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From Fourth International, Vol.11 No.2, March-April 1950, pp.48-53.
Transcription & mark-up by Einde O’Callaghan for ETOL.
Bad times have befallen the arrogant masters of American industry who only a short time ago were poised to reap the harvests of a hundred years’ rule over a helpless and distraught world. The dream of “The American Century” is being dispelled almost before the imperialist giant has had a chance to spread over this wide planet. The harsh reality of disillusionment is having a profound and bewildering impact on America’s monopolists.
How impressive was the strength of US imperialism as it dropped atom bombs on defenseless Hiroshima and Nagasaki! Even at that time, however, it was evident that the cruel incineration of tens of thousands of Japanese was less for the purpose of bringing about unconditional surrender of the Nipponese empire than of exhibiting trump cards to the Soviet Union at the coming peace conference. Almost overnight America’s monopolists renewed their postponed but never-forgotten task of reopening the Soviet Union to capitalist exploitation. A large section of the American bourgeoisie calculated that the time was ripe to achieve this end and, with a boldness reminiscent of 1917-1921, openly and boisterously spoke of preventive war against the Soviet Union.
If this policy of immediate war was not adopted by the State Department, it was not due to a difference over aims but rather to the hopeful illusion that these, aims could be effectively accomplished by peaceful means. The psychological advantage of possessing a monopoly of the atom bomb together with undisputed economic superiority over a badly battered Soviet Union were deemed sufficient to force the Kremlin to make concessions and finally capitulate before the seemingly overwhelming might of the American marauder.
However, it would be wrong to stale that the entire bourgeoisie, or even its most authoritative section, shared this optimism. The danger to American and world capitalism of an immediate war tempered their thinking and caused them to follow the path of delay.
The soldiers’ demonstrations overseas frightened Washington as well as its General Staff and forced a hasty demobilization. The prestige of the Soviet Union, which played the most decisive role in the defeat of Hitler, remained at its height. The more astute American statesmen were aware that a carefully studied campaign was necessary to reorient the thinking of the American masses. All this called for additional time. We must also remember that the influence of the Stalinists in Western Europe was then tremendous and, if hard-pressed, they could with little difficulty have precipitated revolts throughout Europe.
So the bourgeoisie gratefully accepted the plan of the State Department prodigy, George F. Kennan, with its unusual virtue of delaying matters till 1952. I his plan assured the American capitalists that by 1952 they would be in a better position to obtain their demands peacefully, and, failing that, to win a short and easy victory through war. The Kennan thesis was a schematic but well-synchronized plan that embraced the economic, political and military fields. It drew up a timetable for war, setting the date for 1952. The United States would reach the peak of its military strength at that time. Assurances were received from a group of scientists led by Vannevar Bush that the Soviet Union would not be able to produce its first atomic weapon before then. The contrary opinion of other scientists was ignored. By 1952 the American military machine would have at its disposal sufficient atomic bombs to annihilate the Soviet Union in short order.
In the meantime, large military expenditures would serve the dual purpose of preparing the United States for war and preventing a serious depression. A four-year Marshall Plan was to be put into effect which would further bolster the American economy by propping up exports during this period and at the same time helping European production to exceed its pre-war level. With the aid of the Marshall Plan Western Europe would not only be able to stave off revolution but would eliminate Stalinist influence within its governments as well as the working class. The beneficent results of the Marshall Plan would also have a debilitating effect on the Stalinist puppet regimes in Eastern Europe. It would help to forge a grand anti-Soviet alliance of the Western European states.
Eaced with this overwhelming power, there would be little left for the Soviet Union to do except capitulate. Failing that, the full might of this grand alliance would force the Kremlin to its knees by war. If the Soviet Union accepted the terms of surrender peace could be assured for an indefinite period by opening up Eastern Europe and the Soviet Union to capitalist exploitation, enabling the built-up Western European powers to find a ready market for their expanded production. It seems that Kennan left nothing to chance.
The danger that Moscow might move prematurely before the plan was fulfilled was properly discounted. That this was the last thing Stalin desired was well known to American statesmen. Kennan was aware of the weakness of Chiang Kai-shek in China but hoped he would flounder along for another few years. Europe was the strategic area and here the Soviet Union was to be contained. Kennan correctly calculated that Stalin would not proceed beyond the limits marked out by Washington and backed by its money and its arms. Meanwhile the cold war was to be extended to embrace the embargo of shipments to countries beyond the iron curtain of the products of heavy industry so essential to their well-being as well as to their war potential.
Nothing succeeds like success. American capitalists were drinking toasts to the perspicacity of the brilliant young strategist, Kennan. Everything seemed to click. The Truman Doctrine, the Marshall Plan, the Atlantic Pact and military preparations at home became accomplished facts and seemed to be achieving their synchronized goal. These involved the expenditure of billions at home and abroad. But, with the working class harnessed to the plan through the efforts of the labor bureaucracy in the CIO and AFL, no audible disgruntlement on the part of the overtaxed workers seemed to be voiced. The Kennan plan brought record profits into the coffers of American industry even excelling the boom profits of wartime. The Marshall Plan with, the inevitable strings attached permitted American monopolists to continue their exports to a dollar-hungry world. They could eat their cake and still have it.
Stalin was forced to pull in his horns in one outlying sector after another. Three countries bordering on the Soviet Union, Turkey, Iran, and Norway, braved the wrath of the Kremlin and to varying degrees attached themselves-to the American sphere of influence. Finland’s relations with Moscow cooled off perceptibly. Greece, due to the treachery of the Kremlin gang, now became the undisputed satellite of American imperialism. There were many signs that the embargo of heavy industry was weakening not only the Soviet Union but the attachment of the satellites to the Moscow regime. And this pressure undoubtedly created economic difficulties inside Yugoslavia that contributed to the rift between Stalin and Tito.
American newspapers and journals heralded the expansion of production and the increase in living standards in Western Europe in contrast to the lagging production and reduced standards in Stalin’s buffer countries. The Stalinists were summarily dismissed from their posts in the governments of France and Italy and their hold on the trade unions in Western Europe was systematically undermined. To top off this bright picture, the Atlantic Pact reached fruition, further isolating the Soviet Union and making it more vulnerable to attack.
Two factors, however, combined to expose the superficiality of the Kennan plan. While contained in Europe, the Stalinists gained a smashing victory in Asia. The armies of the Stalinist Mao Tse-tung lured away the bulk of Chiang’s forces and smashed the balance, forcing the Generalissimo to seek temporary shelter in Formosa under the continued care of the State Department. With over 450,000,000 Chinese brought into military alliance with the Soviet Union, making a total of about 800,000,000 people under Stalin’s influence – a third of the world’s population occupying a fourth of its wide expanse – it doesn’t require a military strategist to determine that there has been a significant shift in the relationship of forces to the detriment of the American imperialists.
Then in the latter part of September 1949 the world was apprised that the Soviet Union had come into possession of the atom bomb, thereby ending the monopoly upon which the American strategists banked so heavily. Even the scientists most addicted to wishful thinking were forced to acknowledge that the Soviet Union would have a sizable stockpile of this formidable weapon within a year or two, thereby negating the superiority of American arms. The carefully conceived Kennan timetable was thrown askew.
Time was running against the fortunes of American imperialism. Not only would the American military machine be weakened vis-à-vis the Soviet Union by 1952 but the whole economic fabric would then be placed in a vulnerable position. A built-up Europe would come face to face with a limited market for its products while a prodigal America would be forced either to curtail its expenditures or be hurled onto the road of bankruptcy.
The boasts of Paul Hoffman, Marshall Plan administrator, that the United States was winning the cold war because Western Europe was being built up faster than Eastern Europe were falling on deaf capitalist ears. The masters of industry recognized only too well the return of the old capitalist sickness of overproduction. The bourgeois journalists were writing what the Fourth International had informed its readers when the Marshall Plan was first conceived that the very success of the Marshall Plan would turn out to be its gravest weakness. With the world capitalist market restricted by the loss of about 800 million people living outside the orbit of American imperialist exploitation, the developing crisis of capitalism bids fair to become the worst and most turbulent in its history.
The race for markets makes enemies of the best friends. Atlantic Pact countries are already at each other’s economic throats. And the fast-shrinking export market of American industry is in danger of drying up. Not only does the dollar shortage persist but with the decline of Marshall Aid, expenditures will become progressively less. On the other hand, if Uncle Sam continues to shell out in the accustomed manner, the only stable economy in the whole capitalist world will be hopelessly undermined.
One danger signal is already at hand. For the first time in its history capitalist America is running a sizable deficit, in boomtime. As long as 1952 was to be “the year of decision” the American banker could stand this temporary drain. But now with the timetable seriously delayed he cannot afford to continue his profligate course much longer. As if to multiply the already difficult tasks facing American imperialism, demands for new handouts are being made by the Asiatic nations as well as by Latin America.
Awiare that they are heading toward an abysmal crisis, the American imperialists are seeking a way out. The panacea of devaluation was heralded as the cure-all for Europe. Against the bitter remonstrations of some European statesmen, especially the British Labor Government, Washington forced this measure through.
But the results were not exactly what Washington hoped for. The increase in European exports was insufficient to alter much the course of trade in favor of Europe. But it was sufficient to raise the level of the class struggle there. It gave new impulse to the resistance of the workers against their masters who had tried to resolve the contradictions of capitalism on the backs of the working class. Far from stabilizing the European currencies, their convertibility into dollars and into the monetary values of one another is as far removed today as ever before. It is only a question of time before a further devaluation will be found necessary.
With the hope of reopening Eastern Europe to capitalist trade gone for the present, a new substitute for export trade in the European economy must be sought. Why not have armaments replace exports as in the United States? Goods calculated to be destroyed would reduce the field of competition and permit a capitalist economy to function a while longer. But the additional tax burden on the European masses of such an arms program could prove to be the straw that broke the back of the capitalist camel there.
Thus realizing the hopelessness of the panaceas of devaluation and the armament economy, the important accent of late has been on “integration.” This loose word seems to embrace the entire gamut from the formation of an Atlantic Pact Union to the easier conversion of international currencies and the ending of certain trade practices as import quotas, protective tariffs and double pricing. While the United States has threatened countries which persist in these trade practices with the denial of Marshall aid, the American monopolists show no signs of themselves abandoning them, thereby pointing up the hypocrisy of the project.
Moreover, genuine integration of European economies would bring about a far more serious crisis than is in the offing. It would mean closing down entire industries in some countries in favor of those who could for various reasons produce more cheaply. Whereas a depression forces marginal producers in each industry to shut down, integration would wipe out such industries on a national basis.
For capitalism this cure is worse than the disease. And obviously no European country will follow the advice of the arrogant but not overbright American industrialists who would temporarily profit most from such a course, only to tumble into a more cataclysmic crisis a little later. American capitalism correctly states that only integration can solve Europe’s economic crisis – but only a socialist economy with its nationalization of property and planning for use can perform such integration. Thus the present crisis is insoluble under capitalism. Hoffman correctly states that the alternative to integration is another descent into barter and autarchy. But Hitler did not choose that road for Germany because he liked it, but only because there was no alternative. Europe, and especially England, are heading in the same direction.
While the Marshall Plan has the effect of postponing the European crisis for another year or two, the situation in Germany is becoming quite critical. Even before it has reached pre-war levels of production German economy is already in a tailspin. There are well over two million unemployed in this country bringing the percentage of unemployed to more than 10% of the labor force. Deprived of its former markets, Germany once more faces the prospect that haunted the Kaiser and then Hitler after him, only on a far greater scale.
hoever wins Germany wins the cold war. That is the grand prize American imperialism has eyed since the end of the war. Washington was not concerned with helping the German workers but it is also now becoming increasingly clear that it can offer little help to the German capitalists. It has failed in its efforts of convincing the other countries of Western Europe to open up their markets to German competition. It is obvious that it will succeed in gaining for the German capitalists only a minimum of concessions from its neighbors and if it forces the issue will drive the latter from the American orbit. None of the Western European countries can compete against the formidable German industrial machine in a free and unfettered market. It would therefore be suicidal for them to accede to the wishes of Washington. And American imperialism has no other markets to offer them. It requires these for itself.
Washington advises the Germans that unity can be attained by war against the Soviet Union, which has already achieved a partial success in integrating Eastern Germany into its sphere of operations. But German must fight German to achieve this task. Warfare on their own soil, avoided in World War I and which the German bourgeoisie expected to avoid in World War II, becomes a grim certainty in World War III if they ally themselves to America. Irrespective of the outcome, German capitalism will be destroyed in the process.
Now more than ever is the Trotskyist program for Germany realizable and necessary. The establishment of a genuine workers’ state in Germany would at once lead to a Socialist United States of Europe and would kindle the flames of world revolution. Such a program could arouse the German masses to action and, once embarked on such a course, could not be halted by any existing force.
But this is the very last thing Stalin desires. Like the imperialists, he has nothing to offer the German working class; but he can assure the German capitalists a slightly longer life. Stalin offers the German capitalists the only markets in the world that are really open to German goods, the eager markets of the Soviet Union, the buffer countries, Eastern Germany and the vast expanse of China. These markets are complementary to the German economy and it is no surprise that an ever larger section of the German bourgeoisie, anti-communist to the core, is clamoring for this orientation. This state of affairs is causing more gray hair around the temples of American State Department officials than the turn of the Chinese events or the detonation of the atom bomb in the Soviet Union.
But would Stalin dare to build up a united Germany which, when restored to health, might once more lash out at the Soviet Union? Would Stalin not be constructing a Frankenstein that might perhaps succeed in devouring the Soviet Union? Every policy has its risks and to Stalin such a danger is a lesser evil to a workers’ revolution which would beyond doubt bring an end to the barbarous rule of the Kremlin gangsters. If we base ourselves on the thinking of the Soviet bureaucrats in the past, which made the USSR the object of attack in World War II, we can bee why Stalin will prefer to take this course. He hopes thereby to strengthen the industrial potential of the Soviet Union which has been almost completely cut off from all heavy industry manufactured on this side of the “iron curtain.” Stalin figures that, with the monopoly of foreign trade in his hands lor the buffer zones and perhaps China in addition to the USSR, he can cut off trade with Germany at will if the German capitalists get too obstreperous.
It is in the midst of these difficulties that the complete disintegration of the Chiang regime took place in China. The fact that it had been previously predicted made it none the more palatable to Washington, which had been overawed by the speed of the debacle. The loss of face suffered by the mighty giant of the West extended to all Asia and indeed throughout the world. While the loss of China had been discounted in advance there was a tendency to counter this loss with the knowledge of the extreme difficulties faing Mao in building up Chinese economy without United States aid. There was also supreme confidence in the State Department that Stalin could not integrate such a large backward country into his sphere. There is no denying that these difficulties are real and will in the last analysis spell disaster for Stalinism. But Washington is not sure that it will be the one to profit from the events in China.
There is a creeping realization today that it is all Asia which is lost. The recognition of the Ho Chi Minh government in Indo-China by the Kremlin and by Mao, with India on the sidelines, makes it fairly certain that the French puppet Bao Dai will not succeed even with French and American military aid in thwarting the will for independence of the struggling Viet Namese. Thailand and Burma dare not take sides in the cold war and it is but a question of time before they are either drawn into Moscow’s orbit or gain their complete independence from both Moscow and Washington.
India, the second most populous country in the world, has announced its neutrality. Nehru has recognized Mao to the consternation not only of Washington but of his friends in the British Commonwealth. He refuses to lead the Asiatic peoples in a crusade against the Soviet Union under the aegis of the American dollar. He fears his own masses far more than he does American imperialism and prefers to balance himself between the two major world powers. He counts on getting American aid on his own terms and told that to the American industrialists right in their own country during his recent visit.
So humbled has the position of American imperialism in Asia become that the American journalists are forced to write how difficult it will be for the United States to continue domination over Japan and the Philippine Islands, who too are yearning for independence from their “benevolent” protector. When economic conditions in the Orient worsen, as they shortly must, the full force of the chain reaction from the Chinese debacle will first make itself felt.
Even before the events in China had reached their final stage, an atmosphere of defeat and gloom pervaded the corridors of the Pentagon. Differences were known to exist among the services but were kept under wraps with only a rumor here and there leaking out. The atomic blast in the Soviet Union announced in September 1949 knocked the lid from this internal wrangling and inaugurated the Battle of the Pentagon; In vain did the press plead against washing dirty linen in public to avoid hurting American prestige. The top brass as well as the top bourgeoisie knew that it was the other way round. The Kennan plan had misfired. The battle of the brass merely reflected the worsening position of American imperialism on the economic, political and military fronts. The United States was losing the cold war. And the grim thought was penetrating the minds of the American brass that it could not win a hot war.
There were of course no principled differences between the branches of the military whose heads testified before the House Armed Services Committee in October 1949. Each service wanted the lion’s share of the budget. Such differences always exist and can easily be settled in quite conference.
What happened was that a section of the bourgeoisie now intervened in the struggle and utilized the grievances of the Navy to make its position known. It had been previously overawed by the military clique that had begun to stockpile bombs, and at the same time assured the country that the Third World War would be a lark where a handful of airmen would destroy the Soviet Union, if necessary, without any appreciable damage to this country. So psychologized had the American people become with this insidious propaganda that it was even necessary for Omar Bradley, Chief of Staff, to caution against expecting too easy a victory.
But the propaganda had taken hold causing a terrific disillusionment upon Truman’s announcement that the American monopoly of the atom bomb was at an end. The more perspicacious capitalists who feared the “get tough” policy and saw its dangers to the American capitalist system, and those who wanted a more realistic approach to the coming war so that they would be sure to win it, combined to bring the issues out into the open.
The hearings themselves were of course on the low level of the Big Brass but in their analyses the heretofore silent capitalist press was able to make known the ramifications of the various problems that, are besetting American imperialism. No one took seriously the testimony of the Navy that it was immoral to bomb defenseless people with the new atomic weapon, especially since the admirals had previously asked for carriers to assume this same mission. But the thought was nevertheless brought home that if there was any successful retaliation on the part of the Soviet Union, the American bourgeoisie would be the first to reap the wrath of an aroused and deluded nation. They had to realize that they were playing with fire.
The hearings brought out the hopelessness of a military victory for the United States. If we read between the lines we find that a stalemate is the only thing that the Big Brass can assure the country. The Navy wanted carriers for re-invasion because they had no confidence that the Army could stop the Soviet forces short of the English Channel, Army boasts to the contrary notwithstanding. The generals correctly answered the Navy that, once driven out of Europe, a re-invasion would be impossible since no concentration of forces could be effected against an adversary equipped with the atom bomb.
No one took seriously the writings of General Arnold, the former Air chief, who envisioned an airplane blitzkrieg behind Soviet lines which would so disrupt their forces that they could not cope with the American forces. For the first time the country was apprised of the feebleness of the American military vis-à-vis the armed might of Soviet land forces. It was obvious that the United States could not by itself face Moscow’s superior numbers. This was acknowledged by all concerned.
Greater emphasis was placed on the Atlantic Pact. Yet no one expected to get adequate help from British, French and Belgian forces. Germany then assumed first importance in the calculations of the American military. Here is how the US News and World Report of December 9, 1949 reports the combined views of the Big Brass:
Mind you, the important thing is Germany. We can’t hold this strip of Western Europe without the Germans. Wo will put up a real fight and a lot of people will be killed, but we can’t hold it for sure without the Germans. And we’ve got to hold, got to, or the rest of the war will be one awful war with no decisive end. Just bombs and destruction and no decisive end.
What the article omits is that it is problematical that American imperialism can hold it even with the aid of German troops, that it will have little possibility of getting the West Germans to fight on its side and that if Washington does win over the Germans, it will do so only at the expense of losing the support of the rest of Western Europe.
The American people are also frightened. Irrespective of the fortunes of the armies in the field, the huge concentration of the country’s population in key cities as well as of its industries will be pulverized by the atom blasts of the Russians. Even if an impassable radar screen against airplanes is perfected no such defense against the ever growing Soviet fleet of modern schnorkel submarines is assured. Besides, the speedier development by Moscow of guided missiles already effective at a range of 500 miles spells disaster for the large coastal cities on the Atlantic and Pacific Seaboard. The cost of defense against the atom bomb is prohibitive even for the wealthiest country in the world.
The Battle of the Pentagon also paved the way for a section of the capitalists to express their fear of military control. The Committee on Economic Development, composed of solid bourgeois elements, warned the American people of the danger of a police state if the military continued to have the upper hand. Above all they did not want the Big Brass to have the final say on the use of the atom bomb. They remembered only too well what happened to the Japanese Empire where the capitalists became subservient to the warlords.
Even where the military seemed to be on safe ground in preparing the country to build up a defense against atom bomb retaliation, it ran into almost insurmountable difficulties. Industrialists who had huge capital investments on the seaboard and Great Lakes united in a campaign to prevent the Big Brass from transferring plants to the more sheltered Southwest. Instead, they demanded the construction of new plants in the old areas of concentration. Profits were to remain sacrosanct.
There were other repercussions to the Battle of the Pentagon, which we needed not discuss. But they all pointed in one direction. They showed the fear, the division and the confusion of the American industrialists. Their confidence had been shaken beyond repair. There is no longer any doubt that if they plunge the country into war it will be not because they feel certain to win but rather out of desperation arising from their well understood weakness.
There was only one hope on which the US banked heavily: that the Stalinist freebooters would collapse first as the result of the economic pinch so relentlessly exerted by Washington. But two things are worrying the State Department: that the economic squeeze is driving the Stalinists to expand all the more and that, threatened with an impasse, the Stalinists would themselves fight rather than succumb.
With the road of easy victory barred forever there is therefore once more talk of a deal with the Kremlin. No one has any illusions of the permanency of such rapprochment. It could at best be a breather to give American imperialism the opportunity to better prepare to launch its attack. But even a deal means a continuation of the cold war, conducted perhaps with a little less fanfare.
For a while the State Department tried to gain new. strength with the expectation of possessing soon a hydrogen bomb from 10 to 1,000 times more effective than the atom bomb. But the at first sly references to this more dreaded weapon convinced them that the American bourgeoisie and especially its supposed allies were far more frightened of the weapon than were the Russians, not to mention the fear that the masses would be driven to revolt. It was an even greater equalizer than the atom bomb.
The pleas for a new understanding became more insistent. The warmonger, Churchill, whose speech in Fulton, Missouri inaugurated the cold war, espoused this sentiment in the heat of the British election. Nor does it matter much that he did it to gain a few votes. He merely reflected the public will for peace which no European statesman could resist. And good conservative American capitalists and their Congressional representatives joined in this plea. The move is once more up to Washington.
Truman and Acheson are busily explaining to the American people the facts of life; the rules long ago set forth by Machiavelli and Clausewitz and adopted as an inherent part of diplomacy ever since. You must be strong if you wish to bargain. Let us wait a little until we gain vis-à-vis the Kremlin. But other voices are heard which say that time is not on the side of American imperialism. Delay will find the American imperialists in a still weaker position. Let us make this deal while there is still time. The Stalinists, they reason, will be assuaged by the American dollar. Money so spent will bring far greater returns than a Marshall Plan. The Kremlin by past experience can be relied on to forestall and break revolutions far more effectively than funds sent to Europe and Asia for that purpose. But irrespective of whether a deal comes now or a little later it will bring no relief to the masses and will be short-lived.
The peoples of the world are beginning to attune their thought processes to the atomic age. They readily express their fear at the terrific power over life and death that the mad rulers now possess. They are beginning to wonder in awe at the tremendous vistas that lie before them if atomic energy is harnessed for useful purposes. The seeming submissiveness of the masses merely reflects the deep thinking that is going on beneath the surface. When their minds are made up we shall see a lightning change in their reflexes. The fright afnd impotence of the American bourgeoisie are no small factor in convincing the American as well as the world masses that they must take matters in their own hands to avoid catastrophe. The choice is between socialism and death and the desire for life is as strong as ever.
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