The Daily Worker Newspaper, August 18, 1928, Page 4

i Page Four The International Situation and Tasks of Commu nist International sn nn) owe Comrade Bukharin’s Report of the Executive Committee of the Communist International Th munist Inte the official te. task this issue. The of the report of Comrade Nicolai Bukharin made to the Sixth Congress of the Com- ional on July 18 and 19, on behalf of its Executive Committee on the international situation and the ef the Communist International. Because of the unexpected length we can publish only one half of the report in ther half will be published in an early issue of the Daily Worker. i. A General Analysis of Modern Capitalism and the Special Forms of the Crisis of Captialiam THREE PERIODS OF POST WAR DEVELOPMENT. Comrades! Much has happened since the last Congress of the Com- intern. In order that we may be able better to appreciate the events that have taken place during this period, and in order that we may correctly outline our future prospects, we must examine the stage of development through which we have just passed not separately and isolately, but in conjunction with the preceding es. The general appreciation of the whole of the post- war development must be divided into three periods. The t period was the period of acute, revolutionary crisis, particularly in European countries. It was the period in which,revo- lutiona development reached its highest stage, when an enormous | revolutionary wave swept over the whole of Europe. The culminating point of this period was reached in the years 1920-21. This first period includes the February and October revolutions {| in Russia; the workers’ revolution in Finland, in March, 1918; the rice r n Japan*in Au; 1918 (called forth by the rise in the price of rice); the revolutions in Austria and Germany in November, 191°; the rian revolution in Hungary; the rebellion in Korea in March, 19 the setting up of the Soviet Government in Bavaria, in April, 1919; fhe bourgeois national revolution in Turkey in January, 1920; the seizure of the factories by the workers in Italy in September, | 1920. This period must also include the Red Army’s march on Warsaw and finally, we have the so-called March action in Germany in 1921. Vv e, therefore, that this first period was crammed full of reyolutionary events of great magnitude and of great historical sig- nifieance. These events brought out very sharply the process of col- lapse of the capitalist system and primarily of European capitalism. The first period must be regarded as having come to a close at the end of the year ended in severe defeat and in the Autumn of 1923, the German prole- tariat suffered a fresh defeat. The defeat of the proletariat in Western Europe served the bour- geoisie as the political starting point for further development. These defeats, and particularly the defeat of the German proletariat, marked the beginning of the second period of development in Central Europe and in Europe as a whole. This was the period of the capitalist of- fensive, the period of defensive proletarian struggles generally, and defensive strikes in particular. It was the period of the partial stabil zation of capitalism. It must be said, that several of the defensive battles of the proletariat assumed colossal dimensions. Among these were the General Strike and the Miners’ Strike in Great Britain. The second period brought greater “peace and order” to European capi- talism and to world capitalism. Direct revolutionary events passed In September, 1923, the rebellion in Bulgaria | from the continent of Europe to the colonial and semi-colonial coun- | tries. In 1925, we had the rebellion in Morocco, in August, 1925, we had the rebellion in Syria and in the same year the great struggle in China assumed a more acute form. While in the first period the direct revolutionary situation bore a sharply expressed European character, | in the second period the direct revolutionary, situation became the char- acteristic feature of the situation in the colonial periphery of world | imperialism. From the economic point of view, from the point..of..view of the analysis of capitalist economy, the second period-may be described | as the period of the restoration of the productive forces of capitalism. In this period, relying on its political victories and on its relative political stabilization, capitalism strove to achieve, and ultimately did achieve, a certain economic stabilization. The second period passed away to give place to the third period, the period of capitalist reconstruction. This reconstruction was ex- pressed in the pre-war limits being exceeded qualitatively and quan- titatively. The growth of the productive forces of capitalism is due on the one hand to the rather considerable progress achieved in the tech- nique of industry and on the other hand to the extensive reorganiza- tion of capitalist economic contacts. Technical reconstruction, econ- omic reorganization and the rapid process of capitalist trustification are, however, accompanied by the growth of the forces hostile to capi- | talism and by the extremely rapid development of its inherent contra- dictions. Among these must be included first of all the growth of the Union of Socialist Soviet Republics. The period of the reconstruction of capi- talism “coincides” with the period of reconstruction in the Union of Socialist Soviet Republics; the period of the establishment of a new technical basis for, and corresponding with that, the reorganization of our apparatus of production—reorganization in the social economic > (the growth of the socialized section of our ecenomy) as well las in the sense of its increasing consolidation. The economic and poli- tical growth of the Union of Socialist Soviet Republics, the develop- ment of the Chinese revolution, the ferment in countries like India, and finally the rapid growth of the inherént contradictions in the capitalist section of modern world economy and the growing danger of war—all represent the “reverse” side of world development. It is necessary to ana carefully the new world situation that has arisen in the third period. Unless we appreciate all the funda- mental world economic and political changes that have taken place, we shall be unable to mark out a correct political line and be unable to approach properly the tactical problems of the present time. Right from the outset we must clearly state that the postulate regarding the stabilization of capitalism now bears a different char- acter from that which it bore several years ago, and this alteration in the manner of presenting the question must be taken into consid- eration in analyzing the international situation, I come now to the analysis itself. THE ELEMENTS OF TECHNICAL PROGRESS. First of all I will deal with the technique of the present day capi- talist world. We must concede that a considerable growth has taken place in the electrification of production in the important capitalist countries. Important inventions have been brought out in the sphere of applied chemistry. The new methods of producing synthetic fuels, } the Bergius method of producing benzine, the production of artificial ! silk, etc., all these are characteristic features of present day capitalist =production. At the same time we must take note of the growing utilization of light metals, particularly of aluminum, the wider appli- cation of new machinery and aparatuses in industry as well as in j agriculture, for example the combined harvesters in the United States; the development of automobile transport; the extensive application of the endless conveyor system and the new method of organizing labor jn the factories; standardization, mass production, ete. All these are the most characteristic features of present day capitalist technique. I will quote a few figures concerning the production of electrical power in the United States. i Production in Million Kilowatt Hours: 1912 1922 1926 1927 17,572 47. 73,791 79,724 Numerous illustrations can be quoted showing convincingly that the curve of development of capitalist economy, both from the qualita- tive and quantitative point of views marks definite progress. A few figures to characterize the dynamics of the growth and the redistribution of the parts played by various metals in world industry. If we take the total production of 1913 at 100, the figures of produc- tion of various metals in 1926 will be as follows: Steel .... 122 Copper 150 Lead ....... » 107 Aluminum . 310 Aluminum is sudcessfully competing with other metals in the elec- - trical industry, in railway construction and in the construction of street cars ingthe United States and in a i . | Still ‘™more interesting are the. figures illustrating the production of artificial silk. The world production of artificial silk is shown in the following figures (in thousands of kilogrammes) : Pre-war production 11,000 1921 30,000 1925 84,000 1927 125,000 Taking the pre-war figure at 100, the index numbers for the sub- sequent years will be as follows: 1921 173 1925 668 1927 1,036 In regard to the latest inventions and their influence on produc- tion, we will take as an example the Bergius method. In Germany, synthetic benzine produced by this method, already represents 12 per cent of the total amount of benzine utilized in the country. At the present time extensive plans for the introduction of new technical processes are being laid down in many countries, for exam- ple in Germany and in England, which will have very important econ- omic consequences. These are the schemes to supply igas over long distances in Germany, electrification in Great Britain, ete. It is easy to understand that these technical successes, even if we put the word successes in inverted commas, will inevitably lead to an increase in the productivity in social labor. Gunter Stein, in the “Berliner Tage- blatt” writes for example that in the United States the gross output of the manufacturing industries during 1923—1924 incraased by 4.5 per cent compared with the normal, whereas in the same period the number of workers employed diminished by over 5 per cent. This means that the productivity of the worker has increased approximately by 30 to 40 per cent. The development of the chemical irfdustry is important not only from the general point of view, but also from two other points of view: 1. From the point of view of war preparations; for the chemical industry is a first class war industry, and 2. From the point of view of the possibility it holds out of intro- ducing very important changes in the methods of agricultural pro- duction, The world output of chemical products in pre-war times amounted to 10 billion German Reichsmarks; in 1923-24 it amounted to 18 bil- lions. Taking the previous figure at 100 the index number of the second figure will be 40. You will observe that the production of chemical products has greatly increased. The utilization of nitrate products in the important capitalist coun- tries has increased as follows: (In thousands of tons of pure nitrates.) Pre-war 1926 Germany 260 430 Great Britain 54 61 France 79 152 Italy * ~ 22 54 United States .. 167 341 THE DEVELOPMENT OF CAPITALIST MONOPOLIES, STATE CAPITALIST TENDENCIES AND THEIR POLI- TICAL SIGNIFICANCE. I do not think these figures require any comment, they speak for themselves. The changes in technique which in some countries, pri- in the United States, is assuming the character of a technical revolution, are quite definitely linked ip with the trustification of na- tional economy, with the establishment of gigantic banking consor- tiums and already in the post-war period, with the growth of state capitalist tendencies in multifarious forms. I will mention a few examples. Everyone knows, for example of the existence of gigantic trusts like the German Dye Trust, etc. Everyone must know to what colossal dimensions the chemical industry has become trustified in the Mond concern in England (hence the origin of the notorious term “Mondism”). All the comrades are aware of the existence of “Standard Oil” in the United States. We are now passing through a period not only of the birth and rapid development of colossal capitalist organ- izations within each capitalist country, but we are also passing through a period of the establishment of giant international trusts. I have before me a whole list of such trusts, which it would be rather boring to read out here. A short time ago, at the Congress of our Party, I advanced the thesis that we are now observing a certain growth in state capitalist tendencies, not in the pre-war form of “war capitalism” (the social- deceivers of all breeds had the impudence to describe this penal servi- tude war capitalism as “war socialism’), with the card system of rationing and the specific features connected with war, but in a new form, or rather in new forms. We observe at the present time a growing process in which trusts, cartels and banking consortiums are becoming more linked up with and grafted on to the organs of state of the imperialist bourgeoisie. The nature of the shell in which this process is developing is not important. In some cases it may take the form of the state ownership of industrial enterprises and increased state interference in economic life. In other cases it may~take the form of the so-called capitalist economic organizations “capturing the state” from “below” as the liberals express it. categorically reject this latter expression: there is no need to capture the state if the state apparatus is already in the hands of the im- perialist bourgeoisie. What we have in mind is the organizational forms in which the economic organizations of the imperialist bour- geoisie become grafted on to organs of the bourgeoisie state. Thus, the form this process assumes is of secondary importance. All that I wish to assert and stress here is that this process is definitely taking place, We observe it taking place in Italy, in Japan, in the United States and in Germany in a variety of forms. There is not the slightest doubt that the process taking place. Certain comrades formerly expressed doubt concerning this matter. works of the comrades who have specially investigated this matter have been published; I have in mind particularly the works of Com- rades Wurm and Lapinsky who have investigated this subject from the point of view of the development of state and municipal industry and from the point of view of the mutual relations between the pri- vate capitalist and state organizations of the imperialist bourgeoisic. All the facts reveal a state-capitalistic tendency in the modern develop- ment-of imperialist economy. What are the political results of this process? This we can see from the following example. In America a certain Theodore Knappen, in an article in the “Magazine of Wall Street” for March 19, 1928, entitled, “Business Qualifications of the Leading Presidential Candi- dates,” wrote as follows: “It is not an exaggeration to say that he has considered him- self and has actually been the director general of American busi- ness. Never before, here or anywhere else, has a government de- partment been so completely fused with business... He respects big business and admires big business men, he considers that there is more good in one man who does well a big job than a dozen learned dreamers talking about what they have never attempted and will never accomplish... There can be no doubt that Hoover us president would be without precedent. He would be a dynamic business president even as Coolidge has been a static business pres- ident. He would be the first business as distinguished from poli- tical president the country has had.” The fact that Hoover is described as Director General of Trusts is in itself a striking political expression of the process of grafting that is taking place between the capitalist trust organizations and the capitalist political state organizations | | \ | | Of course, we must But since then the | | STRUCTURAL CHANGES, The following questions arise: assuming all these facts are correct, what becomes of our analysis of the so-called stabilization of capital? What becomes of our thesis concerning the partial, temporary, etc., stabilization—stabilization with all the /definitions and qualifications? What becomes of the question of the general crisis of the world capi- talist system when we ourselves admit technical achievements, the growth of trusts and other capitalist organizations and when we on’ these grounds admit that capitalism has undergone considerable con- solidation? What becomes of our special and specific characterization of stabilization? I think that these questions must be clearly pre- sented and clearly replied to. Otherwise we stand the risk of dropping, into ideological confusion. First of all I want to quote a few literary and political references to this question. How did we, a few years ago, picture to ourselves the process of the further development, or the further collapse of the capitalist system? First of all I will deal with the period when we drew up the first draft of our programme. We then formulated the thesis on the condition of capitalism in this way: the capitalist system is undergoing a process of collapse—a process of collapse without qualification. The fate of capitalism as it presented itself to us at that time may be described in the form of a steadily drooping curve. When we took up the discussion of the draft a second time, we came to the conclusion that some changes ought to be made in the definitions. Already at the Fifth Congress our thesis on the state and ultimate fate of capitalist economy was formulated somewhat differ- ently. Then the word “stabilization” came into use with various quali- fications such as “partial,” temporary, ete. Now I submit the following question: what meaning have these definitions and qualifications at the present time? Have they any meaning at all? If they have any meaning, is it the same meaning that we attach to it before, or is it some other? In my opinion the meaning of these definitions now differ somewhat from the meaning we formerly attached to them, I think neve tox as a whole, we may, in a semi-literary style, define our previoW& position on this question in the following manner: It was assurged that some increase in production was observed in only one or two countries and that only as an exception. This in- crease did not. appear to be particularly characteristic and was re- garded merely as an auxiliary or “conventional” circumstance. Tomor- row or the day after another process would set in. If on a certain day we observed in a certain couhtry a growth of techniqie or of | productive forces, or a favorable economic situation, we said that this was only a sort of economic “special day” which could not be takén seriously, It can, and it should be said that at that time there were definite grounds for appraising the situation in this way, but the definition of stabilization as relative stabilization, in many respects, no longer cor- | responds to the present situation. Take each country in turn. The UNITED STATES is marching ahead. Let us assume that predictions concerning a relative crisis in America are true. This possibility is by no means excluded; in fact it is very probable. But the general course of development shows a growth of industry, a growth of production. For the first time in world history and in the | history of the labor movement—to speak in the words of Marx—“V” (variable capital—the value of labor power) in the United States is diminishing not only relatively to “C” (constant capital—the value of means of production), but also ABSOLUTELY. The number of work- ers employed in industry is diminishing. This is occurring for the | first time in world history and in the history of the labor movement on so large a scale. | Some comrades may say that this is a pessimistic view. This is | not true. We must draw a distinction between optimism and stupidity. These are two different things. If we do not wish’to be stupid, we must take the facts as they are. This is the first obligatory pre- requisite for all non-stupid tactics. Take another country, Germany. Some time ago, when I wrote about the growth of technique and of the forces of production in Ger- many, the “Ultra-Left,” anti-Communist Maslov roundly abused me. Now one must be blind not to see that German capitalism is developing rather rapidly and the talk one hears now about imperialism, the dreaming about “mandates” and the longing for colonies, the building of battleships, etc., are by no means accidental. Take Rrance. It must be clear to everyone that a tremendous dif- ference exists between pre-war France and post-war France; everyone “must see that old, usurer France is acquiring new qualities and is now becoming transformed into a substantial industrial country. Take Great Britain. On the whole Great Britain is passing through a period of decline; her strength is undermined, the might of her em- pire is waning. On certain sectors the British bourgeoisie is sueceed- ing in increasing the forces of production: for example the so-called new industries. But even if these facts are true, does it mean that we have to confess that the crisis of capitalism has been liquidated? Or does it mean something else? I would like to put this same question in a more sharply political form: does this analysis coincide with the analy- sis made by the social democrats? I think it is quite easy to understand the real state of affairs. The correct reply to this question should be: The general crisis of capi- talism continues, more than that, is is developing, although the forms of the crisis are now different. Formerly, we examined the most im- portant symptoms of the crisis in the following manner: we took each | in turn*and said: in this country capitalism is undergoing a process of decline, in that country and in another the same process is observed, in a fourth perhaps the process is not so rapid, but it is nevertheless i there. Like everything else in the world, our appreciation of the crisis of that time had its roots in the economic conditions then prevailing. | Germany had reached the lowest ebb of economic collapse. “In a num- ber of other countries, particularly in Central Europe, the situation was the same. Thus, our former definitions were based on a somewhat exaggerated estimation of certain real facts. Now the former forms of the crisis have given way to new forms. That is the whole point. We must not picture the crisis of capitalism and of the capitalist system as a steady decline in almost all capitalist countries or even in a majority of countfies. The situation is not quige that. The crisis of capitalism lies in that as a result of the preceding war and post-war phases a fundamental structural change has taken place in the whole of world economy, a change which inevitably intensifies the contradic- tions of the capitalist system a thousand fold, and will finally lead to its doom. Take for example the fact of the existence of the U. S. S. R. What does it imply? In the first place, the existence of the U. S. S. R. is the result of the post-war crisis of capitalism, and secondly, it im- plies that the crisis continues; for we observe the development of an alien, hdstile, and on principle, antagonistic body in the world economic system of capitalism. An alien body! Is this not a fundamental struc- tural change in world economy? j CHANGES IN’ THE ALIGNMENT OF FORCES. I have already noted the fact that the direct revolutionary situa- tion has passed to the Orient and to the colonial periphery generally. This too, is a result of the post-war crisis. Are not the powerful revolutionary shocks in this periphery of capitalism an expression of profound crises? Further, what does the so-called disproportion between the United States and Europe—which is striving to liberate itself from the hege- mony of America, imply? ° It, too, implies a structural change in the world economic system. Finally, the contraction of the home mar- kets in capitalist countries and the ruination and pauperization of the colonies make it necessary to present the question of the relations be- tween production /and consumption in af entirely different manner from that in which it was presented in the “normal” conditions of capitalism. The situation is developing in such a way that the whole of the future development of the capitalist system may proceed entirely in the forms created by the previous critical periods of capitalism. Capitalism cannot proceed as if the U. S. S. R. did not exist. It can- not proceed as if the Chinese Revolution, as, if the disproportion be- tween the United States and-Europe, as if the contradiction of mar- kets, etc., etc., did mot exist. ‘ | capi These structural changes are of enormous significance for the whole development of the capitalist system and for the appraisement. of its prospects. Take for example the development of all the perma- nent contradictions uf capitalism in itself: the fight for markets, the growth of the apparatus of production, which is surpassing the growth of purchasing power, and all the other contradictions with which we are so familiar. I ask you: what conclusions must we draw from the structural changes in world economy that I have noted? I think the following reply must be made: the ferment in the colonies and the surging development of the class struggle imply that the inherent contradictions’ of the capitalist system are becoming more acute. If the Chinese Revolution is regarded as a mere bagatelle—as the social democrats do, then of course there is no serious crisis of capitalism. If the U. S. S. R. does not exist, then again there is no crisis of capi- talism. When the social democrats go so far as to assert that the present phase of capitalism does not inevitably lead to war, and that Marx has become completely dbsolete because he advanced the thesis that war is the inevitable outcome of the development of capitalism, then of course, the situation according to the social democrats is quite idyllic—no crisis of capitalism! But if we admit that all the things I have referred to actually exist—and they do exist—then the method of presenting the question and the reply to it will be entirely different. If we say that stabilization is decaying, then I ask: What are the facts upon which we base this conclusion? Not from the fact that lism is in a state of direct collapse in one country or another. Stabilization is decaying because in the present situation development is proceeding along new lines created by, the preceding phase and these new lines in their turn cause all the contradictions of capitalism~ to become more intensified. This intensification of contradictions in its turn leads to the great collapse, to the final catastrophe. That is why capitalism is unstable. That is why stabilization can be only relative stabilization. That is why the crisis of capitalism has not.disappeared, it has been driven deep down into the heart of the capitalist system and threatens to develop with great- er intensity than ever. But this crisis must not be regarded from the point of view of a single country taken separately, but from the point of view of the general contacts which all countries have with one another within the framework of world economy. At the same time we must take into consideration the mutual relationships between the imperialists, the relationships between capitalist countries, the re- lationship between various “capitalisms” and the U, S. S. R., etc. THE CONTRADICTIONS OF CAPITALISM DEVELOP IN THE MOST ACUTE FORM. Only in this manner can the question of stabilization be presented. And I think that this manner of presentation is sufficiently clear. Many capitalist countries are developing, but this development is pro- ceeding in forms created by the war crisis; it is proceeding simul- taneously with the existence of the U. S. S. R., with colonial revolu- tions, etc. The inherent contradictions of capitalism become more and more acute. Stabilization is really decaying, not because capitalism in every country is declining, but because the structural changes that have ogcurred in world economy are creating a new situation and are inexorably leading to the collapse of the whole system. These con- tradictions in separate countries, with the development and intensifi- cation of the class struggle and with the growth of the clements of a revolutionary situation. But this process is not now linked up with the process of the direct economic collapse of capitalism in separate | countries, but with the process of the development of the contradictions of stabilization, of contradictions which are being enormously inten- sified by the general conditions of the crisis of capitalism. I have only briefly touched upon a few of the structural changes of world economy. Permit me to make a few remarks concerning the manner in which our opponents treat the phenomena of the crisis. I will mention the so-called “German problem” which, from a certain angle, is nothing more than the problem of the relationships between the United States and Europe. I have before me an article written by the English statistician and economist, Paish; published in the last issue of “Zeitschrift fur Geo-Politik,” No. 4. Paish presents the, ques- tion in the following manner: “Now the debtor countries all over the world are unable to sell their commodities on the scale necessary for the purpose of enabling them to meet their obligations and at the same time to obtain from the sale of their commodities the money necessary for purchasing the things they require for the satisfaction of their needs. For that reason they continue as before to raise large for- eign loans, But the crediting countries cannot advance credits on the same scale that they have been doing during the past few years. Unless relief comes in the near future the whole system must very soon collapse. . .” And then he goes on to say: “Thus, the collapse of the international credit system becomes dangerously imminent. (Author’s emphasis.) This collapse will be inevitable unless immediate measures are taken to enable the debtor countries te meet their obligations by selling their goods, rather than by further loans. Symptoms of the crisis have accumu- lated in abundance: flooded markets, growing unemployment in the United States and the enormous magnitude of credit operations in the important industrial countries, primarily in Germany.” I rather doubt the accuracy of this author when he predicts catastrophe all along the line. Here other interests are on the board and it is not difficult to guess which they are. But certain grounds for making assertions of this kind do exist. But, the German problem is a partial problem which arises out of the fundamental crisis forms of modern world economy. We now observe a number of most acute contradictions. These ‘acute contra- dictions develop along the various lines: Amefican-Great Britain; Germany-France; Italy-France, etc., all these disproportions,—from the point of view of peace and quiet in the capitalist system—find their expression in the fact that after the war a situation arose in which the genuine economic power of certain states do not correspona sto certain of their other features, as for example the possession of colonies. Take for example the United States on the one hand and Great Britain on the other. We observe a powerful growth of American capitalism and yet, to this day, the United States is not a great colonial power. The British world empire is a colonial empire and yet it is in regard to Great Britain that we can say that she is passing through a period of decline, notwithstanding her great colonial monop- oly. A similar disproportion can be observed in other countries. Take present day Germany. From the economic and technical vonage view she is a first class country and yet she has neither colonies nor man- dates nor protectorates. Of equal interest would it be to compare Italy with Spain, ete. But as contradictions arise from the growth of productive forces and as the struggle for spheres for the investment of capital becomes more acute, we have nothing more nor less than the “resurrection” of the profoundest of imperialist problems—a fresh distribution of the globe, of coloniés or other territories. And this means war. From the point of view of the economic analysis of present-day world economy, from the point of view of the specific relationships within imperialist states, from the point of view of the general crisis of capitalism,—from all these decisive points of view, war is the central problem of the present day. That is why, from the point of view of policy and tactics we must put this problem in the forefront. The Soctal Democrats say that war—is our programme! What stupidity,— it is not a lie, it is just stupidity! This problem objectively is the central problem. And our subjective collective task is to solve this problem, not on imperialist lines, but on proletarian lines; not by supporting imperialist war, but by converting war into proletarian civil war against the bourgeoisie. f INTER-STATE ANTAGONISMS. It is quite understandable that the process of economic develop- ment should determine and crystallize corresponding relationship be- tween states. In analyzing the general complex of political relation- ships between ‘capitalist states, the thing that stand out prominently is the great antagonism that exists between various state forms: an- tagonism. between capitalist countries and the colonies, particularly in China; antagonism between capitalist countries and the U. S. S, R. and the antagonism between Europe, particularly Great Britain, and the United States of America. In regard to specific European relationships they are to a considerable degree determined by the changes that have \ i |