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From New International, Vol. 6 No. 3, April 1940, pp. 72–74.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
“WILL WE GO IN?” is the question in every one’s mind. From one point of view, the answer is a matter of life and death. Yet, historically considered, the question is meaningless. We are already “in”. The precise point at which we will formally “enter the war” – i.e., when the US Government will extend its cooperation with the “democratic” belligerents from the economic to the military sphere – this is a technical detail that will be determined by considerations of imperialist strategy and mass psychology. The United States has been in the war since the first shot, and with every month the web of economic interest between this country and the Allies is woven tighter.
As this is written, it looks as though the war may finally have reached the stage of large-scale military operations. This is welcome news to the American business community. To quote the current news-letter of the National City Bank: “Although peace would be the greatest blessing that the world could possibly receive, the reports of peace moves during the past month (March) have been commonly described as a ‘peace scare’ and have been a cause of hesitation in the markets.” Current events in Scandinavia seem to be laying the dread spectre of peace.
It is easy to understand this attitude if one considers what the war, even in its “inactive”‘ phase, has already meant to the American economy. Last spring there were many signs that business was drifting downward to another serious slump. The mounting war tension that summer and the actual outbreak of war in the fall reversed the downward trend. The mere prospect of big orders from the Allies stimulated in the first two months of the war a 20% increase in industrial production, almost the biggest two-months increase on record. The military stalemate that ensued was reflected in a stalemate of American business, which has been drifting in the doldrums for the past few months. If the fighting in Norway develops into big-scale slaughter and destruction, prosperity will come back over here.
The dynamic effects this would have on our economy can be grasped if one considers that, even in the first six inactive months of the war, American exports have been 33% higher than in the same period a year ago. In February, the increase in exports was 59%, and if the current rate continues, 1940 exports will be $4,500,000,000 as against $3,200,000,000 for 1939. The greatest boom has been in aircraft, where 75% of Allied buying to date has been concentrated, and on which they plan to spend over here a special fund of $1,000,000,000. The national productive capacity has tripled in the past year, now standing at 12,000 planes a year, and by the end of 1940 it is expected capacity will be 30,000. The most optimistic possible calculation of the number of new planes that might be needed per year by our own commercial airlines is 7,000 – and this total assumes that the air lines would be carrying all the present Pullman passengers, as well as all railway express shipments and all first-class mail. No wonder they talk about a “‘peace scare”.
How admirably conscious of the interests of American imperialism is the occupant of the White House, is revealed by a recent article in Time describing the expansion and transformation of the United States Army under President Roosevelt:
“Any foreign military attaché looking at the new US Army will recognize it for what it is: a standing expeditionary force, designed for prompt conscript expansion into an expeditionary army of 750,000 active troops, 250,000 reserves ... Remembering that the US Army has fought in China. Siberia, Central America, and France, the General Staff has planned an outfit ready to be packed up and sent anywhere. The last place the Army expects to fight is on the US mainland.”
President Roosevelt exerts his remarkable political talents to maneuver the country into the war on the side of the Allies not because he is personally inhumane or villainous, not because he is in the pay of “Wall Street”, but simply because he is a responsible bourgeois statesman.
A review of the last decade of our history shows that war is the only perspective left for American capitalism. The basic problem that has long confronted our capitalist society is how to find big enough markets to absorb profitably the goods produced so plentifully by our superbly rationalized industrial system. The problem became acute with the 1929 stock market crash and the onset of the depression. The Hoover Administration tried, and failed, to solve it by a conservative defense of the status quo. Between 1933 and 1937, the New Deal worked out a temporary solution along reformist lines, based on the theory of the State intervening to moderate the class struggle and to redistribute national income by increasing the purchasing power of the masses. The State tried to prop up the mass market for the products of industry by means of heavy governmental spending, and also, indirectly, by legislation designed to strengthen labor’s bargaining position and to bring Wall Street and big business under some degree of State control. But the pressure of the big bourgeoisie, supported by conservative rural and small town elements, made progress in a reformist direction more and more difficult within the framework of capitalism. By the end of 1936, Federal expenditures had been reduced to the vanishing point. In the spring of 1937, the conservatives won the Supreme Court fight, a warning signal to Roosevelt that his leadership, was now, for the first time, seriously challenged. His response, characteristic of reformist politicians, was to try to placate his enemies by even greater concessions. In 1937, the Federal Government, for the first time since the beginning of the New Deal, took more out of the national income in taxes than it contributed in its spending programs. The result was the sharpest business decline in the nation’s history: the farm price index stood at 128 in May, 1937, at 92 in May, 1938; the Federal Reserve index of industrial production in that period slumped from 118 to 76.
This 1937 collapse was even more significant than the 1929 crash: it showed that American capitalism could no longer sustain itself within the borders of the United States unless the domestic market received regular blood-transfusions of Government spending. When this reformist course became politically impossible, Roosevelt lost no time in turning to the only alternative under capitalism: an aggressive world imperialist policy to win fresh markets and investment fields for American capitalism abroad. A war drive, furthermore, would get the support of those big bourgeois interests that violently opposed the “New Deal” reformist program of the New Deal. And it would distract the masses’ attention from the collapse of that reformist program. A few weeks after the first big break in the stock market in the fall of 1937, Roosevelt announced his new imperialist policy in the famous Chicago (“Quarantine the Aggressor!”) speech.
Since the war began last fall, the Administration’s war drive has gone through three phases, and now is entering a fourth.
Two days after the first news of the Nazi invasion, the NY World-Telegram editorialized:
“Congress has been chipping corners off the national defense program. The news from Northern Europe ought to put a stop to that. In fact, the Senate Appropriations Committee took one look at the newspapers yesterday and restored to a War Department bill the $15,000,000 fund for starting a third set of Panama Canal locks – an item which the House had dropped.”
The next day the Senate Appropriations Committee reported out without any cuts a naval bill for $967,400,000 for the coming fiscal year, biggest in history. Up to the Scandinavian flare-up, Congress had been following a course most distasteful to the Administration, of cutting army and navy appropriations and increasing farm, relief, and other non-military appropriations. However, “the news from Northern Europe ought to put a stop to that”.
The interests of American capitalism require our participation in the war. But there is an increasingly powerful pressure of mass sentiment against participation. (How much this will be changed by the actual outbreak of major hostilities, with possible large-scale Nazi bombings, remains to be seen.) This sentiment has greatly increased since the beginning of the war. Early in September, Gallup asked: “If it appears that Germany is defeating England and France, should the US declare war on Germany and send out army and navy to Europe to fight?’’ Two out of five answered: “Yes”. But when the same question was asked in February, only one out of five said “Yes”. The American masses share the apathy and cynicism of their European brothers as to the war aims of the “democracies”.
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