Theses voted: December 1934. Published: January 1935.

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The position of the Communist League of Struggle

Chapter I

SIX YEARS OF WORLD ECONOMIC CRISIS

1. The Present Crisis a Combined One.

The winter of 1934-1935 finds the whole capitalist world in the throes of a crisis which has already lasted five full years and is shaking the system to its foundations. The present crisis is not at all like the ones preceding. It is a mutually interacting combination of two distinct sets of forces. On the one hand, ever since the world war, capitalism has been in a chronic basic crisis, on the other hand, the present crisis offers all the features of a cyclical crisis as well. The cyclical crisis has been unprecedented in weight and fury; at the same time capitalism has been unable, as previously, to absorb the shock of the cyclical crisis.

The outstanding fact appears sharper than ever that the capitalist world is no longer mature, strong and healthy, growing with the vigor and promise of the 19^th century. Capitalism is no longer progressive, but has become reactionary, stifling the forces of production. In the era of imperialism, capitalism has reached the stage where it takes a definite turn to stagnation and decay.

The post-war capitalist world is different from the world that existed before the war. Instead of the old basic capitalist rhythms and patterns, we have now the shattering of the basic framework of capitalism; there is no longer any way to prevent the disintegration and collapse of the entire capitalist system.

Prior to the era of imperialism, all the contradictions which have ripened into such monstrous proportions were already in existence, but they were only in germination. The healthy forces of growth could push the contradictory forces into the background, only, of course, to raise the basis for an even greater development of the contradictions later. This was the period of relatively "peaceful" and "organic" development of capitalism. Capitalism went through its cycles of prosperity, boom, panic and depression, revival and prosperity, etc., and in this cycle the prosperity and boom were the relatively prolonged periods, the panic and depression the shorter episodes. However, as capitalism advanced, the crises grew in intensity, affected more countries; the intervals between crises shortened; the effects were more sever. Gradually it appeared that the prosperity and boom were becoming overshadowed by the panic and depression.

The United States furnishes a good example of this development. According to the carefully worked-out chart of the Cleveland Trust Co., starting with the panic of 1837 we find that, leaving aside special causes such as the post Civil War readjustments, the panics lasted only a short time (a year or two), and generally did not reduce business activity below 10% of normal. They were separated by intervals of 15 years, and towards the latter part of the century by intervals of 10 years. It was only in the panic of 1893 that for the first time production fell off 20% from normal and the depression extended for several years (3 to 5 years). On the other hand, in the 20^th century before the war, already we had three periods when industry fell 10-15%.

Following the world war the U.S. went through the crisis of 1920-21, which plunged the country into the deepest depression in its history. Production fell off at times by 25%, over 41/2 million workers were thrown out on the streets. That the U.S. was able to recover relatively quickly then was due to the weakened condition of capitalist Europe and to the great demand by Europe on U.S. economic support for its rehabilitation and reorganization. That is to say, the crisis of 1920-21 in the U.S. was liquidated by the famine, poverty and breakdown of Europe. No such causes for recovery can exist in the present crisis.

The present crisis in the U.S. is in every respect at least twice as severe as the 1920 crisis. Production at one time went down close to 50% of normal. The crisis has already endured for more than five years with very little hope of speedy material improvement.

In the late 19^th century, Frederick Engels posed this question: "The acute form of the periodical process with its former decennial cycle seems to have given way to a more chronic, long-drawn alternation between relatively short and slight business improvement and a relatively long undecided depression, both of them differently distributed over the various industrial countries.... Is it possible that we are now in a preparatory stage of a new world crash of unparalleled vehemence?" (Capital Vol. III pg. 574)

If this question could not have been answered then, it can be answered now. The post-war period of imperialism has shown us that today the period of prosperity is the abbreviated and transient one, it is the period of crisis, panic, depression that is the ordinary affair in the life of society.

Before the era of imperialism, war was the exceptional and untoward event in a period of peace. After the Napoleonic wars, when capitalism had conquered the world, the wars that took place were "local" and "episodic". The last war, however, was no longer episodic and local. It was a world war of such a devastating nature as to change the whole character of world events. It led to the collapse of capitalism in the Soviet Union and its break-down in Europe. It induced such convulsions that revolution followed upon revolution in all parts of the world. Strive as it will, capitalist Europe to this day, has not been able to put down revolution for any length of time.

The world war and the unprecedented crises which have faced the capitalist world are the clearest signs that capitalism has broken down and that it is in the midst of the pains of childbirth, the birth of a new socialist order of society. "The monopoly of capital becomes a fetter upon the mode of production which has sprung up and flourished along with it, and under it. Centralization of the means of production and socialization of labor at last reach a point where they become incompatible with their capitalist integument. This integument to burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated." (Capital, Vol. I pg. 837)

The world war and its aftermath, greatly weakening the power of world capitalism to withstand the shocks of economic contradictions and political antagonisms which spring up ever sharper resulted in the most violent economic and political fluctuations appearing in all countries. England, France, Germany, the large as well as the small countries careened madly from one side to another, from prosperity to crisis, from reaction to revolution. Each country seemed to operate by its own laws. Periods of prosperity and crisis in England did not correspond with those of Germany, nor those of Germany with those of France, or Europe with Asia or with the United States. Each country appeared as an independent fragment dizzily spinning its own way towards its inevitable crash. It is this that has been the basic pattern since the world war together with the fact that entirely different economic and political equilibria governed America, Europe, the Soviet Union and Asia. Comparative statistics in Appendix A illustrate the above conclusions.

It is upon the shoulders of this new economic and political situation that the present crisis comes upon the capitalist world. Riding upon the back of the chronic crisis of world capitalism and superimposed upon it, there now arises, owing partially to the temporary stabilization of capitalism and the recession of the first revolutionary wave, the present crisis. WE HAVE THEN, A DOUBLE OR COMBINED CRISIS, FIRST OF ALL THE GENERAL CRITICAL SITUATION IN WHICH CAPITALISM IS PLACED SINCE THE WAR, AND SECONDLY, THE UNPRECEDENTED "REGULAR" AND "CYCLICAL" CRISIS SUPERIMPOSED UPON IT. IT IS THIS COMBINATION THAT CONCENTRATES THE ECONOMIC CRISIS AND TRANSFORMS IT INTO A POLITICAL ONE.

2. New Features of the Cyclical Crisis.

We have already pointed out that the present crisis of 1929-1935 is unprecedented in the intensity with which it has developed all the capitalist contradictions appearing in such a situation. Behind the present crisis lie all the basic causes which have shown themselves in the other economic cyclical crises that have shaken capitalism every so often. These basic causes, flowing as they do from the law of accumulation of capital, are (a) the output per worker increases more rapidly than the total disposable production thus leading to the discharge of workers even when production is increasing. This increased output per worker is due especially to the increased productivity of the workers, i.e., through the introduction and widespread application of improvements of machinery, etc., the worker with the same mount of labor power expended can turn out larger and larger quantities of commodities. (b) Production increases more rapidly than the possible consumption under capitalism. The solvent demand is greatly limited by the poverty of the masses.

In regard to the cyclical aspect of the present crisis the following new features must be noted: (a) This crisis affects the whole world simultaneously no matter how much the various countries may have differed in the years preceding the crisis. The crisis puts a definite end to the violent zigzags in the particular economic life of the divers countries and with few exception, crashes down the production of all of them. This is quite different than before the war when the crises, though embracing the whole world, yet operated with variations, affecting one country after the other, rather than all simultaneously. (b) This crisis is of far longer duration, so much so as to became a chronic one. (e) The crisis is far more intense and severe in its effects than those heretofore.

These new features are due (a) to the capitalist rationalization, i.e., the "scientific" and systematic attempts to increase the mass and rate of exploitation and thus the "scientific" sharpening of the economic and social contradictions of capitalism. (b) To the relative and absolute diminution of world markets. (c) To the radical structural changes in world economy (such as the shift of the economic center of gravity from Europe to the United States, the rise of Soviet economy, etc.).

The very causes of the crisis are accentuated by the crisis itself. Rationalization is intensified, the market is still further diminished and the law of uneven development leading to radical structural changes and shifts, is still more accentuated. The transformation of the economic crisis into a political one only still further aggravates the economic crisis and plunges the capitalist world into still greater political convulsions.

3. The Increasing Weight of the Crisis.

Since 1929 the world crisis has entered several successive phases. Already in the summer of 1929 the slack in business was distinctly noticeable. But it was with the great stock market crash in New York City that the crisis was really launched. In a very short time industry and trade fell to record lows all over the world. The industrial crisis in turn led to a new financial crisis aggravated by the insecure financial position of the various European governments. Not only large banks began to go bankrupt but the governments themselves controlling these banks. The result was that practically the whole world was forced "off the gold standard", a world-wide moratorium on debts of all sorts was declared. This, in turn, brought about a further stagnation of business leading to a political crisis in the early part of 1933.

How deep were the effects of the world crisis can be seen from the fact that with the 1933 upturn the capitalist world had only recovered to the level of 1913 in mass of production, that production in important countries was down to about 50% of 1929 and trade down 75%. The possibilities for extrication from the crisis could be seen from the tremendous mass of supplies on hand (though the 1933 upturn slightly diminished the stocks) in 1934 especially such stuff as cotton, sugar, rubber, lead, zinc, copper, etc.

The crisis has not affected all countries equally. It has fallen upon the backward agrarian countries (Spain, Poland, Hungary, Rumania, Yugoslavia, Baltic States) even more severely than the major industrial countries of Europe. This is even more true of the non-European agrarian countries, colonial and semi colonial (Cuba, Central and South America, India, China, etc.). Production for export has been practically at a standstill. In view of the disastrous fall in farm prices, far more so than with the articles of industrial countries, crops, raw materials, stuffs have been deliberately destroyed. The oppressive political regimes, the general bankruptcy, have all greatly intensified the economic crises in these countries.

In its desperate attempt to get out of the crisis, the capitalist world has been forced to turn to Fascism and to rampant adventures of the most violent character (Germany, Italy, Japan) each of them fraught with the greatest menace of world war. Although there was a temporary turn since 1933, by the winter of 1934-35 it has become clear that through peaceful methods there can be no way out for capitalism. The war danger has become enormously heightened as the economic crisis now has become intensified into a world-wide political crisis for capitalism.

The intensification of the crisis to the sharpest possible point by no means illustrates the argument of those pseudo-revolutionaries who claim that the collapse of capitalism must automatically come. There is no absolute hopelessness of capitalism. The present one is not necessarily the final crisis of capitalism. Whether capitalism gives way to Socialism depends on the revolutionary class of the proletariat. If the proletariat can not push capitalism into its well prepared grave, then by means of war and terrible destruction, capitalism may again partially stabilize itself. However, it is only through an ocean of blood, through the slaughter of countless thousands of toilers throughout the world that a breathing space for the capitalism of even the strongest country can be obtained for any length of time. On the other hand, for the masses there is no way out save revolutionary Communism.

4. The Contradictions of Capitalism Even in "Normal" Times.

The anarchy of the market is the sole regulator under capitalism. According to the prices on the market, men are employed or fired, millions made or lost, wealth produced or not, countries rise or fall. Competition between buyer and buyer, between buyer and seller, between seller and seller, between the capitalists and the workers, among the capitalists themselves and among the workers, all this transforms society into a veritable jungle where each is for himself and the devil take the hindmost. The whole world lives for exchange, and it is the commodity that lives and the producer who is but attached to it. Production is for the market, for profit and not use.

Although production is a social process, thousands of workers laboring cooperatively to produce a single commodity for the use of others, with a social network of market relations existing at the same time, nevertheless the process is not carried on for the welfare of society as a whole or its producers but for the profit of the few individuals who control and own the social forces and individually appropriate the social product. Between society and its products stands the individual capitalist. Competition among the capitalists, forces the large capitalists to drive out the smaller. They can do this only by lowering the cost of production, by increasing the application of science to the productive forces. Thus the development of industry causes and in turn effects a tremendous technical revolution constantly improving the methods of production and the productive ability of the workers. Nevertheless, the individualistic system of private ownership leads to a terrible waste of the social forces at the same time. The soil is woefully wrung out just so long as it is profitable to the few to cultivate it in that manner. Materials and means of production are scrapped and destroyed wherever profits can be raised accordingly. In a thousand ways, the lives of the workmen are worn out prematurely with a wantonness and criminal irresponsibility. In proportion as the anarchy of the market grips society, the dictatorship of the employers within their workshops takes on a firmer hold.

The competition of the capitalists leads to a monopoly which does not do away with competition but aggravates it. Driven by the necessity to lower the cost of production, the capitalists resort to a feverish attempt to displace workmen and to increase productivity. But hand in hand with this unlimited possibility for increased output there takes place the shrinking of the limited market. Even in the 19^th century the periods of prosperity in the industrial countries could take place only through the terrible impoverishment of the countries whose markets had been taken away. Thus the rise of the factory system of England took place only through throwing millions of Indians into misery, starvation and death.

Even in "normal times" when workers are put to work and wages are at their highest, the wages of the workers never rise as fast as the surplus product (profit) which the capitalist takes. Compared to the capitalist the worker is worse off than ever. Even when he seems to improve his real wages under the increased tension in the factory, the worker is worn out sooner than before, and so the little increase in wages each week does not compensate him, nor does it cover the many weeks he is forced to live without work. At the end of his lifetime of service he has exactly nothing.

The capitalists, on the other hand, are driven on by the fact that the rate of profit always tends to fall. In order to make the same profit the capitalist has to expand his business, accumulate capital, invest more and more in machinery, buildings, etc.(constant capital). All the devices of the capitalists to stop the fall in the rate of profit, such as the introduction of new inventions, seizure of colonies, etc., only speed up the very forces causing it to fall. More and more the dead weight of capital increases and dead labor throttles living labor, the past crunches the present.

Hand in hand with the growth and strength of capitalism goes the increase of pauperism and unemployment even in the best of times. And, more and more, instead of the workers feeding society, society begins to feed the workers on bread lines and through institutions of one sort or another.

Capitalism which represents such an increase in private property, began with tearing control from the direct producers, peasants and artisans over their means of production. It changed commodity private property into capitalist private property where a few controlled the means of production and the rest were forced to sell their flesh and blood as a commodity, labor power. As capitalism developed, private property grew into joint stock companies and corporate property, which later began to take on a public character and developed hand in hand with State public property. Thus with the development of industry, the individual owner was increasingly ousted from the means of production and became on the one hand, a wage-worker, and on the other a rentier, or coupon-clipper.

Whereas, before the introduction of capitalism, industry and agriculture had lived in intimate harmony, the first dependent upon the second, today, it is the reverse, it is industry that leads agriculture, and the city has become divorced from the country. As the gap has increased between them, this has led to all sorts of mal-adjustments and on the international sphere has its counterpart in the tyranny of the imperialist industrialist countries over the agrarian, colonial and semi-colonial.

The development of capitalism, even in its most prosperous times, involves the complete revolutionizing of the class relations within the country. This is particularly true of the lower middle class. Whole sections of the old petty bourgeoisie, small bankers, small business men, small merchants, artisans and such are driven from their occupations and ruined. On the other hand, the rise of large scale and monopoly industry creates a new middle class, professional elements, foremen, technicians, salesmen, etc., and a host of petty interests completely dependent upon the trust or monopoly and no longer hostile to it.

Simultaneously the parasitic class increases in numbers. Coupon-clippers, investors of all sorts appear, completely divorced from the process of production, interested only in consumption, in the pleasures of the hour, and staunch supporters of the government and trusts whose stocks and bonds they own.

The rise of capitalism produces other contradictory features. On the one hand, each country must try to be self-sufficient so as to be dependent on no other country. On the other hand, due to the great increase of production and trade, the markets become international in the truest sense of the term and each country becomes dependent upon the other in a world sub-division of labor.

The fact that internationalism must go through the filter of nationalism has its own repercussions in the colonial field as well. The most backward countries of the world are drawn into the vortex of capitalism and all the Chinese walls of isolation are battered down, which is done, not to advance the backward countries, not to free the colonies, but further to oppress and enslave them. The welfare of the colonies is entirely subordinated to the welfare of the imperialist country and so the capitalist development of the colonies perforce takes on a most uneven, artificial and exasperating character. The tendency of capital to flow evenly all over the world in its quest for a higher rate of profit is burked by monopoly control of the imperialist country. The tendency of the colonies to become industrialized is sacrificed by the need of the imperialist country for sources of raw material, etc. Thus the export of capital whose increase would be one of the laws of capitalist development is hindered by the forces of capitalism itself.

All these contradictions are developed to their highest point in the era of imperialism. The outstanding factor is the development of monopolies under the hegemony of finance capital. The rise of the trust, the cartel, the syndicate, under the leadership of the trustified banking system does not lead to the end of competition but only to its intensification. While the trust may end competition in a particular industry and locality, it only transfers the arena of murderous competition to the trusts themselves which compete among each other and to the competing trustified nations. No longer can production be fettered by national boundaries. The national state becomes a tremendous strait-jacket where laces have to be broken.

To increase the mass and rate of exploitation, industry is "rationalized." All of science is brought to bear to get capitalism out of the hole. A veritable technical revolution takes place in every field of economic development. Industry becomes electrified and mechanized. Subdivision of labor and conservation of effort become systematized in Taylor and similar methods. Standardization and mass production via belt systems are introduced in every field. A delicate balance is sought between the efficiency of large-scale production and the economy of the smaller unit in a trust-chain system. Scientific laboratories take up the utilization of all by-products and waste materials. The further concentration and centralization of capital still more reduces the former chains within the industry. Corresponding to these efforts to increase the productivity of labor, goes the skillful pressure upon the workers to intensify their labor and to increase the hours of labor where possible. The speed-up and stretch-out system is elaborated to its highest point and labor becomes so condensed that the laborer is burned out in a very short time. All sorts of psychological and social welfare measures are introduced to keep the workers docile and to break up any tendency to organization. Company unions are cleverly contrived to channel the workers' discontent and stifle his rebellion.

Hand in hand with this industrial development goes a financial and commercial policy in harmony with it. A whole technique is developed whereby the few may control the stocks of the large corporations through the purchase and control of a minimum part of the shares. Huge holding companies are formed to control financially the industrial organizations and to fleece regularly most of the investors for the benefit of the few controlling ones. The amount of paper securities, stocks, bonds, symbols of money, no longer corresponds to the real wealth of the country. Speculation and insecurity become more feverish then ever. To fill in the watered stock, gambling adventures must be launched. Overwhelmed by the mountain of goods produced, the trusts and financiers try to force domestic sales through the development of installment buying, prohibitive tariffs, government purchases, subventions and foreign sales through the dumping of exports and forced loans, etc. All these methods, however, can only intensify the crisis when it comes and has done a great deal to aggravate the present world crisis of 1929-1935.

Generated by these rising economic contradictions in the normal evolution of capitalism, there spring up a whole host of corresponding social and political antagonisms. In the political sphere there takes place a great rise in state capitalism and public property. State capitalism grows both through the entrance of the state itself into industry and finance especially with the development of militarism and through the most intimate connection between big capitalists, industrialists and financiers with the state apparatus.

In the desperate struggle for self-preservation each capitalism develops a virulent nationalism which grows into a mad thirst for world power. In order to win the foreign markets, colonies, spheres of influence, sources of raw materials and capital investments and military strategic points, and in order to deprive the competing nationalities of these objects, each national capitalism must develop its military and naval power to the maximum. Mercenary armies give way to the arming of the whole population and the mobilization of the entire nation in time of war under the indisputable control of the big capitalist's. The pacifism of the 19^th century Manchester School yields to extreme jingoism of Imperialism. War becomes the mad obsession of capitalism. All the constructive forces are now dedicated to destroy. And in proportion as monopoly lays its deadening hand upon inventions and productive processes generally that may threaten its control, so does it now extend itself in destructive inventions and war-like preparations. War becomes the chief stimulus for industry.

Even in periods of prosperity the pressure upon the working class becomes more and more unbearable as capitalism develops into imperialism. The U.S., in the period of 1923-1929, is a good example.

Nowhere better than in the U.S. has the Marxian law of capitalist accumulation, the greater the strength and energy of capitalism, the larger the unemployed and pauper armies, been demonstrated. The intense capitalist rationalization since the war (1923-1929) has meant the following: (a) the workers of this country suffer the highest accident rate, the highest industrial disease rate of any country in the world. Vital statistics show a smaller percentage of the population alive over 40 years of age than in any advanced country. (b) Here the relative wage is the lowest. While in 1929 over 500 people paid income taxes on incomes over one million dollars --- a record --- over 90% of the people are poor (that is, below the government standards of decency in income). (c) Nor have real wages actually advanced. Counteracting the reported rise in real wages since the war are the increased wear and tear on the worker, the chronic unemployment and part-time work, the complete lack of social insurance, the necessity to support "dependents" over 40 years of age who can no longer get work, etc.

The living and social conditions of the workers in the U.S. have grown worse since the war. The number of deaths is increasing faster than the number of births. The rapid pace which the worker must keep up, coupled with the break-down of family life under capitalism has led to a great increase of nervous disorders, cancer, heart-trouble, etc., and to a big wave of suicides. The malnutrition of the masses is well evidenced by the thousands of deaths yearly from pellagra and above all, consumption. Conservative estimates today would place the number of undernourished school children at 6 million throughout the nation.

The life-breaking pressure on the masses is further shown by the tremendous growth of the crime rate even during a period of prosperity. On the one hand, this is an illustration of rebellion by the masses. It is an anarchist method of striking back at the exploiters and oppressors. (The Baumes Law is one method of reply by the bourgeoisie). On the other hand, we must note that the bourgeoisie is deliberately widening the net so as to entrap as many workers as possible. The widespread application of the vagrancy laws, the method of enforcing the Prohibition Amendment before its repeal, etc., have sent literally millions of people to jail.

Throughout the whole period of the war and since, the ruling classes have exerted the greatest pressure to regiment and discipline the masses. The system of forced labor has never been given up in America. Widespread peonage still exists in the South. Mass arrests on charges of violation of the vagrancy and prohibition laws provide an army of labor for the building of roads, state construction work, manufacture of jute and cotton goods, etc. The practice of farming out prisoners is carried out throughout the country, particularly in the South.

The jailing of millions, besides securing an army of convict laborers, is calculated to break the spirit of the toilers, particularly the youth, to make them know their place. Furthermore, from this criminal element a potential fascist army can be formed. The racketeers bred by the trusts and the gunmen and strikebreakers recruited by detective agencies for the large corporations are legitimate fruits of this crop. Modern capitalism breeds a desperate criminal type potentially fascist, completely under the control and bidding of the ruling classes.

Finally, these wholesale arrests also enormously strengthen the power of the ubiquitous state bureaucracy and corrupt political machines. This bureaucracy exacts a heavy toll from the masses.

The growth of the crime rate brings with it a dialectical movement that aids the workers as well. The masses get hardened. The corrupt state becomes thoroughly exposed in their eyes as a class instrument. The "majesty of the law" no longer means anything to them. They learn to hate the capitalist state and politicians.

The foregoing tendencies were no better illustrated than by the Prohibition Amendment. For the first time the principle was set into the Constitution of the U.S. that the worker in consuming was but taking care of a capitalists machine which he must not damage. However, capitalism could not do away with alcoholism. Alcoholism was necessary to be-sot the worker, to drug him. It was the physical companion to religion. It was needed to make the worker forget his sufferings, to get him to do dangerous jobs and to cheat and swindle him. Besides, it was a prime necessity for the degenerate, wealthy parasites and their counterpart, the underworld.

To sum up we may say that even in "good times" imperialist capitalism meant such an accumulation of the weight of dead capital as to lead to stifling of the productive forces, to chronic crises and permanent unemployment, to wars and revolutions. The very causes are intensified and lead, in a spiral manner, to an ever increasing strain upon all social relations.

If capitalist accumulation leading to relative overproduction is the basic cause of any particular cyclical crisis, this overproduction is still further stimulated by the crisis itself. In order to prevent shut-downs, each manufacturer tries hard to lower the cost of production, that is, still further to rationalize production and lower the wages of his laborers. It is precisely in the period of crises that new machinery is introduced, sweat shops and overwork become general and output per laborer enormously increased. (See Appendix B.) To the horror of overwork and overstrain is added the misery of unemployment and insecurity of labor.

The present economic crisis has greatly aggravated the sufferings of the masses. Unemployment has rapidly risen to over 20 million with about 10 million more on part time. In times of crisis we have not only the number of "floating, latent and stagnant" sections of the unemployed always with us (Marx) besides those thrown out of work by the crisis itself, but part-time workers, adults newly come of working age, wives and children, formerly dependent, now forced to seek work, discharged employees in domestic and personal services and ruined sections of the petty bourgeoisie (urban and rural).

Precisely at this time when there is a plethora of credit, can the little man get no credit and is forced into bankruptcy when the large-scale operator can buy up his property for a song and still further concentrate and centralize his capital. And to the stream of bankruptcies which always runs through capitalism there is added the torrent of bankruptcies under the crisis. At this very time when the market is so needed, the pauperization of the masses, both workers and petty-bourgeoisie, drastically destroys the market.

Further, at the very time when the State has become an insufferable burden upon the masses, the State must enter still more into the arena in order to forestall impending social disasters. It must tax still more heavily, it must increase its prohibitive tariffs, while at the same time enormously augmenting its military expenses. Increasingly dependent upon big capital for loans, it must expend still more in social alleviation of distress, while at the same time forcing the masses to bear the burden of the crisis to the greatest extent possible.

All the destructive forces are raised to their highest degree. Raw materials, instruments and means of production and labor power are wasted in wholesale fashion. All the unevenness of capitalism becomes still further accentuated. Industry tries to throw the cost on agriculture, the imperialists on the colonies, the large capitalists on the small business man, petty bourgeois and worker.

The sharp curtailment of production coupled with the increased output per worker leads the worker still further into insuperable difficulties. If in time of prosperity the skilled worker is being reduced to unskilled, now both find themselves out of work, including layers of the new type of petty bourgeois elements (foremen, technicians, etc.). If before, wage increase never met the increase in mass of profit and even these increases in real wages were illusory, now all wages are drastically cut down at the very moment when the burden upon the poor, through the increase of dependents upon them grows heavier still.

It has been shown that the unskilled poorest paid laborer is the worst victim of wage-cuts, speeding-up, layoffs and unemployment, but the skilled too are feeling the pinch. The fall of real wages coming exactly at a time when unemployment is rife, causes the greatest misery among the masses.

An outstanding indictment of the industrial process is contained in the figures of the U.S. which show that in the present industrial depression the death rate is falling as compared to the preceding period of prosperity. The decrease in the death rate for tuberculosis and nervous diseases speaks volumes for the conditions of employment and the tension of labor that prevailed in the industries of the country. (However, the recent studies made of tuberculosis show a huge and increasing gap between the unemployed and the propertied or salaried classes). The decrease in pellagra is an illustration that even under the poor relief of the federal government, the diet was better than when the masses were forced to slave in the mills and farms. On the other hand, the great increase in cancer and heart diseases that marked "prosperity" is getting still higher. The suicide rate has jumped enormously.

The figures for State and Federal prisons and reformatories show that during the period of depression the crime rate rose at a great rate. However, we must note that the type of crime developed is still more menacing to the ruling class than before. Whereas, Al Capone signified the racketeer gangster, insuring that the ruling class would have its special privileges, today it is the Dillingers and kidnappers that harass the wealthy and with the most modern technique take on the character of Jesse James. There has been a great increase in the proportion of youthful criminals to the total. Whereas, a few decades ago, the typical criminal was a man in the thirties or forties, today he is in the early twenties or less. 39,000 young people between the ages of 15 and 21 are at this present time in State and Federal penal institutions, reformatories or prisons. Of the mass of 200,000 children passing through the courts every year, 25,000 are sent to correctional institutions where, in most cases, they learn to become professional criminals.

The depression enormously accelerates the break-up of the family. Whole families, about a million souls in all, have taken to the road and traveling on the freights. Marriages are falling off: they declined from 1,126,900 in 1930 to 981,800 in 1932. Prostitution and vice have greatly increased in all parts of the country.

To all this must be added the story of the chronic agrarian crisis which already, even in the period of prosperity, had made itself felt throughout the entire nation. This subject will be treated at length in the section devoted to the U.S.

The only alternative from the horrors of peace is the terror of war. During the last world war the holocaust reached unprecedented proportions. Ten million dead on the battlefields, ten million more dead from the forces let loose by the war, twenty million disabled, hundreds of billions of dollars of property destroyed, untold misery and suffering, the shattering of the capitalist system, this is the result of the last world war. Sixteen years after its termination sees Europe still not even up to its pre-war standard in total wealth, or in total or per capita income, when already it is on the verge of a new war even more disastrous then the old.

6. Capitalism Preparing the Way for Socialism.

Thus have become completely verified the prediction of Marx that capitalism itself prepares all the elements for its own destruction. Individual capitalism gives way to State capitalism and public property. A huge socialized technique in production of wealth has been created and made ready for socialism. The ruling class is more and more divorced from the process of production and degenerates into mere parasites. The proletariat on the other hand, increases in numbers and maturity. While it faces ever increasing misery and disaster, at the same time it amasses a body of Marxist knowledge that in its hand becomes a terrible weapon of revolution. As the city dominates the country, the proletariat dominates all other submerged classes and takes the lead in the struggle for the emancipation of all humanity.

The grave-diggers of capitalism are all the more ready to accomplish their tasks as, unskilled laborers that they are, they become more bound up with each other, more acquainted with the factory system as a whole and with all its parts. Capitalism forces the workers to connect theory with practice, to wander all over the world, to try their hand at all occupations, to find themselves reduced to the level of all the others, and to organize and discipline themselves as a class so as to make them fit to build a new society. Capitalism hardens them, tests them, wipes out all their illusions, gives them arms and compels them, under penalty of extinction, to go forward towards Socialism.

In all this the proletariat of the city is aided by the uprisings of the colonies. The development of capitalism in the colonies on the one hand, reduces into impotence the native ruling cliques which must rally to the side of their masters, the imperialists, and thus become thoroughly exposed to the masses of toilers. On the other hand, it brings into being a many-headed modernized proletariat that stands on the shoulders of the past and, skipping intermediate stages of history, emerges full-blown to challenge the capitalist order. Under such circumstances there arises one colonial revolution after another, weakening imperialism and hastening proletarian revolt everywhere.

Chapter II

HEADLONG INTO WORLD CRASH

7. Capitalism Ripe for Revolution.

Under the conditions generated by imperialism, such intense contradictions arose and developed as to make the whole epoch of imperialism one of wars and revolutions. Throughout the world revolutionary situations arose. To produce such revolutionary situations, certain objective changes took place: (a) The ranks of the bourgeoisie and ruling classes were cracked. (b) The sufferings of the masses became unbearably intense. (c) An unusually great activity of the masses occurred.

However, not every revolutionary situation results in a revolution (insurrection). To attain this a subjective factor must be added to the above objective factors, namely - "The ability of the revolutionary classes to carry out revolutionary mass actions strong enough to break (or to undermine) the old government....." (Lenin)

With the world war and the revolutionary wave that flowed in its wake, the epoch of imperialism entered a new stage qualitatively different from the one existing before (from 1900 to 1914). Distinctive of this new stage are the following: (a) the proletarian revolution is victorious in the U.S.S.R. (b) post-war capitalism with all its force, cannot get back to pre-war stability. The decline of capitalism cannot be stopped. All the attempts at "stabilization" become desperate efforts merely to slacken the tempo of the international revolution. This can be seen by the fact, that during this time, while some revolutionary situations are liquidated by the forces of international capitalism, yet other revolutionary situations cannot be liquidated and new ones constantly arise. At the same time a whole host of other situations begin to take on a revolutionary character. (Germany 1923, Bulgaria 1924, Estonia 1924, China 1925-27, England 1926, Austria 1927, India, China, Indo-China, Spain 1930, Cuba 1933, Austria, Germany, France, etc., 1934).

Before the war, neither revolutionary situations nor actual revolutions could have been created by the activity of the Socialist revolutionary parties throughout the world. No matter how well or tirelessly these parties worked, the bourgeoisie was too strong, the level of activity of the masses, generally speaking, too low. Basically, these revolutionary situations had to develop by themselves from the objective contradictions in capitalist society. When, during and after the war, these objective contradictions did cause revolutionary situations to arise, by that time the subjective factor had become so powerful as to be able to mature such revolutionary situations in a number of countries into actual revolutions. From 1918 to 1932, however, imperialism had become so weakened, so close was the situation in a number of countries to a revolutionary one, that it was possible for an international Communist movement, provided it had a Leninist policy and especially when it controlled a State backed by 165,000,000 workers and peasants, to develop situations otherwise still non-revolutionary into revolutionary situations in different countries at different times. (This did not mean, however, that the C.I. could have "ordered" a revolutionary situation in any country at any time). It was a fact that from 1918 to 1932, with the correct policy, it was far easier in many countries to disintegrate the capitalist armies, to ruin the prestige of the ruling classes, to expose the petty bourgeoisie and to activize the masses to an extraordinary degree than before.

The Communist Party (under some circumstances and with a Leninist policy) could have been the decisive force both in stimulating the exploited and oppressed masses with the understanding of the impossibility of living in the old way and in helping to make the ruling class unable to govern as of old. Since the war, the old power and might of the ruling classes had been irretrievably broken. Further, the experiences of 1918 to 1923 weighed mightily on the memory of the masses --- the ruling classes in many countries had been unable to govern at that time. Finally, the Soviet Union, with its tremendous economic and political weight could have thrown this weight at times so as to help break the economic and political power of different sections of the international bourgeoisie at critical moments.

Therefore, it was clear that, very often the activity of revolutionary organizations had estimated the economic and socio-political situation correctly and based their strategy and tactics accordingly, had they been rooted among the masses and obtained their support, could have been the very decisive factor (a) in developing (creating) a revolutionary situation where none existed before and (b) in maturing a revolutionary situation to an actual successful revolution (insurrection).

The recognition of this qualitative change in imperialism must be the cornerstone of Communist International strategy. The victory of Fascism in central Europe, the degeneration of the Soviet Union and the collapse of the Communist International, have changed the situation somewhat. Yet it still must be recognized that today it is possible to have "sudden" changes to revolutionary situations, "sudden" revolutions. Today there has been raised to hitherto unheard-of degree the decisive importance of revolutionary organizations, first, as factors maturing revolutionary situations, and second, as factors changing revolutionary situations to actual revolutions (insurrections).

8. The Impact of the U.S. in World Affairs.

Since the war, there has been a great intensification of the uneven development of capitalism, an uneven development now sharply accentuated by the present crisis and coupled with radical structural changes in world economy.

In the first place, the center of economic gravity has now shifted from Europe to America. The U.S. is now almost equal to all of capitalist Europe and makes up 40% of the capitalist world economy (1928). Besides its own production, American manufactures directly control the production in many other countries and through agreements and cartels dominate many industries which they do not directly control. In its evolution already it has reached the stage where half the exports are finished commodities and two-thirds are finished and semi-finished. On the other hand, the imports are moving more and more to raw materials. Of the worlds wealth, 40% is in the U.S., about equal to that in Europe, while the income is a little larger. Thus Europe has slipped behind America.

The basis for the hegemony of the U.S. throughout the capitalist world rests upon the enormous natural and power resources, the great food supply, the ample raw material at hand, the exceptional equipment and rationalized technique, the huge home market, the lack of any decisive feudal relationships, the non-exhaustion through war and finally, the tremendous reservoir of capital.

As a result of the shifting of the economic center of gravity to the U.S., a most severe struggle is now taking place between Europe and America, between Great Britain and the U.S., and between all the leading capitalist powers for world supremacy. The European capitalists feel the tremendous impact of the U.S. war debts payable to the U.S., amounting to twelve billion dollars. Private loans of the U.S. capitalists abroad amount to about 15.5 billion more (spread about as follows: 4.8 billion to Europe, 4 billion to Canada, 5.5 billion to Latin America, 1.2 billion to the Far East, and of these investments two-thirds are in government and one-third in individual corporations, railroad and public utilities).

More and more the U.S. has became a dominant part of world capitalism. Up to the 20^th century, America had served as an instrument for the rejuvenation of Europe, postponing the ultimate day of reckoning. Today America's doors are shut, the tide of immigration has turned the other way. Now there is no longer any "escape" either for Europe or America from the deadly contradictions of capitalism.

Today whole countries are totally dependent on the economy of the U.S. for their very existence, such as Bolivia supplying tin, Peru-copper, Brazil-coffee, Chile-nitrates, Malay Peninsula,-rubber and tin, Cuba-sugar, Japan-silk, and others.

It was the U.S. that throwing into the fray the whole might of its capitalism, proved to be that reservoir which could save the day for Europe during the first revolutionary wave of 1918-1923 and rehabilitate European capitalists for the while. More and more the ruling class of the U.S. used its favorable position and power to make Europe entirely subservient to its aims, to break up all alliances against it, to place all of the European countries on rations, as it were.

Even before the crisis, from 1925 onward, this impact of American imperialism was not without desperate resistance by the other capitalists. Europe, now partially stabilized and rehabilitated, was giving ever sharper battle to the U.S. Under French and English leadership an attempt was made to organize a debtors bloc against Uncle Shylock. The reactionary French plan of a "United States of Europe" was but an attempt, among other things, to consolidate continental capitalism against the U.S. Many international cartels, (steel, chemical, radio, leather, wire, textiles, glass, zinc cement, potash etc.) have been formed to face the growing U.S. competition. And all the European countries now have very high tariff's on manufactured goods.

The resistance of reconstructed Europe to some extent was successful. In many fields (e.g. shipping) the U.S. has been checked. The share of the imports from the U.S. into the U.K. fell from 18.6% in values in 1925 to 14.7% in 1930 and to about 11% in 1933. Germany in 1923 imported 19.1% of her total imports from the U.S. In 1927, this had fallen to 14.7% and in 1933 to 9%. In spite of this, Europe still lagged far below its former strength both relatively and absolutely and, even though it was able to gain and surpass its pre-war production, it was only for a while and with a greater population than it had in 1913.

Today and all during the crisis starting in 1929 the resistance of Europe has taken still more drastic turns. Practically none of these countries is paying its debts to the U.S. The tariff walls have mounted still higher. In steel, the proportion of the U.S. to the rest of the world which had been 59.3% in 1920, and 47.2% in 1929 was 27.5% in 1932. It was even worse in pig iron where the U.S. fell from 58.9% of the total in 1920 and 43.7% in 1929 to 23% in 1932.

If in 1930 the world's foreign trade had fallen off 7.4%, that of the U.S. had fallen 11.7% and while in 1933 the world was off 65%, the U.S. had fallen 73.9%!

However, it must be noted here that the comparative loss in position is not due to the fact that the other countries have seized the markets of the U.S., but rather to the fact that the markets no longer exit and that each country is curtailing imports, pulling in its belt, in its desperate attempts to achieve self-sufficiency, to avoid complete ruin and bankruptcy and to hold on to whatever it has. The inflation policy of various exporting countries has also meant increased rivalry to the U.S., but this could happen only at a ruinous cost of lowering all the standards of these nations and of stripping them to the bone in order to dump their goods abroad in the foreign market.

The fact of the matter is, Europe cannot pull itself together to give battle to the U.S. Torn between the U.S. on the one hand and the S.U. on the other, Europe is self-divided, cannot unite itself, must be driven down further and further as a bankrupt tool of this or that greater historical force. The sole way out for the people of Europe is through a Soviet United States of Europe. It is only in this way that the European countries can recover their vanguard role.

In all this we can see that the U.S. has become a definitely indissoluble part of world capitalism, world markets, world division of labor. A crisis in the U.S. rapidly affects the rest of the world. Every disturbance abroad is reflected at home.

The U.S. is not an independent system. Over thirty articles absolutely necessary in time of war, over a hundred products normally purchased, cannot be obtained within the U.S. but must be imported. Of the total wealth of the U.S., about 7% is invested abroad (war debts, loans, branch factories, net foreign trade, etc.). All these facts show how closely the U.S. is linked up with the rest of the world. A revolutionary crisis in Europe must rapidly and violently affect the U.S. as well.

9. The Breaking-Up of the British Empire.

A gigantic struggle is being waged between the U.S. and the British Empire for world supremacy. It is a struggle over all parts of the world in every conceivable sphere of activity. In this struggle, the British Empire must continue to give ground and, as it loses its position of world supremacy, it must begin to crack within.

Emerging from the world war with a tremendous material loss both in goods and men, with an antiquated industrial technique and with increased competition, heavily in debt, Great Britain has never been able to regain her old position of before the war. Revolts in the colonies (India, China), the industrialization of other countries, the technological shift to means of production which Great Britain does not produce (shift from coal to oil, for example), coupled with the break-down of Europe after the war and the increased tariff rates all around, further aided to reduce the power of Great Britain. Added to this is the resistance that Labor puts to any drastic decrease in its income and the costly struggles that have followed (British General Strike 1926). In the foreign field, on the one hand, Germany, with the aid of the U.S., has rebuilt its economic machine so that it is now superior to what it was before the war. On the other hand, there has arisen the gigantic competition of the United States which is driving Great Britain before it especially in South America and even in the Dominions, notably Canada. On the third side, there has been the victory of the workers of the Soviet Union that has considerably weakened the position of British Capitalism. Finally, in Asia there is the increased competition in textiles, above all of the rising Japanese Imperialism.

On top of all this has come the present world crisis which has profoundly affected and weakened the British capitalist system. Although the drop in production and foreign trade is not so great nor so prolonged as in the U.S. and the number of unemployed is not so large, nevertheless Great Britain is in a far worse position to bear the strain and has never operated at "par" since the war. In the best of times, there were about 3,000,000 out of work, rising at times to 6,000,000 (we double the number given by the government as "registered"). The British public debt amounts to about 371/2 billion dollars or eleven times what it was before the war and is the highest of any country in the world. Even during "prosperity" (1924-1929) exports paid for only 69% of its imports and the balance was raised from the "invisible" imports (especially interest from capital invested abroad equal to one billion dollars a year). However, during the crisis, this income is cut down about half and linked to the moratoria on debts that had to be effected (Australia, South America, etc.) at the same time as the government budget showed a huge deficit (almost a billion dollars), forces the government of Britain to take drastic steps.

The Bank of England is forced off the gold standard. A sharp policy of forcing exports is entered into, through dumping and devaluation of the British money, making it profitable to buy from but not to sell to England! A bitter trade war is started with both the U.S. and Japan. In order to keep from slipping, Great Britain is forced to encircle the Empire with a tariff of 10% on wheat and meat to be placed on non-Empire goods and in this way to try to hold the British Empire together. At the same time, debts to the U.S. are factually cancelled.

This can not be done without drastic changes within Great Britain as well. The taxes on low incomes are increased, the pay of workers and government officials is cut down. The social insurance is reduced by 10% and consumption taxes are placed on articles needed by masses, etc. This steady drift to the right is marked also by the formation of the National Government and the end of the Labor Government, coupled with the rise of a British Fascist movement. Both the National Government from above and the Mosley Black Shirts from below show definite fascist symptoms, in turn demonstrating the disintegration of the British Empire.

All of these changes bring in their train their own contradictions. The rioting in Belfast, Glasgow and London, the mutiny in the fleet, the drift to the left of such labor organizations as the I.L.P., the split with Ireland and the adoption of the Statute of Westminster recognizing the constitutional independence and equality of the Dominions with Great Britain, all show that British capitalism is not able to deter the rate of disintegration. While it is true that Great Britain has been able to retrieve some of the ground lost to the U.S. after the war in the British Dominions, this has been done at great cost and has been more than compensated for by the steady loss of ground to the U.S. in Asia, (China, Japan) while in South America the fight rages fiercer than ever, Great Britain attempting to consolidate itself in Argentina, the U.S. in Brazil. (See Appendix C)

Political battles grow coincident with the growth of economic competition. Faced with the loss of Germany and Japan and with the present and former hostility to it of the U.S. and the Soviet Union, the League of Nations dominated in the first place by Great Britain, has completely broken down as a world instrument of control. A feverish military and naval race has begun. To counter the growth of American influence in Asia, Great Britain has tolerated the partition of China and the hacking apart of Manchuria. In reply to the recognition of Russia by the United States, Great Britain has allowed France to bring the Soviets into the League of Nations. In answer to the German-United States understandings, Great Britain has tolerated all sorts of adventures by Italy, even to the point of war itself. The perspective for the British Empire can only be one of further disintegration, adventurism and sharp growth of the class struggle.

An excellent illustration of this is the break with Ireland. The pressure of the crisis has caused the reactionary Imperialist group to give way to the petty-bourgeois regime of De Valera and the Fianna Fail. The oath of allegiance to the King has been rejected, the annuities from the lands due to the English have not been turned over, a veritable tariff war is on between Great Britain and Ireland. Within Ireland, the pressure of the masses must force the regime further and further to the left towards a republic, completely independent of Great Britain, and indivisibly embracing all of Ireland, for a moratorium on all debts and for the necessary social measures to alleviate the condition of the masses. Already, to the left and behind De Valera, the Irish Republican Army and Irish Labor are mobilizing, while the Imperialist forces are well on the road to the construction of a Fascist counter-army supported by Ulster and Great Britain. The split of Ireland from the British Imperialist system can never be tolerated without war and Fascism. Such a head-on collision is steadily maturing.

Raising the slogan of a Democratic Republic to which must be added demands for a complete system of social reform and insurance, the Communists must fight above all for the arming of the people and the formation of a workers militia as the only way to protect the independence of Ireland. At the same time, now is the time to raise high the demand for the nationalization of the key industries and workers control over them. Working hand in hand with the poor agrarians and intimately bound up with the toilers of all Ireland, the Communists must do their best to insure that the Irish Labor and Revolutionary movement will win the full support for its cause in both Britain and America. Only through the united support of the workers of Britain and the U.S. can the democratic revolution be pushed through and made permanent by the victory of the proletariat in Ireland in alliance with the peasantry.

10. The Break-Down of Europe.

The world war left Europe exhausted, divided between victorious and conquered powers, artificially bound in the straight-jacket of the Versailles Treaty, torn with internal dissentions and civil wars, unable to regain its world position and ground between the Soviet Union on the one hand and the United States on the other. For Europe the world economic crisis rapidly becomes transformed into a gigantic political one. The Fascistization of middle Europe, the break-down of all stable alliances, the feverish preparations for war and the day-to-day adventures undertaken by desperate sections of the bourgeoisie and finally, the reopening of all the old sores of the last war and the transformation of the new countries created by the Versailles Treaty into veritable explosion points, indicate that the sole way out for Europe is either violent social readjustment or collapse.

11. The Fascistization of Germany and Middle Europe.

The keystone of the arch of capitalist Europe was Germany and the desperate plight of that country is ample illustration of the ruin of political stability in Europe. In many respects Germany was the decisive country in Europe. After the war, defeated and despoiled,

Germany was a weak link in the European capitalist chain. Had Germany turned Soviet in 1918, it would have plunged the whole world into war on the question of world Soviets or world capitalism. However, the defeat of the German revolution of 1923 marked a definite turning point in world history and was the sign of the temporary stabilization of capitalism. Only by the great help of the United States was Germany able to rehabilitate itself.

No country was objectively more ripe for Socialism than Germany after the war. In no country was State and trust capital so highly developed. No country was so heavily saddled with foreign debts and reparations. In no industrialized country had the income and standards of living of the masses fallen so far below the prewar standards nor had their savings and reserves been so entirely depleted by inflation and other measures as in Germany. On the other hand, unfit and untested themselves, the industrialist capitalists of Germany had lost their professional rulers, the Junker, Kaiser cliques. Frightened and disarmed, they had turned over the power to the Socialists who had saved the day for them. On the other hand, the German working class was the most powerful and important of all Europe, the most strongly organized and held the majority of the decisive districts. Having a high political level, disciplined through periods of war and revolution, six million of them voted Communist and eight million Socialist.

The world economic crisis struck Germany, as a weak, defeated country, with frightful force. As in the U.S., production fell about 50% below 1929 and the number of registered unemployed equaled six million (perhaps ten to twelve million in all). The German capitalist system was faced either with complete bankruptcy or with revolution unless it could reestablish its place in the sun as an imperialist power. The sole way out for the German bourgeoisie was the way of Fascism.

The triumph of Fascism in Germany could come about only by the complete collapse of all working class organizations and the capitulation of the Communist International without even a fight. Upon its victory, German Fascism at once proceeded to smash all working class organizations to atoms, to drive the revolutionary forces completely underground and drastically to cut down the costly measures of social insurance and labor protection which the workers had been able to win for themselves.

The victory of Fascism also means the end of the Versailles Treaty, the smashing of the authority of the League of Nations and the termination of all reparation payments and a moratorium on the payment of interest of all debts. Simultaneously, there is necessary the complete mobilization of the German nation on a war basis. Provocation's against the Jews, against Austria, on the Rhine, in East Prussia, steady constant reorganization of the social life within the country have been the inevitable breath of life of German Fascism.

The victory of Fascism in Germany has raised all the contradictions and antagonisms within Europe to an unbearable tension which must break in the very near future. Fascism in Germany means Fascism in all of middle Europe and reaction in all the capitalist countries. Already Fascism has conquered Austria and has become immeasurably strengthened in Estonia, Latvia, Finland, Bulgaria, Yugoslavia and Romania. Fascist tendencies are now a considerable force in France. In Spain, the correlation of forces has taken a definite reactionary swing.

The victory of German Fascism can only mean a militant effort to regain the Saar and to incorporate Austria. Efforts to deal with Poland, e.g., to give Poland Lithuania and another part of the Ukraine in return for a united front against the Soviet Union are being made. The urge for expansion to the East has been greatly heightened. Fascism raises again in their most violent form all the contradictions that led to the last world war.

The crushing of the trade unions and other working class organizations has led to a terrific defeat of the worlds revolutionary forces and the breakdown of any adequate international defense of the Soviet Union. Unprotected by any mass organization of the European working class, the Soviet Union finds itself in an extremely weakened position. All the international brakes to war and counter-revolution have been broken to bits.

Within Germany the Fascist regime has only greatly intensified the crisis and its effects. Within a year the gold coverage for paper money has fallen from 23.7% to 2% and Germany is on the eve of an open inflation which no decrees, no matter how drastic, can stave off. Instead of a favorable balance of trade there has been a large adverse balance, so great as to amount to a catastrophic situation. Already Hitler has to declare that Germany will be forced to rely on the ingenuity of its inventors as it did during the war. Clothing is being made of paper stuff as before. Imports have dropped so as to amount to a virtual standstill of trade and negotiations over eventual debt payments have reached a complete deadlock.

In spite of imminent bankruptcy, Germany has greatly increased her military budget over 100% and a hectic importation of war materials, rearming of the population, reconstruction of her army and navy have begun. All thoughts of disarmament have disappeared, and the disarmament conferences have resolved themselves into laughing-stocks. The whole weight of the German machine has been employed for the breaking of the will of the masses and their transformation into cannon fodder.

The "First Hitler Revolution" has been followed by a "Second" one in which Hitler has definitely smashed any idea on the part of his petty bourgeois followers that they will have any decisive voice in the policy of German Imperialism. Having cut down the wages, and cut in half the unemployment insurance and other benefits, having greatly increased the intensity of labor and established national compulsory labor, having greatly raised the price of commodities needed by the masses while steadily reducing the per capita income, Hitler has now moved against the very petty bourgeois dupes who were his supporters, culminating in the execution of Strasser, Roehm and other spokesmen of the desperate little man turned Fascist. At the same time new and enormous privileges have been accorded the Junker and the Industrialist who now openly control the political affairs of the country. In every respect then, the crisis has reached such a sharp point as can only lead to a breakdown in the near future.

12. European Explosion Points.

The rise of Fascism has broken down the last semblance of order and stability in Europe. The termination of the Versailles system has brought to a head all the antagonisms of a Balkanized Europe, each one of which may be a starting point of world war.

Most extreme is the Austrian situation. Constantly on the verge of bankruptcy, torn between the aspirations of German and Italian Fascism, the pawn of world diplomacy and intrigue, Austria has become the vortex of the capitalist whirlpool. The victory of Austrian Fascism and the destruction of the Socialist and proletarian organizations have moved the bourgeoisie of Austria step by step further to the right. Tied very closely to the economy of Germany without which it cannot live, Austria is violently divorced from the German system by the victorious powers. Within Austria, the position of the ruling clique becomes more and more intolerable. Social explosions have followed one upon the other and no perspective other than perpetual turmoil and strife can be seen unless the problem is definitely solved. The capitalist solution is either by the restoration of the old Austro-Hungarian Empire or annexation to Germany.

In either case the old Versailles system is no more. The Austrian situation has revealed the antipathy of France and Czechoslovakia to Yugoslavia, of Yugoslavia to Italy, of Italy to Czechoslovakia. The old Little Entente combination has been broken up and even the French-Polish alliance is threatened with a new counter alliance between Germany and Poland as the conflict between Poland and Lithuania grows more acute. All is now chaos and confusion, the new groupings and alliances are no longer on the basis of order but on the basis of war.

Other explosion points are the Polish-Lithuanian controversy, French-Italian rivalry in the Mediterranean, etc.

13. France is Next in Order.

The intensity of the world crisis and the rise of Fascism have placed the most severe burdens upon the French capitalist system. All signs point to a rise of a revolutionary situation within France in which Fascism and Communism have to fight it out. The solution of these conflicts will have world wide and perhaps decisive significance.

Although one of the very last countries to be drawn into the crisis, due to exceptional economic conditions, such as the high development of usurer capital, the big reparations payments, etc., France was soon reduced to about 60% of its peak production of prosperity days, dropping very sharply after 1931 and revealing an unemployment of at least 2,000,000 workers. Bankruptcies and receiverships mounted to almost 1,500 a month. Although trade fell, high import surpluses were accumulated, (in 1933 it was 10 billion francs or about half a billion dollars), which could not easily be paid for, due to the drastic drop in tourist income, the cessation of reparation payments, the great lowering of investment incomes, the intensified tariff wars and other losses.

To the 300 billion francs public debt the French Government is forced to add the annually mounting deficits. In spite of drastic efforts to reduce the import surplus, to cut down governmental expenditures and the refusal to pay its debts to the U.S., the French Government financial obligations continue to rise until France is threatened with a drain of gold and the necessity also to go off the gold standard. However, the French, already having liquidated debts after the war by 80%, can go off the gold standard and try inflation again, only by the greatest social convulsions. As the cost of living remains high and the effects of the crisis make themselves felt more, France, with Fascist Germany at its right, and the Spanish Revolution at its left finds itself in a critical transition period.

To the internal difficulties are to be added the external, the loss of the Saar Basin, the rise of German Imperialist Fascism, the rising influence of Italian competition in the Mediterranean, the break-up of French continental hegemony, the necessity to bolster up the puppet countries supported by France for its protection, the need for increased military preparations. It is no wonder that France feels that it will be the next capitalist country to crack and the class formations are crystallizing themselves accordingly.

Already the Stavisky affair (February l934) demonstrates that the Right wing, Royalists and Fascists, are well prepared to take the offensive. As in Austria, and before that in Germany, gradually the government is moving to the right, carefully preparing its base before taking the next step, etc. On the other hand, the French toiling masses have also learned from the experience of the past few years. The perspective is that Fascism will not arrive in France without a fight. Already the united front of all working class organizations is on the road of being created. By no means is the victory assured for the bourgeoisie. Here again, the decisive force lies with the working class and above all with the revolutionary Communists. At the same time, a victory of the proletariat in France must have tremendous and indeed decisive repercussions throughout all of Europe and the entire world.

14. Revolution in Spain.

First of all in Europe was Spain to illustrate the law that the present economic crisis had reached the breaking point and had become transformed into a revolutionary crisis. For four years the revolution has been going on, remaining for the most part in a sort of Kerensky period. Up to now the workers have been able to crush the counter-revolutionary attempts and to preserve the Republic, and on the other hand they have not been able to establish Soviets, or even to enforce the radical decisions of the Republic for the separation of Church and State, the dissolution of the Church orders, the Catalonian question, the cleansing of the army and the formation of a people's militia, the break-up of the large agrarian estates, the arrest of counter-revolutionaries and fascists etc.

It is clear that this unstable equilibrium cannot last very long. With the turn to Fascism that Europe has taken, all the elements of reaction have raised their heads within Spain and step-by-step are driving back the revolutionary elements. To counter this, as in France, there is absolutely necessary the united front of the working class, the most intransigent fight, not only against Stalinism but also against the criminal adventurism of Anarcho-Syndicalism and the betrayals of Social-Democracy. Here again, the cardinal point to stress is that the democratic revolution cannot long exist without Soviets, i.e. the dictatorship of the proletariat in alliance with the peasantry.

15. The Breaking Point in the Far East --- The Manchurian Adventure.

Although seemingly the first to get out of the crisis and now actually experiencing a great boom, this boom which Japan is enjoying is based on the double effect of an inflation and war economy. As such a boom it really signifies a reduction of national wealth and its waste in unproductive purposes. Second, the great increase of exports on an inflationist basis means commodities are being sold abroad below their real value and at the great expense of the masses.

Of all the great powers Japan was least of all able to withstand the shock of the world crisis. In its extremely unbalanced economy, relying mainly upon the export of silk: (which occupies 20% of the country's factory operatives and makes up 40% of its exports), a commodity especially hit by the crisis, and its great underproduction of the means of production (Japan produces 21/2% of the steel produced by the U.S.), Japan was early forced into desperate measures. Both exports and imports had dropped to 1/3 of 1929, especially silk which is exported mainly (30-40%) to the U.S. The task became imperative to end Japan's reliance upon the U.S., to find new markets, to develop other commodities, to become self efficient in basic materials, both in respect to iron and steel, and to food. All this is intensified by the heavy import surplus, the rise in the national debt and increased expenses of government.

The economic pressure became aggravated by the political situation, international and internal. On the foreign front Japan had received many defeats. Its alliance with Great Britain had been broken. Its attempts to raise its naval strength above 60% of that of the U.S. had been frustrated. In China a boycott had been launched against it. In Manchuria the war lords were moving closer to Nanking. Russia and the U.S. were winning the markets and Chinese railways were paralleling the Japanese. Internally, Japanese capitalism was ridden by a militaristic Mikado clique with a form of government as out of date as that of the Czar. In the saddle was an extremely reactionary military landlordism supporting the Bonapartist regime of the Mikado. This unbridled military chauvinism could only welcome war.

Just as Japan's economy was unhealthy, so were the relationship of class forces, for the capitalists. Two big concerns, literally twelve men control practically everything economic in Japan (38% of the commercial bank deposits, 73% of the trust properties, etc.). On the other hand the average income per head of population is on the level of the poorest counties in Europe.

By 1931 Japan, forced off the gold standard, was able, by ruthlessly driving down the masses, to make a great step forward in winning the markets. Greatly extending rationalization of its industry, reducing the number of workers running the same textile machinery by 43%, at the same time speeding up all machinery, paying wages 1/7 of those of Great Britain and cutting the wages 52% while stepping up the cost of living 10%, Japan is able to reach first place in cotton textiles, surpassing even Great Britain and rapidly dominating Asia, increasing its share in India and even in South America. By such aggressive measures Japan has shoved up its proportion of world exports by over 25%.

At the same time and for similar reasons Japan was forced into its Manchurian adventure from which there is no retreat and no way out save war.

The invasion of Manchuria by imperialist Japan marks a critical moment in capitalist post-war history. It has proved again that under the pressure of the crisis the weaker countries become still weaker and further penetrated by the leading powers. The debtor countries become further indebted, the colonies and semi-colonies still more enslaved, the struggle among the leading powers more intense. The greatly increased political instability is one of the direct results of the crisis and is the clearest indication of how transient and ephemeral the much vaunted "stabilization of capitalism" is.

The new aggressive acts by Japan are not due to a sudden change of policy. On the contrary they are but the culmination of carefully laid imperialist plans that date from the Russo-Japanese war. The seizure of Sakhaline, Korea, various Chinese concessions, Kiao-chow, and the Manchurian Southern railway, the all-rounded economic penetration of Manchuria attempted and the support formerly given the Manchurian militarists all show that Japan was but waiting for the proper co-relation of forces in order to seize Manchuria outright as one of her possessions as she has done to Korea.

The present opportunity is extremely ripe for action by the Japanese militarists due to the extreme chaos to which China has been reduced by famine, floods, constant civil war among the military generals desolating the countryside and shattering any central unified power. Within the Nanking government goes on a most corrupt and unprincipled intriguing for power by the various cliques, egged on by the great imperialist powers of the world. The struggles of these militarists both within and against the Nanking government are only the forerunners of the open attempts of the main imperialist powers physically to dismember and to partition China. Such a partition would conceivably allocate the north of China to Japan, the coast and central parts to Great Britain and sections of the south to France. Against these attempts stand the division of the imperialists, especially the United States, which having come into China late and seized no large territory and yet having a great economic superiority and burdened with "democratic" and "non-imperialist" pretensions must support the Nanking regime and temporarily fight for the open-door policy. The second great force preventing the partition of China is the revolutionary movement still strong in China.

The latest outrage of Japan, prelude as it is to a general dismemberment of China by all the imperialists, should Japan be successful, must be resisted with all the force of the Chinese toiling masses, led by the Chinese proletariat, whose vanguard must be the Communists. War by the Chinese people against Japan is the only form such resistance can take effectively. Such a war by the Chinese people against Japanese militarism can only be welcomed by the toiling masses and proletariat all over the world. Such a war would have a most salutary effect on all the struggles of the oppressed colonial peoples for freedom (India, Philippines, Korea, Siam, etc.). A war by the Chinese people is a war of colonials against imperialists, and must be supported by the revolutionary forces of the world.

The betrayal of this war by the Chinese military leaders has been a terrific blow to the masses. It has hastened the dismemberment of China. Already Yunan has been seized by the French, Szechwan by the English Tibetans and a bid made for Chinese Turkestan. However the temporary victory of Japan has greatly intensified all capitalist rivalries, especially between Japan and the U.S. At the same time it has greatly increased the internal crisis in China and the revolutionary movement there. Finally, the temporary victory of Japan has sharpened the antagonisms between Japan and the Soviet Union. The seizure of Manchuria and Inner Mongolia offers imperialism a consolidated base of attack against the Chinese Eastern Railway. It is a thrust to split Siberia, a menace to Outer Mongolia (under Soviets), a move at Turkestan and a threat of outflanking the Communist forces within China. Victory by Japan imperils the whole Soviet Union, the Workers Fatherland against which victory the proletariat of the world must fight.

In all their actions regarding the Sino-Japanese conflict the Communists must start from the understanding that the Chinese people must be supported against Japan. The Chinese Communists must take the lead in demanding support and in mobilizing the masses for struggle against Japan. But war against Japan must be only a starting point. In its seizure of Manchuria and Inner Mongolia, Japanese imperialism but carries into action the fondest dreams of imperialism's, especially that of the U.S.A. War against Japan by the Chinese people must be coupled with the demand that all imperialist powers get out of China including the United States.

The Chinese proletariat and Communist movement must firmly hold to the point that the puppet imperialist tools which compose the Chiang Kai Shek government can war effectively neither against Japanese nor against any other imperialism. Struggle against Japan must be linked up with a drive to exterminate the Chiang Kai Shek Nationalist Government. Not the mercenary armies of Chiang Kai Shek but only the armed people can drive off the Japanese, the Americans and other bloodhounds and can make impossible any extended seizure of large Chinese territory.

As the proletariat of the whole world must support the Chinese masses in their war against imperialism, particularly does the duty fall upon the workers of the Soviet Union. The Soviet Union as the first victorious proletarian regime has the unconditional duty to aid the proletariat and the oppressed peoples of the world.

The international proletariat and Communist movement must raise the demands: All aid to the Chinese toiling masses; out with all imperialists from China; defend the Soviet Union. Should there be a war against the Soviet Union by Japan alone or by Japan together with other countries (Germany, for example), all forces must be directed to aid the Workers Republic of the Soviet Union, and to change the imperialist war to civil war against the capitalists at home.

The proletariat and Communists in the U.S.A. have a particularly grave responsibility. We must go further than the demands "hands off China" and "stop the dismemberment of China", but must demand the immediate restoration to the Chinese people of all the concessions seized by the U.S. government together with the immediate liberation of the Philippines and other colonies of the U.S. We must aid the revolt of the masses in those colonies and must explode the chicanery and hypocrisy of the U.S. government pretensions in the Far East. Further, we must fight against the U.S.-Nanking or other militarist alliances and must support the cry of the Chinese people: Down with the Nanking and other Militarist Puppet cliques.

Finally, the American workers must raise the slogan: Full aid to the Chinese masses (especially those in Soviet China) in their struggle against all imperialism (Japanese, American and other). Supporting the Chinese people, the working class must demand the complete prohibition of Japanese trade to this country and that large military supplies be given to the Chinese people (Soviet China).

Due to conflicting imperialist interests in Manchuria, war may result between the U.S. and Japan, especially if the Soviet Union has not yet entered the conflict. It is clear that such a war between the governments of the U.S. and Japan will be only a war between two robbers over the question which shall plunder China. The American government reeking with the blood of the Chinese masses cannot aid the Chinese people. Not in the least fooled by the hypocritical phrases that will be employed by the U.S. government, the workers of that country must do all in their power to overthrow U.S. capitalism, just as the toilers of China must overthrow the Chiang-Kai shek and other militarist cliques. Only a workers government in the U.S. can effectively war against Japanese imperialism and effectively support the Chinese and Russian Revolutions.

War with Japan must not mitigate the class struggle at home. It must intensify the class struggles eventually to reach the stage of a struggle for state power. As a preliminary stage to this final struggle, the working class must demand the arming of the working population in time of war, the confiscation of all war industries and workers control over those industries, a 100% inheritance and profit tax and an extremely heavy general property tax. Hand in hand with these demands must go the strongest demand for the extension of support to the Soviet Union.

We must emphasize that no Communist organization can support the capitalist government of the U.S. in either peace or war. In raising the demand for the support of the Soviet Union or of the Chinese Revolution, the Communists strengthen those forces which will aid in overthrowing U.S. capitalism. Should the U.S. government declare war against a country already at war with the Soviet Union or the Chinese Revolution, it is the duty of the Communists, while not opposing such a war which would be historically progressive, to overthrow the U.S. imperialists and to establish the proletarian dictatorship. The proletariat of the U.S. can not be opposed to a war against Japan when Japan wars against the Soviet Union. All the more must it be the duty of the U.S. working class to take matters into its own hands and control the government so as to insure the defeat of all imperialist forces.

Unless the workers take over power, the war of the U.S. government against Japan will be a war between two imperialist forces. In such a case the American soldiers must aid the Chinese people to defeat both American and Japanese imperialists. The American soldiers must fraternize with the Japanese. Both must refuse to shoot each other or the Chinese people at the behest of their officers and must take over control of affairs themselves.

An extraordinarily difficult task lies before the Japanese proletariat. Ruled by an all-powerful military caste allied with the bourgeoisie, relatively weak and untried, the Japanese proletariat must check the Japanese imperialism and transform the war into a civil war. It must aid the Soviet Union and refuse to shoot the Chinese. It must fraternize with the American soldiers and both must agree not to shoot each other. The Japanese proletariat must do all in its power to stimulate revolt in Korea, Formosa and other Japanese colonies. It must work for the defeat of its government and for a Soviet regime.

Within Japan, the frightful pressure of the world crisis, Manchurian war and inflation has greatly sharpened all the antagonisms. The Manchurian war alone is taking up the whole income of the Japanese government. With 32% of the peasant's income going to the State in taxes, loaded as he is with a debt of 6,000,000,000 yen (and an interest rate rarely under 10%) and chained in a semi-feudal condition, with the workers regimented in barracks, increasingly exploited, the Japanese scene is pregnant with discontent and revolution. While Fascism is growing rapidly, 2000 strikes last year and 30,000 political arrests in five years attest to the revolutionary vitality of the masses.

16. Chaos and Civil War in China.

It is now abundantly clear that the Chinese masses are recovering from the crushing defeat of 1927. In spite of all the forces launched against them, the huge peasant guerilla warfare waged in the interior of China is more than holding its own. The Communists must stimulate, support, organize and lead this peasant movement. On the other hand, it must be clear that no matter how much the imperialists and native Chinese rulers may be weakened, armed peasant bands cannot take the place of mass peasant uprisings, the peasant movement cannot take the place of a proletarian struggle and peasant "Soviets" cannot take the place of the dictatorship of the proletariat.

The events of the Manchurian war have greatly agitated the masses against the ruling regime. The heroism of the rank and file defenders of Chapei and Woosung and the Manchurian guerilla warfare are giving confidence to the Chinese toilers matched only by their oppression.

The basic slogans for the masses today must be Lenin's three pillars, that is, a basic slogan for the proletariat (say the eight hour day), a basic slogan for the peasantry (confiscation of land and annulment of debts) and the slogan of Democratic Republic. Today the slogan of Constituent Assembly is still correct. At the same time there must be brought forth the slogan of ousting of all foreign imperialists and effecting the complete independence and unity of China.

The struggle for a constituent assembly and the "three pillars" must go hand in hand with the demand to arm the Chinese toilers. The struggle against Japan must be a struggle for the carrying out of a revolutionary agrarian program, for the legalization of the trade union movement, for social insurance for the workers and other measures of reform. War against Japan must be combined with civil war in town and country for Soviets. This combined struggle, starting with a vigorous boycott and confiscation of all imperialist and capitalist property and a proletarian Soviet regime.

17. Ferment in India.

The international export of capital has but greatly intensified the uneven development of capitalism and sharpened its contradictions. The flood of capital to the various colonies, far from de-colonizing these countries, has emphasized their colonial status. Under the impact of this import of capital, the colonies are becoming industrialized. But the industrialization does not result in an all-rounded development of these colonies. On the contrary, this rounded development becomes thoroughly checked. The colonies live but for the imperialist country. The most reactionary elements (feudal-military regime, userer, country gentry, et al.) are all the more firmly foisted upon the masses. The native bourgeoisie becomes thoroughly penetrated by foreign capital. In the main it is but in fact the tool of the foreign imperialists. The formation of large scale factories, on the other hand, brings forth a strong and modern independent proletariat

India is a classic example. The terrible degradation of India has led to a deep-seated ferment that can only culminate in revolutionary explosions. Official figures show in the first 25 years of the 20^th century, 80 million people died of hunger in India. It is estimated that the wealth of India today is one-third less than before the war and the per capita income even during "prosperity" was but $70 a year (compared with $2600.00 in the U.S.). The betrayals of Gandhi & Co., the collapse of the civil disobedience and passive resistance movements have only deepened and revolutionized the movement still farther.

As in China, the slogans of the "three pillar" and Constituent Assembly are still correct. However, more than in China, the slogan of Constituent Assembly can be used correctly only in conjunction with the slogan for a Democratic Republic, in view of the maneuvers of British Imperialism.

The slogan of Soviets can be appropriate only when a sufficiently acute revolutionary situation has been engendered around the "three pillars", when the class struggle and civil war rage in the villages and towns. In this connection, it must be emphasized that Soviets can be built even while using the slogan of Constituent Assembly. The two slogans need not be antagonistic at all times. But what must be stressed is the actual organization of civil war in the village and town and the leadership of the proletariat in this civil war. Only the dictatorship of the proletariat in India can make permanent its revolution.

The Communists must make plain to the masses the role of the nationalistic Indian bourgeoisie and the role of Gandhi as an agent of this class. Not only the experience of 1921 must be gone over, but all the treacherous actions since then (the salt campaign, the anti-machine movement, passive resistance, opposition to workers interests, record at the nationalistic Congresses, the truce with England, etc.) must be elaborated. Simultaneously mass movements in town and country against native usurers, gentry, well-to-do peasants, bourgeoisie, must be effected. By no means must the Chiang Kai shek disaster be repeated. The criminal mistake of the Comintern in building up worker-peasant parties instead of Communist Parties must be liquidated. It is not our business to organize peasant parties.

The main task of the Communists must be the smashing of all caste and religious barriers and the stimulation of movements of the masses around the "Three 'Pillars" and freedom slogans. These movements directed against both native and foreign rulers and bourgeoisie, must soon cause the break with any united front with the native bourgeoisie who may desire merely "freedom for India from the British". In spite of the fact that this break is inevitable, so long as a section of the nationalist Indian bourgeoisie is heading the fight against British Imperialism under the slogan of "Freedom for India" from Imperialist rule, it is necessary for the Communists to enter into this united front. As long as this movement unleashes the energy of the masses which otherwise could not be unleashed, as long as the masses have not been actively mobilized around the correct slogans and while the exposure of the native bourgeoisie is but in its incipiency, the Communists must enter national revolutionary movements. The center of attack must be against British Imperialism and its conscious reactionary agents.

18. Revolution in Cuba.

As in the colonies of Great Britain, similarly has the pressure of the crisis been felt by the colonies of the United States, particularly Cuba. The overthrow of the Machado regime has unleashed all the fury of popular revolt. Within Cuba itself there is no class capable of stopping the revolution, and step by step, through De Cespedes, Grau San Martin and now Mendieta, the revolution is deepening and strengthening itself. It is now the task of the proletariat to take the leadership over the petty-bourgeoisie, of the soldier over the non-commissioned officer.

The Cuban revolution has already reached the position of a dual power existing within the country. The governmental regime of itself cannot control the situation, it must look to the trade unions and mass organizations of toilers where real power lies. But, as in Spain, the Anarcho-Syndicalists infesting the trade union movement have refused to move to the seizure of State power and under their control the proletariat still plays but a secondary influence.

In the light of the above situation the tasks of the Communists must be: first, the raising of the slogan of Soviets; second, the arming of the people and a workers militia; third, a vigorous attack against the forces of the counter-revolution with the confiscation of their estates; fourth, complete social insurance culminating in workers control over industry, which, in turn, can be only a transition towards the dictatorship of the proletariat.

With all the force at its command the proletariat and revolutionary organizations must destroy the Stalinist program which declares that the aim of the Communist Party of Cuba is to buy off American intervention by directing the chief blow of the revolutionary masses not against American Imperialism but against the local Cuban ruling classes. The Communist Party of Cuba declares that it is inadvisable for the workers to seize American enterprises and that it must fight instead and above all for considerable reductions of the rent of the plantations owned by American capital. With such a program, there is no group more capable of beheading the Cuban revolution than the Stalinists. The Cuban Stalinist Party must be completely annihilated before the working class of Cuba will be able to accomplish its goal.

19. Wars and Perpetual Turmoil in South America.

Practically all of the South and Central American countries have experienced "palace" revolutions and revolts as a result of the profound political crisis into which they have been flung. These coups d' etat demonstrate, on the one hand, the struggle between the United States and Great Britain; on the other hand, they show the desperate plight of these countries and the growing hostility of the masses to the ruling regimes. The desperate war over the Chaco region has sharpened this situation.

20. The economic effects of the crisis must only aggravate the very causes that lead to the present crisis and lay the basis for still greater catastrophes. All countries have greatly increased their rationalization of industry, with its trustification, its wage cuts and increased speed-ups. This has been greatly aggravated by the advent of Fascism. Secondly, the struggle for markets has reached its most acute stage since the war. Thirdly, the uneven development between industrial and agrarian countries, etc., has become still more aggravated. The complete failure of all disarmament conferences and the feverish war activity in all countries show us that we are racing headlong to a world smash-up. World war is on the order of the day. The effect of the crisis has been to sharpen tremendously the internal contradictions in all the leading capitalist countries of Europe. Preparing for the most violent conflicts, Fascism is strengthening itself in all the countries of the world.

Chapter III

THE INTERNATIONAL MENACE OF FASCISM

21. The Origin of Fascism.

Historically, Fascism appears as a dominant movement in those countries which, next to the Soviet Union, were the weakest links in the imperialist chain which the masses were breaking. Fascism is thus a post war movement basically directed against Communism and formed by the bourgeoisie to liquidate the proletarian revolution threatening its power. For Fascism to arise the following characteristics had to be present: (a) instability of capitalist relationships, (b) a considerable number of declassed social elements (such as ex-soldiers and officers), (c) pauperization of the urban petty-bourgeoisie and intelligentsia, (d) crisis among the peasantry, (e) threatening proletarian action to seize and to hold state power.

Fascism first arose in countries predominantly agrarian though with a well developed industry and commerce (Italy, semi-Fascist Poland). Fascism, with its merging of all interests of bourgeois society within itself alone, arises only because of (1) the great pressure of international finance capital, (2) the decisive role of large scale corporate and trustified industry (where interest bearing capital supersedes entrepreneur capital) in the country, (3) the desperate crisis within the bourgeois ranks and the prime necessity to take advantage of the breathing spaces granted it by the muddled actions of the proletariat. All of these conditions forced all conflicting bourgeois interests temporarily to unite in order to mobilize all layers of the petty-bourgeoisie for violent struggle against the proletariat.

22. Fascism and the State.

Fascism accelerates state capitalism, although even before the war and especially during the war and immediately afterward state capitalism and public property had grown enormously in all countries. Reactionary imperialist monopoly capitalism had already taken away the economic basis for the "checks and balances" system of the 19^th century with its "oppositions", its many independent parties, its everlasting debates due to the conflict of competitive interests in business. The war had emphasized the complete bankruptcy of political liberalism. Fascism, however, is the violent development of corporate and state capitalism creating its own governmental form.

Fascism is the open dictatorship of the bourgeoisie, with the aid of the petty bourgeoisie, against the workers. It comes at a time when capitalism has no further use for its classical parliamentarianism and when "democracy" as a bourgeois class State had become thoroughly exposed to the masses.

Fascism openly replaces the "democratic" slogans of "Liberty, Equality, Fraternity" with the slogans of "Responsibility, Hierarchy, Discipline". Instead of the peaceful and legal "action of the majority", Fascism replaced this liberalism with the open call for violent action of the minority.

Fascism, then, builds up a complete theory of nationalization of capital, of the untramelled corporate or totalitarian state, of compulsory class collaboration (with its prohibition of strikes, murder of militant workers, breaking up of all workers' organizations etc.) and of the dominant role of religion in State and social life.

23. Fascism and Social Democracy.

Fascism and Social-Democracy (with Syndicalism) are the right and left arms of the bourgeoisie. Nevertheless, nothing marks better the collapse of the Communist International than its identification of Social-Democracy and Fascism by means of the theory of "Social Fascism". Fascism has an entirely different role than Social Democracy. While Fascism is a violent minority attack from above, with forces recruited mainly outside the working class, Social Democracy is a passive reformist movement demoralizing the ranks of the workers from within.

Fascism, from its very beginning, borrows its political program, its social demagogy from the reformist Socialists. The bourgeoisie, through the Fascists, in their desperate efforts to secure time, are willing to promise everything. A good example is Mussolini's original 1919 platform which stood, among other things, for universal suffrage for men and woman, proportional representation, reduction of age of deputies, abolition of the Senate, economic councils with legislative powers elected by professional groups, eight hour day by law, management of industries by workers organizations which prove capable of it (that is, some form of workers control over production), nationalization of munitions plants, heavy capital levy, confiscation of certain church property and abolition of certain clerical privileges, heavy inheritance tax, seizure of 85% of war profits and revision of military contracts, for a republic! The central slogan was issued "Class peace in production, class war in distribution."

The Fascists show the same demagogic flexibility in their tactics. They give special place to the ex-soldier. They even pretend to lead some strikes and to aid the peasantry in confiscating the large landed estates. In Italy, leading Fascists, after the seizure of power, proposed unemployment bureaus, no discharge of workers at will of employers after trial, classification of workers and minimum wage, standard hour wage rates, one week vacation, sickness, death, unemployment and other insurance, etc.

Reformist Social Democracy prepares the ground for and aids Fascism. The Socialists attacks on Russia and on Communism, their class collaboration practices, their national Socialism, their concrete support of all sorts of rationalization schemes and compulsory arbitration, their theory of "State Socialism" with compensation to owners; these theories and practices prepare the ideological and tactical basis for Fascism. (Note the formation of "Socialist-Fascists" who affirm Fascism is the first step to Socialism.) Dependent upon the given relationship of forces, the bourgeoisie has used now Social-Democracy, now Fascism to defeat the workers.

24. Fascism and the Trade Unions

The Fascist "unions" like "company unions" are not really unions at all but strike-breaking, stool-pigeon organizations. The Fascist "unions" differ from "company unions" in that the former are national industrial bodies. Under the Fascists, the regimentation of the workers becomes more complete. The "unions" become connected with the State, their contracts recognized by law.

The Fascist "unions" (officially religious) supplement the criminal work of the "Catholic" or "Christian" unions. Both are class collaboration agencies, the latter demoralize the workers with pacifist persuasion or religious non-resistance; the former aid the capitalists with violent attacks in every possible manner.

In the course of its rise to power Fascism borrows many of the slogans of Syndicalism in the trade union movement. It raises the slogans of no politics in the union, federalism and local autonomy, reduction of salaried officials to zero, low union dues, referendum and industrial unionism only in order to break up the workers organization and paralyze them from fighting effectively in disciplined, centralized formations.

With its theory that the reactionary "free" unions such as the American Federation of Labor are "outright Fascist" the Communist Party has played right into the hands of Fascism. Such a policy runs counter to the whole theory of Leninism that Fascism can find little base among the workers, even the skilled, before it takes power. Such a line displays a Menshevist distrust for the masses, an overestimation of the strength of the enemy which must be stamped out of the working class.

25. Fascism at the Heart of Capitalism

With its victory in Germany and its great growth in the major industrial countries of the world, it is plain that Fascism has moved from the limbs and periphery to the heart and center of capitalism. As Fascism becomes a power in one great country after another, it takes on peculiar national forms and traditions. However, beneath all nationalist forms lies the crisis of nationality itself, a crisis which, historically, can be resolved only by international cooperation of all nations through the victory of the proletariat.

26. Bonapartism and Fascism.

Between parliamentarianism and Fascism, stands the mechanism of Bonapartism as a profound logical necessity. This was the case in Italy, in Germany and in Austria. Already in France and in America definite signs of Bonapartism are appearing. As soon as the struggle of two social strata, the haves and the have-nots, the exploiter and the exploited reaches its highest tension, the conditions are given for the domination of bureaucracy, police, soldiery. The government becomes "independent" of society. These are the characteristics of Bonapartism. While such a Bonapartist regime can become stabilized if it appears after the class forces have become exhausted in actual street battles, it can only be temporary where these class forces have yet to meet. In the present situation of capitalism, Bonapartism can only pave the road for Fascism.

Freed from direct responsibility to any class, buoyant with the illusion of being above classes, resting only upon the armed might of the State mechanism, Bonapartism inevitably brings in its train an adventurist foreign policy.

27. Fascism and the Insurrectionary Moment.

Fascism arises not only where the internal contradictions have become unbearable but also due to external pressure reacting upon the internal life of the nation. Austria is the best example of this. Thus Fascism can arise not only where the workers are actually in revolt, (Italy) or when they are on the verge of revolt (Germany) but also where, due to the international situation, it is necessary to liquidate the working class organizations and solidify the nation around strata of the bourgeoisie (Austria).

But Fascism does not have to wait until strong revolutionary or labor organizations actually exist to threaten the capitalist power. Fascist germs can appear where there are only the potentialities of a deep-going and sudden radicalization of the masses. This is especially true in an era like the present, subject to sudden and violent fluctuations. To guard against surprises, to meet the Fascist consolidations of other countries, to prepare for war, all may force a country on the road to Fascism, as well as the desperation of the immediate situation. Here is the key to the "National Government" in England and the basis for Bonapartism in the United States, both preparatory stages for Fascism and paving the road to Fascism.

28. Fascism and Liberalism

The victory of Fascism arrives not only from the mass pressure of Fascist parties and street battles but through the gradual Fascistization of the governmental apparatus as well and through the mechanism of Bonapartism. Pressed by the crisis and the fear of losing their property through revolution, the liberals of yesterday become the Fascists of today and, as the dupes of reaction, open the gates to Fascism from within parliament itself. Petty bourgeois liberalism thus further reveals its hopelessness as a leading historical force. Unable to follow the proletariat due to its many blunders as manifested by the actions of the Socialist and Stalinist parties, the petty bourgeois can only follow big business into Fascism.

29. National Colorations of Fascism.

In each country, Fascism takes on a coloration to fit the national needs of the capitalists. If Italy raises the term Fascism, and Germany "National Socialism", if Italy stresses Empire, and Germany Race, if Italy has no anti-Semitic tendencies and in Germany they are extremely marked, if Germany flays the usurer and Italy praises finance capital, if Italy is Catholic and Germany attacks Catholic tendencies, if the Italians popularize their State as the "corporate state" and the Germans as "totalitarian", etc., etc., these are but due to the basic demands of each nationalist capitalist group.

Similar it is with the Austrian Fascist movement that is torn between the aims of the German and those of the Italian. And the same is true of the British Fascist movement that tries to synthesize the features of both the Italian and the German and stand upon the experiences of both. In the U.S. too, there is no doubt that the Fascist movement will raise those demagogic slogans designed to enroot themselves in American traditions and in specific American capitalist aims.

30. Italian and German Fascism.

Fascism has now seized the power in two great countries, Italy and Germany. The facts show that Fascism can solve none of the great problems confronting capitalism, that it is only a stop-gap and must drive even the petty bourgeoisie away.

For example, in Italy, in spite of the fact that all figures are greatly faked, it is admitted that over one million are unemployed, although the true figures would be closer to 3,000,000. After the last wage-cut of 12%, 1933 saw a further cut in general wages of 8% in spite of the rising food prices. The wages paid the Italian workers (7 cents an hour) are the lowest of all Western Europe, although food prices have actually risen. The adverse trade balance monthly in 1934 is over 200,000,000 lire, the governmental deficits are running into the billions which, in spite of drastic curtailments of interest payments, etc., is placing the government in a most straitened circumstance. In Italy the militaristic adventures of Mussolini, culminating in the mobilization of troops on the Austrian border, are not only a physical necessity of Fascism but also serve the purpose of drawing attention from the internal situation which is constantly growing more severe as was only recently illustrated by the forced great reorganization of the Fascist Party.

In Germany the Nazi agricultural program called for "A system of land reform in accord with our national requirements, passage of a law which shall provide for the expropriation without compensation of land for socially useful purposes, for the abolition of ground rent and for the prohibition of speculation in land values". In spite of the "Socialistic" phrases, the reality is no better than the Act of 1861 in Russia. The Junkers are parting with 20% of their worst lands at the highest possible evaluation thus filling their pockets at the expense of the government. The government has now become the creditor of the farmers who may purchase the land and who will be so loaded with debt that they will be never able to repay. Thus the peasants by this "concession from above" are bound only still more firmly to the oppression of the Junkers.

In September 1933, the Hereditary Homestead Law was established which, in addition to defining the racial and social status of the farmer and the size of the farms subject to the new law, provided that the qualified owner cannot be dispossessed for debt, his crops cannot be seized for private debt and the farm must pass undivided to a single heir according to local custom. As part of this "National Socialism" however, the farmer is not allowed to divide his lands or give it to anyone but a single heir. Agricultural workers are not allowed to leave their regions without special passes. In the meantime, the power of the Junkers has been immeasurably increased. The swindle of the Osthilfe, the high tariffs in their favor and the restoration in part of feudal traditions, have all seated the Junkers upon the backs of the masses more powerfully than ever since the war.

In spite of the vicious attack in phrases against finance capital and although in the beginning the petty bourgeoisie believed that it would be allowed to dominate and control the trusts and large industries, Hitler has taken good care that with the consolidation of Fascism it is the big industrialist who rules with an iron hand. Every factory owner has become a little Hitler. Thyssen is the direct ruler of the Ruhr.

Similarly, in the domain of trade, the Nazi program has read: "We demand the creation of a healthy middle class and its preservation, the immediate socialization of the large department stores and the renting of their facilities at minimum rates to small merchants and preferential treatment to small tradesmen and merchants in the awarding of national, state and municipal contracts". However, the chain and department stores remain, the cooperatives have not been dissolved but only seized by the Nazis who have thus secured for themselves hundreds of thousands of jobs but have obtained nothing for the small middle class shopkeeper.

In regard to unemployment under Hitler, several hundred thousand workers have been forced to flee the country, others have been too terrorized to appear for their relief, tens of thousands more are in the concentration camps and in prisons. A terrific drive has been launched to force all women out of occupations. Youth from 16 to 25 have been taken off jobs and sent into labor service camps and registered as "employed". In parts of the country there is compulsory labor service. Military public works have been greatly increased and have partly reduced the unemployment figures. Finally the enrollment of 21/2 million Storm Troopers and their feeding and clothing has also reduced the number of registered unemployed. It is only through those desperate methods that Hitler has "reduced" unemployment, but it has only worsened the real situation in Germany. Wages have been drastically cut, the cost of living steadily mounts.

The execution of the leaders of the lower middle class and the terror instituted within the Storm Troops, the vote of seven million in the last elections either against Hitler or abstaining from voting, the steady shift of the government forces to the right and the increased tension, all are evidence of the fact that in order to live Fascism must plunge into the greatest gambles which can only culminate in a new war.

31. Perspectives for Fascism.

In spite of the rapid menacing rise of Fascism we cannot declare that Fascism must last a long period of time. The rise of the class struggle in France, the forces unleashed in the case of a world war, the rise of a Fourth International that can really mobilize the workers for struggle, are among the many uncertain factors that can well turn the scale of events against world Fascism and usher in the period of world revolution. Even if it hangs on to power, Fascism must degenerate more and more into an apparatus.

Chapter IV

THE DEGENERATION OF PROLETARIAN POWER IN THE SOVIET UNION

32. Soviet-Capitalist Co-existence.

For seventeen years Soviet Russia has existed side by side with the capitalist world because of the peculiar world equilibrium which existed at its start and which has continued to the present day. The prolongation of the struggle between the capitalist world and the Soviet Union has led to the illusion in some circles that the Soviet Union can indefinitely co-exist peacefully or for a long period of time with the rest of the world. Such a theory must be extremely dangerous to the workers. It is a class collaboration theory and must be completely eradicated.

The basic causes for the failure of the foreign capitalists to overthrow the Soviets are the following: (a) the enormous and inaccessible territory and the economic self-sufficiency of the country (so far as food is concerned), (b) the numerical and moral strength of the population led by a hardened Communist Party, (c) the failure of the bourgeoisie to unite in time, (d) the weakening of the bourgeoisie by revolutionary movements of the masses, (e) the loyal and tremendous support of the international working class.

On the other hand, the Workers' Republic was unable to defeat the capitalists decisively because of the following: (a) the capitalist reservoir of the U.S. was able to strengthen and rehabilitate the European bourgeoisie, (b) the working masses outside of the Soviet Union were unable to seize and hold power due primarily to the weakness of the Communist movement, (c) Russian economy was relatively weak. While this weakness, coupled with the complete economic breakdown after the war, prevented the Soviet Union from defeating the enemy and connecting the Russian with the German revolutions, at the same time the capitalists could be reconciled to its loss since the loss of Russian economy, unlike the loss of the British or the German, would not at once fatally affect world capitalist economy.

In 1926-27 when Russia was about back to the level of pre-war production, Russian economy equaled only 10% of that of capitalist Europe and but 4% of the world's total. The pre-war wealth of Russia was lower than that of Germany, France or the United Kingdom, its per capita wealth having been the lowest by far of any important capitalist country as was its per capita income. It is this indecisive importance of Russian economy that explains why the capitalist world did not immediately go to pieces on the loss of Russia, as it would have done on the loss of Germany.

The old equilibrium between the Soviet Union and the capitalist world has now been drastically changed, to the detriment of the Soviet Union. The rise of Fascism, the aggression of the Japanese militarists, the pressure of the world economic crisis, the smashing of the European labor movement, the destruction of the Communist International, the internal weakening of the Soviet Union itself with its bureaucratization of all workers organizations and the growth of alien class forces and ideologies have shifted the equilibrium to the point where world capitalism can be united against the Soviet Union without decisive resistance and where the Workers State is on the verge of counter-revolutionary attack.

33. The Self Sufficiency of the Soviet Union.

The Soviet Union could remain self-sufficient only on the lowest pre-capitalist technical plan. The developments of industry in the Soviet Union, the Five Year Plan, the necessity to strengthen rapidly and materially the dictatorship of the proletariat if the Workers State is to ward off the blows of the enemy and face the present tense situation, mean a greater extension of foreign trade in and out of Russia, a more complex economic interrelationship between the Soviet Union and the capitalist world.

The Soviet Union cannot remove itself from its capitalist environment. While in its internal economy it is in a peculiar transition period, laying the basis for Socialism, yet as part of a world dominated by capitalism, it must be affected by capitalist markets and prices. These prices must vitally affect the Soviet economy and its growth both quantitatively and qualitatively.

Although not in the same way as in other countries, the Soviet Union has been vitally affected by the world economic and political crisis. While there are no armies of unemployed yet there is the forced sale of wheat at exceptionally low prices in order to obtain machinery. It is the world crisis that provokes the policies leading to the hunger of the masses, the terrific strain upon the proletariat, the great maladjustments in the Five Year Plan, the feverish preparations for defense against war, etc.

34. Execution of the Five Year Plan.

There is no question but that on the whole the Internationalist Communists were correct both in stressing industrialization and the necessity of a "plan" and in proposing an intensification of the war on the kulak. When we recall Bucharin's slogan to the peasantry "enrich yourselves" and how there was solemnly discussed in Russia the possibility of the "kulak's growing into Socialism", when we recall the arguments that any plan of industrialization was "premature" and would lead to terrible catastrophes and "war in the village", when we recall how backward the original industrialization plans were and how far the masses outstripped the "Party leaders", then the conclusion is ripe that the attack upon the Left Opposition on this question only hid the right opportunism of the Stalin-Bucharin regime.

Due to the pressure of the leftward swing of the proletariat and of the Internationalist Communists, backed as they were by the world events, the Stalin regime was compelled to adopt the Five Year Plan of industrialization. However, under the heavy hand of the Stalinist bureaucracy, aided by the professional saboteurs a terrible zigzag execution of the Five Year Plan took place.

From the slogan "Socialism at a snail's pace" Stalinism ran to the slogan "Socialism by the five year plan". From the idea of "Hand in Hand with the kulak we will build up socialism", Stalinism fled to the idea "Liquidate the kulak as a class within five years". The result was that all the evils that the Left Opposition had warned against and with which it had been charged by Stalinism, the latter actually brought about.

Instead of a plan that would balance the light and heavy industry carefully, all the surplus goods possible were thrown into heavy industry. This led to a shortage of goods from the light industry which makes clothing and shoes, etc., and the result was a deep grumbling from the peasantry and the breaking of the firm alliance between the city and the country. The peasant was taxed to the breaking-point. He saw himself deprived of his stock and stuff and receiving nothing in return but a "plan". He began to sabotage and to kill his stock to eat it himself. Before this move could be checked, in 1932 approximately half of all the livestock in Russia had been destroyed. The peasant refused to till the soil. Hunger began to invade the cities.

Instead of a steady, sure pace, Stalinism put the country on a war basis with the slogan of the "Five Year Plan in Four Years". The workers were forced to work harder than ever. All the bureaucrats began to vie for "records". Quality did not count, only quantity. Shoes and clothing were produced which were not fit to be worn. A dreadful waste took place in all the factories. No control was put over the bureaucrats who soon were in alliance with groups of saboteurs all over the country. Thus the workers were not only worked harder but the stuff they got in return for their labor was but shoddy and waste. Instead of the Five Year Plan with its increase of production, actually the workers, the working class was pushed down more and more.

The result was that the workers also began to sabotage. They refused to work. They began to move from factory to factory in the hope that the next place would be better than the last.

The Stalinist bureaucracy has been forced to take drastic action against the workers to suppress their discontent. Measures are being taken to prevent them from moving about. They are no longer allowed to strike. The trade unions have now been incorporated inside the state machinery. The GPU or its equivalent is everywhere.

Coupled with a disastrous policy in industry there went a similarly disastrous policy in agriculture. The peasants instead of being induced into cooperatives were compelled to join often against their will. Their surplus products were confiscated and in return they were given practically worthless products from the factories. The slogans raised called for the liquidation not only of the kulaks but of the peasantry as a whole and their transformation into agricultural laborers. The basis of liquidating the kulaks could only be established by giving the poor peasants tractors by which they could out-produce the kulak and make the kulak no longer necessary in Russian economy. But since Russia did not have the tractors and since Stalinism was opposed to the line of organizing the poorer peasantry against the kulak, what actually happened was not the liquidating of the kulak but the formation of artificial cooperatives into which the kulak had been driven and where he soon assumed the leadership.

Thus we had in the countryside the formation of cooperatives where the kulak, the enemy of both the workers and the poor peasants, actually was in the lead. Of course, the cooperatives as a whole began to sabotage. That is why, only in 1932, the dearth in the Ukraine and in the Northern Caucasus came about. This was due to the peasantry absolutely refusing to cooperate with the state and to till the soil. The rich steppes became barren, weeds grew everywhere. Actual civil war did not break out but wholesale migrations from the rich land of the South took place and the peasants moved elsewhere trying to better their lot.

On top of all this is the ominous policy of inflation which Stalinism has pursued, and inflation which has raised tremendously all the prices of necessities and made ridiculous any so-called advance in wages which he has given to the workers or advance in prices which has been given the peasant after the harvest.

The industrialization of the Soviet Union must tend to strengthen the revolutionary movement and to hasten the end of capitalism. But whatever economic progress there may be within the U.S.S.R. does not by itself necessarily lead to an advance of the world revolution. Together with the industrialization (the "Americanization") of Russia, there has been fastened upon the Communist Party the theory of building socialism in one country and a rotten nationalism that paves the way for Fascism both within the Soviet Union and outside of it.

Under circumstances in which anti-working class elements have been able to guide the policy of the Soviet Union, destroying the Chinese revolution, destroying the German revolution, causing the collapse of the Communist International, we can no longer say that the Soviet Union is solely an aid to the international proletariat. On the contrary, we must declare that unless the degeneration of Communism is destroyed, it is possible to have an economic advance of the Soviet Union simultaneously with a setback of the world proletarian revolution. The Internationalist Communists exposure of the elements of Thermidor generating within the Soviet Union is correct, and has been amply illustrated by the recent executions of 117, the arrest and imprisonment of Zinoviev, Kameneff and others.

35. Proletarian Control Destroyed.

From the blows of capitalist reaction and Stalinist bureaucracy there has resulted a peculiar situation within the Soviet Union. The Communist Party, the trade unions and the Soviets as real organs of control have been destroyed. With the destruction of these organs, proletarian democracy itself has been crushed. The end of proletarian democracy and these basic proletarian organizations signifies that in fact the dictatorship of the proletariat has been destroyed by Stalinism, so far as it means a form of State power.

However, in spite of the degeneration within the Soviet Union since the death of Lenin, the Soviet Union is not yet a capitalist state. Capitalism cannot return in Russia without civil war and there is no class within the Soviet Union capable of wresting the factories and the means of production from the proletariat. Since capitalist relations are not the dominant ones in the processes of production and distribution in the S.U., there is no other conclusion but to declare that the Workers State still exists, that as such it still must be unconditionally defended by the proletariat of the entire world.

To declare that the Soviet Union is still a Workers State but no longer a Dictatorship of the Proletariat is the most accurate way of placing the contradictory situation in which the first Worker's Republic finds itself today. It signifies that the proletariat has lost that direct and immediate political control over the State which it had in the days of Lenin and Trotsky. It exposes clearly the dangers of Thermidor that exist and how Stalinism is weakening the Soviet Union. It raises the warning that the Workers State can not longer endure if once the workers control has been removed and in its stead there is substituted a bureaucratic dictatorship that sits on top of the workers and that, although still imprisoned within the framework of the 1917 revolution, is but waiting for the opportunity to open the gates to international Fascism from within. Only a new Communist International can defend and save the Soviet Union.

Chapter V

THE ECONOMIC AND POLITICAL CRISIS IN THE U.S.

36. The U.S. at a Turn of the Road.

The United States is at a great historic turning point as decisive as those of 1776, 1860, 1898 or 1917. America is becoming Europeanized. The old individualism is yielding to the open arraignment of classes and open class war. As politics catch up with economics, the question of Fascism or Communism will be put, here to, on the order of the day.

37. First Period of the Crisis in the U.S.

The tremendous stock exchange crash, November 1929, coincided and helped usher in the most serious economic crisis in the history of the U.S. This crisis, already lasting half a decade, has gone through several stages, each one on a higher plane than the preceding one, becoming more and more concentrated and threatening the entire structure of capitalist order. The first stage can be said to have lasted from 1929 to the inauguration of President Roosevelt and the establishment of the New Deal (March, 1933). The second embraces the activity in the period of the New Deal to the winter of 1934-35. We are entering into the next phase of the crisis at the present time.

Given the average year of the years 1923-1925 as equal to 100, then the total industrial production monthly average fell from 119 (1929) to 63 in 1932 or a drop of about 50%; mineral production fell from 115 to 71;. automobiles from 135 to 35, or a drop of about 75%; iron and steel from 150 to 31, coal from 102 to 59 (or a 40% drop); shipbuilding from 185 (1930) to 91. Light industries producing articles of consumption also fell, though not so drastically; leather fell from 104 to 85; food products from 97 to 87; textiles from 115 to 83. Freight car loadings fell from index number 106 to 56. The construction industry which had produced 22 million dollars daily in 1929 had fallen to 5 million dollars in the peak of the summer season in 1932.

In the domain of domestic retail trade, department store sales fell from 111 to 69; mail order company sales fell about 40% (both in values). As for foreign commerce, exports fell in quantity from index number 132 to 69 and in value from 115 to 35, while imports fell from 131 to 79 in quantity and from 114 to 34 in value.

Most acutely did the crisis affect the agrarian toilers in the U.S. If in 1929, they were in a chronic crisis, by the end of 1932 and the beginning of 1933, they were truly in desperate straits. The development of capitalism in agriculture had led to a sharp differentiation among the agrarians in the period of 1920-1928, at that time there had occurred a rise in the importance of "factory" farming. The number of agricultural laborers in proportion to farmers had increased. Mechanization of farming had grown by leaps and bounds; production per acre and per laborer greatly augmented. On the other hand, over 3 million of the farm population had been driven off the farms, expropriated from the means of production. The purchasing power of the farmer in 1929 was but 80% of that of 1919. Mortgages had increased to 10 billion dollars or by 25%. Tenancy had increased greatly. Peonage was still widespread. The conditions among the toilers of the South and Southwest, particularly the Negroes, were worse than those even of Eastern capitalist Europe.

At the end of 1932 the wholesale price of grains, livestock and farm products generally had fallen by 60-65%. The gross income of the farmers fell from a total of 12 billion dollars in 1929 to about 5 billions or a drop of 63%. On top of this drastic fall in prices came the wide impoverishment of the farm masses due to floods and droughts and the loss of reserve capital with the widespread bankruptcy of the small rural banks on which the farmers depended. What with the great disparity between farm and industrial prices (agricultural implements had fallen but 16%, and chemicals, iron and steel 19% and the cost of living generally about 21%), and the actual rise in electric, gas and anthracite rates, what, with the great increase of taxes and the constantly increasing heavy debt payments that had to be met in a period of falling prices, no other outcome faced the farmer but stark ruin.

Generally, in time of crisis, the worker's pay is below the value of his labor power. In this crisis, by 1932 the total payrolls fell far more than the fall in the number of unemployed. Average weekly earnings in factories fell off 25% in 1932 from 1929 in spite of the fact that it was the lowest categories of laborers that were laid off most and first of all, while the higher paid workers and technicians were more able to keep on the payroll. While the cost of living fell less than the wages, those receiving the lesser wages were forced to take care of the army of dependents, unemployed and part-time unemployed whose cost had been thrown upon them. In July 1932, the wages were reported as having fallen one-third in one year alone, the average wage being but $15.43, women getting an average of $10.42 weekly!

The pressure of the crisis forced the mushroom growth of all sorts of sweat-shops where the hours of work were unlimited and the wages were as low as 40 cents a day. Even worse, if possible was the situation among the agricultural laborers whose wages were the lowest since the opening of the 20^th century.

The city petty bourgeoisie also felt the weight of the crisis in full force. Stock prices fell from index number 190.3 to 48.4. Bond prices were the lowest since the war; new capital issues had fallen to 10% of what they were in 1929. Commercial bank deposits fell 55% while 10% of the banks in the country failed. Commercial failures amounted to 2652 monthly average or a jump of 37% over 1929 with liabilities of close to 100% over 1929.

The largest bank crash in the history of this country (Bank of the U.S.) occurred in 1930 involving one-quarter of a billion dollars and radically affecting the assets of hundreds of thousands of depositors. As the crisis grew in severity, larger and larger companies were drawn into bankruptcy (receivership of United Cigars, the Insull crash, etc.). Rapidly, deposits were switched from private banks to postal savings, which increased its deposits 1000% and gold hoarding began. The culmination point of all these failures was the banking crash of March, 1933 at Roosevelt's inauguration.

As the total national income fell from eighty-five to sixty billion dollars the total cost of government rose to 15 billion dollars or 25% of the income. Besides, the government was plunged into heavy debt to meet the extraordinary expenses of the crisis not on the regular governmental budgets. As the number of unemployed grew, the number of people on the payrolls of the government rose to the total of 3,000,000 (state and federal). Further, it became clear that the eleven billion dollar principal (exclusive of $10,000,000,000 interest) owed by foreign nations would not be repaid.

Under Hoover, all the capitalist agencies showed themselves absolutely bankrupt in the face of the crisis. A cautious policy of inflation was begun through the launching of a great deal of paper securities, the removal of some of the gold support from the currency, the gradual issuance of more paper money, etc. The Reconstruction Finance Corporation was established that gave 2 billion dollars credit to the banks, railroad companies, insurance companies and such. A petty campaign against hoarding was begun and, while the measure to cut the salaries of government officials was defeated, a tax bill on such things as theater tickets of 25 cents, telegrams and telephones, oil, malt, postage stamps, etc. was carried. Taxes were increased on lower incomes and a manufacturers tax of 21/4% was introduced. 125 million dollars were handed to the railroads in increased rates.

At the same time, the burden of the crisis was steadily increasing and being thrown upon the backs of the poorer sections of the population. In 1931 alone the defalcations of debts amounted to 10 billion dollars,(6 billion on real estate, 1 billion in foreign bonds, 2 billions in deposits in banks, etc.), without counting mortgages on farms that could not be paid. A tremendous expropriation of the lower middle class was begun and wholesale evictions and passing of property from the small property owner to the big trusts was on the order of the day. In spite of all demonstrations, the bonus to soldiers was refused and only partial payment made.

Taking 1926 as 100, the relative amount paid out in wages in 1929 was the same, but by 1932, it had fallen to 38. On the other hand, the relative amounts paid out in interest and dividends stood at 176 in 1929, 196 in 1930, 187 in 1931 and 160 in 1932.

The government obstinately rejected all social insurance schemes. Instead it put forth the theory of public works. Certainly the building of more jails, armories, reformatories etc., can only make matters worse for the workers. As for roads, dams and such increase of capital investment, they but lay the base for still greater crises. Under the hands of the corrupt political machines, the fund for public works becomes but an added source of graft and plunder. Only a very small percentage of it finds its way as wages and then in such a way as to be a club to batter down wages and working conditions and to strengthen the crooks in office. As for schools, hospitals, libraries and such items, it is precisely this category of public works that was cut down on the ground that the taxes where too high, already.

38. The New Deal.

The New Deal was inaugurated to the music of crashing banks and shots at the life of President Roosevelt. In spite of all the ballyhoo, the New Deal has resulted only in intensifying the effects of the crisis and bringing them to a head. The indebtedness of the U.S. government which had been but one billion dollars just before the war and had risen to 26 billion at the end of the war, rose from 16 billion to which it had been reduced by 1930 to 32 billion by 1934. With a national income reduced to 50 billion dollars (1933) and a national wealth of 300 billion, already public and private debts were increased to 150 billion dollars (the private indebtedness amounted to 40 billion dollars in real estate mortgages - 30 billion dollars on city property and 10 billion dollars on farm property - 20 billions in debts of financial companies, 15 billions in debts of railroads and public utilities each and 10 billions in industrial debt). Before the war, the total debts, public and private, were 37 billion dollars.

The inflationary tendencies of the preceding regimes were greatly extended through the issuance of more unsupported paper, the legislation reducing the amount of gold in the dollar, the embargo on gold, the withdrawal of all gold from the open market, the attempt on the part of the U.S. to corner the gold supply so as to drive the price up, the pumping up of the price of silver and the rounding up of all gold and silver hoarders. At the same time, in an emergency measure, the government took over direction of the banks which could only result in greatly strengthening all state capitalist banking tendencies and in further reducing the little business man to impotence. By only the most drastic measures was the country "saved" from a new panic and run upon the banks. Bank deposits were guaranteed by federal government to the extent of a further 2 billion dollars.

By means of lavish federal expenditures, the frozen assets of business were taken over by the government and new credit pumped into the capitalist system, the turning in of the worthless private securities for government bonds not only helped to release the banks from the incubus of the crisis but loaded the government with bad debts, gave a new market to the financiers and gave them guaranteed interest on the money and increased their power over the government. At the same time the bankers, by purchasing the bonds, became exempt in certain cases from taxation and received guarantees of gold payments. Thus again the administration, like the last, proved itself the friend of Wall Street and only laid the basis for a still greater crash.

The inflationary tendencies of the government, causing prices rapidly to rise, caused a feverish speculation in industry. The immediate results of these policies were reflected (1923-25 equals 100) in the indices as follows: Industrial production rose to 100, mineral production to 91, automobiles to 70, iron and steel to 100, coal to 76, leather to 116, textiles to 133 and department store sales went to 77.

Simultaneously, and with the dollar off the gold standard, a tremendous dumping policy to force exports and to increase the pressure on the foreign markets was begun which could only presage a murderous competition among all the countries of the world, especially Great Britain, Japan and the United States. That this was no return to prosperity but mere artificial speculation to meet the rising prices could be seen from the sharp fall in production at the end of the year, by the fact that new capital issues declined still further to a new low level and that the gain favored the consumable goods industries and not the durable goods industries producing the means of production (iron, steel etc.).

The basic farm policy of Hoover to raise prices and to curtail production was elaborated into a veritably crazy theoretical system. Approximately 11/3 billion dollars were allocated to the farmers as a processing tax for curtailment of their production. Such a tax could only illustrate to the masses the complete bankruptcy of the capitalist system and the asininity of the administration. It could only raise food prices still further and throw the cost upon the masses of consumers. Nor could it really reduce the crops for it could only make still more intense the competition among the farmers, force them to produce more per acre, stimulate all sorts of intensified and mechanical farming and throw out from the land millions of poor toilers, agricultural laborers, share-croppers and tenants.

To "help the farmer" 2 billion dollars were allotted for farm credits which really went into the pockets of the bankers. Already the desperate plight of the farmers, coupled in some places with armed resistance, had forced the biggest companies (Prudential Insurance Co., etc.) to declare a moratorium and postpone foreclosures. Through these farm measures the government saved the banks and insurance companies and itself became the creditor of the farmers, thus transforming the fight of the farmers from one against Wall Street to one against the government itself.

To further separate the small property holder from the revolutionary working class movement, 2 billion more dollars were put up "to save" the homes of the petty-bourgeoisie from foreclosure. Here again, as in the case of the farmers, the net result will be to force the petty-bourgeoisie into a fight with their government as creditor and to save the interests of Wall Street.

In spite of these measures, the New Deal has affected vitally the lower middle class. With the loss of their savings through bank crashes and the fall in property values, with the increase in taxes and the fall of income, a vast section of the lower middle class (storekeepers, professional men, independent producers, farmers, etc.) face utter ruin. Under Roosevelt, government salaries were cut 15% for a while, the bonus was denied entirely and pensions cut down.

It desperation, the New Deal has allotted over 3 billion dollars in public works in an effort to subsidize and stimulate industry, especially heavy industry. All attempts to bring industry to "normal" levels have been in vain. The figures of industry and trade at the fall of 1934 (October) stand as follows: Industrial production: 73, mineral production: 80, automobiles: 41, iron and steel: 41, coal: 64, leather: 85, textiles: 90, car loadings: 57, department store sales: 74.

There are no signs that the U.S. is getting out of the depression or that economic recovery is about to take place. How deep the business stagnation has reached and what is the outlook for getting out of the crisis can be seen from the following:

Building contracts stood at index number 117 in 1929 and by the fall of 1934 (Oct.) was at 31 (a drop of 74%); unfilled orders generally and U.S. Steel orders fell drastically. Forest products on hand rose from 106 (1929 monthly average) to 117; raw material stocks rose from 149 to 201 in the same period. Given 1923-1925 yearly average as 100, commodity stocks rose generally, cotton from 43/4 million to 101/2 million bales etc. Everywhere throughout the world stocks have been destroyed (bananas, milk, fruit, eggs, coffee, etc.), in order to raise prices and bring back the profits of "prosperity". New capital issues fell in 1933 to 60% of what they were even in 1932.

The September, 1934 Bulletin of the National City Bank declares: "The developments in the business situation during the past month have done little to clear up the outlook for Fall.... The wool goods season is disappointing, the leading manufacturers of staple goods have announced a series of shutdowns..... Business activity has now been declining for about four months..... Steel operations have dropped to new low levels..... 19.1% of capacity..... Railroad orders are largely filled, tinplate operations are lower and the automobile industry is in the period of recession which sets in prior to the changeover to new models..... Construction contract awards remain at low figures.....45% below the spring peak..... and..... below a year ago..... Construction is still the chief laggard in recovery."

Still more vicious is the New Deal labor policy. Plans are being worked out for the militarization and regimentation of labor. Military training camps for homeless wandering youths, unemployed placed in barracks, hundreds of thousands placed in CCC camps are now to be seen on every side. Through the N.R.A. the prices were frozen at the highest point, the wages at the lowest and compulsory arbitration schemes put over. Corporations increased their profit 600%.

Since the New Deal, food prices have rapidly risen to 23% increase within one year, while at the same time the increase in payrolls was very inconsiderable. A universal stagger system has been forced upon the people. Not the slightest amelioration of unemployment has been found, the intake of industry not even equaling the increase in the working population for the past year. The CWA soon came to an end, and millions of workers were again thrown on the street. The billions allotted to public works can take in only several hundred thousand workers at the very most.

The first period of the N.R.A. was marked by widespread illusions among the masses regarding the promises of the regime (a new social order, end of unemployment, end of the yellow dog contract, end of child labor, abolition of the Prohibition Amendment, recognition of Russia, right of collective bargaining, end of sweatshops, shorter hours for all, purchasing power of the masses raised, higher pay, social worker as head of Department of Labor, etc.). These illusions are rapidly disappearing and whatever promises have been fulfilled have brought no improvement of the lot of toilers. Neither the abolition of the Prohibition Amendment nor recognition of Russia brought relief to the workers misery. Not the social worker, Perkins, but the conscription-herder, Johnson, was put forward. Behind the recognition of the Soviet Union stood the increased tension with Japan and the great increase in the budget for army and navy and material increase in all the armaments of this country.

39. On the Road to Bonapartism and Fascism.

The economic crisis is slowly maturing into a political crisis in the U.S. Constitutionally or not, the President is assuming more and more dictatorial powers and as the social relationships grow more tense, the Roosevelt regime is further laying the basis for Bonapartism on the road to Fascism. The end of the "lame-duck" Congresses and the greater sensitivization of the central federal government are indications that the government is being reorganized for "war" whether national or civil. The local and state forces do away with the old checks and balances system and becoming increasingly centralized, the Houses of Congress and the Supreme Court yield to the President, the apparatus swings from the party to the President and the party gives way to the Leader, the Strong man.

The dictatorial powers of the President can be seen from the following: Under Public Act No. 10, the President has been given almost unlimited power of inflation and has virtual command of banking and fiscal policies. In Public Act No. 67, Congress actually hands over the power of taxation. Today the President can juggle postage rates, he can impose taxes upon manufactures and upon basic farm processes. In addition, the President now has the right change the tariff rates by simple executive proclamations. Congress has also given to the President vast and increasing powers of appointment as well as virtual control of the pension system.

The dictatorial tendencies of the President can all be accomplished through the Constitution of the U.S. which in its origin was designed to check the will of the masses and which delegated to the office of President greater powers than any oppressor or even king enjoys in other countries. It was well illustrated by the Presidential acts which, in 1917, involved the U.S. in war without even the consent of the Senate or the people. It is sharply illustrated again today. Through the NRA, the AAA, the Banking and Railroad measures and through the CCC, the President has command of all the basic processes of the production and the distribution of wealth in the U.S. He is in direct charge of expenditures of many billions of dollars. Through the Emergency Relief measures he is in full control of all the unemployed. Around him he has gathered millions of public employees and pensioners. It is through these means that the government apparatus can be fascistized and Fascism brought nearer to this country.

The great sharpening of the inner and outer contradictions of American Imperialism gives the basis for a tenseness of relationships, a restiveness of the masses which can enable the Communists with a correct policy to lead the masses into such activity as to radicalize them. As a matter of fact, the working class in the U.S. is marching well on the way towards general radicalization and is swinging sharply to the left. The unemployment riots (especially in Minneapolis, and elsewhere in 1934), the widespread farmers revolt against foreclosures (Iowa, Wisconsin, etc.) and the farm strikes to which has now been added the great industrial strike wave in 1933 culminating in 1934 in a great wave of general strikes or threat of general strikes in various important cities of the country (San Francisco, Portland, Seattle, Minneapolis, Toledo) and the great General Textile Strike involving over half a million workers directly and, still more recently, the great popularity of the "Epic" movement (California, etc.) all these events demonstrate with new force the fact that the masses are steadily moving to the left.

Ever since the war, the working class, now an army of 36 million, has laid the basis for greater united effort than ever before. The composition of the working class has become far more homogeneous than before. The gap between skilled and unskilled has decreased, as a result of capitalist rationalization. The stoppage, restriction and prohibition of immigration have greatly unified the workers. The entrance into industry of millions of women (10 million) and youth have greatly strengthened the movement. The youth, particularly, have played a great leavening and cementing role. At the same time, great sections of the petty-bourgeoisie have become proletarian. The large scale migrations of the Negroes to the North and their deeper penetration into the ranks of the workers have tended to close the gaps of the working class army and weld it into a monolithic whole.

The tenseness of relationships has also resulted in a wide and rapidly spreading Fascist movement. Today, this Fascist movement is not of great importance, being limited to foreign sections (Italian, German) and to certain backward American strata of the population. However, the sharpness of the American crisis must rapidly bring forth new demagogic forces that will build more powerful Fascist movements than have already been attempted. The influence of Huey Long in the South-West is a warning sign to be noted by all revolutionary organizations. Ideologically the growth of such groups as Technocracy, the institution of "brain trusts", the utopian planners of all sorts for a "new social order" in which capitalism will be "organized" and made to function without its disastrous contradictions, all are sowing the field for Fascism in this country.

In the present situation, as the masses swing to the left and the bourgeoisie turns to fascist patterns and methods of action, all the various liberal middle-of-the-road groups are being reduced to impotence. The Socialist Party swings to the Left, the swing of the Muste group to the Left, the strike wave under the banner of the A. F. of L. are all efforts on the part of these organizations to recoup their losses and to stave off the inevitable disintegration that the present period brings for them. Together with the official Communist Party, these groups are historically dead. (The A. F. of L. is treated in a separate thesis on the trade union question.)

The last elections have made it plain there are important changes in political alignments taking place. The Republican Party, as a party of individualism has outlived its usefulness. Unless it changes its front to some sort of Fascist collectivist program it will continue to wither away and lose support even from its traditional bourgeois adherents. The formation of the American Liberty League, however, is a sign that drastic changes will take place in the Republican Party. At the same time, the Democratic Party is gathering within itself two extreme antithetical poles represented by Wall Street Finance Capital, on the one hand, and utopian petty property, on the other.

That the Roosevelt administration is not an illustration of completed Bonapartism, but only incipient Bonapartism, is solely due to the fact that labor has not organized its own party. The moment labor does organize its own party, then sections of the petty-bourgeoisie (Upton Sinclair variety) will fuse with the Labor Party and try to dominate it. The possibilities for a Labor Party have been greatly improved by the leftward movement within the A. F. of L., by the big vote cast by the radical petty-bourgeoisie in the West especially, and finally, by the fact that the Socialist Party is breaking up, a section of it moving towards Laborism and a Labor Party, as it flees from revolutionary action. This last factor may well mark a most important difference between the British Labor Party and any Labor Party now formed in the U.S., namely that the British Labor Party was organized by elements all of them moving to the left, the Labor Party in the U.S. may be organized by groups running away from revolution.

Should a Labor Party be organized, of course it will bring into the sharpest relief all the class forces that we have spoken about. The Democratic Party will split, the right wings of both Republican and Democratic parties will move towards collectivism in the form of Fascism. The petty-bourgeoisie will be sharply divided, some going with the Fascists, some with labor. Inside the labor movement, a strong revolutionary current will make itself manifest. The Europeanization of American Politics will be well on the way

Chapter VI

FOR A NEW COMMUNIST INTERNATIONAL

40. The Collapse of the Communist International.

The Communist International is dead as a revolutionary force. The period of degeneration (1924-1932) is closed with a period of collapse. The steady degeneration of the C.I. since Lenin's death was marked by: (a) the theory of Socialism in one country and national Socialist tendencies flowing from this theory; (b) by the objective protection given by Communists to the enemies of the working class (Chiang-Kai Shek, reactionary British Trade Union General Council, the present Cuban policy of protecting American property, etc.); (c) by the suppression of Lenin's writings and the "rude and disloyal" internal regime of the party, and (d) by the generation of Thermidorean elements within the Soviet Union and the strengthening of the bureaucracy.

The theory of building Socialism in one country discredits the very idea of Socialism, discredits the proletariat. It leads for the greatest contempt for other Communist Parties. It springs from a belief that the international revolution is far away. It tends to glorify the peasantry. It casts false illusions concerning the self-sufficiency of the Soviet Union. It fails to base the support of the Soviet Union on the international working class.

The period of collapse of the Communist International is marked by the blackest cowardice and treachery in failure to struggle against the victory of Hitler but, together with the Socialist Party, to run away from the fight. Completely impotent in the Spanish and Austrian revolutions, having destroyed all semblance of proletarian democracy in the Soviet Union, having disrupted the working class and helped to paralyze it, the Communist International, not even having called an international congress for seven years (and before that for four years) to discuss the epoch-making events that have destroyed the unions and revolutionary movement of Europe and greatly endangered the Soviet Union itself, stands condemned as a counter-revolutionary force, using the Russian revolution against the world revolution, using the Soviet to prevent soviets and the mobilization of the proletariat for victory.

The strategy of the Comintern has been marked by complete bankruptcy. In 1928, in a period of prosperity, the C.I. talked about the "third period", that the Socialist Party was the chief enemy and part of the forces of Fascism and which must be destroyed first of all. The C.I. rejected the united front and called on workers to leave revolutionary unions. This was a period marked by plain hooliganism when Stalinist gangsters broke up workers meetings and tried to terrorize the whole working class. The net result has been complete sterility. Today, in a period of growing radicalization of the working class in the U.S. and in the period of rising struggle all over the world (France, Spain, etc.), the Comintern swings completely to the other extreme and talks of non-aggression pacts with the Socialist Party. The Communist International has given its pledge to the U.S. government not to carry on revolutionary propaganda. Having lost its main support in the international working class, it now turns to all sorts of pacifist demagogic tricks and intrigues in order to sustain itself.

41. The End of the Socialist International.

The Socialist International is also dead, not as a revolutionary force --- as such it died 20 years ago at the outbreak of the world war --- but even as a bourgeois force. The attacks by the bourgeoisie against the Socialists have come about not because the Socialists were challenging the capitalists for power but because in its present desperate straits, capitalism cannot even stand the expense of social reform upon which the Socialist Party is based. Even social reform, in the main, can now be won only by revolutionary action. It is for this reason, because they have been rejected by the bourgeoisie as the agency by which the capitalists could hold power and keep the workers in check, in favor of Fascism, because they have not been able to keep control over the workers, that the Socialist leaders have begun to talk more revolutionary. On the other hand, so far as the Socialist workers are concerned, they must draw the theoretical lessons from the Austrian affair and the desperate situation in which they are placed by the crisis.

The result has been an absolutely unprecedented situation, namely that reformism is giving way to innumerable shades of Centrism, revolutionary in talk, reformist in practice, which now, in the majority of countries, dominate the workers movement. The old Socialist and Labor International has split wide open. In some cases, as the Socialist Parties in fact have degenerated into mere radical parties and even anti-reform parties, in their deadly fear of Fascism, large splits have occurred within these parties, the split-off's moving to the left, to Centrism.

The rise of Centrism from the side of the Socialists is met by the rise of Centrism through the degeneration of the Communist movement. The dissatisfaction within the official Communist Parties grows and splits are taking place there, too, as the Comintern becomes exposed as incapable of fighting against Fascism. The Right Wing Communist International (Brandler-Lovestone groupings) has been completely destroyed by the events. With the loss of its most important sections (Swedish, French, Spanish) and the destruction of the German group as a force of any significance, the Right Wing International grouping has completely disintegrated its component elements either crawling back to the Socialist International or crawling back to the Communist International.

As the Socialist Parties have become anti-reform parties, willing to give up the struggle for reform merely to prevent Fascism, the Communist Parties now take the place of the old Socialist Parties, having turned from revolution to reform, from internationalism to nationalism.

In this situation, the only way out is the regrouping of all revolutionary elements into a new Communist or Fourth International. While the new International has to develop itself chiefly at the expense of the Centrist tendencies and organizations which are now dominant, at the same time the revolutionary international cannot form itself in any other way than that of struggle against Centrism. Ideological intransigence and flexible united front policy are, in these conditions, two weapons for attaining one and the same end.

The formation of a new Communist International must, from the very beginning avoid any aspect of being a haven for Centrism and thus become a new "two-and-a-half" international which would attempt to conciliate the differences between opportunists and centrists on the one hand and genuine revolutionists on the other. Fusion with Centrist parties, thus liquidating independent action, is an absolutely impossible policy for the Internationalist Communists.

In relation to the splits within both the Communist and Socialist internationals, we must recognize that the majority of militants in most countries is still in and around the Stalinists and that the leftward splits among the Stalinists offer far greater possibilities for the Internationalist Communists. On the other hand, the leftward splits among the Socialists may be mere efforts for reformism to take on a militant attitude rather than any genuine struggle for revolution. Nevertheless, it is the bounden duty of the Internationalist Communists to contact all those dissident groups and to win them for the Fourth International.

The rise of Fascism has caused the Comintern and Socialist Parties in some countries to form united fronts for the purpose of fighting the Fascist menace. The united front between Socialist and Communist Parties can only multiply all the centrist and opportunist errors of each group and in no way can correct the situation. Only if the genuine revolutionists take part in the united front can there be any gain for the masses, only if these genuine revolutionary elements can win control of the united fronts can there be any hope for the victory of the proletariat.

The formation of a new Communist International can be achieved only in the course of a long process of splits both in the ranks of the Socialists and the "Communists." The acceleration of these splits is a job exceedingly difficult, in a sense more difficult than the job of forming the Third International. The Third International took five years to build, in the course of which time the various centrist groupings were pushed and tested by the pressure of wars and revolutions and were enabled to move to the left by the great revolutionary wave that broke out all over Europe and the world. Then the Communist Party had a Lenin and was in control of the first Socialist Republic in the history of the world. Even then the C.I. was formed only through a terrific struggle against opportunism and through splits among the Socialists.

Today the situation is quite different and more difficult in many ways. The present breakdown of economy cannot be compared with the effects of the war and its aftermath. The revolutionary wave has given way to the domination of reaction. The centrist groups have not been tested nor hardened, in many cases. It is now centrism that dominates the Comintern and the Soviet Union and not the policy of international revolution. Finally, in the course of the struggle against the Socialists, most of the workers have left the Socialist Parties and latterly the Stalinist Parties. It is in the light of these conditions that we are compelled to declare that the formation of the Fourth International can come only through a hard, long process and that one of the fundamental conditions must be the integrity of the Internationalist Communists and their revolutionary independence at all times.

41. The Breakdown and Liquidation of Trotsky's "Left Opposition."

The degeneration of Communism into centrism and the breaking-up of both the Right Wing Communist center and the Comintern have witnessed also the degeneration of a portion of the "Left Opposition" international center headed by L. D. Trotsky.

At no time was the International Secretariat, tolerated and supported by Trotsky, worthy of the name "Left Communist", but was penetrated with many of the evils that existed within the other groupings, namely: bureaucracy, careerism, factionalism, cliqueism, etc. A fundamental error was made by the "Left Communist" center in not compelling the organizations connected with it from the very start to engage in mass work and fit themselves for building up an independent movement capable of leading the revolution. There was a complete failure to test the leadership in actual concrete struggles in many cases, but there was permitted phrase-mongering, literary intelligentsia to take the lead.

A second fundamental error was the failure to convoke a regular International Left Congress where a comprehensive and collective program and strategy could have been worked out and adequate cadres and discipline established in the various countries. It is to the credit of the Communist League of Struggle that we fought against these fatal errors from the very beginning, although we declared our sympathy and adherence to the basic international views of the "Left Opposition."

Today the International Secretariat with the help of Trotsky, has liquidated its Internationalist Communist movement. Instead of trying to build a real, new Communist International, the International Secretariat has been building up the defunct Second International. Here Trotsky is repeating all the errors of the 1912 "August bloc".

The entrance of the "Left Communists" into the Socialist Party of France has done enormous harm to the Internationalist movement and is a colossal blunder. It demonstrates again how weak the "Left Communists" really were and their ready capitulation to the pressure of capitalist-Fascism. The entrance into the Socialist Party cannot reform that body. It can only further cover up the treachery of the French Socialist Party precisely at a time when more than ever the Socialist Party must be broken up and whatever revolutionary elements still remain won over to a real struggle against Fascism. It cuts off the Left Communists from the main stream of the Communist movement which has not yet entirely degenerated. It greatly exaggerates the leftwardness of the Socialist Party and grossly overestimates its militant composition. The International Secretariat under Trotsky has become coolies for the bankrupt Socialist International. In this way, Fascism cannot be fought but only aided.

The entrance of the "Left Communists" into the Independent Labor Party of Great Britain is another blunder. In the case of the English, it is not done with the same reasons as in France, that is, due to the necessity to fight Fascism. In England the arguments are given that the I.L.P. is breaking up and there is a chance, by working within it, to accelerate this breaking up and later to form a new mass movement and a mass revolutionary party. To give up our banner and our organ and independence in order to merge with the I.L.P. at a time when the I.L.P. is politically lost and knows not where to turn, can by no means be justified. Now, more than ever, was it necessary, while contacting with all progressive elements within the I.L.P. to keep organizational independence.

The liquidation of the Internationalist Communist movement by Trotsky has no precedent in the whole revolutionary movement. It runs counter to the whole program and strategy of Marxism-Leninism. It has disgraced the very name of "Trotskyism" in the eyes of the conscious workers of the world.

Fortunately, Trotsky and the Internationalist Secretariat have not been able to accomplish this liquidation without splits in every country. In France, Germany, England and elsewhere, genuine Internationalist Communists are holding themselves separate and apart from this liquidation. It must be the duty of the Communist League of Struggle to enter into the closest arrangements with the genuine Internationalist Communist groups and help to reform the ranks of the Internationalist Communists throughout the world.

42. The Communist Movement in the U.S.A.

In the U.S., precisely at the present time when the subjective factor is decisive and in a country where the responsibility is so great, the collapse of the Communist International has led to the regrouping of forces which must be carefully studied.

From the very beginning, the Communist movement in the U.S. met severe obstacles, both objective and subjective. The principal objective difficulties were due (a) to the retarded domination of the capitalist mode of production (frontiers, free land, etc.) and the uneven development of capitalism; (b) the unchecked capitalist advance and the exceptional opportunities for advancement before the war, leading to a large petty-bourgeoisie, relatively better conditions for the proletariat, a huge wave of immigration disuniting the workers and retarding the growth of class consciousness. (c) the shift of economic center of gravity since the war, with its consequent huge growth of American imperialism, parasitic rentier class and corruption of a section of the upper layers of the proletariat.

The obstacles inherent in the Communist movement in this country are mainly (a) remnants of Social-Democracy (parliamentarianism, legalism, lack of direct action, pacifism, nationalism, national-Socialism, democratic-illusions, belief in ultra-imperialism [organized capitalism], contempt for agrarian, colonial, anti-military, Negro work, etc., loose party organization and false organizational structure); (b) remnants of A. F. of L. ism (bureaucracy, orientation to skilled workers, class-collaboration theories and practices, contempt for unorganized and impoverished masses, etc.); (c) remnants of Anarchism (individualism, individual terror, minority action, putschism, false theory of the State, etc.); (d) remnants of Syndicalism (fusion of roles of union and of political party, anti-political, anti-election participation attitude, false understanding of role of industrial unions, failure to work within reactionary organizations, to mobilize all oppressed sections of the population, false views on organization questions, and the relationship of leaders to members within working class organizations, etc.).

To these obstacles must be added the special ones that arose from the poor social composition of the Communist movement, the division of the Party into foreign language federations, entirely isolated from the American proletariat, each leading its own separate factionalist existence.

There never has been a genuine Communist Party in this country. The Lovestone-Foster-Cannon joint leadership (up to 1928) drove the movement into non-Leninist channels. The major failures of this joint unprincipled leadership may be classified under two heads: (a) failure to separate the Party from the class; (b) failure to build a party or to root it among the workers.

The failure to separate the Party from the class, to make it truly a "general staff" and "vanguard" organization was evident on every side; (a) in the absence of Marxist theory, in the failure to translate many important volumes of Marx and Engels works and failure to put forth any original serious theoretical work and failure to train a broad cadre of theoretical leaders; (b) vulgar Marxism, national Socialist tendencies, theory of American exceptionalism and of the bourgeoisification of the working class; (c) the existence of foreign federationism; (d) the lack of tests for membership; (e) the degenerate leadership never tested in any struggle as Communists before reaching leadership, rotten with careerism, factionalism, subsidy-corruption and bureaucracy.

Similarly we must stress the complete failure, under the joint Foster-Lovestone-Cannon leadership to build an organization that could be called a PARTY or to root it among the masses. For a long time no concrete mass work was done, the "party" being an agglomeration of 18 foreign language federations utterly isolated among the masses. These foreign federations pushed forward only those leaders who did not wish to fight, who would allow the federations to stagnate as they were. When concrete work was attempted, only the skilled workers in the A. F. of L. were touched (the main slogan was "Amalgamation or Annihilation"). The sole method used was that of maneuver and tricks with A. F. of L. fakers from the top. In the political field, an orientation to the farmers - and well-to-do farmers at that took place. No effort was made to organize the unorganized, this being denounced as dual unionism. There never was even seriously attempted anti-imperialist work, anti-militarist work, Negro work, work in the South, etc. For four years the leaders sabotaged the C.I. theses of Lenin on organization. To the very end, shop nuclei were mostly on paper. Within the Party, the most rampant fakery, lying and dishonesty were the normal everyday methods of leadership.

43. Bureaucratic Centrism in the U.S. Today.

The driving out of the Lovestone and Cannon misleaders from the CPUSA did not change its essential character. Today the C.P. stands as a bureaucratic centrist organization far to the right of Marxism, utterly unable to win the confidence of the masses. In unemployment work they have raised the anti-Marxist slogan "We Want Work," and "Work or Wages". The unemployment insurance bill they sponsor would harness the workers organizations to the U.S. government and thus pave the way to Fascism. In their opportunist advocacy of the bill, they repeat all the errors of the Socialist Party parliamentarians. Under the Communist Party, the unemployment movement showed itself completely sterile and has at bottom been liquidated.

In their mass work the Communist Party has grossly overestimated the force of the trade union bureaucracy, running away from battle with them, splitting the unions in many cases unnecessarily, and organizing foolish paper unions of their own by mere decree. In their own "Red unions", they have amply demonstrated their utter incapacity, having lost all opportunities open to them and led the unions to utter ruin. Today the "Red unions" are all but liquidated.

With their theory that the A. F. of L. was Fascist, they gave the workers the idea that Fascism could win millions of workers before taking power. They confused the workers as to how to fight Fascism and grossly overestimated the forces of the enemy, believing that all not Communists were in one reactionary mass against Communism.

Declaring that the A. F. of L. is made up only of company unions, the Communist Party members only isolated themselves from the trade union members and in reality have paved the way for company unions.

In their tactics of the United Front only from below and their theory that the Socialist Party was social-Fascist, that is, the left wing of the Fascist forces and thus the chief enemy of the workers, the Communist Party broke up all possibility of attaining the united front of the workers and made the victory of reaction particularly easy.

An openly petty-bourgeois line was taken in the Negro question in which the American Negro Labor Congress was liquidated and a League of Struggle for Negro Rights organized, thus dropping any mention of the Negro proletariat and its role and distorting the struggle of the Negroes for the right of self-determination into a mere "democratic" struggle for "land and liberty".

To top all this is the completely hopeless internal regime of the Communist Party. At the top, crass bureaucracy and subsidy corruption in which the Party has been made merely into a Russian national machine to aid the Soviet foreign policy. At the bottom, complete absence of democracy and theoretical development and the transformation of Communists into robots. The terror inside the Party and the absence of adequate discussion is matched by the hooliganism outside the Party, where the Party members learn how to break up any workers meeting that the Party officialdom does not like.

Considering its false program, its false strategy, tactics and internal regime, we must categorically declare that the Communist Party is only a bureaucratic centrist group steadily degenerating and today historically dead as a revolutionary body capable of struggling for the working class.

44. The Right-Wing Lovestone Group.

The Lovestone group (right centrist) has been well fitted by its past to move further and further to the right. Inside of its ranks, sections openly moving to the Socialist Party (Bert Miller, Gitlow, Zam) were soon formed. The splits occurring soon found themselves in and supporting the Socialist Party.

On all the basic programatic questions: theory of building Socialism in one country, national socialist tendencies, methods of carrying out the Five Year Plan, etc., the Lovestone group has warmly supported the Stalinists, hoping to crawl back into the Party and secure the posts they once held. The complete break-up of the international center of this right wing tendency, coupled with the change of line of the Comintern, may actually bring the fusion of the Lovestone group and Party. This can only be welcomed as greatly clearing the air and a sign of the further weakening of both "Communist" groups.

The basic opportunism of the Lovestone group consists in its (a) National Socialism and its failure to see the mutual dependence of the U.S. on the rest of the declining imperialist world; (b) worship of the strength of American imperialism, advertising and overestimating it; (c) its underestimation of the American working class and its capacity for struggle; (d) its orientation only to the A. F. of L. and struggle against the organization of the unorganized; its dastardly attacks on all new unions and its liquidatory attitude towards them; (e) within the A. F. of L. it covers up the bureaucracy of the A. F. of L. (Zimmerman, Keller and such) and carries on no real struggle against them; (f) gross misconception of how to carry on the United Front and yet to struggle against the opportunists in the united front; (g) downright theoretical dishonesty in dealing with the Communist Internationalists.

Both the Lovestone group and the Stalinist group are degenerate Communist groups now on the level of centrist opportunists. Both have the same basic history of criminal mishandling of the Party and the same general false program. Both are right wing groups differing only in the form and tempo of development of their opportunism and in their influence.

45. The End of the Cannon Group (Fake- "Left" Centrists.)

The Cannon group has now come to an end. In spite of its adherence to the Internationalist Communists, from the very start we carried on a ceaseless struggle to expose it as a fake- "left" centrist group that used Trotsky as a mask to cover up its right wing sectarianism and now has completely collapsed.

The whole history of the Cannon group leadership has made it entirely unfit to carry out the principles of the International Left Opposition in this country. Forming one of the most unprincipled factional cliques inside the old Communist Party, the Cannon leadership took a right wing stand on most of the important questions of the day. It was the Cannon-Hathaway clique that raised the theory that the farmers must lead the workers in the Labor Party movement. Cannon was the first to make an alliance with the opportunist Pepper (1923) and was the first to unite with Lovestone against Trotsky (1925). The Cannon leadership was violently opposed to the organization of the unorganized (Passaic Strike, 1926) and generally worked hand in hand with the other cliques in criminally mishandling the Party. Shrinking into the I.L.D., the Cannon bureaucracy helped to break the New Bedford Textile Strike of 1928 by their terrible "defense" tactics.

Since its formation as a separate group, the Cannon leadership has amply demonstrated its crazy caricature of Marxism. It kept up its unprincipled factional character by tacit united fronts with Max Eastman, Ludwig Lore, Salutsky Hardman, Bill Dunne, Sidney Hook and other enemies of the Left Opposition. For years it stubbornly refused to enter into mass work or even into any united front work when the Communist Party was not present. On most of the American questions the Cannon group has taken essentially the same position as the right wing Lovestone group.

Both the Lovestone group and the Cannon group, although one was called "right" and the other "left", agreed on the following basic points: (a) both refused to see any Fascist germs in the Roosevelt regime and saw merely "state capitalism"; (b) both refused to see the radicalization of the working class; (c) in regard to lynching, both supported the policy of fighting for Federal anti-lynching bills and failed to understand how lynching could be used for the class struggle; (d) both groups had an incorrect unemployment program in which they ridiculed the idea of raising the slogan of a general national strike of limited duration to compel unemployment insurance. Both groups fought against any unemployment policy that would direct the workers to the warehouses and food supplies rather than to City Halls and "demonstration marches to Washington. Both were against our slogan: "Fight the Lockout by the General Strike, Open the Warehouses to the Hungry, Open the Factories to the Unemployed". Instead, both supported the slogan: "We are sick of relief. We want jobs"; (e) on the trade union policy, both leaderships hollered "Back to the A. F. of L." Both did their best to liquidate the revolutionary unions and to destroy them. Both refused to recognize their duty to organize the unorganized and made not the slightest effort to carry out this task. Inside the A. F. of L. both leaderships carried on the most corrupt and treacherous conduct. The action of Zimmerman (needle trades) and Keller (textile) were easily matched by the outrageous conduct of the Cannon group in the New York Food Strike and in the Minneapolis Drivers Strike. The Cannon-Lovestone policies were the most dangerous of any to these sections of the working class and have caused incalculable damage; (f) on the Negro question, both groups have taken an out-and-out White Chauvinist policy, denying the Negroes the right of self-determination, the Cannon group actually going so far as to print letters from South Africa to this effect; (g) both the Cannon and Lovestone centrist groups believed in turning over the names and addresses of their subscribers to the United States government and have materially aided the government thereby in making raids and arrests on the militant revolutionary forces whenever the government saw fit to do so; (h) both groups are notorious for unprincipled factional fighting, for rotten cliqueism and failure to test their leaders in struggle. In the light of all this similarity between the Cannon and Lovestone groups, it is not necessary to go into the many other questions on which we have disagreed with the Cannon group but we can draw the balance at once and declare that the Cannon group is only another variety of Menshevist centrism.

The merger of the Cannon group into the Muste American Workers Party is a final act of liquidatory Menshevism. From Lenin to the camp of the counter-revolution, that is the course that the American League (Cannon group) has finally taken. Up to the time of the fusion and the liquidation internationally of the International Secretariat, in order to place the American question before the Secretariat and to fight by the side of Trotsky, we were willing to enter into negotiations with the American League leading to fusion. Now we break sharply and categorically from such a policy. The revolutionary proletariat can carry forward its tasks only by the sternest repudiation of such treacherous conduct by the Cannon group.

46. The A. W. P. --- Cannon Fusion and the Break-up of the Socialist Party.

Of all the centrist groupings, the American Workers Party is the most heavily laden and nearest to out-and-out bourgeois Liberalism. This Party is not a split-off from any of the old Marxist Internationals. On the contrary, all its life it has fought Marxism and openly fights it today. It is not even as revolutionary in its program as the left wing within the Socialist party. It had very few members and was connected only by the slender thread of a few bureaucrats with the trade union movement. Evolving from the A. F. of L. "Brookwood College", a veritable garbage can for all anti-Marxist and Greenwich Village elements, filled with rank nationalist and chauvinist poison, having over a decade of ardent struggle against the Communist International behind it, the American Workers Party represents the most irresponsible and vacillating element within the revolutionary section of the working class.

The fusion of the Cannon group with the American Workers Party enables the Muste and Cannon fakers to cement their hold upon whatever genuine revolutionary elements may have been found within their ranks and influence. Thus the Cannon-Muste fusion is a consolidation of the fake centrist elements in the revolutionary movement. It is on a par with the return of the Lovestone group back into the Stalinist Party and the crawling of Gitlow back into the Socialist Party. The action of the Cannon group is to be particularly condemned because it makes more difficult the task of winning the mass of militants around the Communist Party to the views of the International Communists.

The one favorable aspect of all these capitulation's and fusion's with the opportunists is that it greatly clears the political atmosphere and allow the Communist League of Struggle to carry out its revolutionary work better than ever.

The imminent break-up of the Socialist Party and the great rise of the "Militant" and "Revolutionary Policy Committee" groups and the fusion's that have taken place must compel us to bond all energies to fraternize with every leftward-going element in the ranks of these organizations so as to win them for our position through personal contact and through united fronts.

47. The Reconstruction of a Leninist International.

To reconstitute a Leninist International the following organizational principles must be carried out: (a) The closest working together of all Communist groups as against their class enemies. In the first place there must be established a new center for the Internationalist Communists. (b) The sharpest ideological intransigence. (c) The firm establishment of those principles insuring the greatest inner party democracy possible under the given circumstances and the utmost development of initiative and ability from below. (d) The recognition and the carrying out of the Leninist theory of process of creation of leaders. The absolute prerequisite for leadership, particularly in a legal party, must be the ability to carry on concrete mass work in a revolutionary manner. To this must be added correct and profound Marxian understanding, absolute honesty and courage. Only with such leaders can the working class be successful in its revolutionary struggles.

Chapter VII

THE TASKS OF THE COMMUNIST LEAGUE OF STRUGGLE

48. To Win the Working Class for Independent Revolutionary Action.

The sharpening of all contradictions and antagonisms throughout the world and the dominant role of America in the capitalist world place extraordinarily heavy responsibilities upon the Communists in this country. Basing itself firmly upon the teachings of Marx and Lenin, especially as embodied in the theses of the first four Congresses of the C. I., and following the correct political line of the present theses, the Communist League of Struggle must make as its basic task the winning of the working masses for independent working class action and for Communism.

The very sharpening of the situation makes all the more imperative the vigorous application of the united front tactics by the Communists. The united front is a vital necessity for the workers. By means of the united front the Communists can come to grips with the class enemies rooted inside the ranks of the workers. It enables the Communists to reach and to win the masses. Finally, the united front tactics is a method by which the Communists character is rounded out, their ability, revolutionary integrity and science are put to the test. In all united fronts the Communists must constantly act independently and by enunciating boldly their own program must strive to win the masses to their side away from the control of their temporary allies.

49. Our Policy on the Labor Party Question.

The present political situation makes it not unlikely that the Labor Party question will again be an important issue before the workers. The Communist League of Struggle cannot advocate the formation of such a party though it would be its duty to work within the Labor Party if formed with a mass base on a federative basis allowing full freedom for the various affiliated groups to carry their own banners.

50. For United Front for Insurrection Against Fascism and Imperialist War.

Internationally the chief campaigns of the Communists must be for the united front for insurrection against Fascism and Imperialist War. These struggles must be conducted upon the most concrete basis. In connection with this, large direct aid must be given the revolutionary colonial masses struggling against American imperialism. Serious anti-militarist work must be begun and an illegal apparatus built up. The Communists must be thoroughly prepared to meet the onrush of the new events.

The struggle against Fascism in the U.S. must take the form of demonstrations around the demand "Complete embargo of Fascist goods and the ousting of all Fascist envoys from this country". At the same time a thorough exposure of the Fascist germs in the U.S. must be made.

51. Unemployment Work.

The central campaign in the U.S. still remains the struggle for alleviation of the unemployed and security for the workers during the crisis. In all of our agitation, we must show how the crisis is really an enormous lockout for the workers and must raise the slogan "End the lockout, Open the Warehouses to the Hungry, Open the Factories for the Unemployed". Against the lockout must be counterposed the "General Strike of Limited Duration for Unemployment Insurance" and for other demands that will insure a secure income for the workers. In all of these campaigns every effort must be made to link up the employed with the unemployed. Already, due in part to our efforts, the question of the general strike of limited duration has been brought up at the 1934 A. F. of L. convention.

The immediate program must be non-payment of rent, resistance to evictions, reductions of the cost of living, extension of credits by food shops to those unemployed, seizure of food, increase in relief, fight for social insurance. The unemployment movement must be closely bound up with the movement for resistance to wage cuts and worsened conditions and for the shorter work day. The sternest struggle must be waged against compulsory labor service.

The widest united front movement must be created in order to mobilize the broadest masses. The unemployment movement must help in the organization of the unorganized and in the creation of a strong left wing to win the workers in the reactionary unions to a militant policy.

52. The Trade Union Work.

The trade union work must remain a most important part of the Communists work. The principal job is the organization of the unorganized, the building up of a strong revolutionary trade union movement where none existed before. Only the genuine Communists have the capacity to organize the masses of the unskilled and to hold them in new unions. These new unions must be saved from the destructive tactics of the Communist Party bureaucracy wherever this is possible. More than any other group, the Communist League of Struggle, by the past of its membership, has founded and built up the new union movement.

At the same time it is necessary to intensify work in the reactionary unions, to build again a left wing to struggle against the misleaders and fake "progressives" in control of the unions.

All of this trade union work must be linked up with the general struggle of the Communists against rationalization and for complete social insurance and the shorter work day. As the class fight grows more severe, the trade union fight must lead to the struggle for workers control over production.

53. Negro Work.

Extremely essential is the continuation on a much broader scale of the Negro work that the Communist League of Struggle has begun through the Negro Chamber of Labor. Our full policy is given in a separate thesis on the Struggle for Negro Emancipation. In all of our Negro work we must emphasize the necessity for the Negro masses in the U.S. to win for themselves the right of self-determination.

54. A New Orientation Necessary.

In all of its work, the Communist League of Struggle must take a new orientation based on the thorough appreciation of the fact that wars, crises, riots and revolutions make up and will continue increasingly to make up the "normal" atmosphere of its life.

55. For A New Communist International.

The Communist League of struggle adheres to the basic principles of the Internationalist Communists and fights for the building up of a new Communist International on this basis. Forward in the struggle for Marxism-Leninism. For an international Communist movement and an American section that can lead to victory.

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Appendix A

In 1920, while the U.S. was falling off in Iron and Steel production from about 37 million tons to 17 millions, the United Kingdom was falling from 9 to 4, Germany was rising close to 9 from 6 and France was rising as well. In 1923, when the U.S. had recovered to 40, Germany had fallen to 5, France was still rising and England had recovered to about 7. In 1926, the U.S. remained at 40, France had gone to 10, England to 4 and Germany was at 11. In 1929, the U.S. was 42.6, Germany 15.5, France 10.4 and the United Kingdom 7.6. The situations in the Iron and Steel industry illustrate general business conditions. (National Industrial Conference Bd. # 239)

In regard to finances, as a result of the redivision of Europe by the Versailles Treaty and the chaos caused by war and revolution, one country after the other experienced drastic crises culminating in Germany 1923, in France and Italy in 1925, etc. In 1926, wholesale prices stood as follows: (1913-1914 = 100) Germany 134.4, Belgium 744, France 718, Italy 603, Poland 105, United Kingdom 145, Japan 178.9. By 1929, while prices rose 15% in Belgium, they fell 13% in France and 27% in England. (From Forces of World Business Depression)

In 1924 the number of bankruptcies in the United States was the lowest of the nine years following. In Great Britain it was the highest, while Germany saw the most violent fluctuations, jumping from the monthly average of 516 in 1924 to 1103 in 1926, falling to 475 in 1927 and rising to 821 in 1929. In France it was 659 in 1925, 122 in 1926, 689 in 1927, rising to its greatest height in the first quarter of 1934 with 1256. (League of Nations Bulletin of Statistics, March 1934)

Counting 1927-1930 as 100, France, Germany, Italy and Great Britain showed the greatest differences and trends in wages and cost of living indices. In France the cost of living mounted steadily from 1927 to 1930 (15 points), having jumped up very rapidly from 1925 on. In Germany, despite zigzags, in general it maintained itself at the same level, while in Italy it took a drastic drop from 1925 and in Great Britain it showed a steady decline. In France wages rose above the cost of living, dropping slowly; in Great Britain they had been below the cost of living and also dropped slowly in both Germany and Italy; after 1930 they dropped at terrific speed. (League of Nations Bulletin)

APPENDIX B

The U.S. Dept of Labor reports regarding the coal mines: "A further significant fact shown in these statistics is that the year to year increase in output per man per day has been more rapid in years of depression, i.e., 1930 to 1931 than in a year of more active coal demand, 1929".

The same was stated in regard to the auto tire industry for 1930-1931: "Especially during the last two years, there has been an increase in man-hour productivity much larger than during any preceding year in the history of tire-making." In fact the rate of increase in 1931 was nine times that of 1929!

In the cigar industry new machines having a running speed of 1400 cigarettes a minute have replaced the old with a speed of 600, during the crisis. The same thing is showing itself in all industries.

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(NOTE: These THESES are completed by the following documents:
"The Struggle for Negro Emancipation"
"The Struggle of the Unemployed"
"The Iternationalist-Communists and the War"
"Communism and the Trade Unions"
"The Organization of a Revolutionary Party"

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                               APPENDIX C
                          1913      1927      1932

                    Total Imports to China
From the U.S.             6%        16%       25.3%
From the United Kingdom   16.5%     10.8%     11.2%
                    Total Imports to Japan
From the U.S.             16.8%     31%       35.6%
From the U. K.            16.8%     7%        5.5%
                    Total Imports to Argentine            (1929)
From the U.S.             14.7%     24.7%     13.5%        26.4%
From the U.K.             31%       19.3%     21.5%        17.6%
                    Total Imports to Brazil
From the U.S.             15.7%     28.7%     31%
From the U.K.             24.5%     21.2%     19.2%
                    Imports from U.K.
Into Canada               21.3%     16.8%     21.3%
Into Australia            51.8%     43.4%     41.1%
New Zealand               59.7%     47.9%     51.3%
South Africa              50.1%     42.8%     50%
                    Imports from U.S.
Into Canada               64.6%     4.9%      57.2%
Into Australia            13.7%     24.6%     14.%
New Zealand               9.5%      18.1%     1.1%
South Africa              8.8%      15.3%     12.3%

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