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Consequences of the crisis in USA

Friday 22 May 2009, by Robert Paris

Occupation of the workers of Chicago

Strike at General Motors

“We’re going to see the end of the retail Christmas….we’re going to see a fundamental shift take place….putting food on the table is going to be more important that putting gifts under the Christmas tree,” said Celente, adding that the situation would be “worse than the great depression”.

“America’s going to go through a transition the likes of which no one is prepared for,” said Celente, noting that people’s refusal to acknowledge that America was even in a recession highlights how big a problem denial is in being ready for the true scale of the crisis.

Celente, who successfully predicted the 1997 Asian Currency Crisis, the subprime mortgage collapse and the massive devaluation of the U.S. dollar, told UPI in November last year that the following year would be known as “The Panic of 2008,” adding that “giants (would) tumble to their deaths,” which is exactly what we have witnessed with the collapse of Lehman Brothers, Bear Stearns and others. He also said that the dollar would eventually be devalued by as much as 90 per cent.

The consequence of what we have seen unfold this year would lead to a lowering in living standards, Celente predicted a year ago, which is also being borne out by plummeting retail sales figures.

The prospect of revolution was a concept echoed by a British Ministry of Defence report last year, which predicted that within 30 years, the growing gap between the super rich and the middle class, along with an urban underclass threatening social order would mean, “The world’s middle classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest,” and that, “The middle classes could become a revolutionary class.”

In a separate recent interview, Celente went further on the subject of revolution in America.

“There will be a revolution in this country,” he said. “It’s not going to come yet, but it’s going to come down the line and we’re going to see a third party and this was the catalyst for it: the takeover of Washington, D. C., in broad daylight by Wall Street in this bloodless coup. And it will happen as conditions continue to worsen.”

“The first thing to do is organize with tax revolts. That’s going to be the big one because people can’t afford to pay more school tax, property tax, any kind of tax. You’re going to start seeing those kinds of protests start to develop.”

“It’s going to be very bleak. Very sad. And there is going to be a lot of homeless, the likes of which we have never seen before. Tent cities are already sprouting up around the country and we’re going to see many more.”

“We’re going to start seeing huge areas of vacant real estate and squatters living in them as well. It’s going to be a picture the likes of which Americans are not going to be used to. It’s going to come as a shock and with it, there’s going to be a lot of crime. And the crime is going to be a lot worse than it was before because in the last 1929 Depression, people’s minds weren’t wrecked on all these modern drugs – over-the-counter drugs, or crystal meth or whatever it might be. So, you have a huge underclass of very desperate people with their minds chemically blown beyond anybody’s comprehension.”

Things have obviously been bad for the past year, but things are just beginning to get much worse. As economic forecasters predict another two years of decline, the Associated Press reports: “The economy’s downhill slide at the end of last year was likely much steeper than the government initially thought and it is probably doing just as poorly now — if not worse — as a relentless slew of negative forces feed on each other, pushing the country deeper into recession.” Danny Schechter, a journalist who was one of the first to sound the economic alarm and author of Plunder: Investigating Our Economic Calamity, explains: “It seems endless, and we are not even touching the surface of the real economic time bombs on the horizon from credit default swaps, derivatives and credit cards.” A BBC report states: “There is now $2.2 trillion of toxic bank debt worldwide, the IMF says, $500bn more than it estimated a few months ago.”

It was staggering in January when 655,000 people lost their job in the US, but this pace has continued with no signs of slowing. The US economy is now shedding over 23,000 jobs every day. Since the beginning of the crisis, a little over one year ago, over 4.4 million jobs have been lost, with more than half of the cuts occurring in the past four months. We haven’t seen losses like this since World War II - over 60 years ago. A record (and quickly increasing) five million US citizens now file for unemployment benefits. In the past month, 787,000 people had their work hours cut and now work part-time instead of full-time, bringing the number of underemployed people up to 8.6 million. When you add in unemployed people and jobless workers who have literally given up looking for a job, you get a astounding number of over 22 million unemployed/underemployed people - that’s a 14.8% rate - and climbing fast!

The International Labor Organization predicts there will be over 50 million jobs lost worldwide in 2009. The world’s largest credit insurer reports that 42,000 companies went out of business in 2008, a 45% increase over 2007, and they expect a stunning 62,000 to fail in 2009. Just think of what will happen when all these companies and people are added to the masses that already can’t pay back loans and credit cards, let alone afford to keep their warehouses, stores, offices and homes. The US government, which is about to pump another $787.2 billion of tax payer funds into the dying economy, is already over $60 TRILLION in debt - that’s over $500k per US household - owed before the new stimulus bill! On top of that, US consumers are already $14 trillion in debt from credit cars and mortgages.

On the housing front things are in full-blown crisis mode. As Depression-era style tent cities spread throughout the US, Ariana Huffington writes, “we are facing nothing less than a national emergency, with 10,000 Americans going into foreclosure every day and 2.3 million homeowners having faced foreclosure proceedings in 2008. When we put flesh and blood on these numbers, the suffering they represent is enormous and so is the social disintegration they entail.”

Other than a few worker strikes and some significant, but under-reported, incidents on the home foreclosure front, things have been eerily tame in the US thus far. But with things quickly going from bad to worse, that’s all about to change. For example, ACORN, the nation’s largest grassroots community organization of low and moderate-income people, recently stated:

“ACORN’s campaign is working to put the human faces of foreclosure victims front and center while escalating the campaign tactics to include civil disobedience aimed at keeping people from losing their homes. Everything is on the table: disruption of sales, disruption of banking business, even refusing to be evicted or moving families back into their foreclosed homes. The urgency of the crisis demands no less.”

Salon writer Glenn Greenwald recently wrote about a Fox News interview that shows how much of a disconnect there is between large corporate news organizations and the obviously frustrated public:

“This Fox News interview with Virg Bernero — the Mayor of highly unionized Lansing, Michigan and himself the son of a retired GM worker — is, for several reasons, really worth watching…. The glaring discrepancy he notes — between (a) the consensus of our political class that workers must endlessly give up wage, health and other benefits even as (b) we shovel trillions of dollars in government subsidies to Wall Street for ongoing massive executive bonuses and the like for the very people who caused the collapse — is one that… is rarely heard in our mainstream debate with such clarity and passion.

Even more notable is the dripping condescension directed at him by the Fox personality at the end of the interview for having committed the sin of exhibiting genuine passion and anger over something as trivial as the disappearing middle class and the massive and growing rich-poor gap. That’s the crime of Shrillness, one of the prime hallmarks of Unseriousness — failing/refusing to suppress one’s anger towards our political and financial establishment.”

For another recent example of reality bursting through the numbing television set, former National Security Adviser Zbigniew Brzezinski expressed his fears with MSNBC’s Joe Scarborough :

JOE SCARBOROUGH: You also talked about the possibility of class conflict.

ZBIGNIEW BRZEZINSKI: I was worrying about it because we’re going to have millions and millions of unemployed, people really facing dire straits. And we’re going to be having that for some period of time before things hopefully improve. And at the same time there is public awareness of this extraordinary wealth that was transferred to a few individuals at levels without historical precedent in America….

And you sort of say to yourself: what’s going to happen in this society when these people are without jobs, when their families hurt, when they lose their homes, and so forth?

We have the government trying to repair: repair the banking system, to bail the housing out. But what about the rich guys?… Where is the monied class today? Why aren’t they doing something: the people who made billions, millions…. there’s going to be growing conflict between the classes and if people are unemployed and really hurting, hell, there could be even riots!

Things are about to… EXPLODE

As desperate people in the US and throughout the world look to take vengeance on the people responsible for this disaster, the US, and Wall Street in particular, will be their target. Joseph Stiglitz, Nobel Laureate in Economics, recently stated that this economic global crisis has a “ made in the USA label on it.” Harvard economic historian Niall Ferguson adds:

“… this is a very unfair crisis. The epicentre is the United States… it’s an unfair world…. Here is the world’s biggest economy, which gave us subprime mortgages, rampant securitization, the collateralized debt obligation, Lehmann Brothers, Merrill Lynch….

There will be blood, in the sense that a crisis of this magnitude is bound to increase political as well as economic [conflict]. It is bound to destabilize some countries. It will cause civil wars to break out, that have been dormant. It will topple governments that were moderate and bring in governments that are extreme. These things are pretty predictable.”

These conflicts are something that the US government has been expecting, and preparing for. Dennis Blair, the new US Director of National Intelligence, recently testified before the Senate Intelligence Committee stating that the greatest threat facing the US is not terrorism, but the current economic crisis:

“The primary near-term security concern of the United States is the global economic crisis and its geopolitical implications. The crisis has been ongoing for over a year…. Of course, all of us recall the dramatic political consequences wrought by the economic turmoil of the 1920s and 1930s in Europe, the instability, and high levels of violent extremism.” [Let us not forget the lessons of history, in the most extreme case, it was the Wall Street led economic meltdown in the 1930’s that led to Hitler’s rise in Germany.]

So, as Intelligence Committee Vice-Chair Christopher Bond feared, the economic crisis is now “the primary focus of the intelligence community.”

In addition to threats from outside US borders, the US Army has been preparing for expected riots and turmoil from US citizens. Chris Hedges sums it all up:

“The specter of social unrest was raised at the U.S. Army War College in November in a monograph [click on Policypointers’ pdf link to see the report] titled ‘Known Unknowns: Unconventional ‘Strategic Shocks’ in Defense Strategy Development.’ The military must be prepared, the document warned, for a ‘violent, strategic dislocation inside the United States,’ which could be provoked by ‘unforeseen economic collapse,’ ‘purposeful domestic resistance,’ ‘pervasive public health emergencies’ or ‘loss of functioning political and legal order.’ The ‘widespread civil violence,’ the document said, ‘would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security.’

‘An American government and defense establishment lulled into complacency by a long-secure domestic order would be forced to rapidly divest some or most external security commitments in order to address rapidly expanding human insecurity at home,’ it went on.

‘Under the most extreme circumstances, this might include use of military force against hostile groups inside the United States. Further, DoD [the Department of Defense] would be, by necessity, an essential enabling hub for the continuity of political authority in a multi-state or nationwide civil conflict or disturbance,’ the document read.

In plain English, something bureaucrats and the military seem incapable of employing, this translates into the imposition of martial law and a de facto government being run out of the Department of Defense. They are considering it. So should you.

Adm. Blair warned the Senate that ‘roughly a quarter of the countries in the world have already experienced low-level instability such as government changes because of the current slowdown.’ He noted that the ‘bulk of anti-state demonstrations’ internationally have been seen in Europe and the former Soviet Union, but this did not mean they could not spread to the United States.”

As Joshua Holland put it: “At least in Western Europe, cries of ‘burn the shit down!’ are being heard in countries with some of the highest standards of living in the world…”

Are you ready for the “Summer of Rage”?

In preparation for what many believe is going to be a tumultuous summer, the Obama administration has recently made $2 billion in aid available to local police departments.

In Europe, Military Intelligence and police are bracing for the worst. They have been preparing to suppress mass civilian disorder, as they fear a “summer of rage.” A recent UK poll revealed, “More than a third of voters believe the Army will have to be brought in to deal with a ’summer of rage’ on British streets as the recession bites…” Police and governments around the world know that it is now much easier to recruit “foot-soldiers” to take part in civil disobedience when you have so many unemployed and struggling to make ends meet.

Now that President Obama is off the campaign trail and settled into the oval office, his “Hope” seems to be fading fast as he sees the tidal wave heading for us. Just listen to the “hopeful” Obama in his first news conference as president:

“And if there’s anyone out there who still doesn’t believe this constitutes a full-blown crisis, I suggest speaking to one of the millions of Americans whose lives have been turned upside down because they don’t know where their next paycheck is coming from.”

Or, as George W. Bush said about the US economy just before leaving office: “This sucker is going down!”

So, as we sit here in the US, at the epicenter of the economic meltdown - also the country with the highest inequality of wealth in the industrialized world - it seems to be just a matter of time before all hell breaks lose.

Tick… tick… tick…

Theses on the American Revolution
Adopted by the Twelfth National Convention of the SWP
(November 1946)

From Fourth International, Vol.8 No.1, January 1947, pp.8-15.

The United States, the most powerful capitalist country in history, is a component part of the world capitalist system and is subject to the same general laws. It suffers from the same incurable diseases and is destined to share the same fate. The overwhelming preponderance of American imperialism does not exempt it from the decay of world capitalism, but on the contrary acts to involve it ever more deeply, inextricably, and hopelessly. U.S. capitalism can no more escape from the revolutionary consequences of world capitalist decay than the older European capitalist powers. The blind alley in which world capitalism has arrived, and the U.S. with it, excludes a new organic era of capitalist stabilization. The dominant world position of American imperialism now accentuates and aggravates the death agony of capitalism as a whole.

American imperialism emerged victorious from the Second World War, not merely over its German and Japanese rivals, but also over its “democratic” allies, especially Great Britain. Today Wall Street unquestionably is the dominant world imperialist center. Precisely because it has issued from the war vastly strengthened in relation to all its capitalist rivals, U.S. imperialism seems indomitable So overpowering in all fields diplomatic, military, commercial, financial, and industrial – is Wall Street’s preponderance that consolidation of its world hegemony seems to be within easy reach. Wall Street hopes to inaugurate the so – called “American Century.”

In reality, the American ruling class faces more insurmountable obstacles in “organizing the world” than confronted the German bourgeoisie in its repeated and abortive attempts to attain a much more modest goal, namely: “organizing Europe.”

The meteoric rise of U. K imperialism to world supremacy comes too late. Moreover, American imperialism rests increasingly on the foundations of world economy, in sharp contrast to the situation prevailing before the First World War, when it rested primarily on the internal market – the source of its previous successes and equilibrium. But the world foundation is today shot through with insoluble contradictions; it suffers from chronic dislocations and is mined with revolutionary powder kegs.

American capitalism, hitherto only partially involved in the death agony of capitalism as a world system, is henceforth subject to the full and direct impact of all the forces and contradictions that have debilitated the old capitalist countries of Europe.

The economic prerequisites for the socialist revolution are fully matured in the U.S. The political premises are likewise far more advanced than might appear on the surface.

The U.S. emerged from the Second World War, just as it did in 1918, as the strongest part of the capitalist world. But here ends the resemblance in the impact and consequences of the two wars upon the country’s economic life. For in other major aspects the situation has in the meantime drastically altered.

In 1914-18 continental Europe was the main theater of war; the rest of the world, especially the colonial countries, was left virtually untouched by the hostilities. Thus, not only sections of continental Europe and England but the main framework of the world market itself remained intact. With all its European competitors embroiled in the war, the way was left clear for American capitalism to capture markets.

More than this, during the First World War capitalist Europe itself became a vast market for American industry and agriculture. The American bourgeoisie drained Europe of her accumulated wealth of centuries and supplanted their Old World rivals in the world market. This enabled the ruling class to convert the U.S. from a debtor into the world’s banker and creditor, and simultaneously to expand both the heavy (capital goods) and the light (consumer goods) industries. Subsequently this wartime expansion permitted the fullest possible development of this country’s domestic market. Finally, not merely did the American bourgeoisie make vast profits from the war but the country as a whole emerged much richer. The relatively cheap price of imperialist participation in World War I (only a few score billion dollars) was covered many times over by the accruing economic gains.

Profoundly different in its effects is the Second World War. This time only the Western Hemisphere has been left untouched militarily. The Far East, the main prize of the war, has been subjected to a devastation second only to that suffered by Germany and Eastern Europe. Continental Europe as well as England have been bankrupted by the war. The world market has been completely disrupted. Thus culminated the process of shrinking, splintering, and undermining that went on in the interval between the two wars (the withdrawal of one-sixth of the world – the USSR – from the capitalist orbit; the debasement of currency systems, the barter methods of Hitlerite Germany, Japan’s inroads on Asiatic and Latin American markets, England’s Empire Preference System, etc., etc.).

Europe, which defaulted on all its prior war and postwar debts to the U.S., this time served not as an inexhaustible and highly profitable market, but as a gigantic drain upon ‘the wealth and resources of this country in the shape of lendlease, overall conversion of American economy for wartime production, huge mobilization of manpower, large-scale casualties, and so on.

With regard to the internal market, the latter, instead of expanding organically as in 1914-18, experienced in the course of the Second World War only an artificial revival based on war expenditures.

While the bourgeoisie has been fabulously enriched, the country as a whole has become much poorer; the astronomic costs of the war will never be recouped.

In sum, the major factors that once served to foster and fortify American capitalism either no longer exist or are turning into their opposites.

The prosperity that followed the First World War, which was hailed as a new capitalist era refuting all Marxist prognostications, ended in an economic catastrophe. But even this short – lived prosperity of the twenties was based on a combination of circumstances which cannot and will not recur again. In addition to the factors already listed, it is necessary to stress: (1) that American capitalism had a virgin continent to exploit; (2) that up to a point it had been able to maintain a certain balance between industry and agriculture; and (3) that the main base of capitalist expansion had been its internal market. So long as these three conditions existed -although they were already being undermined -it was possible for U.S. capitalism to maintain a relative stability.

The boom in the twenties nourished the myth of the permanent stability of American capitalism, giving rise to pompous and hollow theories of a “new capitalism,” “American exceptionalism,” the “American dream,” and so forth and so on. The illusions about the possibilities and future of American capitalism were spread by the reformists and all other apologists for the ruling class not only at home but abroad. “Americanism” was the gospel of all the misleaders of the European and American working class.

What actually happened in the course of the fabulous prosperity of the twenties was that under these most favorable conditions, all the premises for an unparalleled economic catastrophe were prepared. Out of it came a chronic crisis of American agriculture. Out of it came a monstrous concentration of wealth in fewer and fewer hands. Correspondingly, the rest of the population became relatively poorer. Thus, while in the decade of 1920-30, industrial productivity increased by 50 percent, wages rose only 30 percent. The workers were able to buy -in prosperity -proportionately less than before.

The relative impoverishment of the American people is likewise mirrored in national wealth statistics. By 1928 the workers’ share of the national wealth had dropped to 4.7 percent; while the farmers retained only 15.4 percent. At the same time, the bourgeoisie’s share of the national wealth had risen to 79.9 percent, with most of it falling into the hands of the Sixty Families and their retainers.

The distribution of national income likewise expressed this monstrous disproportion. In 1929, at the peak of prosperity, 86,000 families had the same income as 11 million “lowerbracket” families.

This concentration of wealth was a cardinal factor in limiting the absorbing capacity of the internal market. Compensating external outlets for agriculture and industry could not be found in a constricting world market.

Moreover, the need to export raw materials and agricultural products tended to further unbalance American foreign trade. This inescapably led to a further dislocation of the world market, whose participants were debtor countries, themselves in need of selling more than they bought in order to cover payments on their debts, largely owed to the U.S.

While appearing and functioning in the role of stabilizers of capitalism, the American imperialists were thus its greatest disrupters both at home and abroad. The U.S. turned out to be the main source of world instability, the prime aggravator of imperialist contradictions.

In the interim between the two wars this manifested itself most graphically in the fact that all economic convulsions began in the Republic of the Dollar, the home of “rugged individualism.” This was the case with the first postwar crisis of 1920-21; this was repeated eight years later when the disproportion between agriculture and industry reached the breaking point and when the internal market had become saturated owing to the impoverishment of the people at one pole and the aggrandizement of the monopolists at the other. The Great American Boom exploded in a crisis which shattered the economic foundations of all capitalist countries.

The economic crisis of 1929 was not a cyclical crisis such as periodically accompanied organic capitalist development in the past, leading to new and higher productive levels. It was a major historical crisis of capitalism in decay, which could not be overcome through the “normal” channels; that is to say, through the blind interplay of the laws governing the market.

Production virtually came to a standstill. National income was cut into less than half, plummeting from 81 billion dollars in 1929 to 40 billion dollars in 1932. Industry and agriculture sagged. The army of unemployed swelled tenfold “normal,” reaching the dizzy figure of 20 million. According to official estimates, based on 1929 averages, the losses in the years 1930-38 amounted to 43 million man-years of labor, and 133 billion dollars of national incomes.

By 1939 the national debt soared to 40 billion dollars, or 14 billion more than the highest point at the end of the First World War. The number of unemployed kept hovering at 10 million. Industry and agriculture stagnated. The foreign trade of the U.S. in a reduced world market fell to less than half of its “normal” peacetime share.

What all these figures really express is the fearsome degradation of living standards of the workers and the middle class, and the outright pauperization of the “underprivileged onethird” of the population. The wafer-thin layer of monopolists, naturally, did not suffer at all, but on the contrary utilized the crisis in order to gobble up even a larger share of the country’s wealth and resources.

The bourgeoisie saw no way out of the crisis. They had no way out. They and their regime remained the main obstacle in the way not only of domestic but of world recovery. In its downward plunge, the American bourgeoisie dragged the rest of the capitalist world with it, and kept it down.

Decisive is the fact that despite all the “pump-priming,” “brain-trusting,” and emergency “reforms,” American capitalism was incapable of solving the crisis. The partial upswing of 1934-37 proved to be temporary and passing in character. The precipitous drop that occurred in 1931 revealed the abyss facing American capitalism. The threatening new downward plunge was cut off only by the huge expenditures made in preparation for the Second World War.

Only the war temporarily resolved the economic crisis which had lasted in both hemispheres for ten years. The grim reality, however, is that this “solution” has solved exactly nothing. Least of all did it remove or even mitigate a single one of the basic causes for the crisis of 1929.

The basis of the current American post-war prosperity is the artificial expansion of industry and agriculture through unprecedented government spending which is swelling constantly the enormous national debt. In its fictitious character the war and postwar boom of the early forties far exceeds the orgy engaged in by European capitalism during 1914-18 and the immediate postwar years.

The diversion of production into war industry on an unheard of scale resulted in temporary shortages of consumer goods. The home and foreign markets seemed to acquire a new absorbing capacity. Universal scarcities and war havoc are acting as temporary spurs to production, especially in the consumers’ goods field.

Overall there is, however, the universal impoverishment, the disrupted economic, fiscal, and government systems – coupled with the chronic diseases and contradictions of capitalism, not softened but aggravated by the war.

If we multiply the condition in which European capitalism, with England at its head, emerged from the First World War by ten times and in some instances a hundred times – because of the vaster scale of the consequences of World War II – then we will arrive at an approximation of the actual state of American capitalism.

Every single factor underlying the current “peacetime” prosperity is ephemeral. This country has emerged not richer from the Second World War as was the ease in the twenties, but poorer – in a far more impoverished world. The disproportion between agriculture and industry has likewise increased tremendously, despite the hothouse expansion of agriculture. The concentration of wealth and the polarization of the American population into rich and poor has continued at a forced pace.

The basic conditions that precipitated the 1929 crisis when American capitalism enjoyed its fullest health not only persist but have grown more malignant. Once the internal market is again saturated, no adequate outlet can be hoped for in the unbalanced world market. The enormously augmented productive capacity of the U.S. collides against the limits of the world market and its shrinking capacity. Ruined Europe herself needs to export. So does the ruined Orient, whose equilibrium has been ruptured by the shattering of Japan, its most advanced sector.

Europe is in dire need of billions in loans. In addition to lend-lease, Wall Street has already pumped almost $5 billion in loans into England; almost $2 billion into France; and smaller sums into the other satellite countries of Western Europe – without however achieving any semblance of stabilization there. Bankrupt capitalist Europe remains both a competitor on the world market and a bottomless drain. The Orient, too, needs loans, especially China, which, while in the throes of civil war, has already swallowed up as many American dollars as did Germany in the early Twenties.

At home, the explosive materials are accumulating at a truly American tempo. Carrying charges on the huge national debt; the astronomic military “peacetime” budget ($18.5 billion for this year); the inflation, the “overhead expenditures” of Wall Street’s program of world domination, etc., etc. – all this can come from one source and one only: national income. In plain words, from the purchasing power of the masses. Degradation of workers’ living conditions and the pauperization of the farmers and the urban middle class – that is the meaning of Wall Street’s program.

The following conclusion flows from the objective situation: U.S. imperialism which proved incapable of recovering from its crisis and stabilizing itself in the ten-year period preceding the outbreak of the Second World War is heading for an even more catastrophic explosion in the current postwar era. The cardinal factor which will light the fuse is this: The home market; after an initial and artificial revival, must contract. It cannot expand as it did in the twenties. What is really in store is not unbounded prosperity but a short-lived boom. In the wake of the boom must come another crisis and depression which will make the 1929-32 conditions look prosperous by comparison.

The impending economic paroxysm must, under the existing conditions, pass inexorably into the social and political crisis of American capitalism, posing in its course pointblank the question of who shall be the master in the land. In their mad drive to conquer and enslave the entire world, the American monopolists are today preparing war against the Soviet Union. This war program, which may be brought to a head by a crisis or the fear of a crisis at home, will meet with incalculable obstacles and difficulties. A war will not solve the internal difficulties of American imperialism but will rather sharpen and complicate them. Such a war will meet with fierce resistance not only by the peoples of the USSR, but also by the European and colonial masses who do not want to be the slaves of Wall Street. At home the fiercest resistance will be generated. Wall Street’s war drive, aggravating the social crisis, may under certain conditions actually precipitate it. In any case, another war will not cancel out the socialist alternative to capitalism but only pose it more sharply.

The workers’ struggle for power in the U.S. is not a perspective of a distant and hazy future but the realistic program of our epoch.

The revolutionary movement of the American workers is an organic part of the world revolutionary process. The revolutionary upheavals of the European proletariat which lie ahead will complement, reinforce, and accelerate the revolutionary developments in the U.S. The liberationist struggles of the colonial peoples against imperialism which are unfolding before our eyes will exert a similar influence. Conversely, each blow dealt by the American proletariat to the imperialists at home will stimulate, supplement, and intensify the revolutionary struggles in Europe and the colonies. Every reversal suffered by imperialism anywhere will in turn produce ever greater repercussions in this country, generating such speed and power as will tend to reduce all time intervals both at home and abroad.

The role of America in the world is decisive. Should the European and colonial revolutions, now on the order of the day, precede in point of time the culmination of the struggle in the U.S., they would immediately be confronted with the necessity of defending their conquests against the economic and military assaults of the American imperialist monster. The ability of the victorious insurgent peoples everywhere to maintain themselves would depend to a high degree on the strength and fighting capacity of the revolutionary labor movement in America. The American workers would then be obliged to come to their aid, just as the Western European working class came to the aid of the Russian Revolution and saved it by blocking full – scale imperialist military assaults upon the young workers’ republic.

But even should the revolution in Europe and other parts of the world be once again retarded, it will by no means signify a prolonged stabilization of the world capitalist system. The issue of socialism or capitalism will not be finally decided until it is decided in the U.S. Another retardation of the proletarian revolution in one country or another, or even one continent or another, will not save American imperialism from its proletarian nemesis at home. The decisive battles for the communist future of mankind will be fought in the U.S.

The revolutionary victory of the workers in the U.S. will seal the doom of the senile bourgeois regimes in every part of our planet, and of the Stalinist bureaucracy, if it still exists at the time. The Russian Revolution raised the workers and colonial peoples to their feet. The American revolution with its hundredfold greater power will set in motion revolutionary forces that will change the face of our planet. The whole Western Hemisphere will quickly be consolidated into the Socialist United States of North, Central, and South America. This invincible power, merging with the revolutionary movements in all parts of the world, will put an end to the outlived capitalist system as a whole, and begin the grandiose task of world reconstruction under the banner of the Socialist United States of the World.

Whereas the main problem of the workers in the Russian Revolution was to maintain their power once they had gained it, the problem in the United States is almost exclusively the problem of the conquest of power by the workers. The conquest of power in the United States will be more difficult than it was in backwards Russia, but precisely for that reason it will be much easier to consolidate and secure.

The dangers of internal counterrevolution, foreign intervention, imperialist blockade, and bureaucratic degeneration of a privileged labor caste – in Russia all of these dangers stemmed from the numerical weakness of the proletariat, the agelong poverty and backwardness inherited from czarism, and the isolation of the Russian Revolution. These dangers were in the final analysis unavoidable there.

These dangers scarcely exist in the U.S. Thanks to the overwhelming numerical superiority and social weight of the proletariat, its high cultural level and potential; thanks to the country’s vast resources, its productive capacity and preponderant strength on the world arena, the victorious proletarian revolution in the U. K, once it has consolidated its power, will be almost automatically secured against capitalist restoration either by internal counterrevolution or by foreign intervention and imperialist blockade.

As for the danger of bureaucratic degeneration after the revolutionary victory – this can only arise from privileges which are in turn based on backwardness, poverty, and universal scarcities. Such a danger could have no material foundation within the U.S. Here the triumphant workers’ and farmers’ government would from the very beginning be able to organize socialist production on far higher levels than under capitalism, and virtually overnight assure such a high standard of living for the masses as would strip privileges in the material sense of any serious meaning whatever. Mawkish speculations concerning the danger of bureaucratic degeneration after the victorious revolution serve no purpose except to introduce skepticism and pessimism into the ranks of the workers’ vanguard, and paralyze their will to struggle, while providing fainthearts and snivelers with a convenient pretext for running away from the struggle. The problem in the U.S. is almost exclusively the problem of the workers’ conquest of political power.

In the coming struggle for power the main advantages will be on the side of the workers; with adequate mobilization of their forces and proper direction, the workers will win. If one wishes to deal with stern realities and not with superficial appearances, that is the only way to pose the question. The American capitalist class is strong, but the American working class is stronger.

The numerical strength and social weight of the American working Bass, greatly increased by the war, is overwhelming in the country’s life. Nothing can stand up against it. The productivity of American labor, likewise greatly increased in wartime, is the highest in the world. This means skill, and skill means power.

The American workers are accustomed to the highest living and working standards. The widely held view that high wages are a conservatizing factor tending to make workers immune to revolutionary ideas and actions is one – sided and false. This holds true only under conditions of capitalist stability where the relatively high standard of living can be maintained and even improved. This is excluded for the future, as our whole analysis has shown. On the other hand, the workers react most sensitively and violently to any infringement upon their living standards. This has already been demonstrated by the strike waves in which great masses of “conservative” workers have resorted to the most militant and radical course of action. In the given situation, therefore, the relatively high living standard of the American workers is a revolutionary and not, as is commonly believed, a conservatizing factor.

The revolutionary potential of the class is further strengthened by their traditional militancy coupled with the ability to react almost spontaneously in defense of their vital interests, and their singular resourcefulness and ingenuity (the sitdown strikes!).

Another highly important factor in raising the revolutionary potential of the American working class is its greatly increased cohesiveness and homogeneity – a transformation accomplished in the last quarter of a century.

Previously, large and decisive sections of the proletariat in the basic industries were recruited by immigration. These foreign – born workers were handicapped and divided by language barriers, treated as social pariahs, and deprived of citizenship and the most elementary civil rights. All these circumstances appeared to be insuperable barriers in the way of their organization and functioning as a united labor force. In the intervening years, however, these foreignborn workers have been assimilated and “Americanized.” They and their sons today constitute a powerful, militant, and articulate detachment of the organized labor movement.

An equally significant and profound development is represented by the transformation that has taken place in the position occupied by the Negroes. Formerly barred and deprived of the rights and benefits of organization by the dominant reactionary craft unions and, on the other hand, regarded and sometimes utilized by the employers as a reserve for strikebreaking purposes, masses of Negroes have since the twenties penetrated into the basic industries and into the unions. Not less than two million Negroes are members of the CIO, AFL, and independent unions. They have demonstrated in the great strike struggles that they stand in the front lines of progressiveness and militancy.

The American workers have the advantage of being comparatively free, especially among the younger and most militant layers, from reformist prejudices. The class as a whole has not been infected with the debilitating poison of reformism, either of the classic “Socialist” variety or the latter – day Stalinist brand. As a consequence, once they proceed to action, they more readily accept the most radical solutions. No important section of the class, let alone the class as a whole, has been demoralized by defeats. Finally, this young and mighty power is being drawn into the decisive phases of the class struggle at a tempo that creates unparalleled premises for mass radicalization.

Much has been said about the “backwardness” of the American working class as a justification for a pessimistic outlook, the postponement of the socialist revolution to a remote future, and withdrawal from the struggle. This is a very superficial view of the American workers and their prospects.

It is true that this class, in many respects the most advanced and progressive in the world, has not yet taken the road of independent political action on a mass scale. But this weakness can be swiftly overcome. Under the compulsion of objective necessity not only backward peoples but backward classes in advanced countries find themselves driven to clear great distances in single leaps. As a matter of fact, the American working class has already made one such leap which has advanced it far ahead of its old positions.

The workers entered the 1929 crisis as an unorganized, atomized mass imbued with illusions concerning “rugged individualism,” “private initiative,” “free enterprise,” “the American Way,” etc., etc. Less than 10 percent of the class as a whole was organized on the trade union field (fewer than 3 million out of 33 million in 1929). Moreover, this thin layer embraced primarily the highly skilled and privileged workers, organized in antiquated craft unions. The main and most decisive section of the workers knew unionism only as “company unionism,” remaining without the benefit, the experience, and even the understanding of the most elementary form of workers’ organization – the trade union. They were regarded and treated as mere raw material for capitalist exploitation, without rights or protection or any security of employment.

As a consequence, the 1929 crisis found the working class helpless and impotent. For three years the masses remained stunned and disoriented by the disaster. Their resistance was extremely limited and sporadic. But their anger and resentment accumulated. The next five years (1933-37), coincident with a partial revival of industry, witnessed a series of gigantic clashes, street fights and sit – down strikes – an embryonic civil war – the end result of which was a leap, a giant leap, for millions of workers from nonexistence as an organized force to trade union consciousness and organization. Once fairly started, the movement for unionism snowballed, embracing today almost 15 million in all the basic industries.

In one leap – in a brief decade – the American workers attained trade union consciousness on a higher plane and with mightier organizations than in any other advanced country. In the study and analysis of this great transformation, rather than in vapid ruminations over the “backwardness” of the American workers, one can find the key to prospective future developments. Under the impact of great events and pressing necessities the American workers will advance beyond the limits of trade unionism and acquire political class consciousness and organization in a similar sweeping movement.

The decisive instrument of the proletarian revolution is the party of the class conscious vanguard. Failing the leadership of such a party, the most favorable revolutionary situations, which arise from the objective circumstances, cannot be carried through to the final victory of the proletariat and the beginnings of planned reorganization of society on socialist foundations. This was demonstrated most conclusively – and positively – in the 1917 Russian Revolution. This same principled lesson derives no less irrefutably – even though negatively – from the entire world experience of the epoch of wars, revolutions, and colonial uprisings that began with the outbreak of the First World War in 1914.

However, this basic conclusion from the vast and tragic experience of the last third of a century can be and has been given a reactionary interpretation by a school of neo – revisionism, represented by the ideologues, philosophers, and preachers of prostration, capitulation, and defeat. They say in effect: “Since the revolutionary party is small and weak it is idle to speak of revolutionary possibilities. The weakness of the party changes everything.” The authors of this “theory” reject and repudiate Marxism, embracing in its place the subjective school of sociology. They isolate the factor of the revolutionary party’s relative numerical weakness at a particular moment from the totality of objective economic and political developments which creates all the necessary and sufficient conditions for the swift growth of the revolutionary vanguard party.

Given an objectively revolutionary situation, a proletarian party – even a small one – equipped with a precisely worked out Marxist program and firm cadres can expand its forces and come to the head of the revolutionary mass movement in a comparatively brief span of time. This too was proved conclusively – and positively – by the experiences of the Russian Revolution in 191l. There the Bolshevik Party, headed by Lenin and Trotsky, bounded forward from a tiny minority, just emerging from underground and isolation in February to the conquest of power in October – a period of nine months.

Numerical weakness, to be sure, is not a virtue for a revolutionary party but a weakness to be overcome by persistent work and resolute struggle. In the U.S. all the conditions are in the process of unfolding for the rapid transformation of the organized vanguard from a propaganda group to a mass party strong enough to lead the revolutionary struggle for power.

The hopeless contradictions of American capitalism, inextricably tied up with the death agony of world capitalism, are bound to lead to a social crisis of such catastrophic proportions as will place the proletarian revolution on the order of the day.

In this crisis, it is realistic to expect that the American workers, who attained trade union consciousness and organization within a single decade, will pass through another great transformation in their mentality, attaining political consciousness and organization. If in the course of this dynamic development a mass labor party based on the trade unions is formed, it will not represent a detour into reformist stagnation and futility, as happened in England and elsewhere in the period of capitalist ascent. From all indications, it will rather represent a preliminary stage in the political radicalization of the American workers, preparing them for the direct leadership of the revolutionary party.

The revolutionary vanguard party, destined to lead this tumultuous revolutionary movement in the U.S., does not have to be created. It already exists, and its name is the SOCIALIST WORKERS PARTY. It is the sole legitimate heir and continuator of pioneer American Communism and the revolutionary movements of the American workers from which it sprang. Its nucleus has already taken shape in three decades of unremitting work and struggle against the stream. Its program has been hammered out in ideological battles and successfully defended against every kind of revisionist assault upon it. The fundamental core of a professional leadership has been assembled and trained in the irreconcilable spirit of the combat party of the revolution.

The task of the SOCIALIST WORKERS PARTY consists simply in this: to remain true to its program and banner; to render it more precise with each new development and apply it correctly in the class struggle; and to expand and grow with the growth of the revolutionary mass movement, always aspiring to lead it to victory in the struggle for political power.


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