels, Lenin and Trotsky, they would soon convince themselves that Marxism really does have a lot of important things to say – and that these things are of great relevance to the modern world.

No More War!

After 1945 the United Nations was set up, supposedly to guarantee world peace. But today, six decades after D-Day, the world is anything but a peaceful place. One war succeeds another in one country after another, on one continent after another. In the modern epoch wars are the expression of the unbearable contradictions that flow from the capitalist system itself. The entire world is dominated by a handful of super-rich nations, which in turn are dominated by a handful of super-rich and powerful corporations and banks. The actions of these are determined – as they were always determined – by the greed for rent, interest and profit, for markets, raw materials and spheres of influence. In the Second World War, fifty-five million men, women and children perished. Millions more will perish in the coming years and decades, not just in wars and other military conflicts, but from starvation and epidemics like malaria, AIDS and simple diseases caused by the lack of clean drinking water.

The worst thing about all this is that it is objectively unnecessary. In the first decade of the 21st century, when science and technology have performed unheard-of miracles, the majority of the human race faces a grinding struggle to survive. The gap between rich and poor has widened into an abyss, and at the same time the gap between the so-called rich and poor nations has never been greater.

These facts lie behind the tensions and antagonisms that create wars, ethnic strife, terrorism, and all the other horrors that afflict our tortured and turbulent planet. As long as these central contradictions are not resolved, wars and other violent conflicts will continue to sow death and destruction. It is useless to bemoan the results of war, as moralists and pacifists do. It is necessary to diagnose the source of the illness and prescribe a cure.

At bottom, the worldwide turbulence is a reflection of the crisis of a bankrupt socio-economic system that has long ago outlived its usefulness and become a colossal brake on the development of human culture and civilization. A system that subordinates everything to the greed of a handful of super-rich barons in control of huge and irresponsible corporations can only signify endless crises, hunger, disease, misery and wars. In order that humankind might live, this outmoded system must be abolished. There is no other way forward.

In place of the anarchy of capitalist production, what is needed is a planned economy, democratically run by the working class. On that basis, it will be possible in a relatively short time to abolish hunger, homelessness, misery and illiteracy and all the other elements of barbarism that make life a hell on earth for countless millions of people. In place of the old strife and rivalry between nations it will be possible to unite the productive forces of the whole planet in a socialist commonwealth, where wars will be consigned, along with slavery, feudalism and cannibalism, to a museum of barbarous relics of the past.

The Sky is the Limit

The development of the productive forces in the U.S.A. over the past century has reached vertiginous heights. Industry, agriculture, science and technique have all been developed to the point where it would easily be possible to make a gigantic leap forward. The productive potential of the U.S.A. alone – if it were harnessed in a rational, democratic plan of production – would be sufficient to eradicate poverty, illiteracy and disease on a world scale.

However, here too we stumble on a dialectical contradiction. In the first decade of the 21st century, millions of people are living on the brink of starvation. A hundred million children each year are born, live and die on the streets and they do not know what it is to live in a house. And the worst thing about this is that, for the first time in history, we can say that none of this is necessary. The terrible suffering, the colossal waste of human resources, all these things could be avoided by taking relatively simple steps.

There is no real objective reason why the world in the 21st century is in the state that it is. We are not faced with some vast, incomprehensible catastrophe, the nature and causes of which we are ignorant, and which we are powerless to resolve. All the contradictions we see on a world scale are only a reflection of the impasse of the capitalist system, a system that subordinates the interests of the millions to the rapacious greed of a few.

In its day, capitalism played a revolutionary role. It freed the productive forces from all the petty restrictions imposed by feudalism. It broke down the narrow local barriers, tithes, tolls and taxes that limited the free flow of goods, and established a national market, the prior condition for the establishment of the national state.

But now the capitalist system has itself become a barrier to the free development of the productive forces. Private ownership of the means of production is now a contradiction in terms, when the means of production have become gigantic corporations that straddle the continents and own greater wealth than many national states. And the national state itself has become as much of a barrier to the free development of the productive forces as were the old local feudal restrictions in the late Middle Ages. In order to break loose from these suffocating bonds, it is necessary to abolish private ownership of the means of production and the nation state. These reactionary barriers must be swept aside if the future of human progress is to be guaranteed.

Freed from the tyranny of the profit motive and a thousand other petty restrictions that cramp the development of the productive forces, science and technology would experience an explosive growth that would transform the lives of millions in a short space of time. The pioneers who opened up the West were inspired by a new and vast horizon of possibilities. But the advent of socialism would open up still vaster horizons for human development on a global scale. What tremendous new vistas would be opened up for humanity!

In recommending the ideas of Marxism to the American public, it is my fervent hope to convince the reader of the correctness and relevance of the ideas of Marx and Engels in the world of the 21st century. If I succeed even partly in convincing you, I will be very pleased. If not, I hope to have dispelled many misconceptions about Marxism and show that it at least has some interesting things to say about the world in which we live. In any event, I hope it will make people think more critically about our society, its present and its future.

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Chapter IX — The Colonial Revolution

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The war in Vietnam, which completely transformed the situation in the U.S.A., did not begin in a planned way. The U.S.A. was sucked into it almost by accident. It began with a covert operation, the sending of officers and “advisers” to prop up an unpopular and corrupt government against its own people. This is the usual style of U.S. imperialism! The regime of Ngo Dinh Diem was guilty of vicious repression in South Vietnam. Buddhist monks burned themselves alive in protest. Finally, Diem was assassinated by his own generals.

Three weeks later, the President of the U.S.A. suffered the same fate. Kennedy was succeeded by his Vice President, Lyndon B. Johnson, who immediately announced that he was “not going to lose Vietnam”. “Win the war!” was his clear instruction. But despite all its tremendous wealth and military firepower, the U.S.A. did not win the war. On the contrary, Vietnam was the first war America ever lost. Korea was a draw. But in the steamy jungles and swamps of Vietnam, the Americans suffered a bitter defeat at the hands of a barefoot army.

In order to step up its military activities in Vietnam (as usual) an incident was required. This was (as usual) manufactured in the so-called Bay of Tonkin incident. It was alleged that a U.S. warship, the Maddox, had been fired upon by North Vietnamese naval vessels in the Gulf of Tonkin. For years it was believed that the U.S. navy had been the target of unprovoked “Communist aggression”. That was completely untrue. Even at the time, the captain of the Maddox admitted that none of his crew had made “actual visual sightings” of North Vietnamese naval vessels, and not one sailor either on the Maddox or the Turner Joy had actually heard North Vietnamese gunfire. The opening of the Hanoi archives has proven conclusively that the North Vietnamese did not fire on the American ships, which were actually inside Vietnamese territorial water at the time. Yet the American public was persuaded to back a foreign war on the basis of false information – and not for the last time, as we know.

The very next day Lyndon Johnson ordered the bombing of North Vietnamese naval bases and an oil depot. It was the start of a huge campaign of bombing that caused havoc in Vietnam, killing a large number of civilians and destroying its industry and infrastructure. On television, President Johnson declared:

“Repeated acts of violence against the armed forces of the United States must be met not only with alert defense but with positive reply. That reply is being given as I speak to you tonight.” (Quoted in Jeremy Isaacs and Taylor Downing, Cold War, p. 216.)

There was not a word of truth in any of this. Johnson and co. had decided to send U.S. troops to Vietnam and that was that. In the same way, George W. Bush and his friends decided long before 11 September to invade Iraq and lied through their teeth about the alleged weapons of mass destruction that were supposed to pose a deadly threat to American security to sell it to the public.

In the years that followed, high explosives, napalm and cluster bombs rained down on Vietnam. The U.S. Air Force dropped toxic chemicals, including the notorious agent orange on forests, allegedly to kill the vegetation and deny shelter to the Vietnamese guerrillas. A total of 18 million gallons of herbicide were dropped. Even today U.S. servicemen are dying from the effects of just handling these toxic agents, especially cancer. One shudders to think of the effects they had on the Vietnamese men, women and children on whom they were dropped. Tests have shown that the South Vietnamese have levels of dioxin three times higher than those in U.S. citizens. It will take many years to flush these toxins out of the fragile ecosystem. This was chemical warfare pursued with a vengeance!

In all, the U.S. dropped more tons of explosives on Vietnam than were dropped by all sides in the Second World War. After bombing one village to rubble, one U.S. officer was quoted as saying: “We had to destroy the town in order to save it.” They are still “destroying towns in order to save them” today. Ask the inhabitants of Fallujah. And the tactic of dropping tons of poisonous chemicals still continues in Colombia, where herbicides are being used in the so-called war against drugs. The damage to people, vegetation and wild life will be the same as in Vietnam. But nobody talks about that.

The name of this particular operation was “Rolling Thunder”. There must be somebody in the Pentagon, some frustrated poet, whose sole function is to think up picturesque names for such acts of barbarity. Lately we had “Operation Shock and Awe”. It is a pity such talented people were not around at the time of the fall of the Roman Empire, or Attila the Hun might have called his activities: “Operation Sweetness and Light”. No matter what the name was, it did not succeed. Once an entire people stands up and says “no!” to a foreign invader, no amount of troops, guns, bombs or chemical agents will make any difference, as George W. Bush will learn to his cost in Iraq. The Vietnamese continued to resist. More and more U.S. troops had to be sent in and more and more body bags were being flown home.

At first the U.S. authorities simply hid the facts of the growing escalation from the American public. They continued to lie and deceive with the active assistance of what is known in some quarters as the free press. But as Abe Lincoln pointed out: you can fool some of the people all the time, and all of the people some of the time, but you cannot fool all of the people all of the time. Slowly, by degrees, and not all at the same time, the people of the United States became aware of what the true situation was.

The suffering of the Vietnamese population will never be fully known. Apart from the huge number killed and maimed, the war caused many other human casualties. The relentless bombing, shelling and defoliation drove tens of thousands of peasants from the countryside to the outskirts of the big cities where they lived in humiliating poverty. The traditional structures of Vietnamese village life were shattered. Young girls became prostitutes for the U.S. soldiers.

A drug culture flourished, which later fed back into the cities of the U.S.A., with devastating results. In 1971 the Pentagon calculated that nearly 30 percent of the U.S. troops in Vietnam had taken heroin or opium, while smoking marijuana was commonplace. Attempts to stamp out the drug trade met with the opposition of the South Vietnamese puppet regime, which was heavily involved in it. That was an indication of the rottenness of the regime the U.S.A. was trying to prop up.

By the end of 1967 the U.S. was spending $20 billion a year on the Vietnam War, which contributed massively to a balance of payments deficit of $7 billion. By the end of 1968, the number of U.S. troops in Vietnam was over 500,000. Towards the end of the war, the U.S. troops in Vietnam were completely demoralized. They understood the situation, that they were fighting an unwinnable war. The Vietnamese were fighting a just war of national liberation, while the U.S. army was a hated army of foreign occupation. In any army there is an element of killers and sadists, and in such a situation atrocities and brutality against civilians became routine. Eventually, these horrors became known at home, with the massacre at My Lai among the most infamous. The supposed moral justification for the war was blasted to pieces – just as in Iraq today.

In January 1968, President Johnson announced that the U.S.A. was winning the war. This was immediately blown apart by the Tet offensive. The Vietnamese mounted simultaneous attacks in more than a hundred cities. In Saigon a sapper unit even managed to penetrate the U.S. embassy compound. These events were shown all over America on the television screens to a shocked public. This cruelly exposed the fact that for all its military might, the U.S.A. had not succeeded. The war finished Johnson’s political career. Richard Nixon, the Republican candidate, defeated L.B.J.’s Vice President Hubert Humphrey in the Presidential elections of November 1968.

The Anti-Vietnam War Movement

While these dramatic events were unfolding, on the other side of the world, France was facing revolution. In May 1968 the French working class staged the biggest revolutionary general strike in history. Ten million workers occupied the factories, while the students demonstrated on the streets of Paris, built barricades and fought with the police. The general mood of radicalization naturally affected the youth first. The youth of America was mobilizing for Civil Rights and against the Vietnam War. Already in October 1967 anti-war protesters organized a huge march. For the first time since 1930 the Federal government called in armed troops to defend the capital. The kids tried to fraternize with the troops, but that night the troops attacked the demonstrators, kicking and clubbing them with extreme violence. One eyewitness spoke of “troops and marshals advancing, cracking heads, bashing skulls.”

This was a good lesson in the realities of bourgeois state power. Engels and Lenin explained that the state in the last analysis is “armed bodies of men”. Its whole purpose is to keep the majority under control by means of organized violence or the threat of violence. The rest is just show. The pent-up tensions of American society, which exposed deep unresolved contradictions, were about to erupt in a most violent way. Dramatic events were being prepared. The broad sweep of the Civil Rights movement had shaken America from top to bottom. The assassination of black leader Martin Luther King sparked-off mass rioting in a hundred cities. There were more than 20,000 arrests and fifty deaths. 75,000 troops were called out to keep order. King’s death meant that the leadership of the black movement passed to more radical elements. The Black Panthers, who embraced Marxism and advocated the united struggle of the black and white poor, were organizing military training in the ghetto of Oakland, California. People were calling openly for revolution. The assassination of Robert Kennedy underlined the general mood of violence and social tension.

A million students and faculty members were boycotting classes in protest at the war. Things came to a head with the Democratic Party convention in Chicago, where the Party was to choose its Presidential candidate. Mayor Richard J. Daley announced: “As long as I am mayor, there will be law and order on the streets”. He gave the Chicago police the order to shoot to kill. When thousands of demonstrators descended on the city, they were brutally attacked by the police. The demonstrators were infiltrated by 200 plainclothes policemen. Demonstrators, newsmen and passers-by were all clubbed and beaten. So much tear gas was thrown that it entered the ventilation system of the hotel where Humphrey was giving his acceptance speech, with predictable results. He commented bitterly: “Chicago was a catastrophe. My wife and I went home heartbroken, broken and beaten.” Some of the demonstrators went home rather more broken and beaten than Mr. Humphrey.

‘A Nation on the Edge of Chaos’

The election of Richard Nixon signified the continuation of the war. It also signified the continuation of the anti-war movement. Nixon authorized the extension of the war into Cambodia, where the U.S. Air Force staged an even more vicious bombing campaign than in Vietnam. The massive destruction and loss of life caused by this bombing was the real explanation for the fanatical hatred of the Americans and their Cambodian allies that motivated the later brutal conduct of the Khmer Rouge, ending in the “Killing Fields”, and a new period of chaos, death and bloodshed.

The student protests against the war led to the shooting of students at Kent State and Jackson State Universities. This poured petrol on the flames. Five hundred universities closed in protest. “Four dead in Ohio” sang the rock group Crosby, Stills, Nash and Young. There was a general outcry. Meanwhile, an increasingly paranoid President authorized wiretaps, surveillance, and “surreptitious entry” – a euphemism for burglary – against the leaders of the anti-war movement. This was the slippery slope that led the Nixon administration to Watergate.

Nixon was re-elected, just as George W. Bush was re-elected. But his troubles had only just begun. He tried to force Hanoi to come to terms by stepping up the bombing of the North. For twelve days over Christmas, the North was battered by wave after wave of B-52 bombers. Still Nixon spoke of “peace with honor”. The people of Vietnam still faced two more gruelling years of war, but in reality the will to fight on the part of the Southern army and the U.S. troops in Vietnam had collapsed. In early 1975 the North launched another offensive, leading to the fall of the cities of Hue and Da Nang. First there was military rout, then political collapse. The American stooge Thieu fled. Within days the Vietnamese Liberation Army entered Saigon. The world was witness to the incredible scenes of panic as the last remaining American personnel had to scramble into helicopters from the roof of the embassy building in Saigon.
The Vietnam War was not only the greatest military defeat in American history. It had a profound effect on American society. The truth is that U.S. imperialism was defeated, not in the swamps and jungles of Vietnam, but in the cities, campuses and streets of the U.S.A. From a military point of view, there was no reason why the U.S.A. should not have won the war – in time. But the colossal drain of the war had a revolutionary effect on American society. In fact, if a revolutionary party had existed in the U.S.A. at that time, it would have been on the brink of a social revolution. This is not an exaggeration. A presidential commission set up to investigate the shootings in Ohio, concluded:

“The crisis has its roots in a division of American society as deep as any since the Civil War. A nation driven to use the weapons of war upon its youth is a nation on the edge of chaos.”

The word “chaos” must here be understood as a synonym for revolution.

The explosive mood of discontent was not confined to the students, as has often been maintained. The student youth is always a sensitive barometer reflecting deep moods of discontent in the bowels of society. The wind always blows through the tops of the trees first. A radicalization of the students is an anticipation of a later revolutionary movement in society as a whole. That was true of the first Russian revolution, which commenced with student agitation against the war with Japan and ended with the revolution of 1905. The student demonstrations in Paris in May 1968 did not cause the general strike, as many have believed. It merely acted as the catalyst for moods of discontent that had been accumulating silently over a long period of time. In the same way, the student agitation in the U.S.A. was the expression of a general mood of dissatisfaction and discontent, which had not yet surfaced but which was being prepared.

It is no accident that the movement of the black Americans reached its most explosive point at the same time, and found its expression in the Black Panthers, the most conscious, courageous and consistently revolutionary of all the tendencies in the black community (along with Malcolm X before his death). They were seen as a particularly dangerous threat by the Establishment because they had moved beyond black nationalism towards Marxism and were advocating the revolutionary unity of black and white workers – an absolutely correct policy. For this they were deliberately targeted by the state and systematically exterminated.

But the greatest danger to the state came from within the state. The U.S. troops in Vietnam were not only completely demoralized by this time. They were in a state of open revolt. There were many cases of mutiny, and also of the killing of officers by their own troops. A new verb entered into the English language at this time: “fragging”. This is derived from “fragmentation grenade” A soldier would pass the officer’s mess or quarters and casually lob a grenade in, killing and wounding those inside. The fact is that the U.S. government had to withdraw the troops from Vietnam, or else face a general revolt. One American general, commenting on the state of the U.S. troops in Vietnam, said that there was only one possible historical analogy, and that was the morale of the Petrograd garrison in 1917. That is correct. If there had been an American equivalent of the Bolshevik Party, which would have had cells in the army, the analogy could have been carried to its logical and successful conclusion.

Intervention in Latin America

For more than a century, the U.S.A. regarded Latin America and the Caribbean as its own back yard. In 1954, the CIA organized the overthrow of the democratically-elected government of President Jacobo Arbenz Guzman in Guatemala. Arbenz was a reformist leader who had intervened in labor disputes between the U.S.-owned United Fruit Company. The latter had considerable influence in Washington, where one of its directors had been U.S. Secretary of State, John Foster Dulles. His brother, Allen Dulles, by a fortunate coincidence, was head of the CIA. By an even more fortunate coincidence, the latter was a former member of the company’s board of trustees.

With a little friendly encouragement from United Fruit, the Eisenhower administration approved a secret plan to depose Arbenz, now dubbed “Red Jacobo”. In fact, Arbenz was never a Communist, although he had been supported in the election by the Left Parties in Guatemala. But Arbenz was carrying out a land reform. He had nationalized 400,000 acres of uncultivated private land, much of it belonging to United Fruit. That was sufficient for Washington. The U.S. ambassador wrote to John Foster Dulles: “If the President is not a Communist, he will do until one comes along.” (Quoted in Jeremy Isaacs and Taylor Downing, Cold War, p. 185.)

In June 1954, an army of Guatemalan anti-Communist exiles, armed and trained by the CIA, crossed the frontier. Prior to this, the CIA had subverted the officers of the Guatemalan army, who defected to the rebels. Arbenz was forced into exile and a right wing U.S. puppet, Colonel Castillo Armas, was installed in power. His junta immediately reversed the land reform and evicted 500,000 peasants from the land they had occupied.

A nightmare began for the people of Guatemala, which has lasted till the present day. The junta unleashed a white terror, killing hundreds of left wingers, union leaders and peasants. The Eisenhower administration, however, was euphoric. Guatemala was considered to be pacified. Central America was safe for United Fruit. But this was an overly optimistic assessment. Guatemala and the whole of Central America was plunged into instability. Castillo Armas was murdered by unknown assassins three years later. Guatemala suffered years of civil war, resulting in genocidal slaughter.

The Guatemalan incident shows just how far the government of the U.S.A. is controlled by the big corporations like United Fruit and just how far the foreign policy of the U.S.A. is dictated by big business interests. There is an uncanny resemblance between these events and the events leading to the invasions of Afghanistan and Iraq, and the ongoing U.S. intrigues within Venezuela.

The U.S.A. and Cuba

In 1898 the U.S.A. invaded Cuba, allegedly to free it from Spanish rule. But, as the people of Iraq have discovered, such “liberators” tend to hang around for a long time after the “liberation”. In the decades after driving out the Spaniards, Cuba was virtually bought up by American companies. Unlike Puerto Rico, the island could not be directly annexed, since this was ruled out under an amendment signed by the U.S.A. at the time of Cuba’s “independence”. But there was nothing to prevent U.S. businessmen from buying up most of the land and industry. In this way, Cuba’s so-called independence became a fiction. U.S. business ruled there with the collusion of corrupt puppet governments like that of the dictator Fulgencio Batista y Zaldivar, who ruled the island directly or indirectly for 25 years until he was overthrown by the Cuban revolution in 1959.

Fidel Castro organized a guerrilla struggle against Batista’s increasingly unpopular and corrupt regime. After two years his government collapsed like a house of cards. A general strike by the workers of Havana dealt the regime the final death-blow. On January 8, 1959, Castro led his guerrilla forces into Havana, after Batista had fled to Miami. At that time, his program went no further than democracy and land reform. It did not include proposals to nationalize U.S. property. Moscow adopted a cautious attitude. The Cuban “Communists” had supported the dictator Batista.

The initial program of the Cuban revolution was therefore not socialist but national-democratic. But all history shows that under modern conditions the national-democratic program cannot be carried out under capitalism. Either the revolution is prepared to go beyond the limits of capitalism, or it is doomed. The Cuban revolution is a classical case. The U.S. companies in Cuba tried to sabotage Castro’s land reform, just as United Fruit had done in Guatemala. In response, Castro leaned on Moscow for support. The Russians signed a trade agreement with Cuba and Washington responded by imposing an economic blockade and stopped buying Cuban sugar. This was a blatant act of aggression against a sovereign state. Since sugar was Cuba’s main export, it would have meant the swift strangulation of its economy.

When the Soviet Union agreed to buy Cuban sugar, Washington responded by refusing to sell petroleum products to Cuba. This was really an act of economic war. The Cubans replied by nationalizing U.S. businesses. Almost overnight, capitalism was abolished in Cuba. Eisenhower reacted by approving yet another covert program of action by the CIA, on the lines of the one that successfully destabilized the Arbenz government. But this time the result was very different.

The CIA trained a force of anti-Castro Cuban guerrillas in the jungles of Guatemala. Eisenhower also endorsed a plan for an amphibious landing by these forces, backed by the CIA, which they hoped would lead to a nation-wide uprising against Castro. These plans, hatched by Eisenhower and Allen Dulles, were passed on to the new president, John Kennedy, on the day before his inauguration in January 1961. He was apparently surprised by the scale of the operation but supported it anyway.

Despite the attempts to present Kennedy as a progressive president, he acted no differently than his predecessors. He kept the plans for the invasion secret and lied about them in public. Three days before the invasion was due to start, he told a press conference: there would not be “under any conditions an intervention in Cuba by United States armed forces.” But privately he told his aides:

“The minute I land one marine, we’re in this thing up to our necks […] I’m not going to risk an American Hungary.” (Quoted in Jeremy Isaacs and Taylor Downing, Cold War, p. 189.)

The reference to Hungary is instructive. In October 1956 there was a popular uprising in Hungary, which was put down by the Russians with extreme violence. Kennedy’s words reveal the real situation and intentions of the U.S. imperialists in Cuba. They understood that, like in Hungary, they would be faced with the opposition of the majority of the population, and that, like in Hungary, they would have to wade through a sea of blood to obtain their objectives. They were quite prepared to do this.

The only problem is that they were defeated. The reactionary rabble that landed was immediately routed by Castro’s forces. The Bay of Pigs episode was one of the most humiliating defeats suffered by U.S. imperialism in its history. After only three days of fighting, the remaining counterrevolutionary forces surrendered. More than a hundred of these bandits had been killed. Only fourteen were picked up by the U.S. Navy.

U.S. imperialism has never forgiven Cuba for this humiliation. It has maintained its criminal blockade. Although this has failed in its objective, it has caused a lot of suffering for the people of Cuba. The CIA has carried on a policy of terrorism against Cuba for decades, including numerous plans to assassinate Fidel Castro. But the Cuban revolution remains a source of hope and inspiration to the oppressed and downtrodden peoples of Central and South America and the Caribbean.

From Chile to Nicaragua

In 1970 the socialist Salvador Allende was elected in Chile. Once again the CIA began a campaign of destabilization, backing the right wing in its attempts to overthrow a democratically elected reformist president. On September 11, 1974, they finally succeeded, by using the services of general Augusto Pinochet to overthrow the government. Allende was either murdered or committed suicide. In the bloody dictatorship that followed, thousands of people were arrested, savagely tortured, murdered or were simply “disappeared” – all with the complicity of the CIA and Washington.

A similar story unfolded later in Nicaragua, where a left-wing guerrilla movement overthrew the dictatorship of general Anastasio Somoza. The Somoza family had ruled Nicaragua, the largest country in Central America, for decades. They had enriched themselves by plundering the country’s wealth mercilessly with the wholehearted backing of the U.S.A. Franklin D. Roosevelt once commented about the founder of this dynasty of scoundrels: “I know he’s a son of a bitch, but he’s our son of a bitch.”

In 1977, there was a national uprising against this rotten and corrupt dictatorship. After a bloody civil war costing nearly 50,000 lives, the Somoza regime was overthrown. As in Cuba, a general strike in Managua put paid to the dictatorship. Somoza fled to Paraguay, where he was later murdered. The Sandinista government began a program of agrarian reform, as in Cuba. But unlike Cuba they failed to expropriate the capitalists. This was a mistake that cost them dearly.

It is not possible to make half a revolution. The Nicaraguan capitalists organized a campaign of sabotage directed against the government with the active support of Washington. But this was only the tip of the iceberg. In November 1981 the U.S. National Security Council authorized substantial funds to assist the extreme right wing counter-revolutionary insurgency of the Contras. With CIA arms, funds and training, a small counterrevolutionary army grew from a few hundred in 1981 to about 15,000 in the mid-1980s.

The stated objective of the NSC was “to eliminate Cuban / Soviet influence in the region” and, in the longer term, to “build politically stable governments able to stand such influences.” Heavy pressure was put on the Sandinista government: the U.S. Navy patrolled Nicaragua’s coast, U.S. aircraft violated its air space, and the U.S. Army staged manoeuvres in Honduras just over the border. As a result of this combined internal and external pressure, in the end the Sandinista government fell and was replaced with a bourgeois government more to Washington’s liking.

In El Salvador, another dictatorial regime was faced with a guerrilla war that had lasted for many years. President Reagan increased the U.S. military aid to the ruling junta from $36 million to $197 million in 1984. The junta used the most savage methods to defeat the opposition, sending death squads into the villages to torture and murder any peasants suspected of sympathies with the guerrillas. Tens of thousands of people were killed or just went “missing”. Almost one in five of the population fled abroad to escape.

In El Salvador U.S. imperialism preferred a bloody right wing dictatorship to the victory of a popular insurrection. Likewise in Argentina, when the brutal military junta seized power in 1976, Washington supported the generals and had excellent relations with the dictatorship until it invaded the Falkland Islands, provoking a clash with British imperialism, the U.S.A.’s main European ally. With extreme reluctance, Reagan was forced to support Thatcher against his old friend Galtieri. But this decision was made purely for political convenience, not out of hatred for dictatorship and love of democracy.

Now Washington is faced with a new problem: the Venezuelan revolution. The people of Venezuela, after decades of oppression and exploitation at the hands of a corrupt and degenerate oligarchy of landlords, bankers and capitalists backed by U.S. imperialism, have begun to shake off the old despotism and move to take control of their own lives and destinies. As in Cuba, this revolutionary movement poses a mortal threat to U.S. imperialism because of the example it gives to millions of workers and peasants in Latin America.

With monotonous predictability, Washington has organized a plan to destabilize the democratically-elected government of Hugo Chavez. It has backed a coup, which failed, then a bosses’ lockout thinly disguised as a “general strike”, which also failed. Finally, it backed a recall referendum, which also failed. Chavez has won every election or referendum in the last six years with big majorities, yet the lie machine in Washington continues to churn out the legend that he is a “dictator”.

In their hostility to the Venezuelan revolution, there was no difference between Bush and Kerry in the 2004 presidential elections. If anything, Kerry’s statements on Venezuela were more aggressive than those of Bush. This fact only serves to underline the extremely reactionary nature of U.S. policy in Latin America. U.S. imperialism is the declared enemy of democracy and progress throughout the entire continent. Everywhere and at all times it has allied itself with the forces of reaction, the oligarchies, the thieves, the cut-throats, the torturers, and the dictators, against the people.

Dynamite in the Foundations

On the eve of the Second World War, Leon Trotsky made a very perceptive prediction. He predicted that U.S. imperialism would emerge victorious from the War and would become the decisive force in the planet. But he added that it would have dynamite built into its foundations. Decades later this remarkable prediction has come true. America has inherited the role of world policeman that was once held by Britain. But Britain had that position in a different period, when capitalism was in its phase of historical ascent. At that time Britain could make considerable profits out of its imperial possessions, despite the overheads involved in maintaining direct military-bureaucratic rule. But now all that has changed.

The U.S.A. has taken over the mantle of British imperialism at a time when the capitalist system is in decline. There is a general crisis, reflected in turbulence everywhere. Wars, uprisings and terrorism are on the order of the day. The U.S.A. finds itself sucked into one foreign adventure after another. This supposes a never-ending and ultimately unsustainable drain on its resources. Whereas Britain succeeded in plundering its colonies and enriching itself with the proceeds, America’s war in Iraq is costing it, on a conservative estimate, one billion dollars a week. Even the richest power on earth cannot sustain such a tremendous hemorrhage for long. The U.S. military is also increasingly over-extended, with long deployments and “stop loss” orders driving down recruitment and re-enlistments. The problem is that to withdraw will be even more costly. But sooner or later, withdraw they must.

The Bush Administration has learned nothing from the experience of Vietnam. It is said that the manifest destiny of the United States is to be involved in Latin America. But the people of the United States can have no interest in plundering the peoples of the rest of the continent for the benefit of the bank balances of wealthy and irresponsible U.S. corporations. The criminal activities of these corporations, and the oligarchies and dictators backed by them, are continually destabilizing the Continent. This instability must sooner or later affect the United States.

Everywhere, the people are rising against oppression. The success of the revolution in any important country in Latin America will have the most profound effects in the U.S.A., where the largest and most rapidly growing part of the minority population is of Hispanic origin. Instead of intervening against the revolution in South America, the U.S. imperialists would be fighting revolution at home.

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Go to Chapter X — The Soul of America and the Future of Humanity

Chapter VIII — World War II

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America and the Second World War

Marx explained long ago that capitalism develops as a world economic system. Today nobody can doubt the correctness of this statement. In 1935 Roosevelt stated: “Foreign markets must be regained if America’s producers are to rebuild a full and enduring domestic prosperity for our people.” That is the reason why the U.S.A. was compelled to participate in the world, despite the objections of the isolationists.

Since the First World War, America’s position as the most powerful and wealthy imperialist power had been clear to all. So when in 1939 a new conflict broke out between the old imperialist powers of Europe, it was only a matter of time before the U.S.A. would have to be involved. After some early ambiguity, Roosevelt came down decisively in favour of using America’s colossal military, industrial and economic power to enhance its position as the leading capitalist nation on earth.

Paradoxically, until the 1930s, the main antagonism on a world scale was between the rising power of the U.S.A. and the old imperial master of the planet, Great Britain. Trotsky had even posed the possibility of war between the two if the U.S.A. insisted on boosting its naval strength to the point of challenging Britain’s dominance of the seas. In the end, however, it was the threat to American commercial interests posed by Japan and Germany that decided the issue. In particular, the clash of interests of the U.S.A. and Japan in Asia and the Pacific was decisive. Japan was challenging the Open Door policy of the United States in China and Germany was making a similar challenge in Europe. Even more threatening was the expansion of Japanese and German interests in Latin America.

Roosevelt attempted to modify the Neutrality Acts in order to prepare for war, but was thwarted at every step by the powerful isolationist lobby. However, the outbreak of war in Europe gave him an excuse to embark on a major program of rearmament with the approval of a budget of $18 billion in 1940. By September Congress was ready to approve the first peacetime conscription Act. All that was missing was the necessary incident that could ignite a mood of mass indignation leading to a declaration of war. At the time of the election of 1940, the polls indicated that the majority of the U.S. public was still opposed to intervention. Roosevelt played along with the general mood: “I have said this before, but I shall say it again and again. Your boys are not going to be sent into any foreign wars.”

No sooner had he been re-elected, however, Roosevelt took steps to involve America in the war. He persuaded Congress to approve a Lease Lend Act to send arms and supplies to Britain. He ordered the navy to attack German submarines that interfered with the shipment of these supplies. He announced on the radio: “America has been attacked by German rattlesnakes of the seas.” These were concrete steps in the direction of war.

The decisive turning point was the Japanese attack on Pearl Harbor on December 7th, 1941. This was precisely the incident that Roosevelt needed. In fact, it is perfectly obvious that he brought it about deliberately. For the whole of the previous year, Roosevelt and his Secretary of State, Cordell Hull, had refused to sell crucial resources, notably oil and steel, to Japan. This embargo convinced the war party in Tokyo that war with the United States was inevitable. The war party demanded immediate action to secure the economic supplies denied to them by the U.S.A. This led inexorably to the attack on Pearl Harbour. U.S. intelligence had cracked the Japanese secret codes and therefore knew about the Japanese plans. Roosevelt and Hull were also well aware of the consequences of their embargo and their refusal to negotiate. The American fleet at Pearl Harbor was an obvious target. Yet strangely, when the Japanese attacked, the American commanders were completely unprepared.

Pearl Harbour was the excuse Roosevelt was looking for. He demanded that the Congress recognize that a state of war existed with Japan, and who could argue? Yet as late as 1945, 80 percent of Americans consulted in a poll considered that Roosevelt had violated his 1940 pledge to keep America out of the war. Pearl Harbor was worth more than ten divisions to Roosevelt.

Russia and the War

The policies and tactics of the British and American ruling class in the Second World War were not at all dictated by a love of democracy or hatred of fascism, as the official propaganda wants us to believe, but by class interests. When Hitler invaded the U.S.S.R. in 1941, the British ruling class calculated that the Soviet Union would be defeated by Germany, but that in the process Germany would be so enfeebled that it would be possible to step in and kill two birds with one stone. It is likely that the strategists in Washington were thinking on more or less similar lines. But like Hitler, the British and U.S. ruling circles had miscalculated. Instead of being defeated by Nazi Germany, the Soviet Union fought back and inflicted a decisive defeat on Hitler’s armies.

The defenders of capitalism can never admit the real reason for this extraordinary victory, but it is a self-evident fact: the existence of a nationalized planned economy gave the U.S.S.R. an enormous advantage in the war. Despite the criminal policies of Stalin, which nearly brought about the collapse of the U.S.S.R. at the beginning of the war, the Soviet Union was able to swiftly recover and rebuild its industrial and military capacity. The truth is that the war against Hitler in Europe was fought mainly by the U.S.S.R. and the Red Army. For most of the war the British and Americans were mere spectators. Following the invasion of the Soviet Union in the summer of 1941, Moscow repeatedly demanded the opening of a second front against Germany. But Churchill was in no hurry to oblige them. The reason for this was not so much military as political.

The Soviet working class was fighting to defend what remained of the gains of the October Revolution. Despite the monstrous crimes of Stalin and the Bureaucracy, the nationalized planned economy represented an enormous historic conquest. Compared with the barbarism of fascism – the distilled essence of imperialism and monopoly capitalism, these were things worth fighting and dying for. The working people of the U.S.S.R. did both on the most appalling scale.

In 1943 alone, the U.S.S.R. produced 130,000 pieces of artillery, 24,000 tanks and self-propelled guns, 29,900 combat aircraft. The Nazis, with all the huge resources of Europe behind them, also stepped up production, turning out 73,000 pieces of artillery, 10,700 tanks and assault guns and 19,300 combat aircraft. (See V. Sipols, The Road to a Great Victory, p. 132.) These figures speak for themselves. The U.S.S.R., by mobilizing the immense power of a planned economy, managed to out-produce and outgun the mighty Wehrmacht. That is the secret of its success.

To some extent the same was true of the United States. The need to mobilize all the productive forces of the U.S.A. for the war effort made it necessary to introduce at least some measures of central control and planning. This was, of course, not socialism but “state capitalism”. Roosevelt appointed a War Resources Board with a prominent representative of big business at its head, Edward Stettinius of U.S. Steel. His ideal was not a workers’ democracy but an economy run by a handful of big corporations operating without price competition within the parameters of objectives laid down by the state: a kind of “managed capitalism”.

It goes without saying that a genuine planned economy is not possible under capitalism. Nevertheless, we are entitled to ask the following question to the defenders of market economics and free enterprise: if the capitalist system is so superior, when America (and Britain) had its back to the wall, when economic efficiency and production were a matter of life and death, did your government simply rely on the laws of the free market? It did not. It introduced elements of central planning, state control and even nationalization. Why? The answer is very clear: because this gave better results!

And we are entitled to ask another, even more interesting question: if a semi-planned economy could give such good results in time of war, why cannot a genuine socialist planned economy, combined with democratic control and administration by the workers themselves, not give even better results in time of peace?

The Turn of the Tide

The real turning point of the War was the Soviet counteroffensive in 1942, culminating in the Battle of Stalingrad and later in the even more decisive Battle of Kursk. After a ferocious battle lasting one week, the German resistance collapsed. To the fury of Hitler, who had ordered the Sixth Army to “fight to the death,” General Paulus surrendered to the Soviet army. Even Churchill, that rabid anti-Communist, was compelled to admit that the Red Army had “torn the guts out of the German army” at Stalingrad.

Throughout the war, the Russians were demanding that the Allies open a second front against Germany in Europe. This was resisted particularly by Churchill. Churchill wanted to confine the Allies’ war to the Mediterranean, partly with an eye on the Suez Canal and the route to British India, and partly because he was contemplating an invasion of the Balkans to bloc the Red Army’s advance there. In other words, his calculations were based exclusively on the strategic interests of British imperialism and the need to defend the British Empire. In addition, Churchill had still not entirely given up the hope that Russia and Germany would exhaust themselves, creating a stalemate in the east.

The conflicts between Churchill and Roosevelt on the question of D-day were of a political and not a military character. The interests of U.S. imperialism and British imperialism were entirely contradictory in this respect. Washington, while formally the ally of London, was all the time aiming to use the war to weaken the position of Britain in the world and particularly to break its stranglehold on India and Africa. At the same time it was concerned to halt the advance of the Red Army and gain control over a weakened Europe after the war. That explains the haste of the Americans to open the second front in Europe and Churchill’s lack of enthusiasm for it. Harry Hopkins, Roosevelt’s main diplomatic representative, complained that Churchill’s delaying tactics had “lengthened the timing of the war.”

In the end, Churchill’s calculations backfired. The Red Army defeated the Wehrmacht and embarked on the most spectacular advance in military history. They took control of Eastern Europe and held onto it. The landlords and capitalists of Poland, Hungary and the other countries of the region had collaborated with the Nazis and fled together with them.

Trotsky once said that to kill a tiger one requires a shotgun, but to kill a flea, a thumbnail is sufficient. The Stalinists liquidated capitalism in Eastern Europe but they did not introduce socialism. These regimes began where the Russian revolution ended – as bureaucratically deformed workers’ states. The expropriation of the capitalists and landlords was undoubtedly a progressive task, but it was carried out bureaucratically, from above, without the democratic participation and control of the working class.

The regimes that emerged from this were a bureaucratic and totalitarian caricature of socialism. Unlike the Russian workers’ state established by the Bolsheviks in 1917, they offered no attraction to the workers of Western Europe. With the exception of Czechoslovakia, the bourgeoisie of Eastern Europe had been very weak before the War. The U.S. imperialists attempted to strengthen the bourgeois elements and gain control of Eastern Europe by offering them Marshall Aid. Stalin understood the manoeuvre and gave the order. The Stalinists took power by expelling the bourgeois elements from the coalitions and nationalizing the means of production.

Origins of the Cold War

President Roosevelt died on April 12, 1945 and was replaced by Vice President Truman. Many people have assumed that Roosevelt was less anti-Communist than his successor. But this is not the case. The reason why Roosevelt did not want an immediate clash with Moscow was that it did not suit the interests of American imperialism to break with Moscow at that point in time. In addition to the considerations already mentioned, the Americans had another reason for not sharing Churchill’s enthusiasm for a “crusade against Bolshevism” – or, at least, the timing. The Americans’ main preoccupation was the war in the Pacific, where they were still locked in a life-or-death struggle with Japanese imperialism.

The problem was that the U.S.S.R. had a huge army in the heart of Europe. Only the possession of nuclear weapons gave the U.S.A. a potential advantage, since the U.S.S.R. did not yet have the atom bomb. But the bomb had not yet been tested, and there was no guarantee that it would work. The Americans tested the first atom bomb on June 16, 1945 at the very time the wartime Allies were meeting in Berlin to discuss the post-war situation.

Truman and Churchill were informed that the test had been successful and wasted no time in letting Stalin know all about it. They hoped to use the threat of nuclear devastation to tip the balance of the negotiations in their favor. Some have maintained that the Cold War did not begin until 1947, but in fact it began immediately after the surrender of Japan, and was prepared even before that. D.F. Fleming states: “President Truman was ready to begin it before he had been in office two weeks.” (D.F. Fleming, The Cold War and its Origins, 1917-1960, Vol. 1, p. 268.)

The possession of the atom bomb gave Truman a sense of superiority, which he did not feel the need to hide. James F. Burns, director of the U.S. war mobilization department, assured Truman that possession of the atom bomb would put the U.S.A. in a position “to dictate our own terms at the end of the war.” (Harry S. Truman, Memoirs, vol. I, Year of Destiny, New York, p. 87.)

As usual, Churchill was the first to foment an anti-Communist crusade. This rabid reactionary and warmonger did everything in his power to push the Americans into a conflict with Russia. Describing his mood at this time, General Allen Brooke, the Chief of the British Imperial General Staff, noted in his diary that “he was always seeing himself capable of eliminating all the Russian centres of industry and population […]” (Arthur Bryant, Triumph in the West, 1943-1946, London, 1959. p. 478.) But the British working class had had enough of Churchill. They had had enough of war too, and certainly had no desire to engage in a new war, least of all against the Soviet Union. In the 1945 general election they kicked Churchill and the Conservatives out of power and voted massively for a Labour government.

In any case, Britain was already reduced to the role of a secondary power, a mere satellite of the U.S.A. – a role that has continued to the present day. The Americans did not pay much attention to Churchill’s raving because they still had unfinished business in the Pacific. They needed the help of the Soviet Union to defeat Japan, and therefore were not in a hurry to bring about a premature confrontation with the Russians in Europe. That could wait until Japan had surrendered.

The Defeat of Japan

All the peoples paid a terrible price for the War. Britain’s casualties totalled 370,000, the U.S.A., 300,000. But the Soviet Union lost a staggering 27 millions – about half of all the casualties of the Second World War. According to one estimate, even before the Normandy landings, 90 percent of all young men between the age of 18 and 21 in the Soviet Union had already been killed. These chilling figures accurately express the real situation. They show that the people of the Soviet Union suffered a disproportionate number of casualties, because the main front in Europe was the eastern front.

Western historians, motivated rather by political considerations than historical truth, have systematically minimized the role of the Soviet Union in the Second World War. This systematic campaign of distortion has increased a hundred-fold since the fall of the Berlin Wall. The defenders of capitalism are not willing to acknowledge the achievements of the nationalized planned economy in the U.S.S.R.. They cannot admit that the spectacular military victory over Hitler’s Germany was due precisely to this.

In order to belittle the role of the U.S.S.R. in the war, they exaggerate the importance of things like American Lease-Lend to the Soviet Union. This falsification is easy to answer. The fact is that the Red Army had halted the German advance and begun to counterattack by the end of 1941 in the Battle of Moscow – before any supplies had reached the U.S.S.R. from the U.S.A., Britain or Canada.

These supplies came mainly in the period 1943-5, that is, at a period when the Soviet economy was already producing more military hardware than the German war machine. They accounted only for a fraction of Soviet war production: two percent of artillery, ten percent of tanks and twelve percent of aircraft. In no sense can this be considered decisive to the Soviet war effort as a whole. Its importance was marginal.

The real reasons for the marvellous achievements of the Soviet Union in the Second World War was something the Western historians are never prepared to admit – firstly, the superiority of a nationalized economy and central planning, and secondly, the determination of the Soviet working class to defend what remained of the conquests of the October Revolution against fascism and imperialism.

This was no thanks to Stalin and the bureaucracy, who had placed the U.S.S.R. in extreme danger by their criminal and irresponsible policy before the War, but in spite of them. The Soviet workers, despite all the crimes of Stalin and the bureaucracy, rallied to the defence of the U.S.S.R. and fought like tigers. This was what ultimately guaranteed victory.

The role of the U.S.S.R. in the defeat of Japan has always been overlooked. Actually, it was quite a significant one. Americas war in the Pacific had resolved itself into a bloody slogging match to wrest control of one coral atoll after another from Japanese control. What is never mentioned is that the Japanese had a powerful land army in Manchuria, the Kwantung army. Its total strength was up to a million men. It had 1,215 tanks, 6,640 guns and mortars and 1,907 combat aircraft.

This formidable fighting force was faced by 1,185,000 Soviet troops stationed in the Soviet Far East. These were reinforced with additional forces after the surrender of Germany and when the offensive began on August 9 totalled 1,747,000 troops, 5,250 tanks and self-propelled guns, 29,835 guns and mortars and 5,171 combat aircraft. In a campaign lasting just six days the Red Army smashed the Japanese forces and advanced through Manchuria with lightning speed. The Soviet forces entered Korea and the South Sakhalin and Kurile Islands and were in striking distance of Japan itself.

On August 6, Truman ordered the U.S. Air Force to drop an atom bomb on Hiroshima. Three days later, the very day the Soviet army began its offensive, they dropped a second bomb on Nagasaki. They did this despite the fact that these were civilian cities with no military value and the Japanese were already defeated and suing for peace. The fact is that these atom bombs were intended as a warning to the U.S.S.R. not to continue the Red Army’s advance, otherwise they could have occupied Japan. The use of the atom bomb was a political act. It was intended to show Stalin that the U.S.A. now possessed a terrible new weapon of mass destruction and was prepared to use it against civilian populations. There was an implicit threat: what we have done to Hiroshima and Nagasaki we can do to Moscow and Leningrad.

Once Japan had surrendered, Washington’s attitude to Moscow changed immediately. The whole shape of the post-war world was now determined. The world would be dominated by two great giants: mighty U.S. imperialism on the one hand and mighty Russian Stalinism on the other. They represented two fundamentally opposed socio-economic systems with antagonistic interests. A titanic struggle between them was inevitable.

The American imperialists now felt themselves masters of the world. They had suffered relatively little from the war. Their productive base was intact, whereas most of Europe’s industry lay in a heap of smouldering rubble. Two thirds of all the available gold in the world was in Fort Knox. The U.S.A. had a huge army and a monopoly of nuclear weapons. They could impose their conditions on the rest of the world. Only the Soviet Union stood in their way. The arrogance of American power was put into words by the managing director of The New York Times Neil MacNeil, who wrote that
“both the United States and the world need peace based on American principles – a Pax Americana […] We should accept an American peace. We should accept nothing less.” (Neil MacNeil, An American Peace, New York, 1944, p. 264.)

The Post-War Economic Upswing

The period after the Second World War was completely different to the period that followed the First World War. After 1945 there was a remarkable upswing of the productive forces in the U.S.A. and internationally. What were the basic reasons for the developments of the post-Second World War economy? In 1938, Leon Trotsky had predicted that the war would end with a revolutionary wave. In fact there were a whole series of revolutionary explosions after 1943, in Italy, France, Greece, and even Denmark. Unfortunately, the Stalinists and the social democrats, in Britain and Western Europe succeeded in diverting this revolutionary movement into safe reformist channels, and the revolutionary potential was wasted. This created the political climate for a recovery of capitalism.

The effects of the war, in the destruction of consumer and capital goods, created a big market (war has effects similar to, but deeper than, a slump in the destruction of capital). These effects, according to United Nations’ statisticians, only disappeared in 1958. Moreover, during the war a whole series of new avenues of investment were opened up as a by-product of arms production – plastics, aluminium, rockets, electronics, atomic energy and its by-products.
The growth of these new industries provided the basis for an enormous increase in productive investment after the war. The increasing output of the newer industries - chemicals, artificial fibers, synthetic rubber, plastics, rapid rise in light metals, aluminum, magnesium, electric household equipment, natural gas, electric energy, together with the building activity caused by post-war reconstruction, provided the basis for a huge boom.

However, a key role was played by the U.S.A. America had emerged virtually unscathed from the War, while her main competitors – Britain, France, Germany, Japan – were either severely damaged or completely shattered. Two-thirds of the world’s gold was in the vaults of Fort Knox. The U.S.A. was therefore able to dictate terms to the rest of the Western world. The Bretton-Woods agreement established the dollar as the world currency, which further assisted the growth of world trade.

The war had created enormous amounts of fictitious capital, created by the armaments expenditure, which amount to 10 per cent of the national income in Britain and America. But in a situation of a gigantic upswing of the productive forces, nobody was worried about the danger of inflation. On the contrary, everybody wanted to get hold of dollars (the pound sterling was now reduced to a secondary currency, reflecting the decline of Britain as a world power). The dollar was considered to be “as good as gold.”

Fear of revolution and “Communism” compelled Washington to intervene decisively to save the European capitalists. The Marshall Plan and other economic aid played a key role in assisting the recovery of Western Europe. This in turn provided new markets for the mighty productive capacity of the U.S.A. The increasing trade, especially in capital goods and engineering products, between the capitalist countries, consequent on the increased economic investment, in its turn acted as a spur. State intervention also played a role in stimulating economic activity, especially in countries like Britain where the post-War Labour government carried out a policy of nationalization and reforms.

A new world order was gradually taking shape. The old empires ruled by Britain, France, Holland and Belgium, had been shaken to their foundations by the war and the Japanese conquests in Asia. One by one, the old colonial masters were being driven out by national liberation movements. This provided new opportunities for U.S. imperialism to muscle in on the new markets in Asia, Africa and the Middle East, elbowing their European rivals to one side.
The new market for capital and engineering products gave the local bourgeoisie the opportunity to develop industry on a greater scale than ever before. All these factors interacted on one another. The increased demand for raw materials, through the development of industry in the metropolitan countries in its turn, reacted on the undeveloped countries and vice-versa. All these factors explain the increase in production since the war. But the decisive factor was the increased scope for capital investment, which is the main engine of capitalist development.

America After 1945

For all these reasons, after the Second World War, America experienced a period of tremendous and sustained economic growth that set its stamp on her entire development. It shaped the consciousness of its people in a decisive way. For decades, American capitalism seemed to be “delivering the goods”. The economy was growing rapidly and the recessions were so shallow and fleeting that they were barely noticed. Living standards were increasing. There was an abundance of things like refrigerators, televisions, telephones and cars that made people feel prosperous.

The feeling that “we have never had it so good” was reinforced by what Americans could see in the rest of the world. Whenever anybody complained, the defenders of the established order could point triumphantly to Stalinist Russia, that monstrous bureaucratic and totalitarian caricature of socialism and say: “You want socialism? That’s socialism for you - dictatorship and the rule of an autocratic bureaucracy! You will be slaves of the state. Is that what you want?” And even the most critical American worker would shake his or her head and conclude that the devil they knew was probably a lot better than the one they didn’t.

In case they were not completely convinced, however, a little coercion could be brought to bear. It was not as severe as the white terror that followed the First World War. That was not necessary, given the full employment and rising living standards. But during what was known as the Cold War, state repression was unleashed in quite a ruthless manner. It was known as the McCarthy era.

On February 9, 1950 Senator Joseph R. McCarthy of Wisconsin claimed that there were no fewer than two hundred Communists in the State Department. This outrageous allegation unleashed a witch-hunt against everyone who was even slightly “tainted” with left wing, progressive or even vaguely democratic opinions in public life. The hysteria that accompanied this campaign closely resembled the kind of pathological collective hysteria of the notorious Salem witch trials of the 17th century. This comparison was made explicit in Arthur Miller’s famous play The Crucible.

In fact, the witch hunting of the American Left had commenced a couple of years earlier. After 1945 the American ruling class lived in dread of Communism and revolution, and launched a “Reds under the bed” campaign, using the House of Un-American Committee (HUAC) to grill suspects. Prominent among the interrogators was an ambitious young Republican congressman, Richard Milhous Nixon (later dubbed “Tricky Dicky”) who was out to make a name for himself as a notorious red-baiter. He subsequently became President, only to be removed for crooked practices following the Watergate scandal.

The power behind the scenes of these witch-hunts was FBI chief and ultra-reactionary, J. Edgar Hoover, who for years ran a state within the state, acting as a law unto himself, scorning all the principles of democratic government, and imitating the conduct of the Mafia that he was supposed to be fighting. This Paragon of Public Virtue said in March 1947: “Communism, in reality, is not a political party. It reveals a conditions akin to a disease that spreads like an epidemic and like an epidemic a quarantine is necessary to keep it from infecting this nation.” (Quoted in Jeremy Isaacs and Taylor Downing, Cold War, p. 109.)

Since his death, Hoover has been exposed as a corrupt gangster who used extortion and blackmail to exert unconstitutional control over elected politicians while he extolled the virtues of American democracy, and secretly led a luxurious and degenerate lifestyle while he delivered lectures on the need for puritanical morals. These were the kind of heroes who led the crusade against Communism in the U.S.A.

Obsessed with his hatred of Communism and radicals, Hoover ordered his agents to use illegal means: wiretaps, break-ins, phone intercepts and bugging of private homes to get incriminating evidence. Neighbors were encouraged to spy on neighbors; parents were asked to spy on their children, and children on their parents. When defence lawyers exposed these illegal practices and used this to get cases thrown out, Hoover launched an attack on the National Lawyers’ Guild, which he accused of being a Communist front (!).

One of the first great achievements of the witch-hunt was to send to the electric chair a young electrical engineer, Julius Rosenberg, and his wife Ethel. They were charged with passing atomic secrets to the Soviet Union. The evidence against Rosenberg came largely from his brother-in-law David Greenglass, who had been part of a wartime spy network. Though interrogated by the FBI, Julius Rosenberg refused to give information or name any other agents. So the FBI arrested his wife, Ethel, although she was clearly not a spy, in order to break her husband. It did not work. He remained silent.

Rosenberg was found guilty of passing secrets to the Russians. Spying in wartime is punishable by death, but when Rosenberg passed secrets to Russia, it was an ally of the U.S.A. But despite pleas for clemency, among others from Albert Einstein and Pope Pius XII, both Julius and Ethel Rosenberg were sent to the electric chair. What is interesting is the conduct of the judicial system in this case. The judges were clearly intimidated to the point where they did not dare defy the general hysteria. Arthur Kinoy, the Rosenberg’s lawyer, reports the words of one such judge:

“Judge Frank looked at us and he said something that we have never, never forgotten. He said, ‘If I were as young as you are, I would be sitting there saying the same things you’re saying, arguing the same points you’re arguing, making the same argument that these planned executions are invalid. But when you are as old as I am, you will understand why I cannot do it.’ And he stands up, turns his back to us, and walks away, and we were devastated. We began to sense something which in later years we understood so clearly. That was that Jerome Frank, as the leading liberal judge, was terrorized himself and frightened by the atmosphere of fear in the country. That if he as a liberal would do something to save Julius and Ethel Rosenberg’s life, he would be charged as a commie.” (Quoted in Jeremy Isaacs and Taylor Downing, Cold War, p. 113.)

The tentacles of the witch hunters extended into every branch of public life. Given the importance of the film industry in American life, Hollywood became a key target. Hoover established an extensive network of spies and informers, chief among whom was a second-rate actor in B-movies called Ronald Reagan. Based in Los Angeles, Reagan was President of the Screen Actors’ Guild. He used his position to pass on information about his colleagues to Hoover. This was the start of a promising political career that ended in the White House. When he died recently, there was flood of laudatory obituaries, praising the former President for his great intellect and ability and attributing to him the posthumous title of “the man who defeated Communism.”

Although he could be accused of many things (bad acting, lack of principles, cowardice, dishonesty, ignorance, provincial narrow-mindedness, disloyalty towards friends and colleagues etc.) no serious person could ever accuse Ronald Reagan of possessing either intellect or ability. As a matter of historical record, the U.S.S.R. (which, in the period under consideration, had very little in common with Communism) collapsed because of its internal contradictions and this had nothing to do with the intellect or abilities of Ronald Reagan.

In 1951, the HUAC launched an all-out offensive against Hollywood. Prominent actors and film directors were grilled by the HUAC, in scenes reminiscent of the Inquisition. The only way to escape from this torture was to incriminate others. Some brave souls refused. The great German composer Hans Eisler, who had fled to America from Nazi persecution and wrote distinguished film scores, when he was accused of being the “Marx of the music world”, answered that he was flattered by the comparison, and was deported for his courage.

However, others were not so courageous. The bosses of the big Hollywood studios pledged not to employ anybody who had ever been a Communist or had refused under oath to declare that they had never been a Communist. Many of the big names in Hollywood decided that discretion was the better part of valor and collaborated in the dirty name of denouncing their fellow actors. Elia Kazan, the famous director who introduced Marlon Brando to the cinema, named eleven former Communists to the HUAC. Jerome Robbins, the successful Broadway and Hollywood choreographer also co-operated with the Inquisition, as did Sterling Hayden. But the man who broke the record for denunciation was screenwriter Martin Berkeley, who named no fewer than 162 Hollywood artists as Communists, past or present.

The consequences for those so-named were dire. They would be sacked and never work again in any studio in Hollywood or any other part of the U.S.A. They would immediately lose their livelihood and reputation and be treated as outcasts and pariahs. About 250 Hollywood personalities were blacklisted in this way in the early 1950s. Some just disappeared. Others went into exile. A few continued to work under assumed names, like Dalton Trumbo, author of Johnny Got His Gun, who caused the whole industry considerable embarrassment when he actually won an Oscar in 1956 for a screenplay written under the name of Robert Rich. One group of blacklisted filmmakers and actors made the marvellous film “Salt of the Earth”, brilliantly depicting the class struggle in the silver mines of New Mexico.

Among the victims of McCarthyism were some of the most talented directors, writers and performers in America. Some did not work again till the 1960s. The great Negro singer Paul Robeson was savagely persecuted. The legendary Charles Chaplin, although British by birth and nationality, had lived in the U.S.A. for over 30 years. He had learned while in England that he would be denounced as a Communist and decided to live the rest of his life outside the U.S.A. He did not return to the U.S.A. until 1972 and then only briefly to accept a special Academy Award. American culture was the real loser.

The place of talented people was taken by hacks who were prepared to write third-rate trash like I was a Communist for the FBI, which won an Oscar for the best documentary (this shows how much an Oscar is really worth). Other gems of the period included My Son John, which depicts a nice young American boy, who, unknown to his parents, becomes a Communist, and I Married a Communist, which depicts a nice American girl who married one, Evil Epidemic, in honor of J. Edgar Hoover, and so on.

The health of the American cinema industry was in good hands. The Motion Picture Alliance for the Preservation of American Ideals was presided by good old John Wayne. This fearless, clean-living cowboy of the silver screen was always speaking lines like “a man’s gotta do what a man’s gotta do.” In this case what a man like John Wayne had to do was to betray his friends and colleagues and throw them to the wolves. This did not require much courage but definitely did one’s career no harm.

Other heroes of the same kind were Clark Gable (“Frankly, my dear, I don’t give a damn”), Gary Cooper and John Ford, who were all on the executive committee of the MPAPA. The presence of the last two named is perhaps ironical, since the celebrated film High Noon, starring Gary Cooper and directed by John Ford, has been widely interpreted as a criticism of McCarthyism in the guise of a Western.

The witch hunters then turned their unwelcome attentions to American education. The worthy senator from Wisconsin discovered that American colleges and universities were hotbeds of Red subversion. Formally, there was no black list as in Hollywood, but in practice anyone involved in political activity of the “wrong sort” would not easily get a job in academia. J. Edgar Hoover, whose educational qualifications were somewhat comparable to those of Conan the Barbarian, complained that American schools were in the hands of “Reducators”. The latter were “tearing down respect for agencies of government, belittling tradition and moral customs and […] creating doubts in the validity of the American way of life.”

The ruling class let these mad dogs off the leash to snap and snarl to their heart’s content. It was useful to have such people intimidate the Left. But the real Establishment had no intention of handing power to the mad dogs. In the end McCarthy overreached himself when he began to interfere with the most sensitive part of the state, the armed forces. In a series of sensational television interviews in 1954, McCarthy accused the U.S. Army of being infiltrated by Communists. That was too much. Having made use of the Senator’s services, the Establishment unceremoniously ditched him. The Senate voted to condemn him for bringing it into disrepute. He was politically a dead man.

The Unions After 1945

Many European leftists regard Americans as hopelessly reactionary. This view demonstrates a lamentable ignorance of American history. I hope that this short study will serve at least partially to correct the error. Americans are neither more nor less revolutionary than anybody else. What is true, as Marx pointed out long ago, is that social being determines consciousness. For several decades after 1945, for the special reasons that we have outlined above, capitalism entered into a phase of upswing. It was the greatest economic fireworks display in history. The main beneficiary was the U.S.A. The living standards of most Americans increased (some more than others, it is true). This was the material basis for a major psychological change. The idea was widely accepted that capitalism was “delivering the goods”. Workers are generally very practical people, and pragmatism has sunk deeper roots in America than any other country. “If it ain’t broke, don’t fix it” is a wise old American saying.

Under these conditions the old revolutionary traditions of U.S. labor, old traditions that went back to the Knights of Labor, passing through the Labor Uprising of 1877, the Chicago Martyrs, the Wobblies, and the class struggles of the 1920s and 1930s, receded from the collective consciousness and were largely forgotten. The new generation knew little of them. In that sense, the knot of history was broken. There is no automatic mechanism whereby the traditions of the working class, the lessons of past victories and defeats can be transmitted from one generation to another. The only mechanism that can fulfil this role is the revolutionary party. The absence of a Marxist revolutionary party with deep roots in the working class in America is a serious problem. It means that the class can only learn through its own experience: this is a slow and painful process that can take decades. This is a situation that must be remedied in the coming period.

Although politically speaking the American workers are not as educated as their European counterparts and lack a class party through which to express their interests and aspirations, even in a distorted and incomplete manner, this by no means signifies that they lack class-consciousness. What they lack in political organization they have made up for in terms of industrial organization and militancy. On the industrial front the American workers have had a tradition that is second to none. It is true that, as in Europe, the American unions are under attack and the control of a bureaucracy that does its best to suffocate the militancy of the rank and file. The capitalist class does its best to corrupt and bribe the union tops. Through the bureaucracy of the unions, the influence of bourgeois ideology, class collaboration and so on, can percolate down into the working class. In particular, the leaders of the big unions are linked to the Democrats, just as the British union leaders were linked to the Liberals in the 19th century. But this situation was the logical consequence of the long years of economic upswing and prosperity. It did not survive in Britain, and will not survive the new period of storm and stress into which we are now heading in the United States.

The traditions of the CIO in its early years are something that the new generation of young Americans should take time out to study. They were reflected very poorly in the big Hollywood movie Hoffa, and much better in the earlier and lesser-known film called FIST – the only decent film Sylvester Stallone ever made. The main thing to see is that this is not ancient history. The class struggle did not cease in the 1930s but has continued, with ebbs and flows, ever since. The American workers have always had a good union tradition, and as a matter of fact, the number of strikes actually increased in the years after the Second World War. From 1936 through 1955, there was a staggering total of 78,798 strikes in the United States, involving 42,366,000 strikers. The breakdown was as follows:

Number of Strikes and Strikers (By Decades)
  Years                     Number of Strikes       Number of Strikers
1923-32                           9,658                          3,952,000
1936-45                          35,519                        15,856,000
1946-55                          43,279                        26,510,000

In order to curb union militancy, the bosses and the government introduced the anti-union Taft-Hartley Act in 1947. Yet in 1949 there were major strikes in the coal and steel industries; 1952, was a year of coal and steel strikes; and 1959, the year of the 116-day steel strike, the largest strike of all-time in the United States as measured by total workdays on strike.

Big business and its state were, and remain, bitterly hostile to trade unionism. Although unions are no longer illegal, the state does not hesitate to invoke anti-union legislation whenever it suits the bosses to do so. The national emergency machinery provided under the Taft-Hartley Act for the investigation of disputes threatening to “imperil national health or safety” was invoked by the President in 23 situations from the time of its enactment in 1947 through 1963 – and is still called upon today.

This is not ancient history. Taft-Hartley is alive and well and still used for busting unions in the U.S.A. President Ronald Reagan fired most of the nation’s air traffic controllers for striking illegally and ordered their union, the Professional Air Traffic Controllers Association, decertified. 13,000 air traffic controllers defied the return-to-work order. Subsequently 400,000 unionists participated in the largest labor rally in American history which was held in Washington in protest against the policies of the Reagan administration. More recently still, George W. Bush used Taft-Hartley against the longshoremen of the ILWU.

In addition, there are other laws that are regularly invoked by the legal establishment to prevent the workers from using their legitimate right to strike. In the war between Labor and Capital, the state is not impartial now any more than it was in the past! The fight for union rights, against unjust anti-union laws is a burning need for the American working class. This fact also shows the utter futility of trying to separate trade unionism from politics.

If anyone believes the class struggle is dead in the U.S.A. I advise him or her to look at experience of strikes such as that of the miners in 1989. In April of that year the United Mine Workers (UMW) called a strike against the Pittston Coal Group for unfair labor practices. These miners had worked 14 months without a contract before the UMW called the strike. Among the practices cited by UMW were the discontinuing of medical benefits for pensioners, widows, and the disabled; refusal to contribute to a benefit trust established in 1950 for miners who retired before 1974; and refusing to bargain in good faith.

Miners in Virginia, Kentucky and West Virginia struck against Pittston.

The miners and their families engaged in an inspiring civil disobedience campaign against the company. In the time-honoured tradition of the American bosses, the strike was met with calculated violence, as state troopers were called out to arrest striking miners. The miners fought back courageously with dynamite. Despite the enormous importance of this strike, the “free press” of the U.S.A. made practically no mention of it, preferring to give a great deal of coverage to another miners’ strike – in Russia!

The movement of the American working class to fight for its own interests continues – as the recent disputes at UPS and on the West Coast docks shows very clearly. If there have not been more strikes and if the living standards and conditions of the workers have not kept pace with the huger increase in profits, it was due to a failure of the leadership of the unions, not the workers. In recent years the trade unions have hit difficulties as a result of this. As in other countries, the unions in the United States have become heavily bureaucratized and the leaders were out of touch with the problems of ordinary workers.

The rundown of heavy industries in the North and East – the traditional base of unionism – has led to a fall in membership. Yet the leadership proved incapable of responding to the challenge posed by Big Business to the union movement. With the development of new industries in the South and West, millions of workers in the United States are now unorganized. The task of organizing them into unions is perhaps the most pressing need at the present time. In order to solve this problem, the unions must go back to their roots, to the militant traditions of the CIO when they organized the unorganized in the stormy years of the 1930s. When that happens, we shall discover that those formerly inert and “backward” layers will be among the most militant and revolutionary in the whole union movement.

The unions have always been the basic organizations of the class. They are on the front line in the defence of the most basic rights of the working class. Without the day-to-day struggle for advance under capitalism, the socialist transformation of society would be utopia. Therefore the struggle to transform the unions, to democratize them at all levels and make them genuinely responsive to the wishes and aspirations of working people, to turn them into genuine organs of struggle, is a prior condition for the fight for a socialist America, in which the unions will play the role that was envisaged for them by the pioneers of Labor – as the basic organizations for running the economy in an industrial democracy.

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Go to Chapter IX — The Colonial Revolution

Chapter VII — The Great Depression

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“Happy Days Are Here Again”

“The American Plan; automotive prosperity seeping down
From above; it turned out there were strings to it.
But that five dollars a day
paid to good, clean American workmen
who didn’t drink or smoke cigarettes or read or think,
and who didn’t commit adultery
and whose wives didn’t take in boarders,
made America once more the Yukon of the sweated
workers of the world;
made all the tin lizzies and the automotive age, and
made Henry Ford the automobilieer, the admirer of Edison,
the birdlover,
the great American of his time.”

(John dos Passos, The Big Money.)

The so-called “Golden Twenties” witnessed a boom that was very similar to the boom of the 1990s through which we have just passed. Production soared to dizzy heights, the stock exchange still higher. President Coolidge believed fervently in the supreme wisdom of the market and its invisible hand. The business of government was to do nothing, to allow business a free hand and all would be well. For a time it seemed to work. No attempt was made to control speculation, which soared to the sky and beyond. Big fortunes were made, and as long as the money kept rolling in, why ask awkward questions? The same mood of what we now know as “irrational exuberance” has existed in every boom in capitalism from the Dutch tulip speculation of the 17th century to the new technology boom of the 1990s. And they all end the same way.

In the boom of the 1920s the illusion was created that wealth could be plucked out of thin air. In the stock exchange, money seemed to beget money in a miraculous and mysterious process. As a matter of fact, the boom of the 1920s, like any other boom under capitalism, was based on the super-exploitation of the working class. Between 1925 and 1929, the number of manufacturing establishments in the U.S.A. increased from 183,000 to 206,000 and the value of their output rose from $60 billion to $68 billion.

J.K. Galbraith comments:

“The Federal Reserve index of industrial production which had averaged only 67 in 1921 (1923-5 = 100) had risen to 110 by July 1928, and it reached 126 in June 1929. In 1926, 4,301,000 automobiles were produced. Three years later, in 1929, production had increased by over a million to 5,358,000, a figure which compares very decently with the 5,700,000 new car registrations of the opulent year of 1953. Business earnings were rising rapidly, and it was a good time to be in business.” (J.K. Galbraith, The Great Crash 1929, p. 31.)

This is the real secret of the boom of the 1920s – the extraction of bigger and bigger amounts of surplus value from the sweat and nervous strain of the workers. Workers in the mass production industries – steel, auto, rubber, textiles, oil, chemicals, etc., – were unorganized, atomized and at the mercy of the employers. They were deprived of all rights and open to the most vicious kind of exploitation. Anyone who stood up for the workers’ rights ran the risk of being accused of being a Communist, a Red, or a Bolshevik. Harry M. Daugherty, head of the Justice Department in the corruption-ridden Harding administration, was put on trial on charges of conspiracy to defraud the federal government. Incredibly, he blamed his downfall on a Red plot: “I was the first public official that was thrown to the wolves by the Red borers of America.” In his book The Inside Story of the Harding Tragedy, Daugherty wrote:
“I believed then, as I firmly believe now, that Soviet Russia is the enemy of mankind. That unless the forces of civilization stamp out this nest of vipers who have enslaved a hundred and sixty million human beings, our social system as well as our form of government will perish from the poison that is being poured into our vitals.”

There is a surprising degree of unanimity on this question that extends right across the spectrum of opinion in the community of red-blooded, freedom-loving American entrepreneurs. The following is another good example from an impeccable source:

“We must keep America whole and safe and unspoiled. We must keep the worker away from Red literature and Red ruses; we must see that his mind remains healthy.”

This ringing endorsement of the free market economy was the work of Al Capone, the notorious gangster, while awaiting trial. But Mr. Capone’s touching faith in the market economy was misplaced. Even when he was speaking, America had already entered the Great Depression of the 1930s.

There is always a speculative element in every boom. Demand increases, the market expands, credit is needed for new investment, banks lend money as if there were no tomorrow. Prices rise in step with demand, and wages follow. Real estate prices soar along with the stock markets. Industrial production reaches dizzying heights and there is the beginning of what is now called over-investment, but which is more properly termed over-production. The whole thing is reaching its limits, but nobody knows or cares. Paradoxically, it is precisely at the apex of a boom when it is on the point of collapsing, that the illusion is strongest that the boom will last forever, and that the boom-slump cycle is a thing of the past. Then comes the collapse. In the language of Marxist dialectics, everything turns into its opposite: all the factors that created the upswing now push the whole thing downwards. Cause becomes effect and effect cause. The result is a slump.

Marx explains that the ultimate cause of every real capitalist crisis is overproduction. The automobile tire industry in the U.S.A. had expanded far more than the demand for tires. Shoe factories had a productive capacity about twice the shoe-purchasing requirements of the country. Two-thirds of the potential capacity of the flour industry was not needed. It would have been possible to close about 40 percent of the U.S. steel industry and nobody (except the sacked workers) would have noticed the difference. And so on. When the stock market finally collapsed in October 1929, it was not, as is generally assumed, the cause of the Great Depression, but only a symptom of the underlying problems of the real economy, and a warning of worse to come.

The Great Crash – Then and Now

On 4 December 1928, President Coolidge delivered his state of the Union speech to the nation. In it we read the following:

“‘No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquillity and contentment … and the highest record of years of prosperity. In the foreign field there is peace, the goodwill which comes from mutual understanding…’ He told the legislators that they and the country might ‘regard the present with satisfaction and anticipate the future with optimism’. And breaking sharply with the most ancient of our political conventions, he omitted to attribute this well-being to the excellence of the administration which he headed. ‘The main source of these unexampled blessings lies in the integrity and character of the American people.”

As late as March 1929, when Hoover took over the Presidency, he was still singing the same song:

“We are a happy people – the statistics prove it. We have more cars, more bathtubs, oil furnaces, silk stockings, bank accounts, than any other people on earth.”

Then in October 1929 the stock market collapsed. Industrial production fell by 50 percent and national income fell from $82 billion to $40 billion in just four years. Unemployment soared from two million in 1928 to three million in 1929, four million in 1930, seven million in 1931, twelve million in 1932 and 15 million in 1933.

The optimistic speeches of America’s leaders on the eve of the collapse have been frequently quoted as proof of the stupidity and short sightedness of Coolidge, Hoover and their contemporaries who failed to foresee the Great Crash of 1929 or to take measures to prevent it. The comforting assumptions are that a) slumps are produced by the stupidity or mistakes of governments and leaders, and that b) our present governments and leaders are much cleverer than Coolidge and will not make the same mistakes again. Unfortunately, both assumptions are false. The history of the past 200 years should be enough to convince any reasonable person that the boom-slump cycle is something inherent to the capitalist system and not an accident caused by clumsy behavior. As sure as night follows day, a period of boom will be followed by a slump. Only the timing, duration and depth of the slump is unpredictable. But slumps under capitalism cannot be avoided.

It is true that the capitalists have evolved a number of mechanisms for postponing a slump, but the problem is that usually the very act of postponing it makes it all the more severe when it finally arrives. Chief among these mechanisms is credit, which, as Marx explained long ago, is a way by which the market (“demand”) is extended beyond its natural limits. This can work for a time, but only at the cost of increased levels of indebtedness. This means that the market is expanded today at the cost of undermining it tomorrow. The central problem is not abolished but aggravated in the long run.

The idea has often been repeated that “we have learned from history” and that therefore a repeat of 1929 is not possible. This is an excessively optimistic view of things. Hegel was much more realistic when he wrote that anyone who studies history can only conclude that nobody has ever learned anything from it. He said that precisely because the same situations continually repeat themselves in history in general, and we might add, in economic history in particular. There are many striking similarities between the boom of the second half of the 1920s and the boom of the second half of the 1990s. Then too the economists and politicians assured us that the boom-slump cycle had been vanquished forever. Marx had been consigned once and for all to the dustbin of history. Once again, they were all merrily plunging into a speculative orgy that drove the stock markets to unprecedented heights. Then came the fall.

It is true that so far, the fall has not been as steep as in 1929. Indeed it has been one of the mildest on record. But the story is not yet ended. The boom of the 1990s, like the boom of the 1920s, was based on a speculative bubble of vast proportions. That bubble has not yet been entirely burst. In fact, they are currently busy reflating it. The astronomical levels reached by the housing market internationally is a symptom of this fact. It bears an uncanny resemblance to the property boom in the 1920s, the bursting of which was one of the things that led to the collapse of 1929. Alan Greenspan long ago referred to the “irrational exuberance” of the boom of the 1990s. But he is doing nothing to restrain this exuberance, which poses a serious threat to the future prospects of both the U.S. and world economy. The longer the bubble is allowed to inflate, the more painful the final reckoning will be. This is what J.K. Galbraith has to say on this subject:

“A bubble can easily be punctured. But to incise it with a needle so that it subsides gradually is a task of no small delicacy. Among those who sensed what was happening in early 1929, there was some hope but no confidence that the boom could be made to subside. The real choice was between an immediate and deliberately engineered collapse and a more serious disaster later on. Someone would certainly be blamed for the ultimate collapse when it came. There was no question whatever as to who would be blamed should the boom be deliberately deflated (For nearly a decade the Federal Reserve authorities had been denying their responsibility for the deflation of 1920-1.) The eventual disaster also had the inestimable advantage of allowing a few more days, weeks, or months of life. One may doubt if at any time in early 1929 the problem was ever framed in terms of quite such stark alternatives. But however disguised or evaded, these were the choices which haunted every serious conference on what to do about the market.” (J.K. Galbraith, op. cit., p. 52.)

These lines could have been written yesterday. They are a graphic warning of just how little the economists and politicians have learned from the past, and just how little they can control the boom-slump cycle. Contrary to the received wisdom, a repeat of 1929 at some stage is not at all ruled out. In fact, it is implicit in the whole situation.

The New Deal

The Stock Market crash in 1929 and the ensuing economic slump punctured the dream of never-ending prosperity and pushed millions into poverty. Construction and housing stagnated after 1929, joining declines in the agriculture, mining and petroleum industries. Overproduction dragged down prices and profits. Wages did not rise fast enough to enable consumers to purchase all the new homes and home products offered for sale. Foreign trade was constrained by growing protectionism in the industrialized world. The Stock Market Crash led to a collapse of consumer confidence and led to a crisis of the financial institutions. Investment slumped. The economy sank into a severe depression, referred to by Americans as the “Great Depression”. This was characterized by high levels of unemployment, negligible investment, and falling prices and wages. Millions of Americans were out of work and living precariously on public or private charity. When Russia invited Americans to apply for six thousand skilled jobs in 1931 it received a hundred thousand applications. Millions of Americans were reduced to penury. A survey in New York City in 1932 concluded that 20 percent of the children were suffering from malnutrition.

A report in a Chicago newspaper graphically describes the conditions:

“Around the truck which was unloading garbage and other refuse, were about thirty-five men, women, and children. As soon as the truck pulled away from the pile, all of them started digging with sticks, some with their hands, grabbing bits of food and vegetables.”

John Steinbeck was the author of novels depicting the lives and struggles of ordinary working Americans during the Great Depression – The Grapes of Wrath, Cannery Row, of Mice and Men. The Grapes of Wrath was published in 1939, when America had still not emerged from the Great Depression and millions were living in dire poverty. Steinbeck’s poignant description of the conditions of the hungry and downtrodden, and their struggle to maintain human dignity, won him the Pulitzer in 1940.

In this novel Steinbeck vividly describes the ruthlessness of the big corporations that sent in the bulldozers to demolish the smallholdings and cabins that represented so much hope and so many years of labor. Men, women and children were evicted overnight and transformed from small farmers into propertyless vagrants. The most remarkable thing about this novel is that it does not seem to be a description of the masses written from without. The author has succeeded in getting under the skin of the “Okies”, and expressing, in their own words and language the innermost thoughts, feelings and aspirations of the people. Here, for example, is how they see the police:

“‘What’d the deputy say?’ Huston asked.

“‘Well, the deputy got mad. An’ he says: “You goddamn reds is all the time stirrin’ up trouble,” he says. “You better come along with me.” So he takes this little guy in, an’ they give him sixty days in jail for vagrancy.’

“‘How’d they do that if he had a job?’ asked Timothy Wallace.

The tubby man laughed. ‘You know better’n that,’ he said. ‘You know a vagrant is anybody a cop don’t like. An’ that’s why they hate this here camp. No cops can get in. This here’s United States, not California’.”

Tom Joad expressed the voice of the underdog:

“They’re a-workin’ away at our spirits. They’re a tryin’ to make us cringe an’ crawl like a whipped bitch. They tryin’ to break us. Why, Jesus Christ, Ma, they comes a time when the on’y way a fella can keep his decency is by takin’ a sock at a cop. They’re workin’ on our decency.”

In a situation where millions were going hungry, Hoover decided that relief was exclusively a matter for the local and state authorities. This worthy representative of big business, a millionaire himself, was concerned lest federal relief should corrupt the American character and undermine the spirit of free enterprise. For Hoover and the Establishment there was no problem: the market would sort things out in the long run. But as the English economist John Maynard Keynes pointed out, in the long run we are all dead.

There was a sharp increase of political ferment and discontent among the workers of America. At that time many of the strategists of Capital feared a socialist uprising in the U.S.A. In order to prevent revolution from below, as so often happened in history, the more far-seeing sector of the U.S. ruling class decided to launch a program of reforms from above. In this way the idea of the New Deal was born. The Democratic President Franklin D. Roosevelt was elected in 1932. He implemented a number of programs to relieve the plight of the poor and unemployed. Over the past twenty years, historians have emphasized the “revolutionary” legislation of the Roosevelt administration. However, at the time, he was bitterly attacked by Conservative businessmen as a revolutionary and a Communist.

F.D. Roosevelt was no radical but the son of a wealthy patrician family and a relative of Theodore Roosevelt. Actually, he was attempting to combat the spread of Communism in the U.S.A. and save the capitalist system from revolution. He probably saved the American ruling class from the threat of social revolution, which was closer then than at any other time in American history. But the Establishment was too stupid to realize this. They distrusted Roosevelt and heaped abuse on him as a covert socialist and a dangerous radical. Roosevelt protested that this was a misunderstanding – and he was right. “I am fighting Communism, Huey Longism, Coughlinism, Townsendism,” he declared. “I want to save our system: the Capitalist system.” The difference is that he was a more competent defender of capitalism than his opponents. Roosevelt was smart enough to see that Hoover’s policies would undermine capitalism in the U.S.A. quicker than anything else.

In the middle of a terrible agricultural crisis, Hoover had the brilliant idea of asking the farmers to reduce their crops, a piece of advice that rivals Marie Antoinette’s “let them eat cake”. Roosevelt correctly said that it was a “cruel joke” to advise the “farmers to allow 20 percent of their wheat to lie idle, to plough up every third row of cotton and shoot every tenth dairy cow.” In order to defend the fundamentals of capitalism, Roosevelt was prepared to be flexible. In an emergency, he was prepared to resort to deficit financing to keep the level of unemployment within certain limits. But this policy has its limits. If it is continued for a long time it will have inflationary consequences. Therefore, as soon as there were signs of a modest economic recovery, Roosevelt cut back on state expenditure. This produced a sharp recession in 1937 and unemployment again doubled from five to ten million and remained high until the outbreak of War.

A whole mythology has grown up about the New Deal. Those who believe that capitalism can be reformed in such a way that it can avoid slumps and achieve social justice point to it as proof of their assertions. But in practice, Roosevelt’s policies had at best only a marginal effect in pulling the U.S. economy out of the slump. The recovery, when it finally came, was not due to the New Deal but to the Second World War. The lowest point of the Great Depression was in 1933, but the U.S. economy showed very little improvement through the end of the decade, and remained grim until it was dramatically reshaped through America’s arms program and participation in the Second World War, which had an even bigger effect than the previous one in stimulating the U.S. economy.

The CIO and the Sit-In Strikes

Following the Great Crash of 1929, the bosses launched on a program of savage wage cuts. The AFL responded by announcing “no-strike” deals. This was supposed to be the result of a “gentleman’s agreement” between the unions and the bosses. But in practice the unions conceded everything, the bosses nothing. From 1922 to 1929 the number of labor disputes diminished year after year. In 1929 there were only 903 labor disputes involving 203,000 workers. On September 1, 1929, noting with satisfaction that the number of strikes in the U.S.A. had gone down from 3,789 in 1916 to 629 in 1928, AFL President William Green asserted that “collective bargaining is coming to be accepted more and more as a preventative of labor disputes.”

Weakness invites aggression. In June-July 1930, 60 corporations and industries announced wage cuts, and the AFL did nothing about it. The result was a rapid decline in union membership. In 1929 only one in five industrial workers belonged to a union in the U.S.A. Of those who did, nearly half were either building or transport workers. By 1931 the AFL was losing 7,000 members a week, and from a high of 4,029,000 in 1920, fell to 2,127,000 in 1933. This is a fitting epitaph on the supposedly “realistic” policies of “unionism pure and simple”.

These were years of violent class struggle in the U.S.A. As Art Preis recalled in his book Labor’s Giant Step: “Almost all picket lines were crushed with bloody violence by police, deputies, troops and armed professional strike-breakers.” The mass demonstrations of unemployed workers organized by the Communist Party were broken up violently by the police, with many jailed, wounded or killed. On March 7, 1932 a demonstration of unemployed demanding work at the Ford Rouge Plant was dispersed with machine-guns, leaving four dead and many wounded. On the direct orders of President Hoover, General Douglas MacArthur, riding a white horse at the head of his troops, attacked a demonstration of 25,000 unemployed war veterans and their families with tear gas, gunfire and bayonets. Such “incidents” were common throughout the 1930s – including under Roosevelt’s “New Deal”. In 1937, for example, ten people were killed and 80 wounded in a Memorial Day clash between police and members of the Steel Workers Organizing Committee at a plant of the Republican Steel Co. in South Chicago.

Several AFL unions established the Committee for Industrial Organization (CIO) to organize the unorganized industries. This organization effort had great success in the rubber, steel, and automobile industries. The internal dispute over organizing these industries continued and, in 1938, the AFL expelled the unions, which formed its own federation and called itself the Congress of Industrial Organizations. John L. Lewis of the United Mine Workers became the organization’s first president. The formation of the CIO was labor’s giant step. Overnight the unorganized were organized. It is not generally realized that the Trotskyists – especially in Minneapolis – helped lead the big Teamsters strikes, which led to the formation of the CIO. People like Farrell Dobbs played a key role, all the more extraordinary given that he had voted Republican in the most recent elections. As a result of the experience of the class struggle he went straight from Republicanism to revolution. This little detail shows how fast moods can change.

Most people believe that it was the French workers who invented the method of factory occupations during the 1930s. Not so! The American workers in the early 1930s developed a powerful movement known in the U.S.A. as the sit-down strikes. It involved employees going to their workplaces and then refusing to work. That is a factory occupation in all but name. The first successful sit-down strike happened in Flint, Michigan in 1937 when the United Auto Workers at a GM factory stopped production. This controversial method proved effective, yet controversial among management and some labor leaders. In the first large sit-down strike the United Rubber Workers (CIO) won recognition from the Goodyear Tire and Rubber Co. But not every strike ended in victory. The five week long “Little Steel” strike was broken when Inland Steel workers returned to work without even having won union recognition.

The militancy of the CIO had dramatic results. It quickly reversed the decline in union membership and led to the organization of new layers who showed great energy and élan. Very soon the CIO had gained two million new members. The mass factory occupations were illegal, but the workers newly awakened to the struggle were determined to fight for their rights. One worker recalled the tremendous spirit of class solidarity:

“It was like we was soldiers, holding the fort. It was like war. The guys became my buddies.” And it was war: class war. The big corporations like General Motors and Ford spent millions of dollars a year on spies and private police to fight the strikers. But the workers’ organization, class consciousness and discipline defeated the bosses and their hired gunmen.

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Go to Chapter VIII — World War II

Chapter VI — Imperialism

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The end of the 19th century saw the birth of imperialism. Germany, France, Britain and Belgium struggled to gain possession of markets, territory, raw materials and spheres of influence. This policy led to the establishment of colonies and empires in Africa, Asia and the Middle East. On the Pacific, Japan’s development followed a similar pattern, following the Western lead in industrialization and militarism, enabling it to gain a foothold or “sphere of influence” in China. As Germany emerged as a great power after victory in the Franco-Prussian War, which completed the process of German unification, so the U.S. would emerge as a great power after the victory of the North in the Civil War.

The United States, as the youngest member of the capitalist club, entered late into the scramble for markets and colonies. As a result it found itself at a disadvantage with respect to the older imperialist nations of Europe. The Panic of 1893 exacerbated the already fierce competition over markets in the growing “spheres of influence” of the United States, which tended to overlap with Britain’s, especially in the Pacific and South America. Like all newly industrializing great powers, the U.S. adopted protectionism, seized a colonial empire of its own (the Spanish-American War of 1898), and built up a powerful navy (the “Great White Fleet”). Following the example of Germany, the United States tried to solve the depression by the adoption of protective tariff protection with the passage of the McKinley Tariff of 1890.

The nascent trend of American imperialism found its voice in a new generation of U.S. politicians, such as Henry Cabot Lodge, William McKinley, and Theodore Roosevelt, all of whom advocated a more aggressive foreign policy as a means of pulling the United States out of the depression of the second Grover Cleveland administration.

In addition to the strictly economic content of imperialism, it also fulfilled an important social and political role. Europe in this period witnessed the re-emergence of far more militant working-class organization and mass strikes. The existing social order felt threatened by the growth of the trade unions and Social Democratic Parties. A period of increasing unemployment and deflated prices for manufactured goods gave an additional impulse to imperial expansion.

Very soon after it had thrown off the yoke of British and European imperialism and established itself as a young and vigorous capitalist power, the U.S.A. began to flex its muscles and assert its power, developing territorial designs on its neighbors, especially Mexico. This was expressed in the Monroe Doctrine, which, as early as 1823, proclaimed that the American Continent was closed to European colonization, that America was for the Americans and that any attempt on the part of Spain or any other European state to reconquer the South American republics would be considered “a manifestation of unfriendly disposition towards the United States.”

On this subject W.E. Woodward writes:

“[…]the South American republics were not grateful then and are not grateful now. On the contrary, they hate us heartily on account of the Monroe Doctrine, as they assume that the doctrine is our indirect way of asserting an overlordship over the countries to the south of us.” (W.E. Woodward, A New American History, p. 358.)

Whatever may have been the original intention, there can be no doubt that that has been precisely the result.

Under the pretext of reaffirming the Monroe Doctrine, U.S. imperialism in reality extended it beyond all recognition through the Roosevelt Corollary of 1904. In practice, this was taken to mean that the U.S.A. claimed the exclusive right to “lead” the entire American continent – North and South. Under McKinley’s Republican administration, the U.S.A. aimed to restore prosperity and obtain new markets through the “Open Door” policy. The meaning of this was already demonstrated in the U.S.-Cuban War.

Spain was the weakest of all the European imperialist states, and its last remaining possession in the New World, Cuba, was an obvious target. In 1895 the people of Cuba rose in revolution against their Spanish colonial masters. The Madrid government sent 200,000 soldiers but were unable to put down the uprising. The Cubans made use of guerrilla war, avoiding pitched battles and resorting to hit and run tactics – just like the Iraqis at the present time. The Spanish imperialists resorted to brutal repression. All suspected rebels were rounded up and placed in concentration camps, where many died of disease and starvation. These events were followed with great interest in the United States, and not only from humanitarian motives. American citizens had about $50 million worth of Cuban property, including sugar and tobacco plantations and iron mines. American property was being destroyed.

A vociferous campaign began in the U.S.A. in favour of “going to Cuba and sorting out the whole damn mess.” This was an early expression of the pent-up chauvinism that was pushing America to assert its power on the world stage. President McKinley was not sympathetic to the imperialists and attempted to keep the U.S.A. out of war. But he was under increasing pressure from the imperialists who made sure that every Spanish atrocity, real or imaginary, was splashed all over the front pages of American newspapers in what was called “yellow journalism”.

We know from more recent experience how easy it is to whip up pro-war feelings by using the mass media to create hate figures and manipulate public opinion – as George W. Bush and his administration did very effectively after the 11th September. It was even easier at that time because the American public had no experience of foreign wars. In such a situation, some incident is always needed to spark off war hysteria. In this case it was provided by the notorious Maine incident. The U.S. war party had a very vocal leader in the person of Theodore (“Teddy”) Roosevelt, who imagined that the U.S.A. should act on the world stage in the same way as General Custer leading the Seventh Cavalry into battle against the “injuns”. He declared that President McKinley had “no more backbone than a chocolate éclair”. All the war party needed was that useful little incident. They got it on February 15 1898 when the Maine was blown up in Havana harbour.

Late in January 1898, the U.S. government sent the battleship Maine to Havana on what was supposed to be a “good will” mission. In fact, “good will” had nothing to do with it. The Maine had been sent to protect U.S. property and citizens in Cuba. Despite this act of blatant interference, the Madrid government swallowed hard, maintained a diplomatic silence and publicly accepted the “good will” fairy story. It could hardly do anything else!

To this day nobody knows what happened. It may be that the Maine was blown up by Spanish loyalists, indignant at the affront to their government. But it is also possible that it was the work of Cuban rebels, intending to provoke a U.S. military intervention against Spain. It is even possible that the ship’s magazine may have blown up through some kind of accident or spontaneous combustion. Certainly the official report on the incident was inconclusive. But it really made no difference. All this has quite a modern ring about it. After the 11th September, the right wing clique in the White House found the perfect excuse for carrying into practice the plans for the invasion of Iraq that they had already prepared long before. The destruction of the Twin Towers was the perfect excuse for this, although it is well known that Iraq had nothing whatever to do with it. Once the war machine starts to roll, like the Juggernauts of ancient India, it crushes everything in its path.

Is it not remarkable how every war is always humanitarian and pacific in intent, no matter how many lives are lost? Chauvinistic and anti-foreigner feeling is whipped up and all kinds of false moralizing arguments are put forward to dress up an act of aggression under the banner of the noblest and most humanitarian sentiments. But behind the scenes the most sordid self-interest is at work. Listen to Senator Thurston of Nebraska: “War with Spain,” he said, “would increase the business and earnings of every American railroad, it would increase the output of every American factory, it would stimulate every branch of industry and domestic commerce.” In other words, war was just another department of big business, or, as old Clausewitz might have said “the continuation of business by other means”.

Faced with pressure of such intensity, McKinley took the honourable way out and joined the war party. In his speech to Congress, the President was economical with the truth. He did not inform Congress that Spain had agreed to accept all the terms imposed by Washington for reform in Cuba. He doubtless understood that a “splendid little war” would not do his prospects for re-election any harm. He would have been right, except that his Presidential aspirations were cut short by an assassin’s bullet.

On April 19th, Congress declared war on Spain. The U.S. Navy moved in with gusto, although it was based on the other side of the world in Asia. Admiral Dewey entered Manila where the Spanish fleet was anchored and reduced it to scrap iron in the space of five hours. U.S. land forces backed by Filipino insurgents defeated the Spanish. But later the same insurgents were fighting the U.S. forces. Not for the last time, one imperialist power had simply replaced another.

From the American point of view the Spanish War was a brilliant success. Casualties on the U.S. side were few. The U.S. Navy lost fewer than 20 men, having destroyed the entire Spanish fleet. The total fatalities of the U.S. army in Cuba were 5,462. Of these, 379 were killed in action. The rest died from disease and bad food sold to the army by unscrupulous Chicago meat companies and accepted without question by stupid or corrupt military managers.

The Seizure of Panama

It was the “splendid little war” in Cuba that brought fame to Teddy Roosevelt, the man who discovered the art of public relations, photo opportunities and political marketing. He commanded a division known as the “Rough Riders” made up, supposedly, of cowboys from “out West”, whose barnstorming tactics were excellent material for the front pages back home. War correspondence has never been the same since. The face of TR is the face of the American bourgeoisie in its expansionist phase: crude, vigorous, self-confident, greedy and uncultured. He enriched the English-American language with picturesque words like “muckraker”, “mollycoddle”, “big stick”, “undesirable citizen” and other gems.

Here was a plain, ordinary American millionaire, proud of his lack of culture, a man who hated the kind of educated, highfalutin’ language of politicians, or “weasel words”, as he called them. His main interest in life was shooting lions and tigers, and especially being photographed in the performance of this manly activity. His moral views were slightly more progressive than those of Atilla the Hun. He opposed birth control as “wilful sterility” and “more abasing, more destructive than ordinary vice.” He also condemned divorce. His taste in literature was as refined as those of the class he represented. He denounced Tolstoy’s Kreutzer Sonata as “filthy and obscene”.

George W. Bush may trace his political line of descent back to Teddy Roosevelt. But there is an important difference. When the U.S.A. invaded Cuba and occupied Philippines, capitalism was still on its ascending curve. It easily dominated countries that lagged behind historically and economically. But now we are in an entirely different historical period. Capitalism on a world scale has long since outlived its historical usefulness. Its progressive role is played out. That is why it is faced with crises, wars, instability and terrorism everywhere.

The decline of capitalism can be seen by comparing the invasion of Cuba with the invasion of Iraq. Even the comparison between the persons of Bush and Roosevelt reveals all the symptoms of decline. They have many things in common: reactionary politics, provincial narrowness and cultural philistinism. But Theodore Roosevelt possessed the élan, the drive and the raw pioneer energy of the American capitalist class in the period of its expansion. In his rhetoric there was a certain defiant style, and he showed personal courage in spite of the theatricalities. Yes, the man was a gangster, but he was a gangster with style. This was a reflection of the boundless self-confidence of rising American capitalism thrusting its way to world domination.

George Bush has all the negative features of his illustrious predecessor without any of his virtues. A mean-spirited provincial, this cowardly and hypocritical second-rater from the Bible Belt perfectly personifies the nature and intellect of the class he represents: the monopoly capitalists in the age of capitalism’s senility. Here is no great idea, no broad horizon, no audacious rhetoric, only vicious intrigues combined with shameless bullying covered with a thin veneer of religious hypocrisy. Insofar as Roosevelt gave any thought to the Almighty, it was to thank Him for the invention of the machine-gun. And despite his aversion for Tolstoy, at least he was capable of putting together a coherent sentence when he wanted to.

The truth is that for the U.S.A. the Cuban war was a small war, though not for Spain, for which it began a period of national humiliation and soul-searching that eventually had revolutionary consequences. For America, on the contrary, it marked the beginning of a long career of imperialist expansion and a fatal involvement in world affairs. The war was supposed to have been fought for Cuban independence from Spanish tyranny. But at the Paris Peace Conference the U.S.A. demanded the control over Puerto Rico and the Philippines. The Spanish were in no position to argue. As a cover for their actions the U.S.A. paid Spain $20 million for the Philippines, and as we know, fair exchange is no robbery. The opinion of the people living on the islands was not asked.

There is a Russian proverb: appetite comes with eating, and the appetite of the new member of the imperialist club was insatiable. Theodore Roosevelt was determined that the United States should control the passage from the Atlantic to Pacific oceans. This was a vital objective both militarily and economically, a major step in the U.S.A.’s march towards world domination. Admittedly there was a small snag: Panama was part of Colombia, a sovereign nation.

However, such trifles have never been known to deter imperialists from Teddy Roosevelt to George W. Bush.

Roosevelt proceeded to negotiate with the Colombians to obtain the necessary permission to control the all-important canal. In early 1903 the Hay-Herran Treaty was signed by both nations, but the Colombian Senate failed to ratify the treaty. Not deterred, Roosevelt got into contact with Panamanian rebels (as George Bush got in touch with the Northern Alliance in Afghanistan and later the Iraqi Kurds and Shiites) and gave them to understand that if they revolted the U.S. Navy would assist their cause for independence. Panama proceeded to proclaim its independence on November 3, 1903, and the U.S.S. Nashville in local waters impeded any interference from Colombia – a classic case of gunboat diplomacy.

When the fighting began Roosevelt ordered U.S. battleships stationed off of Panama’s coast for “training exercises”. Fearing war with the United States, the Colombians avoided any serious opposition to the uprising. As we know, one good turn deserves another. The “independent” Panamanians returned the favour to Roosevelt by generously handing over to the United States control of the Panama Canal Zone on February 23, 1904 for the quite modest amount of $10 million. All in all, a very nice little business deal!

The Philippine-American War

The ambitions of U.S. imperialism went far beyond the New World. The successful outcome of the war with Spain led to bigger things. Although U.S. capital investments within the Philippines and Puerto Rico were relatively small, nevertheless these colonies were strategic outposts for expanding trade with Asia, particularly China and Latin America. The United States suppressed an armed independence movement in the Philippines in the first decade of its occupation. During the ensuing (and largely forgotten) Philippine-American War, 4,234 U.S. soldiers were killed, and thousands more were wounded.

Philippine military deaths were estimated at roughly 20,000. Filipino civilian deaths are unknown, but some estimates place them as high as one million.
U.S. attacks into the countryside often included “scorched earth” campaigns where entire villages were burned and destroyed, torture (the “water cure”) and the concentration of civilians into “protected zones.” As a result many Philippine civilians perished of disease and famine. All these methods were later repeated and developed in Vietnam, where civilians were forced into so-called fortified villages. The depersonalization of colonial peoples as a justification for treating them as animals, to be tortured and killed without a second thought – all were put into practice in the Philippine-American War, and even earlier in the genocidal wars against the Native American peoples.

As in Vietnam and Iraq, reports of the execution of U.S. soldiers taken prisoner by the Filipinos was used to justify disproportionate reprisals by American forces. Many U.S. officers and soldiers called the war a “nigger killing business.” In the same way, the Vietnamese were described as “gooks” and the people of Iraq are depicted as bloodthirsty terrorists. Racism is always the inevitable concomitant of imperialism.

The forcible interference of one nation in the internal affairs of another is conveniently justified on the grounds of alleged racial and cultural superiority. This is supposed to give “our” people the right to decide what another people is supposed to believe and how they should organize their internal government and laws. During the U.S. occupation of the Philippines, English was declared the official language, although the languages of the Philippine people were Spanish, Visayan, Tagalog, Ilokano and other native languages. Six hundred American teachers were imported aboard the U.S.S. Thomas. The people of the Philippines were compelled to accept the language, culture and religion of the conquerors, whether they wanted it or not. In 1914, Dean C. Worcester, U.S. Secretary of the Interior for the Philippines (1901-1913) described “the regime of civilization and improvement which started with American occupation and resulted in developing naked savages into cultivated and educated men.” In 2004, the Iraqi people are being treated in exactly the same way; only the politicians do not speak so honestly.

The United States and World War One

The U.S.A.’s entry into World War One (the “War to End All Wars”) in 1917 marked a qualitative new stage in American history. The whole logic of America’s position in the two decades prior to 1914 rendered American intervention inevitable. The enormous and growing economic strength of the U.S.A. and its resulting military power made a clash with the older imperialist powers of Europe a certainty. That is why during the 20th century the U.S. was involved in two World Wars. However, when World War I began in 1914, the United States at first firmly protested neutrality – and none more loudly than the President, Woodrow Wilson. He was a strange figure in history. Wilson was neither a socialist nor a radical but a man of rigid views who tried to reconcile imperialism with democracy and pacifism. This was approximately like trying to reconcile a man-eating tiger with the principles of vegetarianism. No wonder Wilson died a bitter and disappointed man.

To imagine that the U.S.A. could keep out of the war in Europe, given America’s important and growing role in world affairs, was utopian. The logic of events was pushing her into the war. All that was required was the usual incident to justify intervention. This was provided when early in 1917 Germany resumed its policy of unrestricted submarine warfare. The RMS Lusitania, a British ship carrying many American passengers, was sunk by German submarines. The Lusitania, like the Maine, Pearl Harbor, and the Gulf of Tonkin incident later, served as a convenient excuse to justify intervention in a European War, in a way that was to turn the U.S.A. into the de facto arbiter of the destiny of Europe – and hence the world. This created the necessary public indignation and led to a final break of relations with the Central Powers. President Wilson requested that the United States Congress declare war, which it did on April 6, 1917.

All sides in this War claimed that they had entered it with the purest and most Christian and civilized reasons. But, as in all other imperialist wars, this was only for the gallery. That goes just as much for the “idealist” Wilson as for Lloyd George and Clemenceau. The British and French insisted that the United States emphasize sending infantry to reinforce the line. They needed more cannon fodder to replace the millions who had been already led like sheep to the slaughter since the summer of 1914. The United States Army and the National Guard had already been mobilized in 1916 to pursue the Mexican “bandit” Pancho Villa, which helped speed up the mobilization. However, it would be some time before the United States forces would be able to contribute significant manpower to the Western and Italian fronts.

With American help, Britain, France and Italy won the war. The latter naturally (from an imperialist point of view) took their revenge on the defeated and imposed savage economic penalties on Germany in the Treaty of Versailles. Wilson gained a short-lived popularity by proposing his famous Fourteen Points, which proposed a democratic peace without annexations or crippling indemnities, as well as self-determination for all peoples etc., etc. As a list of good intentions it was admirable. But as a program for the post-war world it was useless. The British and French leaders, Lloyd George and Clemenceau, thought Wilson was mad. But they needed America’s money and soldiers, and so they bit their tongues. Lloyd George was the wilier and more cunning of the two. He loudly demanded small concessions on matters of no importance, in order later to abandon them in exchange for getting his way on all the important questions later.

The style of the French President George Clemenceau was of a different type, although the substance was the same. As W.E. Woodward correctly states:

“Clemenceau spoke English well. He was annoyed by Wilson’s abstractions and ideals, and by his dissertations on the inalienable rights of mankind. His only comment on Wilson’s essays was frequently an expressive, obscene and unprintable English word, which has been expunged from the record.

“Clemenceau did not want to be considered a gentleman; he looked upon all that as a lot of flummery and a waste of time. He made it perfectly plain that he was not in sympathy with the Fourteen Points, except those which gave something substantial to France.” (W.E. Woodward, A New American History, p. 794.)
The conduct of Lloyd George and Clemenceau has rightly earned them the reputation of callous brigands. But there was a definite logic behind their conduct. It was largely determined by the relations between Europe and America. The Allies owed a large amount of money to the U.S.A. and they intended to squeeze it out of Germany. Despite all President Woodrow Wilson’s calls for reasonable terms, the Versailles Treaty amounted to a decision to plunder Germany.

A New World Power

“I spent 33 years in the Marines. Most of my time being a high-classed muscle man for Big business, for Wall Street and the bankers. In short, I was a racketeer for capitalism. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I brought light to the Dominican Republic for American sugar interests in 1916. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenue in. I helped in the rape of half a dozen Central American republics for the benefit of Wall Street....” 

- Smedley D. Butler (1881-1940) Major General (U.S. Marine Corps)

Somebody once said to Lenin “war is terrible”, to which he replied: “Yes, terribly profitable.” In 1922, the U.S. government created the Nye Committee to investigate the reasons the United States got involved in the war. The committee reported that between 1915 and April 1917, the U.S. loaned Germany 27 million dollars ($27,000,000). In the same period, the U.S. loaned Britain and its allies 2.3 billion dollars ($2,300,000,000), or about 85 times as much. They concluded that the U.S. entered the war because it was in its commercial interest for Britain not to lose. In other words, the decision to enter the War was the result of a simple business calculation.

The human balance of the First World War was as follows: Allied soldiers killed: 5,497,600; Central powers soldiers killed: 3,382,500; Civilians killed:

6,493,000. However, the economic balance of the War was quite satisfactory. The American firm J.P. Morgan and Co. bought approximately three billion dollars’ worth of goods during the War on behalf of the Allies, and made a profit of thirty million dollars from this source. In addition they made a great deal more from the sale of Allied War Bonds in the U.S.A.

The World War turned the U.S.A. into the most powerful nation on earth. As the world’s creditor, it was in a position to put Europe on hunger rations. The Allies were in debt to America to the tune of $10,350,000,000. Italy owed $2,000,000,000 and was given 62 years to pay up at an interest rate of four tenths of one percent. The French owed twice as much and were to pay it back at an interest of 1.6 percent. Great Britain had the biggest debt of all:

$4,600,000,000, to be amortized in a similar period at 3.3 percent.

Since Europe was ruined, these debts could not realistically be paid. The ruling class in Britain and other countries passed the bill to the working class in the form of savage wage cuts that led to a sharp upswing in the class struggle. In order to pay their bills, the French and British ruling class exerted brutal pressure on the defeated Germans. They intended to pay the United States out of reparation funds squeezed from the German people. But bleeding, shattered, starving Germany could not pay.

Within one year the German payments stopped. The Dawes Commission looked into the situation and decided to reduce the amount paid to a more “lenient” sum: $500,000.000 in gold, payable by 1925, followed by an increasing amount thereafter. As a guarantee of payment, Germany’s railroads, controlled revenues and large-scale industries were placed under international control. The author of this plan, Charles G. Dawes, was given a Nobel Prize in 1925, but the plan collapsed immediately.

In 1928 Germany ceased to make any payments. Another committee of experts was formed under Owen D. Young. It proposed that Germany liquidate its debts in 59 years. During the first 37 years the annual payments were to be $512,500,000; after that, “only” $391,250,000. The total amount was twenty-seven and a half billions. The only problem that the authors overlooked was that it is not possible to squeeze blood from a stone.

In 1931, President Hoover had to face the facts and announced a moratorium on all foreign debts owed to the U.S. government. The economic impact of the reparations mandated by the Treaty caused chaos and misery on an unprecedented scale. These conditions ultimately led to the rise of Adolf Hitler who seized power in Germany in 1933. The United States Senate did not ratify the Treaty of Versailles; instead, the United States signed separate peace treaties with Germany and her allies. But the power of the U.S.A. was enormously reinforced by its intervention in the War.

By 1934 all the foreign debtors, except Finland, had ceased to make payments of either principal or interest. From 1920 to 1932 the total payments on the consolidated principal amounted to $583,000,000. All these payments were made in gold or its equivalent in international exchange. In this way, the United States accumulated the biggest stock of gold ever held by a national treasury in the whole of human history. Other nations were forced off the gold standard as a result of this huge drain. This opened the door to a chain of competitive devaluations that seriously aggravated the Great Depression of the 1930s.

The Russian Revolution

In March 1917, demonstrations in Petrograd culminated in the overthrow of Tsar Nicholas II. The workers and soldiers organized themselves in soviets –democratically elected action committees. The appointment of the Provisional Government, dominated by bourgeois liberals and politicians of the old regime, solved nothing. Power was really in the hands of the workers and the Petrograd Soviet. This confused and chaotic situation of dual power could not last. The bourgeois Provisional Government could neither end the war, nor solve any other of the pressing problems of the Russian workers and peasants.

As a result, discontentment grew and the government became more and more unpopular.

Inside the soviets, the Bolshevik party, led by Vladimir Ilyich Lenin and Leon Trotsky, began to gain an echo. By the autumn of 1917 they had won an overwhelming majority in the Soviets and were in a position to take power. The triumph of the Bolsheviks in November (October according to the old pre-Revolutionary calendar) was a turning point in world history. Here, for the first time – if we exclude that glorious episode that was the Paris Commune – working people succeeded in overthrowing the old oppressive order and at least beginning the socialist transformation of society.

It is true that the Revolution later suffered a process of bureaucratic degeneration, as the result of being isolated under conditions of extreme backwardness. But at least the Russian workers showed that a socialist revolution was possible. As Rosa Luxemburg said: “They alone dared”. The Bolshevik Revolution lighted a beacon that inspired hope in the hearts of millions of downtrodden and exploited people everywhere. Its echoes were heard far across the Atlantic in the United States.

If you ever visit Moscow and take a stroll around the Kremlin walls, you will find among the tombs of famous Russian revolutionaries the graves of two outstanding Americans – “Big” Bill Haywood and John Reed, the celebrated American writer and journalist who was the central character of the movie Reds. John Reed was active in the American labor and socialist movement before the First World War and is best remembered for his marvelous book about the Russian Revolution Ten Days that Shook the World, which Lenin himself described as a most truthful account of the October revolution. After Trotsky’s monumental History of the Russian Revolution it is the best book one could read about this subject. Not only is this a great and truthful work of historical journalism. It is a remarkable human document in which every line is vibrant with the excitement of the moment:

“It is still fashionable, after a whole year of the Soviet Government, to speak of the Bolshevik insurrection as an ‘adventure.’ Adventure it was, and one of the most marvellous mankind ever embarked upon, sweeping into history at the head of the toiling masses, and staking everything on their vast and simple desires. Already the machinery had been set up by which the land of the great estates could be distributed among the peasants. The Factory-Shop Committees and the Trade Unions were there to put into operation workers’ control of industry. In every village, town, city, district and province there were Soviets of Workers’, Soldiers’ and Peasants’ Deputies, prepared to assume the task of local administration.

“No matter what one thinks of Bolshevism, it is undeniable that the Russian Revolution is one of the great events of human history, and the rise of the Bolsheviki a phenomenon of world-wide importance. Just as historians search the records for the minutest details of the story of the Paris Commune, so they will want to know what happened in Petrograd in November, 1917, the spirit which animated the people, and how the leaders looked, talked and acted. It is with this in view that I have written this book.

“In the struggle my sympathies were not neutral. But in telling the story of those great days I have tried to see events with the eye of a conscientious reporter, interested in setting down the truth.” (Ten Days that Shook the World, preface)

What a refreshing change from the kind of book that now floods onto the market every day, written by allegedly “objective” and “scholarly” authors whose only intention is to blacken the name of the Russian Revolution, to bury it under a heap of lies and calumnies and thereby to convince the new generation that revolution is a very bad thing. What concerns these “impartial” hypocrites, of course, is not so much what happened in Russia almost a century ago, but what might happen in America tomorrow.

The modern American who wishes to understand the Russian Revolution could do no better than to read this marvellous book. John Reed was by no means an exception. Many Americans were inspired by the Russian Revolution at the time. And despite what happened subsequently, it remains a source of infinite inspiration and hope for the human race. Future generations of Americans will look back with infinite gratitude and affection to people like John Reed who were prepared to face slander, isolation, persecution and worse to defend the cause of socialism and justice.

White Terror in the U.S.A.

John dos Passos’ U.S.A. is yet another socialist American literary masterpiece. It comprises three novels The 42nd Parallel, 1919, and The Big Money. The second of these novels expresses with extraordinary vividness the nature and atmosphere of the period that followed the Russian Revolution. It is an extraordinary work, written in a highly original form, combining newspaper headlines and telegraphic episodes with real-life and fictional stories. Although in later life dos Passos went to the right, he wrote a book that really gives a flavour of the times.

The notorious Versailles Treaty that set the seal on Germany’s defeat in 1919 was put together by the U.S.A., Britain and France. As an example of cynical power politics and imperialist robbery it is perhaps without parallel. With the sureness of touch of a master artist, dos Passos conveys the essence of the wheeling and dealing of the great imperialist powers and the sheer hypocrisy of the leaders of the “civilized Christian world”:

Lloyd George,
Woodrow Wilson.
Three old men shuffling the pack,
dealing out the cards:
Rhineland, Danzig, the Polish Corridor, the Ruhr, self-determination of small nations, the Saar, League of Nations, mandates, the Mespot, Freedom of the Seas, Transjordania, Shantung, Fiume, and the Island of Yap:
machinegun fire and arson
starvation, lice, cholera, typhus;
oil was trumps. […]”

“On June 28 the Treaty of Versailles was ready and Wilson had to go back home to explain to the politicians, who’d been ganging up on him meanwhile in the Senate and House, and to sober public opinion and to his father’s God how he’d let himself be trimmed and how far he’d made the world safe for democracy and the New Freedom.”

Whether it is Germany in 1919 or Iraq in 2004, the diplomatic representatives of the great powers never admit that their activities are dictated by crude economic interests (oil was – and is – trumps). Their motivations are always pure and noble (“making the world safe for democracy”). And just as the monstrous Treaty of Versailles, which was supposed to make the world safe for peace, made the world a lot more unsafe and guaranteed the Second World War, so the present wars waged by the U.S.A. in Afghanistan and Iraq to “make the world a safer place” only render it far more unstable, unsafe and dangerous than before. George W. Bush also believes fervently in the God of his fathers, to whom he prays while ordering the bombing of Iraqi cities and inflicting machine-gun fire, arson, starvation and disease on millions of people. Meanwhile, behind all the rhetoric, oil is still trumps.

The description of the class struggle in the U.S.A. in the stormy years after the First World War in Dos Passos’ book is outstanding in its raw and uncompromising realism. These were the years when the bosses and the government, fearing the effect of the Russian revolution on the American working class resorted to the methods of lynch law and mob rule to crush the labor movement. The year 1919, which gives Dos Passos’ book its name, was a high point in the class struggle in the U.S.A. The war, as we have seen, was a time when the bosses were making easy profits. The coming of peace was marked by more difficult conditions. The party was over for the capitalists.

As in other countries, the American bosses tried to pass the bill for post-war readjustments to the workers. As a result, an epidemic of strikes and labor disputes broke out involving, at one time or another, 4,160,000 workers. In April 1922, there was the first coal mining strike in American history in which both the bituminous and anthracite coalfields were involved. More than half a million miners struck against sweeping reductions in wages. The strike lasted four months and ended in victory for the miners.

The repression against the labor movement had begun during the War when many were sent to prison, including socialist veteran Eugene Debs, now an old man. His only offence was that he had opposed the war. This gentle old man of American socialism was sentenced to ten years in a federal penitentiary. After the War, that fine Christian humanitarian Woodrow Wilson, out of spite, refused to pardon him. President Harding finally released him, after he had spent three years in prison.

Congress passed draconic espionage and sedition laws. The Postmaster General was given autocratic powers of censorship over written or printed matter sent through the mail. Socialist publications like the Milwaukee Leader and The Masses were excluded from the mail – a measure intended to bankrupt them. As if that was not enough, Congressman Victor L. Berger, the editor of the Leader, was given a twenty-year prison sentence. All these measures were in direct violation of the First Amendment of the Constitution, which guarantees all American citizens freedom of speech and of the press. More than fifteen hundred people were dragged before the courts for disloyal utterances.

State repression reached a feverish peak after the War. Terrified of the events in Russia, and fearful that revolution would spread to the United States, the ruling class unleashed a white terror against the American labor movement. When the AFL unions, which had grown to a membership of five million by 1920, organized a wave of strikes to combat the post-war inflation, corporate leaders denounced them as “radicals, connected with Bolshevism, aided by Hun money.” Given the record of the moderate AFL leadership, this was ironic. But as always the ruling class was not afraid of the leaders of the unions but of the masses that were behind them.

A wave of violence was unleashed against the strikers, of whom twenty were killed. The strikes were defeated. Thousands of spies were hired to infiltrate the unions and identify labor leaders who were fired and blacklisted right across the U.S.A. The bosses attempted to destroy the unions by forcing the workers to sign “yellow dog” contracts, promising not to join unions. It is an indication of how far back we have been thrown that such contracts still exist in the U.S. at the beginning of the 21st Century. And this is regarded as acceptable in a supposedly democratic country! A mood of hysteria was created that fed the flames of lynch law. The Washington Post reported approvingly that when an irate citizen shot someone who had criticized a patriotic pageant, “the crowd burst into cheering and hand clapping.” (P.N. Carroll and D.W. Noble, The Free and the Unfree, a New History of the United States, p. 331.)

In Indiana it took a jury just two minutes to acquit another patriotic citizen who killed a man for saying “to hell with the United States”. In Connecticut a salesman for a clothing company was sentenced to prison for calling Lenin “one of the brainiest men in the world.” As usual, the most violent expressions of hate were reserved for the religiously minded. Billy Sunday, the nation’s most powerful evangelists, said: “If I had my way with those ornery, wild-eyed socialists, I would stand them before a firing squad.” (ibid.) Senator McKellar of Tennessee was much more moderate. He merely advocated the establishment of a penal colony on Guam for political prisoners. The senator was a man ahead of his times. It took another 85 years for his ideal to be realized by another great democrat and patriot, George W. Bush. However, some of his contemporaries had a good crack at it.

The Attorney General, A. Mitchell Palmer, set in motion widespread raids, breaking into private homes and union halls without even the pretence of a warrant. On Palmer’s initiative, a special anti-radical division was set up under a young officer by the name of J. Edgar Hoover. Thousands of suspected radicals were arrested, held without bail, denied access to lawyers, and often brutally beaten after being marched in chains through the streets. Most were later released. But not all were so lucky. In Massachusetts two anarchists, Nicola Sacco and Bartolomeo Vanzetti, were convicted on a murder charge. The trial was clearly politically motivated. Judge Thayer who presided, declared that he wanted to get “those anarchist bastards”. Despite a huge international campaign to save them, Sacco and Vancetti were executed – two more martyrs to the cause of American labor. They were not the only ones.

In his book 1919, John dos Passos recounts the story of the brutal lynching of War veteran and Wobbly Wesley Everett is one of the most moving episodes of the work:

“Armistice Day was raw and cold; the mist rolled in from Puget Sound and dripped from the dark boughs of the spruces and the shiny storefronts of the town. Warren O. Grimm commanded the Centralia section of the parade. The ex-soldiers were in their uniforms. When the parade passed by the union hall without halting, the loggers inside breathed easier, but on the way back the parade halted in front of the hall. Somebody whistled through his fingers. Somebody yelled, ‘Let’s go … at ‘em boys’. They ran towards the wobbly hall. Three men crashed through the door. A rifle spoke. Rifles cracked on the hills back of the town, roared in the back of the hall.

“Grimm and an ex-soldier were hit.

“The parade broke in disorder, but the men with rifles formed again and rushed the hall. They found a few unarmed men hiding in an old icebox, a boy in the stairs with his arms over his head.

“Wesley Everest shot the magazine of his rifle out, dropped it and ran for the woods. As he ran he broke through the crowd in the back of the hall, held them off with a blue automatic, scaled a fence, doubled down an alley and through the back street. The mob followed. They dropped the coils of rope they had with them to lynch Britt Smith the IWW secretary. It was Wesley Everest’s drawing them off that Kept them from lynching Britt Smith right there.

“Stopping once or twice to hold the mob off with some scattered shots, Wesley Everest ran for the river, started to wade across, up to his waist in water he stopped and turned.

“Wesley Everest turned to face the mob with a funny quiet smile on his face. He’d lost his hat and his hair dripped with water and sweat. They started to rush him.

“‘Stand back,’ he shouted, ‘if there’s bulls [police] in the crowd I’ll submit to arrest.’

“The mob was at him. He shot from the hip four times, then his gun jammed. He tugged at the trigger, and taking cool aim shot the foremost of them dead. It was Dale Hubbard, another ex-soldier, nephew of one of the big lumbermen of Centralia.

“Then he threw his empty gun away and fought with his hands. The mob had him. A man bashed his teeth in with the butt of a shotgun. Somebody brought a rope and they started to hang him. A woman elbowed through the crowd and pulled the rope off his neck.

“‘You haven’t the guts to hang a man in the daytime’ was what Wesley Everest said.

“They took him to the jail and threw him on the floor. Meanwhile they were putting the other loggers through the third degree.

“That night the city lights were turned off. A mob smashed in the outer door of the jail. ‘Don’t shoot, boys, here’s your man,’ said the guard. Wesley Everest met them on his feet, ‘Tell the boys I did my best,’ he whispered to the men in the other cells.

“They took him off in a limousine to the Chehalis River Bridge. As Wesley Everest lay stunned in the bottom of the car, a Centralia businessman cut his penis and testicles off with a razor. Wesley Everest gave a great scream of pain. Somebody has remembered that after a while he whispered, ‘For God’s sake, men, shoot me … don’t let me suffer like this. Then they hanged him from the bridge in the glare headlights.”

Having described this bloody lynching in merciless detail, dos Passos reverts to a cold and crushing irony:

“The coroner at his inquest thought it was a great joke. He reported that Wesley Everest had broken out of jail and run to the Chehalis River Bridge and tied a rope around his neck and jumped off, finding the rope too short he’d climbed and fastened on a longer one, had jumped off again, broke his neck and shot himself full of holes.

“They jammed the mangled wreckage into a packing box and buried it.

“Nobody knows where they buried the body of Wesley Everest, but the six loggers they caught they buried in Walla Walla Penitentiary.”

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