INTERNATIONAL ECONOMIC
AND POLITICAL PERSPECTIVES
Theses
The object of the following theses is to distinguish the general tendencies of the years to come both in the capitalist economy and in that of the workers' states, insofar as they can be deduced on the basis of the present conditions and dynamics of both types of economy and in the purely theoretical eventuality of the lack of any major conflict during this period; also to evaluate the influence of these economic tendencies on political developments, in order to derive therefrom certain general political perspectives.
This method of proceeding from an extrapolation,. starting from the present condition and dynamics, ignoring the possibility of major disturbances, only possible method of determining the general tendencies and perspectives.
The prognoses thus established will naturally have only a relative value, that is to say, these prognoses will be valid only insofar as the interacting factors which determine the tendencies and evolve in such a way as to produce roughly the same global result as can be envisaged from the analysis of the present state and dynamics of these factors.
But, if certain of these siderably modified in the years to come, or other unforeseen factors intervene, the basis of the calculation will be changed.
This is how Marxist prognoses differ from the prophecies of dogmatists.
On the other hand it must be taken into account, especially where economic forecasts are concerned, that polities, particularly in the present advanced stage of imperialism, constantly influence economics, and may reënforce or abruptly interrupt the process of so-called capitalist stabilization.
The class struggle in the capitalist countries is unquestionably influenced by the economic conjuncture, but this in its turn is profoundly influenced by the class
In fact, in most capitalist countries the margins of economic stabilization are always so narrow that the outbreak of a widespread struggle is enough to undermine all the achievements of the « stabilization » and to start off a new « recession » or crisis.
A Marxist analysis retains all its validity and importance if it helps to forecast a general tendency, even if the end-result of the tendency (for example, a crash, war, or revolution) does not actually occur for some time as a result of the intervention of opposing factors.
This is the classical case with numerous analyses and Marxist perspectives, from Marx himself and Capital down to the present day.
Errors in a Marxist assessment should be sought either in a mistaken estimation of the present dynamics of the factors analyzed, or in the fact that, subsequently, it has not taken account in time of fundamental modifications in these factors which would necessarily result in a different global effect from that initially foreseen.
1. - The implications of the economic situation of capitalism and the workers' states during the decade has elapsed since the end of the last war (especially since 1946) have greatly influenced evolution of the general international political situation. They throw even more light both on certain political developments which have taken place during this period and on the political perspectives for the immediate future. Thanks to this retrospective analysis one can gain a better understanding of exactly what has occurred in the basic evolution of the economy and the tendencies which it is now beginning
2. - The economic evolution of capitalism during this period led it, through minor crises and «recessions, » towards a reconstruction and strengthening of capitalism's productive apparatus, entirety has reached double the industrial production of 1938 and now surpassed even this (1). the world capitalist market has had amputated from it the workers' states in Europe and Asia, its productive capacity is even larger than this.
3. - In this general upward evolution, it is necessary 1o distinguish three interdependent sectors: that of the United States, that of capitalist Europe, and that of the colonial or semi-colonial countries, or on the road to becoming new capitalist powers (India, Brazil, Argentina, etc.).
It is, moreover, necessary to distinguish between a first rather chaotic period of reconstruction in all these countries, with the exception of the United States, period which continued by and large until the Korean War, and the period which has succeeded it. in this second period that the rising movement of the capitalist economy as a whole towards upswing and boom became manifest.
4. — In the first period, which lasted up to the Korean War, the capitalist economy of Europe, destroyed by the war, was gradually put back on its feet, thanks
(1) From an index figure of 70 in 1938, industrial production reached 100 in 1948 and 146 in 1955 (according to the figures of UNO). The average annual increase of industrial production during the period 1938-1955, as during the period 1948-1955, was around 6 %.
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essentially to the economic and military aid of the United States, itself still sustained by the stimulus given to its economy by the war.
In this period, the economy of the colonial and dependent countries benefitted from the need for raw materials and agricultural products, mainly by Europe, and it continued to profit from the advantages accumulated during the war itself.
In the second period, which started with the Korean War, different processes becames apparent in the three sectors of the capitalist economy :
- the U'nited States consolidated and reenforced the sector of war economy which has constituted since then -- as during the war - the No. 1 stimulus of the whole economy of the country ;
- reconstructed capitalist Europe, stimulated by the boom in industrial investments and internal demand, advanced, in a relative sense, by increasing its share capitalist production and international and dependent countries, developing their economy, were outdistanced by the progress of the industrial countries, their relative share of international trade diminishing in comparison with the trade among the industrial countries (3).
The turning point of these processes lay somewhere
It was after this date that capitalist Europe experienced a period of almost full employment of its productive capacity in machinery and manpower -unique in the whole history of capitalism since the first World War, while the United States quickly overcame the slight depression, from 1953 to mid-1954, entered also on the road of boom. The colonial and dependent countries, on the other hand, experienced a deterioration both in their trade balance and in their finances, and were embroiled in still uncontrollable inflationary difficulties.
From the point of view of the rate of growth of industrial production, both for capitalist Europe and for the United States, the culminating point lay in the year 1955. After that the progress in general continued, but its rhythm slowed down.
5. - The expansion of the European capitalist economy since 1953 is essentially an expansion of industrial production, stimulated by investments means of production and in durable consumers' goods. It has been supported by the previous action of stimulants such as housing construction and military expenditure.
The expansion of the American economy since the end of 1954 is equally due, apart from military expen-
(2) As becomes clear in the following table which shows the lowering of the percentage of the USA in world capitalist production:
1947 58.6 1948 56.4 1952 52.6 1955 (first quarter)
At the same time the share of the USA in the export trade of the capitalist world diminished in favor of Europe.
(3) The share of trade between industrial and non-industrial regions, which was 55 % in 1937, dropped to 53 % in 1950 and to 50.7 % in 1955 (GATT report of world trade in 1955).
FOURTH INTERNATIONAL diture and construction, to the stimulus of industrial investments and the maintenance of internal demand, mainly thanks to the considerable extension of consumers' credit.
On the other band, the unfavorable evolution of the balance of trade of the colonial and dependent countheir inflationary process, as well as the relative slowing down of industrialization (due to the slowing down of the accumulation of native capital are due to changes occurring
6. - These changes in the structure of trade, which contrasts with the pattern of world trade before the war, can be summed up and explained as follows:
The share of exports of means of production and durable consumers' goods of the industrial countries to the colonial and dependent countries is increasing at the expense of the share of semi-manufactured or consumers' This reflects the process of increased industrialization of these countries since the
On the other hand, the share of the trade between colonial and dependent countries and industrial countries diminished in comparison to the growth in trade among the industrial countries. This is explained chiefly by the increase in the production of natural raw materials in the industrial countries and by the growing importance of artificial raw materials (4) ; as also by the colonial and dependent countries' own industrialization, part of the raw materials previously exported.
Nevertheless, it should not be deduced from this observation that for the industrial countries there has been a lessening of the still vital importance of the colonial and dependent countries, as reserves of indispensable raw materials (all the more natural reserves of the industrial countries are becoming exhausted because of the drain of the expansion), and industrial products and for capital. There can be deduced from it only a widening of the gap between the industrial and the backward countries. in spite of the absolute progress of the latter and their continuing industrialization. The present technological revolution (utilization of automatic and atomic energy) threatens to aggravate this situation.
7. - It is partly because of these transformations in the structure of postwar world trade that the political loss of certain colonies - by the accession to of the native bourgeoisie - has so shaken the metropolitan countries. Other factors have operated in the
The share given up by imperialism to the bourgeoisie of these colonies, in terms of raw materials, industrial production, and capital, was not decisive and could and other means of production are now made in Europe with
The total volume exports of natural raw materials and fuels of the non-industrialized regions to the industrial countries in 1955 did not exceed the 1938 volume increased during the same period by about 70%. other hand it is calculated that the needs of the industrial regions in imports of natural raw materials non-industrialized regions would be about 40 % more than duced in the industrial countries had not existed.
FOURTH INTERNATIONAL be compensated for by the growth of the market in Europe and elsewhere.
In any case imperialism continues to maintain important economic interests in these countries. of colonies does not affect imperialism except where their political independence, combined with social revolution, is brought about under régimes of proletarian dictatorship which detach them structurally from the capitalist circuit. Or, on a long term view, in the case of a important hypothetical development of the national bourgeoisie, which then monopolizes for itself, to the detriment of imperialism, the raw-material industrial products, and capital of these
8. - A further new feature of world trade, more especially since 1953, is the increase in trade between the workers' states and the dependent countries (5).
strengthening of the industrial potential of the workers' states and by their technological advance, which enables them to export means of production and technicians, i.e., to furnish the material and technical aid which the backward countries need in order to commence and give impetus to their industrialization. In future this tendency can only be accentuated, with all the political consequences which it implies, coming into head-on collision with the vital interests of imperialism in this field.
9. - Capitalist expansion, especially since 1950, has undoubtedly taken on unwonted dimensions which have upset the prognoses made in the first post-war perior, both by Marxists — including our own movementand by the most competent bourgeois experts.
Furthermore, the fact that capitalism has not undergone a major economic crisis since the war and is even engaged, especially since 1953, in what appears to be a classical industrial boom, raises the question of a more profound analysis of the reasons for such an evolution and of its perspectives. This leads us in the first place to examine the bases of American « prosperity.»
10. - It is impossible to overemphasize the role played in the American economy by government expenditure, in the form of purchases of goods for its military aims, investment of capital in government military establishments, upkeep of its armed forces (6),
(5) The tendency to increase in trade exchanges between
Eastern Europe, and China, and the rest of the world, began in the second quarter of 1953 The most important developments have taken place since then in the direction of countries such as Burma, India, Indonesia, Egypt, Syria, Japan, and Argentina.
(6) In particular, the full extent of the militarization of the American economy must be appraised both in comparison with its pre-war condition and in an absolute sense. Here are certain data which cast light on this subJect:
For the three fiscal years 1937-1938, 1938-1939, 1939-1940, direct military expenditure of the USA was only 3,600 million dollars, which was less than 15 % of the budget and equal to only 1,5 of the national income (especially for the year 1937-1938).
For the fiscal year 1944-1945, which marked the end of the war, total government expenditure rose to about 98,700 million dollars, which 84,600 million dollars, i.e. 86 %, were for direct military expenditure.
In 1948-1949, it fell to 14,500 million dollars, i.e. 6,5 % of the national income, only to rise again during the Korean war and to reach 47,700 million dollars, that is 15,8 % of the (official) national income, in 1953-1954.
as well as economic and military aid abroad, amortization of the national debt, support of agricultural prices, and large-scale public works. This is still the principal stimulant of the American economy that prevents it from crossing the borderline between « prosperity »
It is equally this stimulant which, thanks to the super-profits of a production with an assured outlet such as those for military purposes, has aided the investment of private capital in industry in order to expand and modernize the American productive apparatus as a
The beginning of the genuine technological revolution represented by the productive utilization of nuclear energy and automation, as well as the accelerated industrialization of the Southern states, are the manifestations of the impulse thus given to industry as a whole.
t is these investments as well as lhe extension of redit to consumers (7) which has since 1953 bolstered up the American economy, exhausted in spite of the stimulus of the war, enabling it to weather the « recession » and start a new boom.
But the other side of the coin of this « prosperity,» which has lasted since roughly the beginning of the last war, consists in the enormous public (8) and private indebtedness of the country, and by the accelerated depreciation of the currency (9).
Furthermore agricultural overproduction, which is becoming more and more of a burden on the economy total sum of government credits for direct and indirect military purposes is even higher than this and constitutes about 75 % of all government expenditure.
(7) The private debts for instalment buying of cars and other goods rose in 1955 to 28,000 million the interest and other charges were of the order of 4,000 million dollars! The total of bankers' and mortgage loans Juring this same year (1955) was 112,000 million dollars
1956 private debts for instalment purchases showed a about 3,000 million dollars. The others by about
It is estimated that the increase
1956 (though considerably lower than the remarkable increase in the rate shown by the year 1955 over 1954-more than 6,000 million dollars).
1955 total private indebtedness rose 140,000 to 360,000 million dollars, which is an annual increase of about 25,000 million dollars.
(8) The public debt of the United States rose in 1956 to 280,000 million dollars as opposed to 1,000 million dollars in 1902, 19,000 million dollars in 1932, and 72,000 million dollars in 1942. Since 1945 it has increased by 30,000 million dollars. Most of it is held by different financial institutions (banks, insurance companies, etc.) who receive increasing interest rates.
In 1955 the interest on the public debt rose to 6,500 millior dollars, which was 10 % of the Federal budget
The war was financed in a large measure by the extraordinary extension of the public debt in the period 1940-1945, rising to some 194,000 million dollars.
(9) The purchasing power of the dollar has diminished by Mere ber 1956, his pie hasing peter diminished d
% (according to the recent study by the international expert, Franz Pick).
'rom this point or view. the gross national product of he United States per capita has increased 1956, in terms of the purchasing power of 1946, only by 16 %, as compared with 63 % in nominal dollars.
6 of the country as a whole, has become chronic in the United States (10).
11. - The unquestionable result is that the tremendous concentration of power and wealth in the hands of a small group of monopolies and of the state which is completely subservient to them, has allowed them, with the aid of the experience of the 1929-1933 crisis, to perfect a whole arsenal of « anti-depression » measures to deaden the effects of the sudden impact of economic crises and to keep within bounds, to a certain degree, their 'rapid, cumulative, and uncontrollable extension. The capitalist state is watching over the economic conjuncture and intervenes with all the means in its power in order to avoid such an outcome. Apart from the weapon of the size and elasticity of its own budgetary expenditure, the state intervenes by means fiscal investments, by the extension of social security guaranteeing a minimum purchasing power, finally by the credit policy which to a certain extent regularizes the expansion and limits the dangers of stock-exchange speculation and financial crash.
All these measures have been carefully studied in the United States and flexibly applied by the « brain trust » of advisers, experts, and big capitalists, of the United States government. In addition, the banks are forearmed against a sudden crisis, a considerable part their resources being in state securities..
rinally the continued concentration of Us enterprises in giant monopolies (oil, steel, auto) puts at their disposal enormous reserves of capital which enables them to a certain extent to face up to the fluctuations of the conjuncture.
12. - The conclusion must be that the capitalist monopolies in the United States, making use of a large degree of «planning » by the capitalist state, have the possibility of breaking the force of the onset oj limited economic crises and of transforming them into more or less deep and widespread « recessions » (the difference between a depression cession » lying essentially in the fact that a depression does not grow in a cumulative way but rapidly hits the lowest point of the conjuncture and stays there for a longer or shorter time according to the magnitude
(10) To appreciate in its the full significance the chronic agricultural crisis in the USA, which foreshadows the crisis of overproduction of mechanized agriculture in the entire capitalist system, certain statistical data are necessary:
agricultural population of the USA is constantly d million in 1909, 6 130% or 22e total populavion, against In 1956 it totaled 22 million individuals (against 60 % a century ago. It is grouped in some 4.8 million farms. Of this number, two million alone provide 85% the commercial agricultural production. That is to say, 2.8 mil lion farms produce the remaining 15 %.
The government supports by subsidies the prices of six basic agricultural products and a few others, which constitute about 50 % of agricultural production. It is obvious that this considerable aid (8,500 million dollars of agricultural surplus stocked by the government in 1956; more than 10,000 million •dollars this year!) goes mainly to two million privileged farmers. But it is powerless to check the constant decrease in agricultural incomes resulting from the overproduction characteristic of this market as consequence of the development of productivity and the shrinking of external outlets for American agriculture.
FOURTH INTERNATIONAL of the causes which precipitated it, and of the new forces which go into action to overcome it).
This is the road that the American economy has followed since the war up to the present time.
The « recessions » (of 1949 and 1953) were an expression of the temporary disequilibrium between increased production and relatively lagging consumption. They were overcome, the first by the. conjuncture of the Korean War, which stimulated mainly the military expenditures of the state, the second by the boom of private investments and the expansion of consumer credit.
But these methods are inoperative in the face of a large-scale crisis, which would necessitate such great increases in public expenditures to soften its effect, that the whole of the monetary system would be in
The same reservation applies with equal force long-term repetition of even limited crises, since there is a limit to public indebtedness as there is to production and stockpiling military expenditure in general), i.e., a point in the depreciation of the currency beyond which there is a danger of precipitating financial bankruptcy.
Furthermore, insofar as productive capacity stantly increases while consuming capacity (even leaving aside unemployment) is constantly undermined by currency depreciation, the frequency as well as the depth of « recessions» can only become accen-
The productive capacity of the United States, merely by increased productivity, annual average of 3 %. The technological projects now in hand regarding automation, and soon the eventual use of atomic energy on a big scale, will have the effect of maintaining if not of increasing this percentage.
Without an adequate constant increase in production (of at least 4 %) this will mean that at least three million workers (of which 700,000 new ones arrive yearly on the American labor market) will each year enter the industrial reserve army.
American economy is under the dual pressure of contradictory processes: on the one hand of the expansion of its productive apparatus and productivity, on the other the relative contraction (in relation to the enlargement of productive capacity) of consuming capacity, due to monetary depreciation, to the decrease in agricultural revenues, and to technological unemployment.
Hence the inevitable perspective of an acceleratedl rhythm and aggravation of the « recessions.»
13. — Actually the same considerations apply equally to the European capitalist economy, with some special modifications.
Its present boom was fed by an investment boom, by internal demand, and by exports. The object of the investments was both to expand and to modernize the productive apparatus, in an almosphere of constantly sharpening international competition. They resulted in a considerable increase in the productive capacity of the European economy (11).
(11) Increase in production of electricity is an indication of the extension of productive capacity. England this
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The internal demand affected mainly housing construction and durable consumers' goods; the external demand being for the means of production, as well as consumers' goods.
In this productive effort, capitalist Europe exhausted its own sources of power and in some places even of manpower. Its dependence on coal and petroleum products from the United States, as well as petroleum products from the Middle East, has increased, simultaneously with its dollar deficit.
Furthermore, in order to improve their position international competition, as well as to face up to the increased cost of labor power, the European capitalists, in their turn, are getting deeply involved in the technological changes of automation. But this phase, which is manifested by the expansion of the productive apparatus of Europe and constant increase in its productivity, coincides with the tendency to saturation of the home market, which is also undermined once more by the increase in inflation and the sharpening difficulties the colonial countries and dependencies have in draining more imports from the industrial countries.
Hence the present tendency to a flattening out of the boom, while waiting for a « recession » in the European capitalist economy as well.
14. — For a more accurate appraisal of the short-term economic perspectives, it would be necessary to know more concretely the volume of industrial investments not yet carried out, and that of new investments. For, if it is admitted that military expenditure in all the capitalist countries has reached a ceiling (except 'for the increase applied in the United States budget for 1957-58) the main economic stimulant remains at the present time that of industrial investments. in comparison with the investments already carried out in recent years or in course of being carried out, new investments, aimed especially at developing automation and fulfilling the programme of atomic power stations, do not appear to encourage especially favorable prognoses for a considerable extension of the market. Investments in automation are by their nature stricted (12). On the other hand, investments in atomic energy could be much greater and play a role of supplementary stimulant to the economy in the case where production rose from 2,000 million kwh (monthly average) in 1936, to 6,400 million in 1955.
The corresponding figures for Germany are 2,600 to 5,800, and for France 1,500 to 3,800.
The increase in production of electric power between 1948 is higher than the total figure for prewar
(12) The cost of certain automatic installations is prohibitive for medium and small enterprises. lose sight of the facts that the cost is diminishing constantly, and that, for many branches of industry, relatively small amount to total cost of their It is calculated that the average cost o1 automation of a factory is 6 % of the total.
Consequently it should not be expected that automation will give rise to a considerable development of investments, comparable, for example, to that of the first industrial revolution.
7 they are in addition to other public and private expenditures and not instead of them (13).
Furthermore, these investments will not be carried out by the capitalists unless they maintain a high rate of profit — which will depend on the possibility, or otherwise, of reducing the present level of consumption of the masses, now being undermined by the increase of inflation. In case the workers should fight maintain, if not to increase, their present share of the national income, this will actually result in a fall in the rate of profit of the capitalists and probably also a reduction in the volume of investments.
Thus the probable relatively low level of the investments made in the new technological revolution in process (automation and atomic energy) will contrast with the rather rapid rise in production capacity and productivity of the European productive apparatus that
15. — Thus the capitalist regime is now faced with the political and social consequences of an eventual technological transformation of its productive apparatus by the new productive forces now in the possession of h/manity: automation and atomic energy.
Assuming that, in the decade now opening before us, capitalism, impelled by the demands of competition, engages in a large-scale programme of automation and atomie energy, it could only aggravate its evolution by more frequent and serious crises, expressing the fundamental contradiction between enormously increased capacity for production and the inadequate development of the consuming power of the masses.
This last factor will be the combined result of inevitable technological unemployment, including that
(13) In the case of atomic installations there is unquestionably another possibility of new investments. England, which has just announced a programme of atomic construction undoubtedly all other countries (apart from the USA and the USSR) is significant in this
Here, according to the Economist of 9 March 1957, are the investments envisaged for the years 1957-1965 (in millions of pounds) :
Installations 1957-60 320 90 410 400 810 1961-65 310 780 1,090 800 1,890 Total . 630 870 1,500 1,200 2,700
* T&D: Transmission and Distribution.
In order the better to judgé the influence of these investeconomy, it is necessary to recall that the annual military budget of England amounts to 1,600 million pounds, and that annually to sums appreciably analogous to those now absorbed by the programme of power stations.
In the same connection of ideas, the programme envisaged by the three European « wise men » concerning the development of atomic power 1967 the then needs of the « Europe of the Six » in power, would absorb 550 million dollars each year, a great part of which would be employed for expenditures in
8 of white-collar workers (14), of the purchasing power of currency undermined by the inflation inherent in a régime of war economy and excessive public indebtedness, and of the diminution of agricultural casualties of inevitable agricultural overproduction. 16. — While capitalism confronts the new post-war decade with an enlarged and rebuilt productive apparatus, and is obliged to try somehow to assimilate technological revolution now in progress, the USSR and, to a rather lesser degree, states, are seen to be making great practical achievements and tackling new problems.
Overcoming the enormous destruction of the war, the USSR has developed during the last decade at an annual rate of increase of industrial production which was on the average double the corresponding average capitalist increase (15).
At the same time its productivity, whose backwardness compared with that of the United States is far gréater than its backwardness in production, increases annually twice as fast as that of the latter country (16). On the basis of scientific and technical progress, which were rendered possible only by a statified and planified economy, the USSR has furthermore been able to construct a vanguard industry that has proved itself in a sensational manner by the recent demonstrations of the intercontinental ballistic missile and the earth-satellite.
Thanks to this progress, the USSR is now position that allows it to envisage the possibility of catching up and outstripping, in the next few years, the total production of capitalist Europe, its per capita production, and on a longer-term basis to come close to the United States in regard to total production in certain branches of industry (17).
(14) One of the results of automation will be to reverse the tendency to an increase in number of office clerks, and other employees of the service sector, of years increased very he United States, from five million in 1940 to eight millior from eleven to sixteen per hundred These white-collar workers will be largely replaced by the wholesale introduction of electronic machines.
(15) Industrial production in the USSR has increased since 1930 twenty average (as against 3.5 % in the United States and about 2.4 in England). This fact is now admitted by a large number of Western economists such as: F. Selton (« An Estimate of Soviet Industrial Expansion » in Soviet Studies of October 1955) Adjusted Rubles Rational? » in the same publication); A. Gerschendron (« Notes sur le taux de croissance actuel de l'industrie soviétique» in Economie Applia. October-December 1953); and even by the American Hodgman (In the collective work edited by A. Bergson, Soviet Economic Growth, 1953, and the same author, Soviet Industrial Production 1928-1951, 1954).
(16) Productivity in the USSR, while it is still two to three times lower than that of the USA, is now developing twice as rapidly as that of the USA, and two to three times as rapidly as that of Western Europe. The present annual rate of increase in production per man-hour in the USSR as against 3 % in the United States. sions Dr. Seymour Melman, Columbia University.)
(17) Predictions of the comparative evolution of the Soviet economy and the capitalist economy are naturally hazardous. like any extrapolation of this. kind based on the average rhythms of the past. We can however mention the
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On the other hand, its backwardness in agricultural production and light industry is still considerable.
During the same period, industrial production and results obtained from this procedure, basing ourselves on the work done in field by bourgeois economists.
on the subject of national income: according Legislative Reference (1955), « in the 1938-1953 period the national income of the three times fast as that of the USSR. Between 1948 and 1953 it increased only 30 % more than that of Europe, and only 2/3rds as fast as that of the the subject of steel production: towards 1960, production of the USSR plus that of the European Peoples' while still remaining lower than that of the United States (about outstrip that of the whole of capitalist Europe, including per capita production Towards 1970, at the latest, American and Soviet heavy industries should be equal. Towards 1975, Soviet heavy should outstrip that of the United States, including per capita production.
The question of the perspectives of development of the USSR and the United States is now often dealt with by bourgeois economists. Here are two recent versions of this theme:
Extracts from the study of A. Nove in the Lloyd's Bank Review (April 1956) :
« How does Soviet industrial production compare with that
It is not possible to give a precise igure provisionally advanced by Hodgman, which seems to be very approximately of the correct order of size: 1950 the Soviets produced 35 % of what was produced by the United States. For illustrative purposes cautious hypotheses: irstly that industrial production continues Let us take for Soviet expansion during the same the conservative estimate of 75 % and not 85 % which they themselves claim to be able to achieve, even if our hypothesis constitute an injustice. Soviet rate of growth is reduced so that the expansion is
60 % between 1955 and 1960, The following results will follow.
Industrial Expansion of the USSR and the United States
(Base: Industrial Production of the U.S. in 1950: 100).
USSR as Year USSR United percentage States of USA 1950 35 100 35 1955 61 124 49 1960 98 154 64 1965 147 191
« This table is based on hypotheses that are in the main favorable from the table that the USSR, although far behind the USA can by 1963 have achieved about the present production of the United States. »
Extracts the study of the Deutsches Institut fur Wirtschaftsforschung, of Berlin, published in its Wochenbericht of January 18th 1957:
« Three closely related factors of great importance for an appreciation of the perspectives of development must espethe very much higher rate of industrial expansion of the USSR compared with that of almost equivalent growth of its production in absolute distinctly lower present level; finally the fact that, in the space of half the relationship industrial production in the USSR to that in the United States has passed from about 1/3 rd to nearly 50 %. All this shows a « vigor of growth »
USSR stronger than that of the United States and at the same time provides a basis for an appreciation of
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FOURTH INTERNATIONAL comicate more than antic that of th capitalist countries.
As for China, comparison is valid only in relation either to its development before the Revolution or to that of the industrialization of India under the bourgeois regime (18). In both cases the comparison is decisively in favor of the statified and planned economy. Nevertheless, it would be unwise to underestimate the still considerable backwardness of Chinese per capita production, which will not be able to catch up to the level of the advanced countries except in the case of a rapid extension of the world socialist revolution.
17. - This development of the USSR and the other states was accomplished in spite of the excesses, the muddles, the errors, and the braking effect of bureaucratic management and the Stalinist regime
If, on the one hand, this regime has been able to achieve a high rate of accumulation, thanks to holding the consumption of the masses and their general wellbeing down to an extremely low level and to making them work excessively hard, it has, on the other hand, wasted considerable human and material resources, sterilized the creative energy and initiative of the masses, impeded harmonious and rational planning in economic sector of the workers' states, in liaison as far as possible with the rest of the world
•Its peasant policy alone has undoubtedly given rise to one of the most serious bottlenecks which prevented a more harmonious growth of the economy, a precondition for achieving, at a certain stage, a still more expansion of the forces of production. means that the Stalinist regime has become, relatively very quickly, a brake on both the quantitative and the development of production —and of this the masses are becoming more and more conscious, which is what gives the fundamental drive to their growing struggle against the bureaucracy.
18. — The disproportions thus created in the economy of the USSR and the other workers' states by this development are becoming more glaring now that the economy, having exploited to the full the possibilities of progressing somehow without consideration for the the question of whether the USSR will be able to catch up with United States.
« Assuming that the targets of the sixth Five-Year Plan are achieved and that the rate of expansion during the next Five-Year Plan diminishes at the same rhythm as during the preceding ones, Soviet industry will achieve in seven to eight years from now the present level of production in the United States.
« Even assuming that, during the period necessary for the USSR to raise itself to the level of the United States, the geometrical progression of its rate of expansion is reduced to the average rate of the United States during the last five years (i.e. 4.4 %), the present level of production of the United States will be reached in 1965, i.e., in ten years time. »
(18) Both the percentage of investments (in relation to che national income and the percentage of industrial production (of steel in particular) of India remains about 1/3 those of China (for a population equal to 2/3 that of China). This disproportion threatens to increase with time, the scale and dynamics of the new Chinese plan being much greater than those of the second Indian five-year plan.
9 resources in raw materials and labor power, and without regard to production costs, is now at last reaching the phase of its rationalization.
pressure of the masses, moreover, repressed for a whole period, is now acting in the same
The Soviet economy cannot go on progressing with the same dynamism as in the past without rejecting the management of the bureaucracy in its fundamental
The problems of economizing raw materials, manand financial resources, of production of quality, of the adjustment of the ratios among heavy industry, light industry, and agriculture are now beare also intimately bound up with the human factor, with the activity of the working masses, in a double sense: if they remain' unsolved, these problems will provoke and exacerbate the discontent of the masses who are more and more chafing at their position under bureaucratic managment; and they furthermore cannot be solved without the democratic participation of the masses in the management of the economy and of the state. democratization of the regime has become imperative not only politically but also from an economic point
The attempts made by the political leadership of the bureaucracy to remedy at least some aspects of bureaucratic management of the economy, to reduce the disproportions, restore some elasticity to the plan, take off the improductive and paralyzing weight of supercentralization, are so many manifestations of the blind alley into which bureaucratic management has precisely got itself.
The examples and figures given both at the time of the public discussion of Khrushche's theses on « decentralization » and during their presentation to the sufficiently illustrated the financial and economic excesses of this management.
Insofar, however, as «decentralization » will be made only to the detriment of the people in the central offices and to the benefit of the managers and technicians in the factories, without real democratic that and this it participation of the masses, it will an expansion of the basis of the bureaucracy and thus its reenforcement.
But, on the other hand, the decisive struggle for workers' management or bureaucratic management of the enterprises and of the economy in general will thus not fail to be stimulated.
19. — Because of their social and economic structure, the USSR in the first place, and already to a certain extent the other workers' states as well, are infinitely more capable than capitalism of adapting themselves without disturbance to the technological and industrial revolution in progress in regard to automation and atomic energy. In a sense they are leading this revolution, while capitalism remains tensely on the brink, hesitating — with good cause - on the verge of this
The USSR has already embarked on the automation of its productive apparatus, the development of a network of atomic power stations, and research on cheap production of atomic energy.
interval of technological changes which imply a certain slowing down in the rhythm of increase in industrial production, it can make a decisive advance over the capitalist states, with all the implications that such an event will have for the relationship of forces.
crucial trial of strength on the economic plane should take place, assuming that war does not break during the which is now and more especially towards the end of
But on the other hand, it is becoming evident that imperialism will closely watch this development and will find in it additional reasons for taking a decision concerning war.
20. - The present state of the capitalist economy, both in the United States (19) and in Europe (20), is for concluding that 1956 was less than 3 %. In the last quarter of 1956 it was actually no more than 2.2 %. If official unemployment was official unemployment figures do not include partial unemwhich has considerably increased, register the increase in average duration of unemployment among those listed as unemployed.
actual progress in productivity seems to have been much slower in 1956 than the average long-term progress (estimated at 3 %) and lower than what might have been expected from a colossal and ever increasinvestment in new factories and new equipment has been going on over a number of years.
volume of under-employment with inefficient what one might call concealed In the long run a high rate of increase productivity must get the unemployment finally appear clearly, including in statistics, amount of unemployment.» (According to the French Commercial Attaché in Washington, in his report of 1 February
Concerning the activity of the American economy for the estimates are based on increase in public expenditure and also on basic investments factories and equipment (down only 10 compared with those of 1956). It is estimated that the gross investment for 1957 will be than that of 1956 in real volume (compared with an increase of 4.1 % in 1956 over 1955). All this does not make possible to predict a rate of economic growth superior to
% and certainly not 4.5 %, which would be necessary to eliminate the danger of unemployment. probable perspective of a significant increase unemployment for the present year and for next year.
(20) The rate of growth of industrial production of the with previous years, save in the case of France.
to the volume of investments. the inflationary spiral has started again everywhere varying degrees. The really new and significant fact about 1956 was the slowing down of German economic activity, the diminution in the volume of investments, and a measurable increase
March to October 1956, production has made practically no progress.» to the Deutsche Institut Wirtschafts.)
25% of the total national income, is now also declining.
businessmen seem to be borrowing less and limiting their expenditure on new factories and equipment.
Under these circumstances the prospect for the current year and next year is that more higly developed than which now possesses productive capacity necessarily accompanied by an increase in unemproduction, is still a stimulus in reserve for the German economy:
FOURTH INTERNATIONAL characterized by a slowing down of the rate of increase of industrial production, an accentuation of inflation, and the reappearance of serious unemployment. The flattenning out of the boom is obvious, and in fact the only questions left to answer are whether lowering of activity will become accentrated towards recession, and in how short a time, or whether there will be a serious new upswing.
The still considerable volume of government expenditure and investments works in favor of the following short-term perspective: a rate of growth of industrial production less than that of 1956, with an accentuation both of the inflationary process and of unemployment, i.e., an evolution towards a new « recession » but not towards a sudden crisis.
It is likely that in the beginning this process will be more marked for the United States than for Europe and therein will be more marked for countries like England, Denmark, the other Scandinavian countries, and Spain, than for France, Germany, Italy, Holland, Belgium, Austria, and Greece.
The longer-term perspective will be affected by the constant increase in the producing capacity of the capitalist productive apparatus (including agriculture) in the face of a no less constant diminution in the consuming capacity of the masses.
The first factor will be the result of inevitable technological progress. The second, already analyzed. will be the result of this progress on employment, as well as the influence of inflation and agricultural overproduction on the purchasing power of the laboring
Without any new and important increase in government expenditure and the volume of investments, longer-term perspective is that of a « recession » which, by its breadth and depth, will be indistinguishable from a real economic crisis except by a gradual rather than a sudden initial development.
21. — The colonial and dependent countries run the risk of remaining in their present condition of inflation stagnation of their industrial and agricultural production. possibility that their trade situation with the industrial countries will improve but, on the contrary, will more
Which may result, among other things, in slowing down the accumulation of native capital that could stimulate the industrialization of these
But then again, without a rapid industrialization of these countries which would change the structure of their present trade with the industrial countries, their backwardness compared to these countries is likely to increase.
Hence the conclusion that the revolutionary potential in these colonial and dependent countries will remain al a high and explosive also the possibilities of imperialism and the workers' stales in influencing these countries are
Imperialism cannot do so save by exporting means of production and technicians, and making massive investments in order to bring industrial transformation of terms of payment which take into account the actual needs and possibilities of these countries,
LOURTH INTERVITIONIL term repayments in kind. From this point of view the workers' states have a favored position, as the case of Syria has recently demonstrated, except in regard to massive indusirial investments on the spot. Nevertheless, the short-term possibilities of the Uniled States in particular, in the field of economic and financial aid, should not be underestimated.
Many case, interest in these countries can only increase as well as the struggle to win them over, both between imperialism and the workers' states, and, in the imperialist world, between the l'SA on the one hand and the other imperialist countries on the other. The principal stake in the struggle between imperialism and the workers' states will be primarily the Middle region and the whole of the African continent; secondarily, India and Indonesia.
Furthermore, these same regions will be the objects of greed among the different imperialist powers. economic interest of the Middle East lies in the fact immense oil reserves growing industrial needs for this product for the whole of the coming decade, and even for the one following (in view of the shortage of coal and before full-scale production of atomic energy can replace themi.
The economic interest of Africa lies in its resources, still unexploited and even unexplored, in various raw materials and in hydroelectric power, as potential market for industrial products and capital.
The strategic interest of these two regions moreover lies in the nearness to the USSR of the bases they offer io imperialism, as well as their central position in to the USSR, the USA. Eurasia, American continents, a position the control of which could decide the outcome of war.
23. - The economic interest of these regions also explains the struggle for influence over them which is going on among the imperialist powers. Without the imperialists, in particular, are at the mercy of the United States (because of the fact that they depend on the latter's oil and aid in dollars to buy it with).
constitutes, reserve, from whose exploitation they hope to compensate for their losses elsewhere.
But the impossibility for both British and French imperialism of fulfilling the capital requirements of the Arab and African countries, added to their being so compromised in the eyes of the masses of these coun tries, places them in a very bad position compared possibilities American imperialism. The latter is now engaged in unscrupulously and brutally supplanting them in these because it is to a certain extent economically associated with the United States in the exploitation of the colonial and dependent This, with its obvious political implications, both for the world policy of the United States and for the latters' relationship to the USSR, is an important point to bear in mind.
Investment of American capital in German industrial enterprises is growing in importance, for these enterprises are often entrusted with furnishing the indis-
11 pensable industrial equipment on behalf of American capitalists to various colonial and dependent countries, including those of Latin America.
24. — The relative economic prosperity of capitalism in recent years, especially by ensuring full employment, has naturally had a considerable effect on the level, extent, i and depth of workers' struggles and on the general policy of the bourgeoisie; paternalist and « liberal» at home; patient and « peace-loving » abroad.
The bourgeoisie will depart from this line only if it is faced with a danger of revolution at home or abroad which might affect its vital interests.
This economic conjuncture has certainly been favorable to « peace, » al home and abroad. Nevertheless, the national and international plane, be globally lavorable to the proletariat and to the revolution despite limited defeats suffered here and there. It is only the existence of the reformist and Stalinist leadership of the masses that has so far prevented them from exploiting more fundamentally the objective conditions which are favorable for the wresting of advantages from capitalism and for extending the conquests of the revolution over a larger part of the world.
It is also only the absence of a revolutionary leadership of the proletarian masses in the colonial and dependent countries which has prevented the masses of these countries from exploiting more fundamentally the difficulties of imperialism and the national bourgeoisies, in order to advance the revolution.
In the period of full employment the proletariat of the metropolitan countries would have been able to gain substantial concessions from the bourgeoisie regard to raising of wages, diminution of hours, and guarantees against unemployment.
Never, since the First World War, were objective conditions so favorable for such demands. Nevertheless, the lack of revolutionary leadership of the masses resulted in the workers contenting themselves with crumbs, apart from which they have developed an illusion of well-being, thanks to the possibility of overtime and of whole families going out to work. 40-hour week (even less in USA) and a substantial guaranteed annual wage were actually sabotaged by the reformist or Stalinist trade-union leaders.
25. But the proletariat will enter the new decade - in which it will probably see full employment give way to increased technological unemployment and its purchasing power still further undermined by the excessive indebtedness of states involved in the bankruptcy of militarization and the practice of giving all kinds of support to an inherently failing economy -with its forces in most cases virtually intact and with strengthened consciousness of its relative class weight
Hence the perspective of serious social struggles accompanying the passage of the conjuncture from « boom » to recession.
This wave of struggles, reenforced by the dangers resulting from the renewed worsening of East-West • relations, stimulated at a later stage by the example that the USSR and the other workers' states might give of their abilily to assimilate the technological revoIntion, might make it possible to bring to power and
12 consolidate Socialist governments in several countries - especially in Britain. In the United States the idea of a labor party based on the trade unions could also this time take on a decisive impetus.
These are the relatively short-term perspectives, as well as the possible fall of Franco in the near future.
The bourgeoisie, for its part, will try to solve its problems by attempts at the economic integration of the exploitation of Africa, and the development of its own atomic industry. The agreements on the « common market» and « Euratom » correspond to these preoccupations.
A certain degree of economic integration of the European capitalist countries, including Britain, inevitable, for it corresponds to economic and commercial European trends which are already established and which are becoming strengthened. Furthermore, the economic exploitation of African territories cannot be envisaged by any European country separately, without the risk of losing these territories, including on the economic plane, more especially to the advantage of the United States.
In the same way, the development of a genuine European atomic industry, capable of supplying both the military and civil needs of the European bourgeoisie, without a close dependence on the United States, envisaged except by the common effort of the European countries.
In addition to these economic considerations, the European integration corresponds to the political and military needs of the European bourgeoisie in order to face up better to the « Soviet peril » and to free it, at least partially, from a too close dependence on the • United States.
But, on the other hand, there must not be minimized the still existing obstacles and those which will not fail to appear in the future — especially in the case of an unfavorable evolution of the economic conjuncture - in the path of a real unification of Europe, and which flow from the antagonistic nature of the ational capitalist powers, principally Germany on th ne hand. and France and Britain on the other
26. - In the colonial and dependent countries the
FOURTH INTERNATIONAL a period all eflective opposition. As long, however; as the tempo of development of this country will not be to solve the question of unemployment and the agrarian reform will not be implemented, the political power of the bourgeoisie is sitting on a volcano...
the lesson of the 1957 elections, and of the difficulties encountered at present by the country's five-year plan.
27. — The preceding analysis and the perspectives which emerge from it are - as already noted - made to a certain extent without reference to the interpenetration and interaction which in fact exist between economic tendencies and the political development dependent on them, and on the other the development of relations between Fast and West.
These presuppose that relations will not become unduly exacerbated and will not rapidly evolve towards
But this assumption will be brought into question each time that a really important advance of the Revolution takes place in the colonies or metropolitan countries, or that the political revolution is victorious in other countries in the Soviet orbit, or that capitalism enters a prolonged and deep « recession.»
The overall situation is such that these possibilities, which are in mutual interrelation, continue to exist on both a long-term and short-term basis.
None of the questions in dispute between the two state camps is settled — either in Europe or Furthermore, the arms race, for more and more perfected atomic, and indeed « absolute, » arms, is continuing and becoming generalized at the expense of former arms and former conceptions of strategy and
All eventual discussions and compromises about « disarmament » are in reality concentrated only around « concessions » concerning those aspects rendered superfluous by the era of atomic arms.
The fact is that both the Suez crisis and the Hungarian and Polish events, as well as the new crisis in the Middle East and the sensational advances of Soviet industry, have once more the unstable equilibrium recently established between the camps, and initiated a new era of tension, of « cold economic difficulties will work in the direction of war.» up and accentuating the The main centres of this will be in countries such as Indonesia, the Arab countries of the Middle East and North Africa, in Argentina, Bolivia, and Brazil.
towards these countries that the centre of gravity of the colonial revolution tends to be shifted.
In all these countries the native bourgeoisie, still weak, has to face a powerful mass movement demanding the effective abolition of the after-effects of imperialism, a substantial raising of their living standards, and real freedom. By contrast, the case of India is a special one, the Congress Party under Nehru having been able — with the complicity of Pekin and the Kremlin, and in the absence of a genuine revolutionary leadership of the masses—-to neutralize for
In the effort on both sides to profit from this upset of the equilibrium in order to change the balance of power, each in its own favor, any important gain by either side in this sense may provoke the most violent reactions in the other camp.
But one must also count on the spontaneous, autonomous action of the which could also profoundly alter the relationship of forces, as it did in October and November 1956.
Under these conditions the general conclusion could" be formulated thus: the economic and political perspectives should develop in the context of a general situation which could suddenly evolve towards the decisive clash in case of any really serious alteration in the present relationship of forces.
Report
PRESENTED BY COMRADE MICHEL PABLO
The r