FASCISM AND SOCIAL REVOLUTION

A Study of the economics and Politics of the Extreme Stages of Capitalism in Decay

by R. PALME DUTT

Œ Proletarian Publishers Edition 1974 Second Printing 1976 Third Printing 1978

Proletarian Publishers P.O. Box 3566 Chicago IL 60654

"We say to the workers: 'You will have to go through fifteen, twenty, fifty years of civil wars and international wars, not only in order to change existing conditions, but also in order to change yourselves and fit yourselves for the exercise of political power."'

MARX (On the Communist Trial at Cologne, 1851).

"The bourgeoisie sees in Bolshevism only one side . . . insurrection, violence, terror; it endeavors, therefore, to prepare itself especially for resistance and opposition in that direction alone. It is possible that in single cases, in single countries, for more or less short periods, they will succeed. We must reckon with such a possibility, and there is absolutely nothing dreadful to us in the fact that the bourgeoisie might succeed in this. Communism 'springs up' from Positively all sides of social life, its sprouts are everywhere, without exception-the 'contagion' (to use the favourite and 'pleasantest' comparison of the bourgeoisie and the bourgeois police) has very thoroughly penetrated into the organism and has totally impregnated it. If one of the 'vents' were to be stopped up with special care, 'contagion' would find another, sometimes most unexpected. Life will assert itself. Let the bourgeoisie rave, let it work itself into a frenzy, commit stupidities, take vengeance in advance on the Bolsheviks, and endeavour to exterminate in India, Hungary, Germany, etc., more hundreds, thousands, and hundreds of thousands of the Bolsheviks of yesterday or those of to-morrow. Acting thus, the bourgeoisie acts as did all classes condemned to death by history. The Communists must know that the future at any rate is theirs; therefore we can and must unite the intensest passion in the great revolutionary struggle with the coolest and soberest calculations of the mad ravings of the bourgeoisie.... In all cases and in all countries Communism grows; its roots are so deep that persecution neither weakens, nor debilitates, but rather strengthens it,"

LENIN ("Left-Wing" Communism, 1921),

PREFACE TO THE SECOND EDITION 7

INTRODUCTION 15

CHAPTER 1. TECHNIQUE AND REVOLUTION 21

I. The Growth of the Productive Forces 23

2. The Conflict of the Productive Forces Against Existing Society

3. Productivity and Unemployment 35

4. The Alternative-Social Revolution or Destruction 44

II. THE END OF STABILISATION 46

I. The Last Attempt to Restore Pre-War Capitalism 47

2. The Collapse of the Illusions of the Stabilisation Period 52

3. After the Collapse 57

III. THE NEW ECONOMICS AND POLITICS 62

I. The Destruction of the Productive Forces 63

2. The Revolt Against the Machine 68

3. The Revolt Against Science 74

4. The Revolt Against "Democracy" and Parliament 78

5. "National Self -Sufficiency 82

6. War as the Final "Solution" 88

IV. WHAT IS FASCISM? 92

I. The Class-Content of Fascism 93

2. Middle-Class Revolution or Dictatorship of Finance-Capital? 97

3. The Middle Class and the Proletariat 103

4. The Definition of Fascism 107

V. HOW FASCISM CAME IN ITALY 111

1. The Priority of Italian Fascism 111

2. Socialism in Italy 113

3. Was Revolution Possible in Italy? 117

4. The Growth and Victory of Fascism 120

VI. How FASCISM CAME IN GERMANY 127

1. The Strangling of the 1918 Revolution 128

2. The Growth of National Socialism 135

3. The Crucial Question of the United Front 140

4. The Causes of the Victory of Fascism 143

CONTENTS PAGE

VII. HOW FASCISM CAME IN AUSTRIA 153

I. The Significance of the Austrian Experience 153

2. The Betrayal of the Central-European Revolution 157

3. The Fascist Dictatorship and the February Rising 162

VIII. SOCIAL DEMOCRACY AND FASCISM 169

I. The Capitalist View of Social Democracy and Fascism 170

2. The Germs of Fascism in Social Democracy 176

3. How Social Democracy Assists Fascism to Power 183

4. The Question of the Split in the Working Class 186

5. The Adaptation of Social Democracy to Fascism 191

IX. THE THEORY AND PRACTICE OF FASCISM 197

I. Is There a "Theory" of Fascism? 197

2. Demagogy as a Science 204

3. Capitalism, Socialism and the Corporate State 212

4. The Outcome of Fascism in the Economic Sphere 225

5. Fascism and War 232

6. Fascism and the Women's Question 238

X. THE ESSENCE OF FASCISM-THE ORGANISATION OF SOCIAL DECAY 243

XI. TENDENCIES To FASCISM IN WESTERN EUROPE AND AMERICA 252

I. The Basis for Fascism in Britain, the United States and France 254

2. The Significance of the National Government in Britain 262

3. The Roosevelt Emergency Regime 267

4. The February Days and the National Concentration Government in France 272

5. The Beginnings of Fascist Movements 278

XII. FASCISM AND SOCIAL REVOLUTION 290

1. The Dialectics of Fascism and Revolution 291

2. The Fight Against Fascism 296

INDEX 311

MARX (On the Communist Trial at Cologne, 1851).

LENIN ("Left-Wing" Communism, 1921),

7. PREFACE TO THE SECOND EDITION

THE issue of a second edition of this book provides the opportunity for a short note on the development of Fascism and Anti- Fascism in the six months since May 1934.

The outstanding development in the world of Fascism during this period has been the signs of the first stages of a gathering crisis of Fascism-most sharply expressed in the events of June 30 in Germany, but also reflected in the desperate murder-coup fiasco against Dollfuss on July 25, in the extreme GermanItalian war-tension, and in the Arpinati episode in Italy, and still further reflected (in the countries not yet conquered by Fascism) in the setback to the Fascist advance in France during the months immediately succeeding the February offensive, in the setback to Mosley in Britain as shown by Olympia and Hyde Park and by the formal disassociation of Rothermere from Mosley, and in the strength of the Spanish workers' resistance to Fascism. While it would be a mistake to exaggerate the significance of particular events and fluctuations in a long-drawn and profound world-conflict, it is evident that there has been during this period an increase in the inner contradictions and difficulties of Œ Fascism and an awakening and gathering of the mass forces of resistance to Fascism.

The central point of this process for Fascism has been the events of June 30 in Germany, which marked a turning point of international significance. The leaders of the fighting forces of German Fascism, the principal leaders of the Storm Troops, within fifteen months of the accession of Fascism to power had to be shot down by the leader of German Fascism, Hitler, as the representative and agent of the demands of German Finance-Capital and of its direct instrument, the Reichswehr. The majority of the Storm Troops had to be liquidated. We see here the classic demonstration of the process of Fascism after power, the alienation and disillusionment of the petit-bourgeois and semi-proletarian elements which were made the tools and dupes of Finance-Capital and now find all their aspirations thwarted with the denial

8. PREFACE TO THE SECOND EDITION

of "the second revolution," the consequent narrowing of the social basis of the Fascist regime, and the ever more open demonstration of its real character as the terrorist dictatorship of Finance-Capital. While a warning must again be uttered against exaggerating the tempo of development and rate of growth of mass opposition, it is evident that a single chain unites the phases of the factory elections in the spring of 11934, with their unfavourable results for the Nazis, the intensive campaign against the "critics and carpers," the alleged "revolt" and its bloody suppression on June 3o, and the results of the plebiscite in August, when (after the declaration of Goebbels on the eve of the poll that the loss of a single vote in comparison with the previous November would be a disaster) the direct No vote rose from 2.1 millions in November, 1933, to 4.3 millions in August, 1934, and reached an average Of 20 per cent. in the main industrial towns. Parallel with this process has gone forward the steadily worsening economic situation, the mounting adverse trade balance in place of the previous exports surplus, the sharp cutting down of imports of essential raw materials, and tightening Organisation on a war basis of rationing and hardship (reflected in the tone of Hitler's Buckerberg speech of September 30, 1934: "Never will they bring us to our knees," "if the worst comes to the worst" etc.. The whole concentration of Nazi policy becomes more and more openly directed to the most intensive preparation of war as the sole path forward.

On the other side, the examples of Germany and Austria have led to a widespread awakening of working class and general popular opposition to Fascism in all countries; and this has led to a rapid advance of the united working class front, and, in particular, the united front of the Socialist and Communist Parties, against the fascist and war menace in a number of leading countries. This extending development of the united working class front is the most important and the most hopeful development of 1934. In this advance the French working class has led the way. The united front pact of the French Socialist Party and of the French Communist Party was finally signed Œ on July 27, 1934; and the powerful influence of this common front is stimulating and mobilising the entire working class, and spreading confidence and fighting spirit, has been the decisive factor in delaying the planned rapid offensive of

9 PREFACE TO THE SECOND EDITION

Fascism in France during 1934. With the fall of the Doumergue- Tardieu Cabinet of National Concentration in November, with the combined demand of all the bourgeois forces for anti-democratic constitutional changes, and with the Fascist groupings preparing renewed offensives, heavy tests are now in front for the fighting strength of the united working class in France.

At the same time in Austria the lessons of the February battles have produced a far-reaching transformation in the working class. The illegal Communist Party has advanced to the position of a mass party with the absorption of the left Social Democratic and Schutzbund elements, many organisations in leading working-class districts coming over en bloc.

The Revolutionary Socialist Committees, composed of former Social Democratic elements and later setting up the United Socialist Party, have maintained the old forms and contact with the emigrant leadership and with the Second International but have proclaimed the aim of the dictatorship of the proletariat and denounced the old "democratic and reformist illusions" ("The Fascist dictatorship in Austria has dispelled all democratic and reformist illusions among the workers"letter of the Central Committee of the Revolutionary Socialists of Vienna to Bauer and to the Second International on May 20, 1934). In July a united front was established by the Communist Party, the Central Committee of the Revolutionary Socialists of Austria, and the Committee of Action of the Schutzbund, with a joint manifesto for "the revolutionary dictatorship of the working class" and for "a united revolutionary class party of the Austrian proletariat."

The united front of the Socialist and Communist Parties was also established in Italy, in the Saar and (in September) in Spain. Among the working class youth organisations in all countries the advance of the united front was even more marked.

On the other hand, the British Labour Party and a number of other Social Democratic Parties, notably the Scandinavian, the Dutch, the Belgian, the Swiss and the Czecho-Slovak, actively opposed the united front and even developed extended disciplinary measures to prevent its realisation. In October, 1934, the Communist International approached the Second International for common action in support of the Spanish

10. PREFACE TO THE SECOND EDITION

workers. A meeting took place, at which the representatives of the Second International, Vandervelde and Adler, while declaring Œ themselves unable to agree to any immediate common action or to commit their constituent parties, agreed to continue the negotiations with a view to reaching a basis of common action analogous to that in France. The British Labour Party, on the other hand, which is the largest section of the Second International, and which had just at its Southport Conference passed draconian decisions against any form of united front or even "loose association" with Communism, expressed strong disapproval of any negotiations taking place. At the same time the Spanish Socialist Party, equally a section of the Second International, had not only reached a united front with the Communist Party, but was taking direct part in armed civil war under the slogan of the dictatorship of the proletariat.

This extreme and extending division and disparateness of policies among the parties of the Second International is a symptom of the profound process of transformation going forward among the Social Democratic workers under the influence of the object-lesson of Fascism. The further development of this situation in the international working-class movement is of critical importance.

The Spanish revolutionary mass struggle, reaching in October 1934, to the stage of open civil war against the advancing Fascist offensive of the combined reactionary clerical-militarist-landlord-bourgeois forces, and in the province of Asturias reaching to the formation of Soviets, has immeasurably raised the whole international working-class movement, even more than the battles of Vienna in February. It has revealed a far higher degree of mass-participation and unity, and of consciousness of revolutionary aim, even though not yet reaching the conditions of Organisation and leadership for final victory. The formation of the Soviet regime in Asturias at the outset of the struggle, and the prolonged and tenacious resistance against all the forces of the Spanish Government, reaches a point of revolutionary struggle unequalled in Western Europe since the days of the Hungarian and Bavarian Soviet Republics in 1919. The lesson endeavoured to be drawn by the reformists, of the inevitable failure of armed struggle against the military resources of modern governments, is the

11. PREFACE TO THE SECOND EDITION

exact opposite of the reality; for the prolonged resistance of the workers of Asturias, facing alone the entire forces of the Spanish Government and its African levies, has abundantly shown that, if the workers of the other principal regions, and especially Catalonia, Andalusia and Madrid, had been fighting at the same time, with equal tenacity and leadership, the forces of the Government would have been powerless to cope with the situation, and a Soviet Spain would have been already won. The Spanish revolutionary struggle at the end of 1934, following on Vienna at the beginning, is the signal of the future in Europe.

But the heaviest struggles are still in front. In the face of the present international situation of the increasing difficulties, desperation and discrediting of Fascism, the weakening of its mass Œ basis in the countries where it has won power, and the gathering of mass forces of resistance in the countries where it has not yet won power, a new illusion has begun to be widely spread in Liberal and Social Democratic circles-the illusion of the retreat of Fascism. It is said that Fascism has passed its zenith, is on the downgrade, that the heaviest danger of Fascism is passing. The extreme pessimisitic defeatism of a year and a half ago is giving place to a no less baseless and illusory optimistic complacency. A year ago the prophecies were all of an "epoch of Fascism" lasting for decades. To-day a Citrine can declare that "dictatorship in every land has passed its peak; there was an appearance of stability about the regime in Germany, but he was satisfied that even there a change would gradually but surely come, and that ultimately the democratic rights of the people would assert themselves" (speech to the International Clothing Workers' Conference, August, 1934).

Underlying this outlook of a section of the Social Democratic leadership is undoubtedly the belief that Fascism, faced with increasing internal difficulties and mass discontent, may yet be compelled to turn to Social Democracy for assistance, and that a renewed sphere of permitted activity may open out for the Social Democratic and trade union leadership within Fascism (as was already hoped for and sought by German Social Democracy in the initial period of the Hitler regime by the May 17 vote for Hitler and the trade union bureaucracy's courting of the Nazis). Nor are signs of this possibility lacking. The

12 PREFACE TO THE SECOND EDITION

well-informed Manchester Guardian special correspondent (always in close touch with Social Democratic circles) reported in August that Hitler, in view of the failure of the Labour Front and the Nazi factory cells to win the support of the workers, had approached former Social Democratic leaders with a view to the formation of "non-political trade unions"; the proposal had been referred to the Executive at Prague, and "Wels was in favour of further negotiations" (the subsequent formal denial issued by Wels, to the effect that he had not met any representative of Hitler-the intermediary was in fact a Social Democrat- left the essence of the Manchester Guardian report unrefuted). Similarly may be noted Bauer's suggestion in the August Kampf that the Schuschnigg Clerico-Fascist Government might extend its basis to the left by "an understanding with the working class." In Italy during the same period Mussolini made his approach to the former Socialist leaders, Caldara and Schiavi, for their collaboration and even for the issue of a permitted "Socialist" journal in Milan. These are only signs so far; but the possibility is not excluded that Fascism in difficulties may turn to the collaboration of a section of the Social Democratic and old trade union leadership (as was done by De Rivera in Spain, by Pilsudski in Poland, by Bulgarian Fascism, etc.).*

These hopes of a section of the old Social Democratic leadership, however, bear no relation to the real process of transformation taking Œ place in the main body of the Social Democratic workers and rapid advance to militant struggle and working class unity.

* How thin is the margin between the ideology of the old Social Democratic leadership and Fascism is illustrated by the expression of a representative of German Social Democracy, E. Conze, who has been conducting propaganda in the British Labour Movement since the advent of Hitler to power. He writes:

"Fascism is the organised attempt to introduce Socialist planning with the consent of Big Business" (E. Conze, Time and Tide, July 28, 1934.)

"I do not mind the Fascists being labelled 'capitalistic.' 1 want to add, however, that the self-destructive policy of German reformism and Communism created to a certain extent a temporary harmony between the interests of the masses and those of the capitalists, which was exploited by Fascism. If the masses have no chance to get socialism, they must back capitalist imperialism as the only alternative" (E. Conze, Plebs, October 1934).

From this typical Social Democratic view of Fascism as "the organised attempt to introduce Socialist planning with the consent of Big Business," representing "to a certain extent a temporary harmony between the interests of the masses and those of the capitalists," it is obviously no very far step to cooperation with Fascism, 13. PREFACE TO THE SECOND EDITION

No illusion could be more dangerous than the illusion that Fascism can be in retreat without a decisive struggle, that Fascism can ever be finally overcome save by the workingclass revolution and the establishment of the working-class dictatorship. It is equally necessary to fight the illusion of the inevitability of Fascism, or of the inevitable long-term power of Fascism in the countries where it has won power, as it is necessary to fight the illusion that a temporary fluctuation can mean the retreat and ultimate disappearance of Fascism, or disappearance of the menace of Fascism in the countries where it has not yet conquered, without a decisive revolutionary struggle. On the contrary, the greater the difficulties of Fascism, the more desperate and ruthless will be its fight for existence. The massing of the working-class united front does not yet mean the defeat of Fascism; it means only the massing of the forces for the struggle against Fascism and for the final revolutionary struggle.

It has been the essential purpose of the present book to establish that Fascism is not merely the expression of a particular Œ movement, of a particular party within modern society, but that it is the most complete expression of the whole tendency of modern capitalism in decay, as the final attempt to defeat the working- class revolution and organise society on the basis of decay. This tendency runs through all modern capitalist countries without exception, and the advent of open Fascism to power is only its final and completed expression. The drive against the working- class, the strengthening of executive and police powers (Sedition Bill in England, constitutional reforms in France, new emergency dictatorship forms in the United States), the attempt to paralyse the working-class organisations from within upon a basis of enforced class-co-operation and war against all revolutionary elements (social fascism), the drive to war and increasing Organisation of the entire economic social and political structure for war, go rapidly forward in all countries, including the formally "democratic" countries,

Britain, France and the United States. The fight against Fascism is the fight against this entire process of modern capitalism.

In particular, the drive to war, in close unity with the drive

to Fascist forms of Organisation and preparation of war within

14. PREFACE TO THE SECOND EDITION

each country, becomes the more and more dominant character of the present stage.

The supreme task now is to build up the widest United Front against Fascism and War. Widespread anti-Fascist and anti-war feeling exists on all sides. But the essential need is organisation. The resistance to the united front must be overcome. No separate and sectional interests can be allowed to stand in the way of this. The all- inclusive united working-class front, drawing in its wake the mass of the petit-bourgeois and unorganised elements, requires to be built up in every country. Only the widest common front can defeat Fascism. And for the victory of the struggle it is essential to understand the true character of the issues, the final necessity of the revolutionary alternative, which can alone defeat Fascism and war by the victory of the socialist revolution.

In the six months since this book was published, the urgency of these issues has become still greater.

November, 1934. R. P. D.

Œ INTRODUCTION

A VERY sharp issue confronts present society. Events move with great speed. The traditional forms of thought still cling to the remnants of past periods. The victory and advance of Fascism over an extending area has come as a brutal shock to millions. Yet Fascism is no sudden growth. For a decade and a half the whole post-war social development has been incubating Fascism. To all those who have hitherto accepted as unquestioned the existing social forms and their continuity, and above all to those who have looked to the possibility of peaceful progressive advance within those existing social forms, and who have dismissed the revolutionary outlook as the fantasy of a minority, Fascism, and more especially the victory of Fascism in an advanced industrial country such as Germany, has come as a brutal shock. It may yet prove a salutary shock, if it can open their eyes to the real issues of our period. With every year, and with every month, that the long overdue social revolution in Western Europe and America, for which the world war of 1914 already gave the signal-that is, the ending of the private ownership of the means of production which inevitably produces the increasing contradictions, anarchy, destruction and barbarism of the present day-is delayed, denied and postponed, the world situation grows more desperate, and the whole future of society is brought into question. The world war of 1914, the opening of the world socialist revolution in 1917, the partial revolutions and civil struggles succeeding the war, the post-war chaos, the world economic crisis since 1929, and now the victory and advance of Fascism and approach to a second world war-these are the successive warnings of the real issues of the present stage. Fascism has already been the subject of an enormous discussion and literature over twelve years, and above all over the past two years. Yet the treatment of Fascism has hardly yet brought out its full significance.

16 INTRODUCTION

On the one side, Fascism has been widely treated as simply the expression of brutality and violence, of militarism and suppression, of national and racial egoism, of the revolt against culture, against the old slogans of liberty, equality and brotherhood.

On the other side, Fascism has been treated as the expression of Œ national rebirth, of the emergence of youth, of the end of decadent liberalism and intellectualism, of the advance to a balanced and organised social order.

In order to get closer to the true character of Fascism, it is necessary to go deeper, to see Fascism in relation to the whole character of modern social development, of which Fascism is an expression and reflection, and above all to get down to the basic movement and driving forces of economy and technique' of which the social and political forms, including Fascism, are only the reflection.

Such an examination will reveal beyond dispute that the modern development of technique and productive powers has reached a point at which the existing capitalist forms are more and more incompatible with the further development of production and utilisation of technique. There is war between them, increasingly violent and open since 1914, and entering into a new and extreme stage in the world economic crisis and its outcome. One must end the other. Either the advance of the productive forces must end capitalism. Or the maintenance of capitalism must end the advance of production and technique and begin a reverse movement. In fact the delay of the revolution has meant that the reverse movement has already begun throughout the world outside the Soviet Union.

Only two paths are therefore open before present society.

One is to endeavour to strangle the powers of production, to arrest development, to destroy material and human forces, to fetter international exchange, to check science and invention, to crush the development of ideas and thought, and to concentrate on the Organisation of limited, self-sufficient, nonprogressive hierarchic societies in a state of mutual war-in short, to force back society to a more primitive stage in order to maintain the existing class domination. This is the path of Fascism, the path to which the bourgeoisie in all modern countries where it rules is increasingly turning, the path of human decay.

INTRODUCTION 11

The other alternative is to organise the new productive forces as social forces, as the common wealth of the entire existing society for the rapid and enormous raising of the material basis of society, the destruction of poverty, ignorance and disease and of class and national separations, the unlimited carrying forward of science and culture, and the Organisation of the world communist society in which all human beings will for the first time be able to reach full Œ stature and play their part in the collective development of the future humanity. This is the path of Communism, the path to which the working masses who are the living representatives of the productive forces and whose victory over capitalist class domination can alone achieve the realisation of this path, are increasingly turning; the path which modern science and productive development makes both possible and necessary, and which opens up undreamt-of possibilities for the future development of the human race.

Which of these alternatives will conquer? This is the sharp question confronting human society to-day.

Revolutionary Marxism is confident that, because the productive forces are on the side of Communism, Communism will conquer; that the victory of Communism, which is expressed in the victory of the proletariat, is ultimately inevitable as the sole possible final outcome of the existing contradictions; that the nightmare of the other alternative, of the "Dark Ages" whose creeping shadow begins already to haunt the imagination of current thinkers, will yet be defeated, will be defeated by the organised forces of international Communism.

But this inevitability is not independent of the human factor. On the contrary, it can only be realised through the human factor. Hence the urgency of the fight against Fascism, and for the victory of the proletariat, on which the whole future of human society depends. The time grows shorter; the sands are running through the glass.

To many, the alternative of Fascism or Communism is no welcome alternative, and they would prefer to deny it and to regard both as rival, and in their view even parallel, forms of extremism. They dream of a third alternative which shall be neither, and shall realise a peaceful harmonious progress without class struggle, through the forms of capitalist "democracy," "planned capitalism," etc. 18. INTRODUCTION

This dream of a third alternative is in fact illusory. On the one side, it is the echo of the conceptions of a past period, of the period of liberal capitalism, which was already perishing with the advent of imperialism, and which cannot be revived when the conditions that gave rise to it have passed away, in the stage of the extreme decay of capitalism and of the extreme intensification of the class struggle. Even the caricature of democratic forms which is still precariously maintained in the imperialist states of Western Europe and America is increasingly supplemented and displaced by more and more open dictatorial and repressive methods (increase of executive powers, diminution of the role of Parliament, growth of emergency powers, extension of police action and violence, restriction of the rights of speech and meeting, restriction of the right to strike, violent suppression of demonstrations and strikes, combined with the typical methods of social demagogy of the millionaire Press, stampede Œ elections, etc.). The trend of capitalism in all countries towards fascist forms is unmistakable, and is wider than the question of a Mussolini or a Hitler.

On the other side, the dream of a "planned capitalism" is already an unconscious groping after Fascism without facing its logical implications. For in practice the endeavour to realise the self- contradictory aim of a "planned capitalism" can only be pursued along the path of Fascism, of repression of the productive forces and of the working class.

Thus the myth of a third alternative is in fact no alternative, but in reality a part of the advance towards Fascism.

Fascism is not inevitable. Fascism is not a necessary stage of capitalist development through which all countries must pass. The social revolution can forestall Fascism, as it has done in Russia. But if the social revolution is delayed, then Fascism becomes inevitable.

Fascism can be fought. Fascism can be fought and defeated. But Fascism can only be fought and defeated if it is fought without illusions and with clear understanding of the issues. The causes of Fascism lie deep-rooted in existing society. Capitalism in its decay breeds Fascism. Capitalist democracy in decay breeds Fascism. The only final guarantee against Fascism, the only final wiping out of the causes of Fascism, is the victory of the proletarian dictatorship.

Fascism offers no solution of a possible stable social organisation

19.

to replace the existing society in dissolution. On the contrary, Fascism carries forward all the contradictions of existing class society, because Fascism is only a form, a means of capitalist class rule in conditions of extreme decay. Not only that, but Fascism carries forward the contradictions of existing class society to their most extreme point, when the contradictions are laid bare in open civil war and the organisation of the entire capitalist state upon the basis of permanent civil war. Fascism is thus society at war within itself. On this basis, Fascism, so far from being a solution of existing social problems, represents their extreme intensification to the point of final disruption. The only final outcome can be the victory of Communism, because Communism alone contains within itself the solution of the contradictions.

But in the interim period of struggle and transition, if it is Œ prolonged, if Fascism succeeds for a period in organising its basis of civil war and violent reactionary dictatorship, an enormous consequent destruction of material wealth, of human lives and of culture, can take place, and increasingly threatens. Therein is the desperate urgency of the fight, not only for the ultimately inevitable victory of Communism, but for the rapid victory of Communism.

The urgency of the present issues needs no emphasis. All sense the gathering storms. A host of issues, of war, of armaments, of Fascism, of the economic chaos, are taken up. But none of these issues can be taken in abstraction. It is necessary to see them in relation to the whole social development, to the basic issue underlying all these forms, the issue of the rule of the bourgoisie or of the proletariat, of capitalism or socialism, on which the future of the human race depends.

Present society is ripe, is rotten-ripe for the social revolution Delay does not mean pacific waiting on the issue. The dialectic of reality knows no standing still. Delay means ever-extending destruction, decay, barbarism. The words of Lenin on the eve of October apply with gathering force to the present world situation: "Delay means death."

May, 1934. R. P. D.

21. CHAPTER I

IN the issue of the Automobile Engineer for March 1931, appeared an article on "The Machine Tool: An Analysis of the Factors Determining Obsolescence."

This article was not written as a criticism of existing society. It was written, with considerable detail statistical calculations, to assist employers or their technical managers to determine under what conditions the installation of new high-production machinery can be profitable. Nevertheless the conclusions reached were in the highest degree revolutionary.

The first conclusion was to the effect that, quoting the words of a paper of Mr. H. C. Armitage to the Institute of Automobile Engineers: "high-production machines that are being developed in America cannot be economically used in this country." The reason given was "because existing British plants can already produce more rapidly than the products can be disposed of. . . . The statement has been made many times that American factories in the main industries could more than supply the world's needs, even if all other supply sources closed down." On this ground, objection was taken to the common complaint Œ of "uninformed critics of British industry" that British employers had fallen behind in the race because of maintaining "hopelessly out-of- date factory equipment."

On the contrary, in fact, the British capitalists knew very well what they were doing when they left their German and American rivals during the decade after the war to install gigantic modern equipment of large-scale production at heavy expense, requiring heavy maintenance costs and an enormous market, while they themselves preferred mainly to concentrate on speeding up and driving harder their labour on relatively older machinery, requiring less maintenance costs and a smaller market; on this basis they have been better able to meet the crisis than their German and American rivals.

22. FASCISM AND SOCIAL REVOLUTION

The second conclusion went even further and declared that this principle now applied also to American industry:

The time has now arrived when Mr. Armitage's remarks may be widened to a statement that the latest machine tools now being developed in America cannot even be economically used in the United States.

That is to say, the most modern developments of technique can no longer be utilised in even the most advanced countries of capitalism.

The third conclusion provides the complement to the first two. One market, it is pointed out, still remains for the most advanced machine tools. That market is the Soviet Union.

American machine-tool makers, having a range of equipment sufficient to meet the needs of the American production plants, have supplied to Russia machine tools outside this range, specially designed to obtain still faster production. An excessive price has been demanded for these special machines on the ground that, while the tools show an improvement in output speed on their standard lines, they have no immediate prospects of finding other customers for them, there being no demand outside Russia for faster production than can be obtained with existing models.

Thus, according to the testimony of this technical engineering journal, the most modern developments of technique, making possible the most extensive and rapid production with the minimum of labour, can no longer be utilised in the countries of capitalism, where they have originated, but can only be utilised to-day in the country of socialist construction, in the Soviet Union.

The significance of this present stage of technique and society here revealed-and this example is only one of ten thousand constantly arising in every direction in the present periodrequires no emphasis. Here, as in a single crystal, is expressed the whole present stage of the general crisis of capitalism, of the exhaustion of the possibilities of Œ productive advance within the fetters of the old private property ownership, and the necessity of the socialisation of production as the sole condition for further development.

In the situation that this picture reveals lies the real root of the issue of Fascism or Communism. In this situation lies the basic cause why precisely at the present stage of social development

23. THE GROWTH OF THE PRODUCTIVE FORCES

the issue of Fascism or Communism inescapably confronts existing society.

I. The Growth of the Productive Porces.

A century ago, Robert Owen, on the basis of his experience as a successful manufacturer, noted the contradiction between the new social productive labour and the private appropriation of the f ruits:

The working part of this population Of 2,500 persons (in New Lanark) was daily producing as much real wealth for society as, less than half a century before, it would have required the working part of a population of 6oo,ooo to create. I asked myself, what became of the difference between the wealth consumed by 2,500 persons and that which would have been consumed (Robert Owen, The Revolution in the Mind and Practice of the Human Race, 1849.)

The contradiction of capitalism was thus already clearly seen by Owen on the basis of his conduct of the model factory of New Lanark from 18oo, to 1829. But the criticism remained an idealist criticism. For capitalism in this period, despite all the cruelty and poverty involved in its process, was still ascending; it was still able to organise and develop the productive forces; it was still a progressive factor, carrying through the transformation from wasteful and uneconomic small-scale production to modern large-scale production, and thus preparing the material basis for the future society. The critique of capitalism in this period by Owen and others remained utopian.

The answer to this type of critique of capitalism was provided by Marx in his discussion of a similar line of argument of Proudhon: am Al

In 1770 the population of the United Kingdom of Great Britain was fifteen millions and the productive population three millions. The scientific power of production would about equal a population of twelve more millions; thus making a total of fifteen millions of productive forces. Thus the productive power was to the population as I is to I, and the scientific power was to manual power as 4 is to I. Œ In 1840 the population did not exceed thirty millions; the productive population was six millions, while the scientific power amounted to 650 millions, that is to say, it was to the whole population as 2 1 to I, and to manual power as 108 to I.

24. FASCISM AND SOCIAL REVOLUTION

In English society the day of tabour had thus acquired in seventy years a surplus Of 2,700 per cent. of productivity, that is to say that in 1840 it produced twenty-seven times as much as in 17 7 o. According to M. Proudhon it is necessary to put the following question: Why is the English workman of 184o not twenty-seven times richer than the workman of 1770?

In putting such a question one would naturally suppose that the English had been able to produce these riches without the historical conditions in which they were produced-such as: the private accumulation of capital; the modern division of labour; the automatic workshop; anarchic competition; the wage system, and, in fine, all that which is based upon the antagonism of classes-having to exist. But these were precisely the necessary conditions for the development of the productive forces and of the surplus of labour. Thus it was necessary, in order to obtain this development of the productive forces, and this surplus of labour, that there should be some classes which thrive and others which perish.

(Marx, Poverty of Philosophy, 1, 3.)

This basic conception of the capacity of development of the productive forces as the measure of a progressive or reactionary social order is no less strongly expressed in Marx's praise of Ricardo:

The reproach moved against him, that he has an eye only to the development of the productive forces regardless of "human beings," regardless of the sacrifice in human beings and capital values incurred, strikes precisely his strong point. The development of the productive forces of social labour is the historical task and privilege of capital. It is precisely in this way that it unconsciously creates the material requirements of a higher mode of production.

(Marx, Capital, Vol. III, Kerr edition, P. 304.)

The Marxist critique of capitalism thus basically differs from the utopian school still surviving in the so-called "English Socialism." The Marxist critique recognises the historical role of capitalism in the development of the productive forces. But the Marxist critique laid bare, already nearly a century ago when no other economists or Œ thinkers had the slightest glimmering of the future line of development, that the inner laws of capitalist development would inevitably lead to a stage at which capitalism could no longer organise the productive forces, but could only result in successively more violent crises, stagnation and decay, and at which only the new social class, the proletariat, freed from the limitations of private property, could

THE GROWTH OF THE PRODUCTIVE FORCES 25.

alone organise the social productive forces to a higher level. This is the heart of Marxism, whose political expression is the dictatorship of the proletariat as the necessary condition of the solution of the problems of the present epoch.

It is this culminating stage of capitalism that we are at present living through-the stage of imperialism or capitalism in decay, and, more particularly now since 1914, the stage of the general crisis of capitalism, or final phase within imperialism, when the forces of production are in ever more violent conflict with the cramping fetters of the existing property relations of production, when capitalism in more and more obvious decay is faced with the advance of victory of the proletarian social revolution, and when capitalism in decay is resorting to every device and expedient to maintain its power.

Let us note first the gigantic growth of the productive forces since the early criticisms of a century ago.

The following table gives the growth of industrial machinepower, omitting motor-transport power, in the past century, in millions of horse power (one horse power is commonly calculated as equivalent to the muscular power of six men).

GROWTH OF INDUSTRIAL MACHINE POWER. (in million horse power)

United Kingdom 1835 0.3, 1875 6, 1913 28.5, 1928 37. France 1835 0.02, 18753, 1913 12.5, 1928 18.5. Germany 1835 0.01, 1875 4, 1913 21, 1928 32. USA 1835 0.3, 1875 7.8, 1913 86, 1928 162. Extra-European countries (other than U.S.): 1835 0.01, 1875 1.9, 1913 31, 1928 93. World 1835 0.65, 1875 26.5, 1913 211, 1928 390.

(Hausleiter, Revolution in der Weltwirtschaft, 1932, published in English under the title The Machine Unchained, 1933.) Œ A century ago, we have seen, it was already complained that productive power bad increased twenty-seven times over in England in the previous seventy years without any corresponding improvement in the standards of the workers.

But in the century since 1835 industrial machine power multiplied a further hundred times over in England, and six hundred times over in the whole world-and has ended in mass starvation and unemployment without equal.

In the decade and a half alone between 1913 and 1928 industrial machine power in Europe has increased So per cent.,

26. FASCISM AND SOCIAL REVOLUTION

in the United States 100 per cent., and in the extra-European countries other than the United States 200 per cent.

The inclusion of all forms of power would bring the world total to something like 1,500 million horse power.

On this basis Stuart Chase in his Machines and Men (1929) has estimated the machine power of the world as representing the muscular power of 9,000 million additional men, or equivalent to five slaves for every man, woman and child of the human race.

Between 1913 and 1927 electrical power production, according to the report on "Power Resources of the World," presented to the World Power Conference in 1930, increased from 47,000 million units to 200,000 million units. Between the first and second World Power Conferences in 1924 and 1930, electrical output doubled from 150,000 million units to 300,000 million units (Economist, 21 June, 1930).

This expansion of productive power has most strongly affected manufacturing industry, but has also affected agriculture and the output of raw materials, not in equal degree, but far outstripping the growth of human population.

Already by 1890, according to Hausleiter (op. cit.) the costs of agricultural production in the great Grain Circle (United States, Canada, Argentine, Australia) had been reduced by mechanisation to one quarter of the costs of the old production by hand-labour in 1830.

Between 1 890 and 192 1, according to the report of the Senior Trade Commissioner in Canada for May 1930, further mechanisation of agriculture and extension of the area of cultivation had multiplied the yield of wheat per agricultural worker fivefold:

Mr. Field lays great stress on the rapidity with which power-driven machinery is displacing labour in Canadian agriculture. Whereas in 1890 133/2 bushels of wheat were grown for each rural dweller, there were seventy in 1921; and as the most revolutionary machine, the Œ combined reaper and thresher was only introduced in 1924, the output per worker must now be a great deal higher. Moreover, the scope for the mechanisation of agriculture has by no means yet been fully exploited.- (Economist, September 8, 1930).

Between 1920 and 1929 the number of tractors in the United States increased from 246,000 to 843,000 (U. S. Yearbook of Agriculture, 1930).

27. THE GROWTH OF THE PROD CTIVE FORCES

Between 1900 and 1924-8 the harvests of all cereals increased in Australia 104 per cent., in the Argentine 172 per cent., and in Canada 330 per cent. Between 1913 and 1928 the volume of world grain exports increased 147 per cent. In the same period world population increased 11.6 per cent.

The old ignorant Malthusian notions of absolute "overpopulation," or the modern lugubrious chants of birth-control as the necessary solution of poverty, are thus abundantly exploded by facts. It is worth noting that this reactionary propaganda is still maintained, not only in clerical and conservative quarters, but also by the would-be "progressive" (actually, as we shall have occasion to see, one of the real bulwarks of conservatism in England) Labour Party. The Labour official organ writes:

The figures published by the League of Nations show that the world population, already 2,012,000,000, is increasing by 20,000,000 a year.

That means that unless the rate of increase is checked, it will have doubled in far less than a century; for the increase is, as it were, at compound interest.

There is not the least reason for assuming that the "march of progress" will automatically provide ways and means of feeding and supporting that doubled population.

There is only too much evidence-in India and China for example - that the overcrowding of a too big population brings with it appalling conditions of misery.

Either an unendurable suffering, or the "natural checks" of famine and pestilence and a high death rate. Or, on the other hand, a deliberate and conscious lowering and controlling of the birth rate.

Those are the alternatives that face humanity.

(Daily Herald editorial, August 8, 1932.) Œ Fortunately, these are not the alternatives that confront humanity to-day. The alternatives that confront humanity to-day are serious enough; but they are alternatives of the destruction and anarchy of capitalism, involving still greater poverty and misery in the midst of abundance and rising productive power, or the social organisation of production, bringing abundance for all. The "overpopulation" (like the simultaneous "overproduction") is only relative to the capitalist conditions of production. Against this reactionary and vicious propaganda, concealing under cover of obsolete clerical superstitions the true social causes of poverty and misery (concealing

28. FASCISM AND SOCIAL REVOLUTION

also, characteristically enough, the role of imperialism in India in creating poverty) may be quoted the opinion of the leading international statistician, Sir George Knibbs, who estimated that even with present resources and technique the earth could easily maintain four times the present population at a good standard.

The late Sir George Knibbs . . . estimated after a careful survey that the earth could well support a population four times as great as at present, or about eight thousand million.

(Dr. R. A. Fisher, of the Statistical Department of the Rothamstead Experimental Station, Spectator, March 7, 1931.)

The facts of the crisis show a very different picture to the cant of "overpopulation" outstripping natural resources. Already by 1925, according to the reports presented to the 1927 International Economic Conference at Geneva, despite the destruction of the world war, world production of foodstuffs and raw materials had risen over pre-war by 16 to -18 per cent., against an estimated increase of population by 5 per cent. Between 1913 and 1928, according to the League of Nations Economic Section, world production of foodstuffs and raw materials had increased by 25 per cent., of foodstuffs by 16 per cent., of raw materials by 40 per cent. (of industrial products enormously more), against an estimated increase of world population by 10 per cent.

World stocks of primary products, on the basis of 1923-5 as 100, increased by the end of 1926 to 134, by 1928 to 161, by 1929 to 192, by 1930 to 235, by 1931 to 264, and by the end of 1932, despite all the destruction of stocks, still stood at 263, or more than two and a half times the volume of eight years before (Economist, May 6, 1933). World stocks of manufactures showed a less overwhelming accumulation only because "the existence of a large volume of unemployed but immediately available factors of production" has the Œ same effect in the sphere of manufactures "corresponding to that exercised by enormous stocks of primary products" (ibid., May 13, 1933).

The growth of production in every direction, whether of foodstuffs, raw materials or manufactures, has thus greatly exceeded the growth of world population. And the increase of productive power, which has only been partially and incompletely used under capitalist conditions, with many artificial

PRODUCTIVE FORCES AGAINST EXISTING SOCIETY 29.

limitations and restrictions, has been in reality enormously greater than the actual growth of production.

But this gigantic increase of productive power has outstripped the capacity of capitalism to organise it.

The outcome of this gigantic increase of productive power has been world crisis, stagnation and closing down of production, mass unemployment, mass impoverishment and the lowering of standards, on a scale without parallel since the beginning of capitalism, accompanied by growing social and political disturbance and recurrent war.

This problem is the basic problem confronting present-day society.

2. The Conflict of the Productive Forces Against Existing Society.

This is the world situation which reveals that the system of capitalist relations, the capitalist class ownership of the means of production, has outlived its progressive role, and has become a fetter on the Organisation of production.

The world war was the beginning of the violent explosion of this conflict, of the conflict between the ever-growing productive forces and the limits of existing property-society. Since 1914 we have entered into a new era, the era of the general crisis of capitalism and of the advance of the world socialist revolution. The world economic crisis which opened in 1929 has brought these issues of the present stage of society, and of the basic economic contradictions underlying them, more sharply to the general consciousness than ever before. But the significance of this world economic crisis is commonly seen through too narrow spectacles. It is seen as a special temporary disorganisation breaking in on an otherwise harmonious and smoothly working economic Œ mechanism. Alike in the pessimistic and the optimistic readings of its significance the proportions have tended to be lost. just as the extreme low depths of depression produced almost universal utterances of pessimism and apocalyptic gloom from the leaders and professors of capitalism, so the first signs of an upward movement produced a universal sigh of relief and reprieve, as if the worst were over and all might yet be wen again. In fact, "the devil was sick."

But the real significance of the world economic crisis, which has so greatly exceeded in its scope all previous economic crises,

30. FASCISM AND SOCIAL REVOLUTION

can only be correctly understood in relation to the whole development of capitalism, and in particular the development of capitalism during the last two decades-that is, in relation to the general crisis of capitalism which opened in 19 14.

The general crisis of capitalism should not be confused with the old cyclical crises of capitalism which, although demonstrating the inherent contradictions of capitalist relations, nevertheless constituted an integral part and direct factor in the ascent of capitalism. The cyclical crises, as illustrated in 1920-I and 1929, continue, but take on a new and intensified character in the period of the general crisis.

The old cyclical crises were, according to Marx, "always but momentary and forcible solutions of the existing contradictions, violent eruptions, which restore the disturbed equilibrium for a while" (Capital III, P. 2 92 ). Their characteristic f eature was to solve the contradictions, albeit by anarchically violent and destructive means, to restore the equilibrium, and permit of the resumption of production on a higher plane. They weeded out the smaller and less efficient concerns; they wiped out a portion of capital values in order to save the remainder; they effected a concentration of capital; they compelled a drive to open up new markets. On this basis they permitted, after a relatively short period, the resumption of capitalist production at a higher level.

Elements of this character can also be traced in the post-war world economic crisis; but these "progressive" elements are overshadowed by the major, negative effects of the whole process of the development of the cyclical crisis on the basis of the general crisis of capitalism, in the consequent destruction of stabilisation and hastening of revolutionising processes.

For the general crisis of capitalism admits of no such solution. The domination of the imperialist Powers has already been expanded to its maximum extent throughout the world; monopoly capitalism, which Œ had already divided up the greater part of the world by the beginning of the twentieth century, and by 1914 was at war over its re-division, is now faced with a still sharper situation of contradictions, not only between the imperialist Powers, but also between imperialism and socialism, So far from there being available new regions to open up, one sixth of the world has passed out of the sphere of capitalism into that of the social revolution; the colonial peoples are rising in revolt; the world available for capitalist exploitation has begun

PRODUCTIVE FORCES AGAINST EXISTING SOCIETY 31.

to contract. At the same time the growth of productive power is greater than ever, the extreme crisis, competition and war forcing forward technical development at an unheard of pace. Under these conditions there is no room for a harmonious solution, but only for ever more violent conflict. The upward movements within the general crisis become ever shorter; depression becomes the normal, broken by short upward movements and violent social and political explosions; the recurrence of the old cyclical crisis within the general crisis takes on a new intensity.

The general crisis of capitalism has now continued for twenty years without a break, only changing one form for another. The violent explosion of the world war only gave place to the still more profound struggle of revolution and counterrevolution throughout the world. The defeat of the revolution in the countries outside the Soviet Union brought no solution and peaceful development, but only laid bare the post-war chaos of capitalism. The temporary stabilisation and upward movement of the middle 'twenties proved only a false and illusory stabilisation; "the prosperity of the period 1923-29 was to a large extent illusory; and the seeds of future trouble had already been sown" (British Government Note to the United States, December 1, 1932). Its only outcome was the new form of the basic contradiction expressed in the extreme world economic crisis which began in 1929 and continues now in its fifth year. This in its turn breaks out into new and violent explosions in the spread of Fascism and the visibly approaching second world-war.

Already in the closing years of his life Engels noted the approach of a new era: "there is now no doubt that the position has changed fundamentally by comparison with formerly"; "we have entered upon a period much more dangerous for the old society than that of the ten- year cycles"; "the crises become chronic" (Engels, letter to Bebel, January 20, ISM). In 1909 Kautsky, writing then as a Marxist theorist, in his Path to Power, exposed the revisionist illusions of gradual and peaceful progress, and demonstrated the now close entry of capitalism into a period of violent explosions. In 1916 Lenin in his Imperialism laid bare the foundations of the new period as the period Œ of monopoly capitalism, in which all the contradictions come to a head, of decaying capitalism, of the eve of the

32. FASCISM AND SOCIAL REVOLUTION

socialist revolution, the period which broke into violent explosion in 19 14.

UP to 1913 capitalist production, despite the increasing tendencies of decay already visible in imperialism, was still able to maintain an almost continuous ascending line.

For many decades before the war, world production, according to the best estimates available, increased with remarkable regularity of trend, broken only in minor degree by successive crises. This trend of increase ran through both the period of declining prices from 1873 to 1895, and the period of rising prices from 1895 onwards.

(League of Nations World Economic Survey 1932-3, p. 68.)

Between 1860 and 1913, according to the tables presented in this publication, world production of basic commodities ascended in an almost continuous line and multiplied from four to five times. World industrial production ascended in an almost continuous line and multiplied over six times.

But the twenty years since 19 14 reveal a different picture.

If the line of trend from 186o to 1913 is extended to 1932, the rather startling conclusion is reached that the index of world production, on the hypothesis that nothing bad occurred to alter its regular upward trend for the fifty preceding years, would to-day be rather more than twice as great as it actually is. (ibid., p. 82.)

The present world economic crisis is without precedent:

There is no precedent for such a marked decline. Statistical series ranging back to 186o fail to reveal any previous period in which the decline in either raw material production or manufactures has been so precipitate or so severe. Independent estimates agree that in 1932 the level of industrial production in the world as a whole fell below that of 1913. (ibid., p. 82.)

Thus the war and post-war period, taken as a whole, reveals the first large-scale absolute setback of capitalist production.

The attempt is often made, on the basis of the above facts and figures, to argue that, since 1914 appears as the great dividing point, Œ therefore the war is the cause of all the present maladies. Comparisons are sometimes made to the postNapoleonic period of unsettlement, revolutionary unrest and the industrial revolution; and the inference is drawn that the troubles of the present period are also troubles of post- war unsettlement and of the "second industrial revolution,

PRODUCTIVE FORCES AGAINST EXISTING SOCIETY 33.

heralding a no less great expansion within the forms of capitalism.

This very superficial approach to the real historical move. ment of two entirely different periods, and to the crux of modern world problems, is demonstrably incorrect both in fact and in reasoning.

In the first place, no comparison is possible between the post- Napoleonic period of young and ascending capitalism and the twentieth century period of old and declining capitalism. Fifteen years after the Napoleonic wars, production, trade and employment were gigantically above the pre-war level; capitalist society was bounding forward. Fifteen years after the war of 1914-18 production, trade and employment are actually below the pre-war level; capitalist society is in a greater dilemma than ever, greater than even in the period succeeding the war. The dislocation, instead of diminishing as the war recedes, actually increases; it is greater fifteen years after the war than it was ten years after the war. It is obvious that some deeper factor is at work than the disturbances consequent on the war. At the same time, the social and political issues of the two periods are basically different. The issue of the first half of the nineteenth century was still the issue of the bourgeois revolution, which swept forward through the processes of the Napoleonic wars and after, despite the seeming victories of reaction. The issue of the first half of the twentieth century is the issue of the proletarian social revolution, which began its advance in the conditions of the war of 1914-18, and which maintains its growing strength in the midst of the capitalist reaction.

In the second place, it is not correct that the division between before 1914 and after 1914 is a simple and absolute division between the ascent and the descent of the level of production. On the contrary, the actual level of production in 1927-9 was for the short period of the boom higher than the pre-war level; the real growth of the contradictions, which was to find expression in the subsequent slump falling below the pre-war level, lay elsewhere. The true measure of the decline and bankruptcy of the existing capitalist order lies, not in any simple arithmetical figures of the level of production, but in the growth of the contradictions of the existing society to bursting point, in the growth of the contradiction between the potential productive Œ

34. FASCISM AND SOCIAL REVOLUTION

power and the actual production, between the conditions of existence of the bourgeoisie and of the proletariat, between the rival imperialist Powers, and the consequent expression of these in social and political explosions. It is in this sense that the general crisis of capitalism dates from 1914, but its causes lie in the whole conditions of the imperialist epoch *

Finally, and in consequence of the above, the world war of 1914-18, so far from being the cause of the crisis of capitalism, was on the contrary itself only an expression and breaking out of the crisis-a link in the chain of imperialist development. The war was no arbitrary, accidental, unforeseeable first cause, suddenly breaking in from nowhere to change the whole course of development. It was the direct consequence of the conditions of imperialism, which was itself the direct outcome of the previous nineteenth-century capitalist epoch. It was fully foreseen, and even predicted in detail for years beforehand, as the outcome of the growing tensions of imperialism. Its outbreak coincided with the gathering industrial crisis which was already beginning in America in 1913, and spreading therefrom to hover menacingly over Europe. As the war-leader, Lloyd George, confessed nearly twenty years after, the war appeared as the way out from the gathering crisis, which he is now convinced would have in any case developed, even had the war not broken out at that point:

If we had not had a great war, if we bad gone on as we were going, I am sure that sooner or later we would have been confronted with something approximately like the present chaos. There must be something fundamentally wrong with our economic system, because abundance produce(Lloyd George, speech at Cambridge, Manchester Guardian Weekly, April 7, 1933.)

The fact that the dynamic of capitalist development, even after the direct destruction caused by the first world-war has been repaired, only reverts to the recurrence of still more gigantic economic crisis and the visible approach to a second world-war, shows how little of "accident" there was in the basic development of capitalism through imperialism to world war, however large the role of "accident" may appear to be in the particular historical Œ manifestations of the process.

In order to understand the problems of the present epoch of the general crisis of capitalism, it is essential to be able to see

PRODUCTIVITY AND UNEMPLOYMENT 35.

deeper than the immediate surface manifestations and episodes, whether of the world war of 1914 or the world economic crisis Of 1929, and to understand these in relation to the general line of development, of which they are expressions. The general crisis of capitalism, the conflict of the productive forces against the existing relations of production, expresses itself in a whole series of successively growing conflicts and explosions, up to the final victory of the proletarian social revolution. It is in relation to this development of the general crisis of capitalism that Fascism is a further stage and episode.

3. Productivity and Unemployment.

The development of the productive forces has rendered the old class-society obsolete.

Already before the end of the war the leading trust magnate, Lord Leverhulme, estimated that, if the then existing productivity were organised, one hour's work per week of all citizens would provide the necessaries of life for all:

With the means that science has already placed at our disposal, we might provide for all the wants of each of us in food, shelter and clothing by one hour's work per week for each of us from school age to dotage.

(Lord Leverhulme: Preface to Professor Spencer's Wealth from Waste, Routledge, 1918.)

That was fifteen years ago. In the intervening decade and a half, according to the engineer, J. L. Hodgson, in his paper on "Industrial and Communal Waste" before the Royal Society of Arts on June 20, 1932, in the course of which he quoted and accepted Lord Leverhulme's statement, "since that date our average potential productivity has nearly doubled." One halfhour's work per week should thus provide a minimum standard for all, and one hour's work per week an overwhelming abundance.

Why should this almost immeasurable increase in productive power and the possibility of universal abundance result in universal impoverishment and lowering of standards? Œ This is the question that confronts the whole human race, that is becoming a life and death question for the nineteen hundred million human beings of the capitalist world outside the Soviet Union, to which these hundreds of millions must find the answer or go down in catastrophe.

36. FASCISM AND SOCIAL REVOLUTION

It is evident that what is here in question is no natural or technical causes, but only social causes-that there is no social organisation of production.

This question is sharpened by the contrast of the productive increase in the Soviet Union alongside the actual decline of capitalist production. Between 1925 and 1932 industrial production in the Soviet Union (on the base of 1025-9 as 100) increased from 59 to 240; the corresponding figure for the United States decreased from 95 to 58, for Britain from 99 to 86, and for Germany from 89 to 66 (League of Nations World Production and Prices 1925-1932, P. 49). Between 1929 and 11932 industrial production in the Soviet Union increased by 65 per cent. and in the capitalist world as a whole decreased by 37 percent. (League of Nations World Economic Survey, 19321933, pp. 85 and 7 0

The most glaring and direct living expression of this present stage of the contradiction between the growth of the productive forces and existing society is the spread of mass unemployment throughout the capitalist world, already before the onset of the world economic crisis, and reaching a total at the height of the world economic crisis, in 1933, according to official figures, of thirty millions, and according to unofficial figures of fifty millions.

Britain, the oldest capitalist country, and the most advanced in decay, first reached this basis of permanent mass unemployment. This situation revealed itself in the winter of 1920-2 1, and has continued up to the present without a break; in the beginning of 1933 the Chancellor of the Exchequer staggered the House of Commons by announcing that he calculated on the continuance of such mass unemployment for the next ten years. The other countries in the succeeding years reached a similar and even more extreme basis (running at the highest point to eight millions in Germany and fourteen millions in the United States).

Unemployment at a certain level has always been present in capitalism. The development of production in capitalist conditions has always displaced workers and independent producers, and thus created the industrial reserve army which was indispensable to meet the fluctuations of capitalist production and to maintain the proletariat in Œ subjection. But this industrial reserve army was a part of the machinery of expanding

PRODUCTIVITY AND UNEMPLOYMENT 37.

capitalist production; the absolute number of productive workers employed successively grew. It is only since the war that the new phenomenon appeared of a permanent unemployed army, grudgingly kept just alive at the lowest level of subsistence by the bourgeoisie, while the absolute number of productive workers employed has directly decreased.

Of the possibility of such a stage of chronic unemployment and absolute decline of the productive workers, Marx wrote:

A development of the productive forces which would diminish the absolute number of labourers, that is, which would enable the entire nation to accomplish its total production in a shorter time, would cause a revolution, because it would render the majority of the population superfluous.

(Marx, Capital, 111,

Engels wrote in 1886: p.309.)

America will smash up England's industrial monopoly-whatever there is left of it-but America cannot herself succeed to that monopoly. And unless one country has the monopoly of the markets of the world at least in the decisive branches of trade, the conditionsrelatively favourable-which existed here in England from 1848 to 1870 cannot anywhere be reproduced, and even in America the condition of the working class must gradually sink lower and lower. For if there are three countries (say, England, America and Germany) competing on comparatively equal terms for the possession of the world market, there is no chance but chronic overproduction, one of the three being capable of supplying the whole quantity required.

(Engels, letter to Mrs. Wischnewetzky, February 3, 1886, reprinted in Karl Marx and Friedrich Engels, Selected Correspondence, London and New York, 1935, P. 443.)

To-day we are face to face with this situation. The position in America is reported as follows:

The United States Commissioner for Labour Statistics recently stated that if 200 Out of the 1,357 boot and shoe factories in the Œ country worked full time, they could satisfy the whole existing demand, and the remaining 1,157 establishments could be closed down. Similarly, 1,487 out of the 6,057 bituminous coal mines could produce all the coal that was needed.

(H. B. Butler in the International Labour Review, March 1931.)

Between 1919 and 1927 factory output in the United States rose from 147 to 170, on the basis of 1914 as 100, while the

38 FASCISM AND SOCIAL REVOLUTION

employment index fell from 12 9 to I 15 (Times, March 8, ' Between 1919 and 1929 the Federal Reserve Board index of industrial production (1923-5 as 100) rose from 84 to 119; while the number of industrial wage workers fell from 9,039,000 to 8,742,000 (United States Statistical Abstract, 1932). This absolute decline in employment was before the collapse, during the great upward boom.

Britain reveals a similar picture. Between 1913 and 1928 the increase in output per head of workers employed in thirty principal industries in Great Britain was 33 per cent., but the increase in employment was 2.2 per cent., or less than the increase in population (Times Trade Supplement, July 23,1932). Still more marked is the process if the post-war period is taken alone. Between 1923 and 1928 the number of insured workers in employment fell from 8,368,000 to 7,898,000; the index of production (London and Cambridge Economic Service, based on1913 as 100)rose from 88.7 to 96.3. Production rose 7.6 per cent.; employment fell 5.6 per cent. And all this before the world economic crisis began to make the heaviest effects of the process felt.

What is to happen to the "superfluous" workers? For long the old theory of "alternative employment" was still endeavoured to be put forward as applicable to this situation. The decline in the industrial productive workers was to be "compensated" by the increase of auxiliary "services" and luxury occupations (clerical, distributive, advertising, commercial, and luxury services). Certainly, a very considerable increase in these auxiliary and in the main non-productive occupations is to be traced in the United States, Britain and other countries during the post-war period, thus providing the basis of the rapid expansion of the so-called "new middle class," which became one of the breeding-grounds of Fascism; just as the growth of the permanent unemployed army provided a further breeding-ground. The expansion of the rentier class on the one side, and of luxury services and endlessly multiplied salesmanship" services on the other, is a measure of the degeneration of capitalism. Œ The capitalist mode of production, while on the one hand enforcing economy in each individual business, on the other hand begets by its anarchical system of competition the most outrageous squandering of labour power and of the social means of production,

PRODUCTIVITY AND UNEMPLOYMENT 39

not to mention the creation of a vast number of employments at present indispensable, but in themselves superfluous.

(Marx, Capital, I, p. 540.)

Nevertheless, this supposed "compensation" was soon revealed as a doubtful solution. In the first place, it was manifestly no solution for the millions of miners and heavy industry workers thrown out of work. In the second place, the extent of "compensation" had obvious limits which were soon reached. For in these occupations, too, rationalisation begins to get to work and to repeat the process of throwing off the superfluous workers. Mechanisation transforms clerical work, and begins increasingly to replace clerks by more and more elaborate calculating and book-keeping machines; centralisation cuts down the number of competing businesses; staffs are reduced. The "white-collar workers" also find themselves increasingly thrown on the market alongside their industrial brothers.

Increasing doubts of the whole process and its outcome, as well as of the stock explanations and solutions, found expression in an editorial of the London Times in 1930 on "American Unemployment" (characteristically endeavouring to treat the problem as an "American" problem, but in fact describing equally unemployment in Britain):

It is difficult to avoid the conclusion that unemployment must henceforth be counted as a permanent American (!) problem. To ascribe its occasional recurrence in an acute form to some special event is no less delusive than to explain it as a merely "seasonal" manifestation. . . . The experience of recent years has gone to prove that recovery is less and less complete after each crisis, and to show that forces other than the seasonal and the accidental are at work. There is little reason to doubt that permanent unemployment is to-day the lot of an always growing number of American

men and women.

On this basis doubt is expressed of the whole system of "mass production," i.e., of capitalist large-scale production:

The advantages residing in a system which relies on the mass production of standardised articles deserve more critical examination Œ than they have yet been given.

The current answers of "the apologists of the system," that the reduced costs of production and therefore reduced price means

40 FASCISM AND SOCIAL REVOLUTION

increased demand and consequent re-absorption of the unemployed, are "no longer altogether convincing":

It is still doubtful whether the increased production can always be absorbed; it is a very large question whether new industries are created quickly enough to employ the displaced workers. In other words, it remains to be seen how perilously the machine has run ahead of man, and whether some re-adjustment of social condition may not ultimately be imperative. The question drives like rain to the roots of American (!) life. (Times editorial, March 8, 1930.) Under the thin disguise of "America" it is obvious that "the question drives like rain to the roots" of capitalism in all countries, and not least in Britain, with its longest record of permanent mass unemployment.

What prevents capitalism from carrying out the alternative solution universally proposed by all the myriad schools of reformers of capitalism (reformist socialists, social credit theorists, currency reformers, etc.)-i.e., the general raising of the standards of the workers to a point compatible with the consumption of the increased production alongside higher profits for the capitalists? The answer why capitalism is unable to carry out this apparently simple solution, but is in fact actively engaged in carrying out the opposite, lies in the whole character of capitalism. The reformist dream of grafting on to the capitalist mode of production an entirely different and incompatible system of distribution (whether by legislative means, raising wages, social services, a "national dividend," or the like) only reveals its advocates' failure to understand the elementary workings of capitalism and the necessary conditions of the capitalist mode of production. The reformists apply in their fantasy the conceptions of an organised society directly to the jungle of capitalism, which, by the very conditions of private property and production for profit, cannot follow the principles of an organised economy, but can only follow entirely different laws. In fact, even the very limited measure of social reform which could be achieved, under the pressure of the working class, in the conditions of ascending capitalism become increasingly circumscribed and even in part diminished and withdrawn in the conditions of declining capitalism and of the capitalist crisis. Œ The realities of capitalism are both in fact and in iron necessity entirely different. The greater the crisis, the greater

PRODUCTIVITY AND UNEMPLOYMENT 41

becomes the need of the rival capitalist concerns to lower the costs of production, to increase the rate of exploitation, to drive the dwindling number of employed workers harder, to attack the workers' standards and the social services, in order to compete more successfully for the dwindling market. At the same time the growth of unemployment facilitates these attacks. The development of the crisis has been accompanied in every country by successively renewed and intensified attacks on the workers' standards. The authentic voice of capitalism is the voice of the American capitalist magnate, Owen D. Young, the sponsor of the Young Plan, when he declared: "Let no man think that the living standards of America can be permanently maintained at a measurably higher level than those of the other civilised countries" (Economist, April 12, 1930.)

The Roosevelt "experiment," which has skilfully utilised the reformist propaganda of higher standards as the solution of the capitalist crisis, but utilised it in fact for the exactly opposite purpose to carry through intensified exploitation and lowered standards (just as President Wilson of old utilised pacifist propaganda for the purposes of war), is proving in practice, as we shall later have occasion to see, only a more complete demonstration of this reality.

The growth of productivity has been accompanied, not by an increase of the workers' share, but by a decrease of the workers' share. Between 1913 and 192 8 the percentages of the national income going to wages fell in the United States from 36.4 to 36, and in the United Kingdom from 42.7 to 40.9 (World Economic Survey, 1932-3, p.101). In the United States, between 1921 and 1927, the value of the product of industry rose from 18.3 thousand million dollars to 27.5 thousand million dollars (U.S. Department of Commerce, Census of Manufactures); but in the same period the percentages of the value of the product of industry going to wages and salaries fell loom 58.7 per cent. in 1921 (54.2 per cent. in 19'4) to 51 percent. in 1927 (P. H. Douglas, Real Wages in the United States). in Great Britain, between 1924 and 1930, according to Colin

Clark's The National Income 1924-31, the output per person employed rose from 100 to 113, while the proportion of wages to home-produced income fell from 41.5 per cent. (42.5 percent Œ in 1911) to 38 per cent.

I 'The effect of the world economic crisis has been, not to

42 FASCISM AND SOCIAL REVOLUTION

reverse this process, but to carry it enormously further forward. The drive to rationalisation to speeding up, to extracting a still higher output per worker for less return, has been intensified under the conditions of the crisis. Between 1929 and 1932 the output per man- hour has actually been forced up by 12 per cent. in the United States, alongside twelve million unemployed!

Labour costs per unit of output have been substantially reduced by an improvement in productive efficiency. The output per manhour in the United States increased by about 12 per cent. between 1929 and 193 2 (Economist, May 5, 1933.)

It is obvious that the effect of this is still further to intensify the contradiction which already led to the economic crisis.

In the face of these facts increasing doubts begin to assail the capitalists whether there can ever be full-scale employment again, even if the extreme intensity of the crisis of 1929-33 should give place to a considerable upward movement. Thus it is reported from America:

American employment reached its highest point in 1918, American production in 1929, and it is carefully and accurately computable to- day that if by some magic a return could be made to the productive maximum of three years ago, there would still be no work for 45 per cent. of the present twelve million unemployed. (Washington Correspondent of the London Times, November 2, 1932.)

From Britain comes the same tale:

If the 21/2 millions of unemployed were absorbed in factory occupa. tions, the national output of manufactured articles would be on such a scale that the available buying markets . . . would be inadequate to absorb it. Hence, if such a method of labour absorption could and did take place, it would only precipitate a new crisis.

(Times Trade Supplement, July 23, 1932.)

Such are the alternatives which begin to be seen by the I capitalists, even if the present crisis should give place to the Œ most extensive upward movement. Either continued mass unemployment of millions, even if

"by some magic" the record level of the previous production boom could be attained.

Or, if all the unemployed are absorbed into productive

labour, then inevitably the immediate precipitation of a new crisis.

PRODUCTIVITY AND UNEMPLOYMENT 43

As this new situation begins to be realised, the beckoning phantom of a new world war as the only "solution" to utilise the productive forces and wipe off the "superfluous" population begins to exercise a visibly increasing attraction on capitalist thought and policy as the final gamble.

Nearly a century ago Engels wrote of the necessary consequences of the inevitable future breakdown of the British capitalist monopoly: "Should English manufactures be thus vanquished . . . the majority of the proletariat must become forever superfluous and has no other choice than to starve or to rebel." (Engels: Condition of the Working Class in England in 1844, Ch. xi.)

In 1932, eighty-seven years later, the British Prime Minister spoke in the House of Commons of the prospect, even if trade should recover and prosperity return, of having to find "great bodies of men and women, perhaps even amounting to a couple of millions, to be, to all intents and purposes, in our society, superfluous scrap." (J. R. MacDonald in the House of Commons, November 2 2, 1932.)

In 1933 the leader of British Conservatism had to make the same melancholy admission:

There is the great core of unemployment. We do not know what the numbers may be. There may be a million, a million and a half, or less than a million; but there will be a vast number for whom there is but little hope of employment being found in this country. The gates of migration are closed against us. What can we do? That is a problem that has baffled the country completely up to now.

(Stanley Baldwin in the House of Commons, November 27, 1933.)

"What can we do?" This is the final answer of what was once the most powerful capitalism in the world, when faced today with the problem of millions who seek only to work and live. Œ There could be no sharper expression of the bankruptcy of capitalism than when, in the midst of wealth and unexampled productive power, it can no longer even find the means to exploit a growing proportion of its slaves, and is compelled to proclaim millions of human beings, living, strong, and able and willing to labour, as "superfluous scrap." The time draws close for the second half of the alternative-"to rebel"-as the only solution for the extending millions of producers cut off from production, no less than for the millions whose growing output is accompanied by growing poverty.

44 FASCISM AND SOCIAL REVOLUTION

4. The Alternative-Social Revolution or Destruction.

The alternatives which confront society at the present stage are thus clear.

Capital can no longer utilise the productive forces. Capital can no longer utilise the full labour-power of the productive population. Monopoly capitalism is more and more visibly choking the whole Organisation of production and exchange.

The working masses can no longer find even the former limited conditions of existence within the conditions of capitalism. Increasing millions are thrown aside as "superfluous." The standards of all are successively attacked. Intensification of labour of the dwindling numbers employed is accompanied by worsening of standards.

The class struggle grows more intense. New forms of widening mass struggle develop. New and intenser methods of repression and coercion are brought into play by the ruling class.

Against this situation the knowledge and understanding, which begins to grow more and more widely spread, of the scientific and technical possibilities of unlimited production and abundance for all, confronts existing society like a mockery and a torment: creating on the one side, among a growing section of the dispossessed, revolutionary anger and determination; creating on the other side, among the doomed possessing classes, growing desperation and recklessness, the revolt against science, the revolt against mechanical technique, and readiness to embark on ever more frenzied courses of violence and destruction.

Two alternatives, and only two, confront existing society at the present stage of development of the productive forces and of social organisation. Œ One is to throttle the development of the productive forces in order to save class-society, to destroy material wealth, to destroy millions of "superfluous" human beings in the slow rot of starvation and the quick furnace of war, to crush down the working-class movement with limitless violence, to arrest the development of science and culture and education and technique, to revert to more primitive forms of limited, isolated societies, and thus to save for a while the rule of the possessing classes at the expense of a return to barbarism and spreading decay. This is the path which finds its most complete and organised expression in Fascism.

THE ALTERNATIVE-REVOLUTION OR DESTRUCTION 45

The other is to organise the productive forces for the whole society by abolishing the class ownership of the means of production, and building up the classless communist society which can alone utilise and organise the modern productive forces. This is the path of Communism, of the revolutionary working class.

The issue of these two paths is the issue of the present epoch.

It is to the former of these two alternatives that the existing capitalist world is to-day moving at an increasing pace, and to which it will more and more visibly develop in the period ahead, if the revolutionary working class does not succeed in time in saving the whole future of civilisation and of human culture.

CHAPTER II

THE END OF STABILISATION

THE technical and economic situation described in the previous chapter finds its social and political expression in the storms of the present epoch, in the world war, in the revolutionary struggles, in the world economic crisis, in the advance to renewed world war and in Fascism.

The objective conditions for the social revolution were ripe already from the beginning of the period of imperialism, and more particularly since the opening of the general crisis of capitalism in Œ 1914.

But the living human factor was not yet ready. The minds of men were still dominated by the conceptions of the past epoch. The bursting of the contradictions in the world war and after broke on the majority of men like a natural catastrophe. The first aim was widely proclaimed on all sides to resume the broken thread of pre-war continuity.

The proletariat in the leading capitalist countries, although advancing to social revolution, was not yet strong enough, not conscious enough, not organized enough, to overthrow the rule of the capitalist class. The revolts of the proletariat after the war, although drawing close to success and profoundly transforming the political situation, were finally defeated in all countries outside Russia.

The capitalist class, having overcome the immediate menace to its rule, set itself the aim to restore the shaken mechanism of capitalist production and exchange, to return to "pre-war,, or "normalcy."

The proletariat, following the leadership of Social Democracy, after the defeat of the revolution, sought to win improved conditions within the capitalist restoration.

On this basis was built up the capitalist restoration or temporary "stabilisation" of 1923-9. The illusory character of this basis, which sought to resurrect the vanished conditions of the old pre- war capitalism, was not at first realised by any save the Marxists.

THE LAST ATTEMPT TO RESTORE PRE-WAR CAPITALISM 47

Only when a new cycle of capitalism on this basis had resulted with extreme speed in a more intense crisis than ever before, shattering one by one all the pillars of "stabilisation," did the recognition begin to become universal on all sides that the old conditions were passed beyond resurrection, and that fundamental issues of social, economic and political Organisation would have to be faced.

From this point stabilisation ends, and a transformation begins to develop in the whole of capitalist policy and in the consciousness of the proletariat. Social Democracy, which had shared in the boom of capitalist restoration, goes through a series of inner crises, and weakens before Communism. Fascism which had previously developed only in an experimental stage in a secondary capitalist Œ country, now comes to the front as a world factor, dominating directly a major capitalist country, as well as in greater or less degree a whole series of other countries, and revealing itself as the most typical expression of modern capitalist policy.

1. The Last Attempt to Restore Pre-war Capitalism.

The basis of the attempted capitalist restoration after the war was the defeat of the proletarian revolution outside Russia.

To this objective the principal concentration of world capitalist policy was directed in the period immediately after the war. This primary preoccupation was true, not only of the governments of Central Europe, where the revolution came closest to victory, but above all of the governments which held the world leadership of capitalism, of Britain, France and the United States. Thus Hoover declared in 192 1

The whole of American policies during the liquidation of the Armistice was to contribute everything it could to prevent Europe from going Bolshevik or being overrun by their armies.

(Hoover, letter to 0. Garrison Villard, 1921, reprinted in the New York Nation, December 28, 1932.)

In the same way, for Britain, Sir William Goode, British Director of Relief in Central Europe, wrote on "European Reconstruction" in 1925, quoting from his official report in

1920:

Food was practically the only basis on which the Governments of the hastily created States could be maintained in power. . . . Half

48 FASCISM AND SOCIAL REVOLUTION

of Europe had hovered on the brink of Bolshevism. If it had not been for the 1'37 million in relief credits granted to Central and Eastern Europe between 1919 and 1921, it would have been imposisible to provide food and coal and the sea and land transport for them. Without food and coal and transport, Austria and probably several other countries would have gone the way of Russia. . . . Two and a half years after the Armistice the back of Bolshevism in Central Europe had been broken, largely by relief credits. . . . The expenditure of L137 million was probably one of the best international investments from a financial and political point of view ever recorded in history.

(Sir William Goode, Times, October 14, 192 5.) Œ Subsequently, the Dawes Plan, Locarno and the flow of American credits and loans to Europe carried forward the same process of capitalist restoration at a higher stage.

What was the basis of the defeat of the proletarian revolution and the rebuilding of capitalism in the years immediately following the war? Fascism at this time did not exist as a factor save in Italy. The main weapons of capitalism were threefold.

The first was direct civil war and counter-revolution-the wars of intervention against Russia, the White Terror in Finland, Hungary, Poland, etc., the military aid to Poland in 1920, the permission of the counter-revolutionary military organisations, officers' corps, Orgesch, etc., in Germany (which helped to build up the basis of the subsequent Fascism in Germany), and the like. This was of decisive importance at the immediate critical points of struggle, but it could not provide the main basis, as it had no mass support and could only build on the narrow ranks of the ex-officers and direct reactionary classes; the failure of the Kapp Putsch demonstrated this weakness. It was only later that Fascism was to find the way towards a temporary solution of the problem of the combination of counter-revolution with winning a wide measure of mass support.

The second weapon was Social Democracy and the granting of temporary concessions to the workers. Social Democracy because of its mass basis, was the main weapon of capitalism in the years immediately after the war for the rebuilding of capitalism. The advance of the workers to the struggle for power, the immediate onrush of which after the war was too powerful to be successfully defeated in direct battle, was circumvented by a strategical ruse-the placing of Social

THE LAST ATTEMPT TO RESTORE PRE-WAR CAPITALISM 49

Democratic governments, presidents and ministers in office, thus appearing to surrender to the workers the seats of power, while the realities of power remained with capitalism. Only in this way, by the alliance with Social Democracy, by hiding capitalism under a Social Democratic front, was the capitalist state saved after the war. Social Democracy united with capitalism to defeat the workers' revolution. A great show of concessions to the workers was made; promises were lavishly broadcast; Socialisation Commissions, Nationalisation Commissions, Sankey Commissions were set up; wages were increased and hours shortened.*

Subsequently, as soon as the power of capitalism was thus successfully re-established, a reverse action took place. The concessions were withdrawn; inflation wiped them out in the Œ European countries; the capitalist offensive drove back the workers even below pre-war levels; the Social Democrats, while still occasionally used as governments, were increasingly relegated to the role of "opposition." At the same time, the consequent growth of disillusionment of the workers with the whole process and with Social Democracy led to the necessity of capitalism discovering a further basis of power, and the development of Fascism as the parallel instrument of capitalism alongside Social Democracy. But this development only took place on a wider scale as the stabilisation began to break down in the world economic crisis.

The third weapon of capitalism in the re-establishment of its power and of its economic system was the drawing on the colossal reserves of the still unshaken centre of world capitalism -American capitalism. American loans and credits poured into Europe to bolster up and rebuild the shaken fabric of European capitalism. On this basis the restoration of the gold

*The character of this period was revealingly described, with reference to the

Sankey Coal Commission, by Evan Williams, President of the Mining Association, in his evidence before the Mining Court of Inquiry in 1924:

"It was an atmosphere charged with the emotions of the time in which the Commission sat. There were fears throughout the whole country as to what might happen, and it was felt that the miners' position ought to be met in order to maintain peace. That was the atmosphere of the Commission. The atmos- phere was an unreal one altogether, and conclusions were arrived at without any real foundation. Two of my colleagues, mineowners and myself," went on Mr. Williams, with 9. smile, "actually signed a report which recommended a reduc- tion in the hours of work in mines." (Daily Herald report, April 26, 1924.) The "smile" is the comment of capitalism on its own ruse, after the ruse has succeeded.

50 FASCISM AND SOCIAL REVOLUTION

standard took place. The triumph of stabilisation was celebrated by the bankers of the world. It was obvious that this basis was a false one, and would involve a boomerang outcome, as was predicted at the time by Marxists.*

On this basis was built the restoration of capitalism after the war, and subsequent upward movement and boom of 192 7-9. Œ It is evident to all to-day that this basis of stabilisation was a hollow and rotten one.

In the first place, the direct counter-revolutionary fighting Organisation was still built on the narrow circle of privileged strata and their immediate range of influence, and bad no wider mass basis. The masses were still only reached by Social Democracy or Communism.

Second, the weapon of Social Democracy was more and more blunted by each successive use. Widespread disillusionment grew with the failure of Social Democracy, not only to lead any fight for socialism, but even to fight to maintain existing conditions or defend the daily interests of the workers. The more and more desperate use of ever extending disciplinary and coercive measures by the Social Democratic leadership to maintain their power could not check this growing discontent. In the European countries as a whole during this period the vote of Social Democracy declined, and that of Communism increased.

Third, the American Colossus, on whose support and subsidies the restoration of capitalism was built up, was a colossus with feet of clay. As rapid as was its expansion and apparent prosperity and power in the war and post-war period, no less rapid was the bursting of the contradictions of its capitalist structure into a more gigantic economic crisis than any previously experienced in any country of capitalism. But just as American capitalism had provided the economic base for the

* See, for example, the Labour Monthly for February 1925, on "The Restoration of Europe," and for March 1025, on "The Gold Standard," where it was predicted that, as soon as the flow of new loans and credits should begin to dry up, and be exceeded by the necessary return movement of interest and amortisation, requiring an enormous expansion of European exports in the overcrowded world market, this would necessarily precipitate a new crisis, leading to the shattering of the gold standard. To-day this analysis, made in 1925, and fully realised six years later, provides an instructive comparison of the effectiveness of the Marxist line in contrast to the complacent contemporary statements during that period of all the leaders and professorial experts of capitalism on the success of stabilisation and of the return to the gold standard.

THE LAST ATTEMPT TO RESTORE PRE-WAR CAPITALISM 51

rebuilding of capitalism throughout the world, so the American crash brought with it the crash of the whole structure of stabilisation throughout the world.

Fourth, the very success for the moment of stabilisation of rationalisation, of the enormous expansion of the productive structure, brought with it the intensification of all the problems and conflicts of capitalism, and only resulted in the more rapid and complete shipwreck. The gigantic productive mechanism required a no less gigantic expansion of the market; unless it could maintain its mass output at full working, its very much heavier maintenance costs made it actually less economical than more primitive technical forms.

The presuppositions of the attempted restoration and stabilisation of capitalism after the war had been the return to the conditions of pre- war capitalism (which had in reality already been undergoing far- reaching modifications and transformations already before the war), to the free market regulation of supply and demand, to the automatic gold standard, etc. But in fact monopoly capitalism had already before the war transformed these conditions of classic capitalism beyond recognition, and led to the growing disequilibrium which found expression in the war. After the war, monopoly capitalism was enormously further developed, not only in the scale of the trusts and in the concentration of the financial oligarchies, but in the ever closer unification of the financial oligarchies and the State machine, in the growing State economic intervention and control, in the utilisation of direct political means for economic ends (reparations, debts, loan policies, colonial policies), and the rising network of tariffs, subsidies, quotas, licenses, and all forms of restrictions to maintain the closed monopolist areas. The whole resulting structure was top- heavy. The crash was inevitable. Capitalism under these conditions was more and more revealing itself, no longer as a "working system," but as a clogging fetter on production and exchange, with vast concentrations of conflicting and irresponsible power at strategic points, which could rock the whole system.

When the crash came with the world economic crisis, the conditions of monopoly capitalism still further prevented the "normal" working out of the crisis, and intensified and prolonged the crisis. The great capitalist monopolies were able to maintain relatively high profits in the midst of the depression,

52 FASCISM AND SOCIAL REVOLUTION Œ by artificial measures of restriction, by maintaining monopoly prices above the general price-level, and by passing on the burden of the depression to the working masses, to the petitbourgeoisie and to the colonial peoples. The prices of cartellised goods in Germany in the beginning of 1933 had only fallen 2 0 per cent. below the level of the first half of 19 2 9, whereas the price of non- cartellised goods had fallen 55 per cent. (League of Nations World Production and Prices, p. 109). The prices of manufactured goods in the imperialist countries were maintained above the pre- war level, at the same time as the prices of the raw-material products of the colonial peoples were depressed to an average of half the pre-war level. But this meant to intensify the contradictions at the root of the crisis. In this way the workings of monopoly capitalism hindered the "normal" solution of the crisis after the methods of "healthy" capitalism.

Thus it became more and more evident, both from the circumstances leading to the crisis, and from the further development of the crisis, that the "restoration of capitalism" of the pre-war type was no longer possible; that its breakdown was not due to any particular, isolated, accidental causes (reparations, debts, gold supply and distribution, etc., as was at first suggested), but was inherent in the whole nature of the attempt in relation to modern conditions of production and economic Organisation; and that in fact, as began to become increasingly recognised in informed capitalist quarters, the whole attempt at "restoration" during the nineteen-twenties had been in reality a chase after an illusion.

As the recognition of this begins to spread within the capitalist world, the conscious direction of capitalist policy begins to change more and more openly-the decisive point of change from the old to the new may be marked in 1933 with the advent of Roosevelt in the United States, with the advent of Hitler in Germany, and with the breakdown of the World Economic Conference-and moves to new types of policy in accordance with the changed conditions, and to corresponding new types of economic and political Organisation.

2. The Collapse of the Illusions of the Stabilisation Period.

The short-lived "stabilisation" and upward movement of capitalism in the nineteen-twenties gave rise to a host of myths

COLLAPSE OF THE ILLUSIONS 53

and illusions as to the possibilities of permanent capitalist Œ prosperity, of a new era of harmonious capitalist advance, of "organised capitalism," of "super-capitalism," of improving standards for all without the need of class struggle or revolution.

These illusions were important at the time as the means by which capitalism sought to maintain its hold on the masses and to counter the issue of the social revolution, which concretely confronted the world since 1917.

The collapse of these illusions with the world economic crisis was of decisive importance in the development of capitalist ideology to Fascism.

The main forms taken by these illusions were twofold, both closely connected.

The first was the myth of American Capitalism as a new type of capitalism, which had overcome the contradictions and crises of the old capitalism, which had "ironed out the trade cycle," and found the key to permanent prosperity and the abolition of poverty through continuously rising standards of the workers alongside continuously rising profits. American Capitalism was held out as the triumphant refutation of Communism. "Ford versus Marx" was the common popularisation of this theme.

The second, closely connected with the first, was the conception of "Organised Capitalism" as the new type of capitalism developing throughout the world, and building up under capitalist leadership a rational productive world order, which would eliminate the evils, poverty and discords of the old nineteenth- century capitalism and replace them by unparallelled universal prosperity. This conception found its final expression in "Ultra- Imperialism," or the conception that capitalist development was working towards a unified world capitalist order, eliminating war and the divisions of imperialism under the beneficent and pacific control of international finance.

There is no doubt that these illusions were to some extent shared by a portion of the leaders of capitalism during this period, who were dazzled by the apparent rapid recovery from the war and the unparallelled advance in production, trade and profits, and looked forward to a period of ever-growing prosperity. Thus President Hoover declared on July 2 7, 192 8: "The outlook of the world to-day is for the greatest era of commercial expansion in history." And again, on August II,

54 FASCISM AND SOCIAL REVOLUTION Œ 1928, in a speech accepting the Republican renomination for President:

Unemployment in the sense of distress is widely disappearing. We in America to-day are nearer to the final triumph over poverty than ever before in the history of any land. The poorhouse is vanishing from among us. We have not yet reached the goal, but given a chance to go forward with the policies of the last eight years, and we shall soon with the help of God be within sight of the day when poverty will be banished from this nation.

(New York Nation, June 15, 1932.)

Similarly Keynes in 1925, addressing the Liberal Summer School under the title, "Am I a Liberal?" distinguished three periods of economic development: the first, of scarcity, up to the fifteenth or sixteenth centuries; the second of abundance, represented by the nineteenth century; and the third, of it stabilisation," now opening:

But we are now entering on a third era, which Professor Commons calls the period of stabilisation, and truly characterises as "the actual alternative to Marx's Communis(Keynes Am I a Liberal? 1925, reprinted in Essays in Persuasion, 1931.)

The principal channel of these illusions throughout Western Europe and America was Social Democracy. Through Social Democracy these illusions were transmitted to the masses. The "American Model" and "Ford versus Marx" became the battle-cry of Social Democracy and the Second International in the fight against Communism. Government-paid missions of abour leaders were sent from Britain, Germany and other countries to the United States to bring back the new gospel from the Holy Land of Capitalism. It is unnecessary now to repeat (although it would be profitable for those who come newly to these questions to study this record of capitalist and social democratic illusion and ignorance on the basic questions of our epoch) the more fantastic utterances of all the principal Labour Party, trade union and social democratic leaders and theorists on the American Miracle and the triumph of capitalism over Marxism.*

* Reference may be made to the present writer's Socialism and the Living Wage, published in 1927, for a collection of some of the typical British Labour expressions - Labour Party, trade union and Independent Labour Party-in adoration of the American Mammon, Fordism, the New Capitalist Era, Rationalisation, etc. It may be noted that Labour Press reviews of this book, which in 1927 exposed the clay feet and impending crash of the American Colossus, rejected its reasoning on the grounds that it was based on the "obsolete" theories of Marxism, which only had reference to nineteenth-century capitalism and were refuted by modern capitalism, as demonstrated in America. Œ

COLLAPSE OF THE ILLUSIONS 55

What is important is that capitalism in this period, through Social Democracy, was able to build up a powerful propaganda in the working class of expectation of a new capitalist era, of rising prosperity, of the unshakable strength of capitalism, and of the refutation of revolutionary Marxism. The entire machine of reformist socialism, in control of the working class organisations, spread this propaganda.

Thus Snowden on behalf of the Labour Party declared:

He did not agree with the statement of some of their socialist friends that the capitalist system was obviously breaking down. He believed that we were to-day in a position very much like the industrial revolution that took place about 120 years ago. Then the steam age was ushered in.

Now we are entering in, I believe, the new age of electricity and an age of chemistry. Wide-awake capitalists are seeing this, and they are taking steps to appropriate for private profit and private ownership the exploitation of these great forces. If they succeed in doing that, then the capitalist system will be given a new and long and more powerful lease of life.

(Snowden, Daily Herald report, April 17, 1926.) Citrine, on behalf of the Trades Union Congress, defending the policy of "Mondism" or alliance with capitalism, explained that the policy of co-operation with the employers

aims at using the organised powers of the workers to promote effective co-operation in developing more effective less wasteful methods of production, eliminating unnecessary friction and unavoidable conflict in order to increase the wealth produced and provide a steady rising standard of social life and continuously improving conditions of employment for the workers.

(Citrine, in the Labour Magazine, October 1927.) In this way the expectation of "a new and long and more powerful lease of life" of capitalism, and of "a steady rising standard of social life and continuously improving conditions of employment for the workers" within capitalism was preached by Social Democracy.

Similarly the theorist of German trade unionism, Tarnov, wrote that Marxism was now refuted by modern capitalism:

We must distinguish two epochs in the development of capitalism; Œ

56 FASCISM AND SOCIAL REVOLUTION

the epoch of British capitalism, which was limited in its possibilities of expansion, and the epoch of American capitalism, which on the basis of the latest technical advances can unendingly expand and develop.

For the first epoch, Marx and Lassalle were typical. They maintained that wages are determined by certain economic laws, that they depend on the cost of labour-power, etc. For the second epoch, Ford is typical. He proved that capitalism can prosper, while the worker need not at the same time remain poor.

Along the same lines another leading theorist of German trade unionism, Naphthali, wrote:

Cyclical development, under which there was a regular succession of prosperity and crisis, of which Marx and Engels wrote, applies to the period of early capitalism.

A younger theorist of the Labour Party wrote in a book appearing as late as 193 1:

There are grounds for thinking that the situation is changing for the good. The wave of world revolution, on which the advance of Communism is depending, has subsided. Capitalism has been suc- cessful up to a point in stabilising itself-though at the price of admitting into its structure socialist elements which will ultimately supersede it. . . . There is a good deal in the classic Communist pic- ture of a world in the grip of ineluctable conflict that is out of date. (A. L. Rowse, Politics and the Younger Generation, 1931, P. 294.)

This writer argued further that the most modern capitalist monopolies were showing an enlightened and benevolent tendency of scientific world Organisation which held out the prospect of an ultimate "synthesis of common aims" with socialism. Unfortunately for the writer, he chose as his example of this progressive tendency of modern monopolist capitalism and potential ally with socialism- Kreuger.

It is noteworthy that one of the greatest and most progressive of modern finance corporations, the Swedish Kreuger and Toll Co., in a brilliant review of world conditions comes to conclusions not dissimilar. (A quotation from their report follows):

When a great capitalist concern speaks in these terms, one seems to Œ see a glimpse of the future in which the existing conflict between socialism and it is resolved in a synthesis of common aims.

(Ibid., pp. 46-7.)

The Preface of this book was dated 29 July, 1931. The collapse

AFTER TM COLLAPSE

and exposure of Kreuger and his swindles took place within eight months. This writer for the "younger generation" was belated in his repetition of social democratic propaganda of a preceding period, which had already reached its climax and completed its main currency in 19 2 7-9.

What was the effect of this dominant line of propaganda and policy of Social Democracy during the short-lived boom period of post-war capitalism?

First, it completely concealed the real character of post-war capitalism, the real issues of the period, and the real struggle confronting them, for the working class. Thus the workers were left confused and unprepared for the gigantic issues which faced them, and which the crisis laid bare.

Second, the subsequent collapse of all these theories and of the entire line of leadership with the advent of the world economic crisis produced a tremendous disillusionment throughout the petit- bourgeoisie and the working class who had followed the promises of Social Democracy. All the hopes which had been built up collapsed.

Thus the path was laid open for the advance of Fascism in the petit-bourgeoisie and in certain strata of the working class.

3. After the Collapse.

At first the full extent of the collapse involved in the world economic crisis was not understood by the leaders of capitalism. It was attempted at first to regard the crash of the autumn of 1929 as a crisis of speculation on the American Stock Exchange, unrelated to the general economic situation.

On 29 October, 1929, President Hoover affirmed that "the fundamental business of the country is on a sound and prosperous basis," The Assistant Secretary of Commerce, Dr. Klein, explained that "a decline in security prices does not greatly affect the buying power of the community . . . the industrial and Œ commercial structure of the nation is sound." On November 24 Dr. Klein stated that American business was

"healthy and vigorous and promises to be more so." On December 3 Hoover announced: "We have re-established confidence. . . . A very large degree of unemployment which would othe