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January 2003 • Vol 3, No. 1 •

From the Arsenal of Marxism

The International Prospects of Capitalism and Socialism

By James P. Cannon

The Second of Six Lectures From America’s Road to Socialism

Part 1

Almost as soon as I was old enough to look around and see and think for myself, I rebelled against the poverty, injustice, and all-around crookedness of capitalism. I became a socialist and joined the movement when I was a boy, and have been working at it ever since.

And if I made a mistake, I can’t say I wasn’t warned. Quite a few practical people who were interested in my welfare and thought I was marked for success in life began to shake their heads sadly when they heard me popping off on the street corners about socialism.

“It’s a fine idea, son, but it’ll never work,” I was told. “It’s against human nature.” “There always have been rich and poor and there always will be. Be a realist. Don’t waste your life on a Utopian dream that can never be realized. If you want to get ahead in this world, you’ve got to be practical and look out for Number One.”

I mention this to show you that I know all the arguments against socialism. I heard them more than forty years ago. And I won’t say that I didn’t pay attention to them. I did. Especially the argument that socialism is a Utopian dream that can never be realized. I was then, as I am now, inclined to realism, and I never saw any point in expending energy on impossible and unrealizable projects. The argument that socialism is not practical and not realizable worried me.

It was this troubled frame of mind that brought me, more than forty years ago, to an open forum such as this, conducted by the Socialist Educational Society in Kansas City. I went there in search of more detailed information about this thing called socialism, which had charmed me and inspired me with its grand promise of the future society of secure peace and abundance for all; a society based on equality, solidarity, and comradeship.

It was at that forum that I got my introduction to the ideas of Marx and Engels, the ideas of scientific socialism. From the discussions of that forum and the further study inspired by them, I became acquainted with Marx’s analysis of capitalism, and his sweeping assertion that socialism is not only a good idea, but is the next inevitable stage of social evolution; that the further development of capitalism cannot lead to anything else but its downfall and the socialist reorganization of society.

That did it. That settled all my youthful doubts about the practicality and realizability of the idea. It convinced me theoretically, and that is the firmest conviction there is, that all the forces of history were working on my side, on the side of socialism, and that all I had to do was lend a hand, along with others, to help the historic process along.

Compared to the privilege of participating in this magnificent historical mission, all the so-called practical concerns of life and the possible material rewards of conformity seemed trivial to me more than forty years ago, and they still do. I have never changed my mind about this question in all the intervening years. That was not because of dogmatic obstinacy, but simply because I saw no good reason to change my mind.

I have always been willing to listen to anybody who would undertake to explain or make an argument against socialism from a realistic, practical point of view. As I went along I continued to hear those arguments, and still hear them if I cock my ear in the direction of the most noise.

Every theory must be submitted to the test of events. That applies to the theory of Marxism, just as Marx ruthlessly applied it to all other theories. If I grew stronger in my socialist convictions as the years passed by, it was because it appeared to me that the development of events was confirming in life the analysis and predictions of Marx.

It was Marx himself who said that no social system can be superseded until it has exhausted its progressive capacities. If capitalism is capable of further progressive development on a world scale, and is therefore invulnerable against any attempts to change it in a radical manner, then there is not much point in arguing that socialism would be a better system.

But on the other hand, if capitalism has lost its progressive character and become reactionary, has ceased to grow and expand and develop the productive forces of the people, upon which all human welfare is based; if it has entered into its period of decline and decay—then the optimistic defenders of capitalism are in the wrong. They are the real Utopians of the present day.

The issue, then, goes to the evidence, to the facts. Let us rest the case on this solid foundation of reality, and go to the facts as they have been unfolded in the great events of the past half century. If we look with clear eyes at what has already happened, we may get a good hint of what is going to happen. If we can see enough in these events to indicate a historical trend, then we can be fairly sure of what the ultimate outcome will be. It is by this method and from this point of view that I propose to discuss the international prospects of capitalism and socialism tonight. Naturally, in a single lecture, it will be possible to hit only the high spots, and I will confine my presentation to what I consider the six main facts of modern history.

It must be admitted that forty years ago there was some ground for the popular opinion that capitalism was a securely based, going concern, with a long life and few troubles ahead. Over a span of many decades, since 1871, the great powers had been at peace. Industry and trade had been expanding, the enslaved races in the colonies of Africa and Asia were being freely plundered without fear of revolts, and the workers in the advanced countries, partly sharing in the superprofits of the colonial plunder, enjoyed a small, but real, improvement in their standard of living. Democracy flourished.

Under such conditions there could be no prospect of a workers’ revolution. Socialism was relegated to an ultimate goal whose realization was pushed far into the future. Marx’s predictions about the increasing misery of the workers forcing them to revolution seemed to be refuted. The capitalists for their part, in those far-gone halcyon days, grew rich and complacent, fat and sassy and self-confident With their trained economists at their elbows, they periodically raised their voices in a hearty and happy chorus of a song that might have been called: “Everything is Lovely and the Goose Hangs High.”

Then something happened. Something went wrong. The world had suddenly grown too small for the rival capitalist powers in their mad scramble and competition for markets, colonial territories, and spheres of influence. The conflict suddenly exploded in 1914 in the First World War. This war, which lasted more than four years, cost 12 million dead and 20 million wounded, wrecked the economy of Europe, expanded the economy of America at the expense of Europe, raised America to first place among the imperialist powers, and, as a sort of byproduct, resulted in the Russian Revolution, which tore one-sixth of the earth’s surface out of the capitalist market.

This colossal shake-up, brought about by the First World War, can be put down under the head of fact number one. Quite a fact, you must admit, which looked bad for capitalism at the time, and has been getting worse ever since.

The war was a devastating blow to capitalism, at least as far as Europe was concerned. If its goose wasn’t cooked, at least it didn’t hang high any more.

America, remote from the scene of actual conflict, enriched itself on the spoils, but the world system had been irremediably dislocated. Its days of expansion were abruptly ended. In the postwar period the sleeping colonies began to stir. In the metropolitan centers of Europe the economy stagnated, and the living standards of the workers drastically declined. The war, and the terrible poverty resulting from it, radicalized the working masses of Europe, brought a revolution in Hungary, produced revolutionary situations in Italy and Germany, and put a question mark over the future prospects of capitalism as far as the whole of Europe was concerned. Europe, after the war, especially in Germany and Italy, was ripe for revolution. But the workers were not yet ready with a party that could lead it and carry it through. They paid dearly for that unpreparedness. The result was a series of defeats for the workers. And on the basis of these defeats, with the help of American loans, the capitalist economy in Europe slowly recovered and attained a new stabilization which brought new illusions of a new Golden Age of prosperity and expansion.

But no sooner was the new stabilization of the capitalist economy proclaimed and celebrated than the whole world was again shaken to its foundations by the worldwide economic crisis touched off by the New York stock market crash of 1929. This time rich and powerful America, which had grown fat at the expense of other countries in the war, was hit hardest of all. Production was cut in half, and the living standards of the workers were reduced in about the same measure. This crisis put an end to all prospect of capitalist expansion on the basis of stable, democratic regimes and brought fascism to power in poverty-stricken Germany following the earlier example of poverty-stricken Italy.

Just as the world war had put an end to capitalist prosperity based on peace, the 1929 crisis and its aftermath put an end to capitalist prosperity in Europe based on democracy.

The economic crisis of 1929, and the resort of capitalism in Italy and Germany to the monstrous crisis rule of fascism, can be put down as important fact number two. This was also bad for the prospects of capitalism, for it showed its economic system to be weakened, shaken and declining.

Meanwhile, earlier attempts of the great powers to overthrow the workers’ government of the Soviet Union were defeated, the victory of the revolution was consolidated on the basis of nationalized and planned economy, with a monopoly of foreign trade. This closed off the Russian market to capitalist exploitation from abroad. During the crisis, which dragged on in the capitalist world for a number of years and was never really overcome, Russian industry under the five-year plans progressed by leaps and bounds, multiplied its output many times and eventually brought the Soviet Union to second place in industrial production.

The survival of the Soviet Union in a hostile capitalist world, and its ability to increase and even multiply its productive capacity, while the economy of the capitalist countries was declining and stagnating, raises in the most striking and irrefutable fashion a hitherto unproved assertion of Marxism: that is, the superiority as a productive force of a nationalized and planned economy—which is immune from crisis—over the anarchic, unplanned economy of capitalism, which cannot escape periodic crises. Here, in my opinion, is the key to the future development of the world.

This can be put down among our exhibits as fact number three, the fact which shows the rise and development of a new social and economic system simultaneously with capitalist decline.

By 1939, the basic conflicts which had caused the world war to break out in 1914 had not been eliminated. On the contrary, they reasserted themselves in a more aggravated form. Each one of the big powers, stifling in the still unresolved crisis which struck the capitalist world in 1929, saw its existence conditioned upon the acquisition and retention of foreign markets and territories and fields of influence for the export of its surplus goods and capital. The richer nations felt obliged to hang on to what outlets they had at all costs, and if possible to find new ones. German capitalism, on the other hand, defeated in the First World War, and suffocating in its restricted barriers, had to expand or perish. The same was true of Italy and Japan.

I think history will record the year 1939 as the fateful year of decision which finally sealed the fate of capitalism as a world system; the year in which terrible economic difficulties, brought about by the operation of the laws of capitalism, were supplemented and enormously aggravated by the bankruptcy of political and military decision. Capitalism lost the power to think for itself.

Here was the situation in 1939: The rival big powers of capitalism confronted each other as rivals of the same kind, of the same system, in the fight for a diminishing world market for trade and investment.

The Soviet Union, embracing one-sixth of the earth’s surface, confronted all of them as a rival of a different kind, a rival representing a new and different social system, whose superiority over the social system of capitalism as a productive force had been demonstrated to the hilt in the prolonged crisis. The Soviet Union confronted the capitalist nations as a rival whose further existence and possible expansion could spell only death in the long run for the rival system of capitalism.

Moreover, the territory occupied by the Soviet Union had been withdrawn from the capitalist market since the revolution of 1917. And this fact in itself had contributed enormously to the economic difficulties of the capitalist nations, in Europe particularly.

It was the most imperative necessity of the capitalist nations in the fateful year of 1939 to take counsel together and to unite in their own enlightened self-interest, to face their greatest danger, which was at the same time their greatest opportunity. They were confronted with an overriding need to crush the Soviet Union and thereby to remove, for the time being at least, a rival social system from the world arena; and at the same time, to open up the Russian market for capitalist exploitation and thus get a new lease on life for the system as a whole.

The inability of the capitalist nations, because of conflict among themselves, to unite for this crucial and indispensable task in 1939, to save or at least to prolong their own life, was, in my opinion, the surest sign of their hopeless degeneration and decay, manifested by their inability even to think for themselves any longer.

It doesn’t help matters any to say that it was all Hitler’s fault and that Hitler was a madman. That is true enough. But what kind of social system is it when madmen can make its most important decisions? An historical law reasserted itself in this circumstance: the law that social systems which have outlived their time can’t do anything right any longer.

Instead of uniting to attack the Soviet Union, the rival capitalist imperialist powers embarked upon a war among themselves. The Soviet Union was at first on the sidelines, and later engaged in the war with the powerful allies, America and Great Britain. The results of the war are well known. Germany and Japan, which previously had menaced the Soviet Union from the West and from the East, were crushed. The colonial and nationalist revolutions, taking advantage of the difficulties of the imperialist masters during the war, were able to strengthen their forces and undermine the whole colonial system, without which world capitalism cannot operate.

And on top of everything, the most important thing of all, the Soviet Union emerged victorious from the war and rose to the position of the first economic and military power in Europe.

Let us put all this down in our list of exhibits as fact number four, as a brightly lighted signpost pointing out the direction of future developments which were not long unfolding in the postwar period.

Formally speaking, the Axis powers—Germany, Italy, and Japan—lost the war, and the Allied powers, the United States, Britain, the Soviet Union, and France, won it. That’s the way formal history records the outcome, and that’s the way Churchill, the world’s most articulate wishful thinker, writes it. The essential content within that outward form looks different. In reality, as measured by their actual position when the smoke cleared away, the Soviet Union and the United States emerged as the only victors and all the others were losers—England and France no less than Germany, Italy, and Japan.

Go to part 2





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