V

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 in 1929 to $40 billion in 1932. Industry and agriculture sagged. The army of unemployed swelled tenfold “normal,” reaching the dizzying 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 of national income.

By 1939 the national debt soared to $40 billion, 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 one-third” 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 1937 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.

VI

The basis of the current American postwar 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 the case 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 needs 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 debit; 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 source 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.

VII

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 1929-32 conditions look prosperous by comparison.

VIII

The impending economic paroxysms must, under the existing conditions, pass inexorably into the social and political crisis of American capitalism, posing in its course point-blank 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 incurable 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 be met 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.

IX

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.

X

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 hundred-fold 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.

XI

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 backward 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 age-long poverty and backwardness inherited from tsarism, 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.S., 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.

XII

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 working class is stronger.

The numerical strength and social weight of the American working class, 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 sit-down 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 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 foreign-born 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 strike-breaking 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 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.

XIII

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.

XIV

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 century can be and has been given a reactionary interpretation by a school of neorevisionism, 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 experience of the Russian revolution in 1917. 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.

XV

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 continuation 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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1. From The Struggle for Socialism in the American Century, James P. Cannon, Writings and Speeches, 1945-47,(New York: Pathfinder Press, 1977).

2. In response to the world depression, the British government in 1932 abandoned its previous policy of free trade and adopted tariff barriers against foreign competitors. At a conference at Ottawa, Canada, the same year it established the Empire Preference System, which exempted from tariff duties countries of the British Commonwealth.

3. The Lend-Lease Act was passed by Congress in March 1941. It authorized the delivery of immense quantities of war material to Britain (and later to the Soviet Union). Congress and the president rejected the idea of a cash loan because Britain had already defaulted on its payment of debts incurred to American creditors from World War I. The British government opposed an outright gift as an affront to its pride. This led to the fictitious formula that the munitions and equipment shipped by the U.S. government were being “leased” by the British and would be returned or paid for at the end of the war.

4. The term “Sixty Families” was popularized in the book America’s Sixty Families (1937) by Fedinand Lundberg. In this work Lundberg showed that the basic core of the American ruling class consisted of sixty immensely wealthy families, the most famous of which are the Morgans, Rockefellers, and Du Ponts.