A View From The International Left-German Trotskyists Say No to SPD Coalition with Merkel For a Revolutionary Workers Party!

Workers Vanguard No. 1129	9 March 2018

German Trotskyists Say

No to SPD Coalition with Merkel

For a Revolutionary Workers Party!

The following article was issued on February 21 as a supplement to Spartakist, newspaper of our comrades of the Spartakist-Arbeiterpartei Deutschlands. On March 4, a referendum of German Social Democratic Party (SPD) members sanctioned a grand coalition federal government known as GroKo, renewing the SPD’s current partnership with Chancellor Angela Merkel’s Christian Democrats (CDU) and their CSU Bavarian affiliate.

After many years of selling out the interests of the working class in coalition governments with the Greens and the CDU/CSU, the SPD has plunged into a deep crisis. The SPD leadership’s swing back toward again forming a grand coalition with the CDU/CSU led to open opposition within the SPD. There had been tremendous enthusiasm in the SPD base when, in the wake of the SPD’s major election setback last September, its leadership announced that it would no longer participate in a GroKo. A rude awakening soon followed, and the SPD leadership is now trying to make a new GroKo palatable to its base.

At the SPD party conference on January 21, the leadership barely managed to obtain a narrow majority for entering negotiations with the CDU/CSU for a new GroKo. Following the conclusion of these negotiations, SPD leaders now aim for a “yes” vote for GroKo with its anti-worker policies, an aim that is supported by the DGB trade-union tops. There is strong opposition to GroKo in the SPD, and we Marxists also say: “No to GroKo!” Rejection of the GroKo would destabilize German imperialism and the EU [European Union], thereby making international class struggles easier.

While the Jusos [SPD youth group] are leading the campaign in the SPD, they are giving voice to a much broader dissatisfaction, especially among the SPD’s working-class base. For 20 years the SPD has, virtually without interruption, helped administer German capitalism in coalitions with bourgeois parties, with catastrophic results for the working class and immigrants. Particularly hated are Agenda 2010 and the Hartz Laws adopted [early last decade] by the SPD/Green government led by [former SPD Chancellor] Gerhard Schröder, which have led to systematic wage-slashing, two-tier wage scales and an ever-greater redistribution of wealth from the bottom to the top. The Left Party, wherever it is in state government, has carried out policies identical to those of the SPD. The working class is bled dry so German capitalists and bankers can fill their pockets. The low-wage sector of the workforce has become the largest in all of Europe.

The SPD [Schröder] government proclaimed the “war against terror” that has fanned racist witchhunting of Muslims and massively expanded the means of state repression, all of which is ultimately aimed at the entire workers movement. With their treacherous policies, the SPD and Left Party paved the way for the rightists and the [racist/nationalist] AfD [Alternative for Germany]. Successfully combating the consequences of these policies requires hard class struggle against the capitalists.

The opposition in the SPD remains wholly within the bounds of reformism, believing it possible to achieve a “social” capitalism through elections and parliaments. No, socialism cannot be achieved through administering the bourgeois state in a parliamentary democracy. Rather, the bourgeois state must be smashed and the dictatorship of the proletariat established under the rule of workers councils.

The GroKo and Popular Fronts

The Spartakist-Arbeiterpartei Deutschlands, section of the International Communist League, opposes not only GroKo but all coalitions (popular fronts) of bourgeois workers parties (the SPD and Left Party) with bourgeois parties. Bourgeois workers parties are, as Lenin said, parties with a working-class base but a leadership that pursues pro-capitalist politics. Similarly, we opposed on principle the SPD/Green coalition of Schröder and [Joschka] Fischer and are also against a possible coalition of the SPD, Left Party and Greens. The capitalist class is not averse to such governments when the task is one of pushing through unpopular measures directed against the working class. The interests of the working class are always subordinated to the bourgeois component in such alliances.

Even if a bourgeois workers party [like the SPD] forms a government by itself or in coalition with another bourgeois workers party (like the Left Party), such governments do not constitute “workers governments” (as some leftists claim) but capitalist governments. Between 2002 and 2011, the coalition of the SPD and the Left Party/PDS [Party of Democratic Socialism] in the Berlin Senate had as its central task imposing an austerity program against public workers and salaried employees and ripping up their collective bargaining agreements. This coalition came into being only in order to attack the workers and guarantee the profits of the capitalists.

In cases where a mass reformist workers party claims to represent the interests of the working class and runs independently of and against the parties of the bourgeoisie, it can be appropriate for revolutionists to employ the tactic of critical electoral support (in Lenin’s words, “the way a rope supports a hanged man”). Critical electoral support serves as a means for revolutionaries to deepen the contradiction between that party’s proletarian base and its pro-capitalist leadership. However, the inclusion of even very small capitalist formations (like the Greens or other liberal formations) acts as a guarantor of the bourgeois program, suppressing this contradiction.

Support to the EU Is Anti-Working-Class

In contrast to the SPD and the Jusos, we Trotskyists, i.e., proletarian-internationalist Marxists, stand in fundamental opposition to the EU, which is dominated by German imperialism. The EU is a consortium of capitalist states. Its goal is to both maximize the exploitation of the working class and enforce the economic domination over and subjugation of the poorer countries such as Greece, Portugal and Spain by the imperialist powers, centrally Germany. The common currency, the euro, is the EU’s financial instrument to this end. The purpose of the EU is to increase the competitiveness of the European imperialists vis-à-vis their rivals in the U.S. and Japan. Despite left social democrats’ fantasies about a “supranational,” “social” Europe, the EU is an unstable formation exposed to the continual tensions arising from the different national interests of the European imperialists, which repeatedly threaten to rip the EU apart.

In the July 2015 referendum held in Greece by the bourgeois party Syriza to determine “yes” or “no” to additional EU-dictated austerity measures, over 60 percent of voters delivered a stinging rebuke to the imperialists and voted “OXI” (no). Preceding the referendum, our comrades of the Trotskyist Group of Greece (TOE) called for “OXI,” pointing out: “Anything but a clear ‘no’ in this referendum is a betrayal of the interests of workers here and internationally.” The TOE advocates the exit of Greece from the EU and the euro. Similarly, our British section, the Spartacist League/Britain, voted for Brexit. Lenin wrote in “On the Slogan for a United States of Europe” (August 1915):

“From the standpoint of the economic conditions of imperialism—i.e., the export of capital and the division of the world by the ‘advanced’ and ‘civilised’ colonial powers—a United States of Europe, under capitalism, is either impossible or reactionary....

“Of course, temporary agreements are possible between capitalists and between states. In this sense a United States of Europe is possible as an agreement between the European capitalists…but to what end? Only for the purpose of jointly suppressing socialism in Europe, of jointly protecting colonial booty against Japan and America.”

“Freedom for German Capital!” is at the core of what the EU is all about: the deregulations and privatizations, which apply to hospitals, the service sector, public transportation and utility companies, are mandated by the EU and carried out by successive governments. EU policies are massively directed against the working class in Germany, which means that it is in the workers’ own interest to be against the EU.

But the SPD and the Jusos hail the selfsame EU as the best thing that ever happened to Europe, and the Left Party provides the rent-a-crowd for this lie. Many workers share the SPD’s position, with the trade-union tops preaching that Germany’s leading role in the EU is in the interest of the workers since Germany’s export-oriented industry profits massively from the euro. Behind this is the false notion that workers have joint interests with their bosses, a view also promoted by the lie that it is in the workers’ interest to defend “Standort Deutschland” [Germany: the place for investment and industry]. Using the threat that otherwise plants will be moved [to other countries], the Social Democratic trade-union bureaucracy opened the way to a deep split in the working class by establishing a two- or three-tier wage system, with increasing parts of the working class losing ever more of their rights through precarious employment conditions. By increasing profits, these anti-worker measures have led directly to German imperialism assuming a greater leadership role in the EU.

The trade-union bureaucrats have further strengthened this system of precarious employment by failing to organize these workers and striking rotten deals with the bosses. Take IG Metall [the metal workers union], which agreed in its union contract to a clause extending the period from 18 to 48 months before temporary workers are to be hired permanently (a farce in either case, since they’re transferred or fired beforehand). Such precariously employed workers feel less and less represented by the SPD, which is, after all, centrally responsible for their plight. And they are also not represented by the trade unions, which leads to depoliticization. Even worse, due to their precarious status, or the fear of it, workers are driven to the AfD, which is itself deeply anti-working-class. What is necessary is for the unions to organize all workers and take up the fight against precarious employment. The still well-organized skilled workers must grasp that this system will in the long run destroy the unions and with them their still relatively good working conditions.

Opposition to the EU and to German imperialism at home is central to this struggle. Internationalist class struggle is necessary to defend workers against assaults from the EU and the capitalists! Germany is still the industrial powerhouse of Europe, and its powerful working class, when set in motion, can play a decisive role in this desperately needed struggle.

What’s necessary is a class-struggle leadership of the trade unions, one that will not play by the bosses’ rules and those of their government. It will then become clear that the state and government stand on the side of the bosses. Police out of the DGB! For mass pickets that no one crosses! Programs of public works at full union wages to reintegrate the long-term unemployed! A 30-hour workweek at full pay for all! Down with labor-broker hiring, temporary jobs and contract work! Down with the Hartz Laws! For medical treatment and care at the highest level, free at the point of service! For class-struggle solidarity with the Greek and South and East European workers! Ultimately, only unity on a socialist basis, achieved through proletarian revolutions and the expropriation of the bourgeoisies, can bring about rational worldwide economic development without exploitation. For the Socialist United States of Europe!

SPD: Trojan Horse of Counterrevolution

Since the [1990] capitalist counterrevolution in the DDR [the East German deformed workers state] and shortly afterward in the Soviet Union, the German bourgeoisie has regarded the “welfare state” as superfluous and has increasingly undermined it. The necessity of competing with the social gains in the DDR and giving capitalism a more humanitarian face has vanished. The destruction of the DDR made it possible for the European imperialists to carry out their plans to privatize large parts of the postal service, railways and airports. The Treuhand [privatizing agency], which smashed the East German Kombinate [industrial conglomerates], was the model years later for the austerity measures forced on Greece by the Troika [EU, IMF and European Central Bank].

We Trotskyists always stood for unconditional military defense of the DDR, the other deformed workers states of East Europe and the Soviet degenerated workers state against internal counterrevolution and the imperialist threat. And we do so today with the remaining deformed workers states of China, Cuba, Vietnam, Laos and North Korea. The SPD under Oskar Lafontaine, its candidate for chancellor [in 1990], was a driving force behind counterrevolution in the DDR. Lafontaine preferred a slower capitalist reunification, in order to make Anschluss [annexation] to imperialist West Germany more palatable to the working class of the DDR. The SPD was the Trojan horse of counterrevolution and central to its purpose was selling the notion that bourgeois parliamentary democracy is the best of all systems. The SED-PDS [the Stalinist ruling party in the DDR], which sold out the DDR when Mikhail Gorbachev gave the green light for capitalist reunification, also bears responsibility.

We Spartacists, on the contrary, in 1989-90 fought for revolutionary reunification of Germany through a political revolution [in the East] to sweep away the Stalinist bureaucracy and a socialist revolution in the West to overthrow the capitalist class. In the elections to the Volkskammer [DDR national assembly] in 1990, we were the only organization that fought for “No to capitalist reunification!” and “For a workers soviet Germany!” We are proud of our struggle, which we lost to overwhelming forces. It was a litmus test for revolutionaries, for anyone who does not defend already achieved gains cannot win new ones.

Full Citizenship Rights for All Who Live Here

In a FAZ article (20 November 2017), Nils Heisterhagen, policy adviser of the SPD parliamentary fraction in the [state of] Rhineland-Palatinate, demands: “‘Merkel must go,’ this has to come from the SPD soon.” He insists that “the SPD must sound the call for an attack on neoliberal-style capitalism. It is not the right-wing populists that are the SPD’s main enemy but the neoliberal, global, self-righteous elite I initially referred to.” Not a word from Heisterhagen about class struggle or mobilizing the working class against the bosses.

Instead, he argues that to fight the AfD the SPD must make the question of “internal security” its own cause, writing: “Internal security is important for everybody—from the little man to the company boss, but above all for many people in the ‘middle.’... For what is needed for more security is a strong state.” Heisterhagen advocates heightened repressive measures against immigrants and refugees. At present, increased state repression is directed particularly against the PKK [Kurdistan Workers Party], with Kurdish demonstrations in effect banned. Down with the ban on the PKK and all Kurdish associations! Down with the state-promoted anti-Muslim witchhunt!

The bourgeois state and its institutions cannot be used to advance the interests of the working class. On the contrary, the working class must recognize that the bourgeois state is fundamentally hostile to it. A fight for full citizenship rights for everyone who has made it here is necessary to sweep away the divisions in the working class along national, ethnic and religious lines.

People flee their countries primarily because of imperialist wars and trade policies—like those of the EU—that destroy the economies of oppressed neocolonial countries. In 1999, under the pretext of preventing a new “genocide,” the SPD/Green government seized the chance to finally send the Bundeswehr [German army] into battle by joining NATO’s war against Serbia. Since then, the Bundeswehr has been playing an ever-larger role in all sorts of imperialist slaughter. The solution is destruction of the system of imperialist exploitation, oppression and war, for which socialist revolutions in the imperialist centers will be decisive. That is what the ICL is fighting for.

Opportunism in the Left

The fake-Trotskyist SAV [German section of Peter Taaffe’s Committee for a Workers’ International], which works inside the Left Party, sees “both advocates and opponents of a GroKo as driven not by fundamental differences of content but by fear.” While there does exist a great deal of political agreement between the Jusos and the SPD leadership, the “no” to GroKo in fact reflects great dissatisfaction in the SPD’s proletarian base. For its part, the SAV concentrates on building the social-democratic Left Party and refers to the SPD as a “former workers party.” As late as 1990, these reformists were in the SPD and called for the openly counterrevolutionary SPD to go “on the offensive” in the DDR. Now they share responsibility for the class-collaborationist politics of the Left Party and in principle have nothing against its popular-frontist alliances and betrayal of the working class.

The pseudo-Trotskyist Gruppe ArbeiterInnenmacht (GAM) [Workers Power Group] has grasped that there is a polarization in the SPD. However, if you look at the practice of this organization, it is shaped by tailing after the Social Democracy. They share the SPD’s pro-EU line and oppose the result of the Brexit referendum: “Leaving the Union or the Euro zone...constitutes a reactionary response to the crisis.” In Moscow in 1991, these “revolutionaries” stood on the barricades of Boris Yeltsin, who was leading the counterrevolution in the Soviet Union. Their tradition is one of always calling for voting for the SPD and/or the Left Party, even when these organizations are campaigning for coalitions with bourgeois parties. The GAM claims to be exploiting a contradiction [within a bourgeois workers party], one that is no longer there when it runs as part of popular-front alliances. For the GAM, the political independence of the working class is a matter of indifference.

The Lessons of October

In voting for war credits in August 1914, the SPD openly passed over to the side of its own capitalist class. When the workers of Russia under the leadership of Lenin’s and Trotsky’s Bolsheviks carried out the first successful socialist revolution, the SPD leadership opposed this revolution. Fundamental to the Bolshevik victory was that Lenin’s party had early on split from the reformist Mensheviks; the Bolsheviks were built as a conscious vanguard party. When the defeat of German imperialism in World War I could no longer be concealed and German workers and soldiers in November 1918 began to set up councils on the Russian model, the SPD leadership sprang to the aid of rotting capitalism in order to save the capitalist class from a socialist revolution in Germany.

The SPD leaders Ebert, Noske and Scheidemann even called their capitalist government the “Council of People’s Deputies,” obviously so as to mislead the workers and soldiers in revolt as to its character. The SPD was aided by the centrist (revolutionary in words, reformist in deeds) USPD [Independent Social Democratic Party of Germany] led by Hugo Haase and Karl Kautsky, who had been expelled from the SPD. In November/December 1918, the SPD and USPD formed a coalition government. At the turn of the year, having the USPD in the government was no longer necessary. The SPD heading the capitalist state power used the arch-reactionary Reichswehr and Freikorps to go after and defeat the revolutionaries. At the behest of the SPD, Rosa Luxemburg and Karl Liebknecht were murdered by the Freikorps, beheading the leadership of the newly founded KPD [German Communist Party].

By arguing that the National Assembly (parliament) and workers councils could and should exist side by side, Kautsky’s USPD aided the SPD in re-establishing bourgeois order. This is fundamentally wrong: a government resting on parliament is a capitalist government (the dictatorship of the bourgeoisie) and irreconcilable with a government of workers councils (the dictatorship of the proletariat). When the situation had stabilized, the SPD set about dissolving the workers councils.

Up to the end of 1918, the Spartakusbund [predecessor to the KPD] had belonged to the USPD. The Spartakusbund around Luxemburg and Liebknecht should have split much earlier from the SPD and USPD, as Lenin had done in Russia. This could have given the working class the necessary leadership in the class struggles against the imperialist war and in the 1918 revolution.

The young KPD was still dragging too much social-democratic baggage with it when once again a revolutionary crisis erupted in Germany in 1923. French occupation of the Ruhr and the countermeasures of the German government set off a deep crisis marked by a disintegrating economy and hyperinflation. The workers were fleeing the SPD and the trade unions linked to it in droves. Instead of orienting the working class toward the seizure of power, the KPD pursued the illusion that the left wing of the Social Democracy could be a “revolutionary” partner and joined the SPD in capitalist state governments in Saxony and Thuringia, as the supposed springboard to revolution. Instead, entry into these governments served to put a halt to revolution. The 1923 defeat of the German Revolution was extremely demoralizing for the working class of the Soviet Union, which had been urgently hoping for international extension of its revolution. This defeat laid the basis for the rise of the Stalinist bureaucracy in the Soviet Union.

Thus, the basic question is the stance leftists take toward the bourgeois state, the bourgeoisie’s instrument of repression to maintain its class rule. To overthrow this state, what is required is a revolutionary workers party based on the example of Lenin’s Bolsheviks and anchored in the working masses. Building such a party that will intervene in and lead class struggles is an urgent historical necessity.

***"A Rose Is A Rose Is A Rose"- Gertrude Stein In Exile

BOOK REVIEW

March Is Women’s History Month

The Autobiography Of Alice B. Toklas, Gertrude Stein, Vintage Books, New York, 1990

Okay, Gertrude so there was no there, there in Oakland. (I agree, having lived there for a period at a much later time-San Francisco, however, is a different matter). So, by hook or crook, Miss Gertrude Stein gets herself (along with her older brother) by a circuitous route to turn of the century Paris (turn of the 20th century that is) and becomes not only an international literary and cultural figure in her own right but a veritable magnet for every "advanced' bourgeois cultural tendency in the then known Western civilized world. Starting with the nova Paris anti-academy art world as the likes of Picasso, Braque and Matisse and their schools take it by a storm on through to the sparse World War I years when the flower of European culture was almost destroyed to a re-emergence in the aftermath of that war with "lost generation" types like Hemingway and Fitzgerald we get a bird's eye view of important trends in modern cultural history during the first third of the 20th century. And of Stein's own struggle to get the kind of literary recognition she craved and desired.

What we do not get is anything that, even with the looser standard for such endeavors in the beginning of the 21st century, that we recognize as autobiography either of the ostensible subject of the book, Stein's long time companion (to use a quaint term of the time for two women living together) Alice B. Toklas or Ms. Stein herself. Nor as we suppose to. What we are treated to is a `modern' writing sensibility trying to free up the language (and grammatical constrains) from their 19th century moorings. More conventionally we are given a travelogue, gossip column, some helpful hints and some very witty writing that gives tidbits of what Ms. Stein thought of literature, her place in it and the place of others in her literary pantheon.

In some sense this book, while quite readable even today, is not for the faint-hearted, or those who are not modern Western literature majors or readers of something like "The New York Review Of Books". Fortunately I am a devoted reader of that magazine and therefore the seemingly hundreds of literary figures that Stein `name drops' along the way I had at least passing familiarity with. Some of the many art figures that passed through I was less sure of. What is clear is that Ms. Stein's `mobile salon' (for lack of better words to trace this pair's movements) and her literary achievement here is an echo from a bygone era. Nobody today, as least in the circles I run in or want to run in, could stand up to the `precious' visits by English and other celebrities that dropped in Stein's residences. Or the standard variations on the European grand tour by American college students or young marrieds that made a stop obligatory. Or the stifling aimlessness and routinism of many the various denizens of the Paris of the day, famous or not. But in a world that currently suffers from serious disconnects with its cultural past it is interesting to read about those who had time to "do' the literary scene. But, mainly, get this book for some very clever writing by Ms. Stein.

The Bolshevik Revolution and Women’s Liberation

Workers Vanguard No. 1107 10 March 2017 TROTSKY LENIN The Bolshevik Revolution and Women’s Liberation (Quote of the Week) On International Women’s Day in Petrograd in March 1917, a mass outpouring of working women sparked the revolutionary upheaval that culminated in the Russian October Revolution. The smashing of capitalist class rule brought unheard-of gains for women in all areas of public and private life. Despite economic backwardness and poverty, the young Soviet workers government sought to undermine the material foundations of women’s oppression, which is rooted in the institution of the family. The Bolsheviks understood that complete social equality could only be attained with the abolition of classes in a world socialist society. In a 1920 commemoration of International Working Women’s Day, Bolshevik leader V.I. Lenin underscored the fact that the fight for women’s liberation is inseparable from the fight for international socialist revolution. Capitalism combines formal equality with economic and, consequently, social inequality. That is one of the principal features of capitalism, one that is deliberately obscured by the supporters of the bourgeoisie, the liberals, and is not understood by petty-bourgeois democrats. This feature of capitalism, incidentally, renders it necessary for us in our resolute fight for economic equality openly to admit capitalist inequality, and even, under certain conditions, to make this open admission of inequality the basis of the proletarian statehood (the Soviet Constitution). But even in the matter of formal equality (equality before the law, the “equality” of the well-fed and the hungry, of the man of property and the propertyless), capitalism cannot be consistent. And one of the most glaring manifestations of this inconsistency is the inequality of women. Complete equality has not been granted even by the most progressive republican, and democratic bourgeois states. The Soviet Republic of Russia, on the other hand, at once swept away all legislative traces of the inequality of women without exception, and immediately ensured their complete equality before the law. It is said that the best criterion of the cultural level is the legal status of women. This aphorism contains a grain of profound truth. From this standpoint only the dictatorship of the proletariat, only the socialist state could attain, as it has attained, the highest cultural level. The new, mighty and unparalleled stimulus given to the working women’s movement is therefore inevitably associated with the foundation (and consolidation) of the first Soviet Republic—and, in addition to and in connection with this, with the Communist International. Since mention has been made of those who were oppressed by capitalism, directly or indirectly, in whole or in part, it must be said that the Soviet system, and only the Soviet system, guarantees democracy. This is clearly shown by the position of the working class and the poor peasants. It is clearly shown by the position of women. But the Soviet system is the last decisive struggle for the abolition of classes, for economic and social equality. Democracy, even democracy for those who were oppressed by capitalism, including the oppressed sex, is not enough for us. It is the chief task of the working women’s movement to fight for economic and social equality, and not only formal equality, for women. The chief thing is to get women to take part in socially productive labour, to liberate them from “domestic slavery,” to free them from their stupefying and humiliating subjugation to the eternal drudgery of the kitchen and the nursery. This struggle will be a long one, and it demands a radical reconstruction both of social technique and of morals. But it will end in the complete triumph of communism. —V.I. Lenin, “International Working Women’s Day” (4 March 1920)

From The Marxist Archives- On the Need for a Workers Party

From The Marxist Archives- On the Need for a Workers Party

Workers Vanguard No. 1126 26 January 2018 TROTSKY LENIN On the Need for a Workers Party (Quote of the Week) This January marks the anniversary of the 1938 founding conference of the Socialist Workers Party (SWP), which was the U.S. section of Leon Trotsky’s Fourth International. We reprint below excerpts from the SWP’s Declaration of Principles on the need for a Leninist vanguard party to lead the proletariat in the fight for socialist revolution. In the early 1960s, the founding cadres of the Spartacist League fought within the SWP to uphold this understanding. They were bureaucratically expelled for opposing the SWP’s deepening capitulation to non-working-class political forces—from Fidel Castro’s petty-bourgeois guerrilla fighters in Cuba to the misleaders of the black struggle in the U.S., particularly black nationalists. Today, the program of the International Communist League, including the fight to reforge the Fourth International, represents the Marxist continuity of the revolutionary SWP. The working class, under capitalism and in the initial stages of the socialist revolution, is neither economically nor socially nor ideologically homogeneous. It is united in terms of fundamental historical class interest, and by the urgent needs of the daily class struggle. However, it still remains divided by different income levels and working conditions, by religion, nationality, culture, sex, age. Through the perverting influence of capitalist oppression and propaganda, it is further divided by conflicting ideologies, and weakened by the low cultural and educational level of many of its members. There are, moreover, the divisions between various sections of the working class and its potential allies in the revolutionary struggle. For these reasons, the working class cannot, as a whole or spontaneously, directly plan and guide its own struggle for power. For this, a directing staff, a conscious vanguard, arising out of the ranks of the proletariat and based upon it, participating actively in the day-by-day struggles of the workers and in all progressive struggles, and planning clear-sightedly the broader strategy of the longer-term struggle for state power and socialism, is indispensable. This staff and vanguard constitutes the revolutionary party.... The program of the revolutionary party rests upon the great principles of revolutionary Marxism expounded by Marx, Engels, Lenin, and Trotsky, and representing the summation of experience of the working class in its struggle for power. These principles have been verified in particular in the experiences of the last world war and by the victory of the Russian proletarian revolution. They have been concretized in the basic documents of the first four congresses of the Communist International and the fundamental programmatic documents put forward by the movement for the Fourth International in the past fourteen years. The SWP stands upon the main line of principle developed in these documents. — Declaration of Principles,” printed in The Founding of the Socialist Workers Party (Monad Press, 1982)

Ideologues of Decaying Capitalism The Bankruptcy of Liberal Economists By Joseph Seymour and Bruce André

Workers Vanguard No. 1125	12 January 2018

Ideologues of Decaying Capitalism

The Bankruptcy of Liberal Economists

By Joseph Seymour and Bruce André

(Part One)

“This expropriation [of capitalist property] will make it possible for the productive forces to develop to a tremendous extent. And when we see how incredibly capitalism is already retarding this development, when we see how much progress could be achieved on the basis of the level of technique already attained, we are entitled to say with the fullest confidence that the expropriation of the capitalists will inevitably result in an enormous development of the productive forces of human society.” [emphasis in original]

— V.I. Lenin, The State and Revolution (1917)

Lenin thus summarized Karl Marx’s fundamental critique of the capitalist system as well as the ultimate goal of socialism. Marxists gauge human progress by the development of mankind’s productive forces, from the stone tools of primitive society to present-day science, technology and the modern factory. With the advent and development of industrial capitalism beginning in the late 18th and early 19th centuries, one could envisage for the first time a future end to scarcity and class divisions. However, the private ownership of the means of production increasingly acted as a brake on the further development of the productive forces, not least through periodic economic crises. The emergence of modern imperialism at the end of the 19th century marked the onset of an epoch of global capitalist decay. The major capitalist powers, having divided the world through imperial conquest, embarked on a series of wars for its redivision, seeking to expand their colonial holdings and spheres of domination at the expense of their rivals.

The goal of proletarian revolution is to resolve the contradiction at the heart of capitalism, in which production for private profit stifles overall productive growth. Collectivizing the means of production and making the bounty of society available to all, a workers state will organize all of industry in the way that an individual assembly line is today conceived: according to a rational plan. An international socialist economy, by applying scientific planning to the entire economic system, will unleash a qualitative development of the productive forces and of labor productivity. This will liberate the productive capacities of mankind, ultimately eliminating economic scarcity and, with that, laying the material basis for the disappearance of classes and the withering away of the state.

In contrast to that Marxist view, the equation of capitalism with unlimited economic growth was an article of faith for bourgeois economists of the post-World War II generation. Today, that faith has largely faded. In the eyes of liberal economists, the meager rate of economic growth experienced in the U.S. in the past few decades has become the “new normal.” Lawrence Summers, a key economic operator in the Bill Clinton administration in the 1990s, sees the advanced capitalist countries as having entered a prolonged period of “secular stagnation,” reviving a notion that originated among liberal Keynesians like Alvin Hansen during the Great Depression of the 1930s.

That view was reflected in the 2016 presidential election as Hillary Clinton offered nothing except more of the same—“America is great”—with maybe some minor tinkering. Even her left-liberal (“progressive”) Democratic Party challenger Bernie Sanders did not claim that his policies would lead to a substantial boost in economic output but only that they would bring about a somewhat more equitable redistribution of income. Right-wing demagogue Donald Trump promoted the patent lie that he would double the current annual rate of economic growth from 2 percent to 4 percent, or even triple it.

Now, Trump and the Republican-dominated Congress, resurrecting Ronald Reagan’s supply-side economics, have pushed through a massive tax cut for corporations and the ultrarich. The idea that the benefits resulting from tax breaks for the wealthy will “trickle down” to the rest of the population in the form of increased investment, more jobs and higher wages is even more ludicrous today than it was in the 1980s, when it was the centerpiece of Reaganomics. American businesses are already sitting on an unprecedented stockpile of more than $2.4 trillion in cash. Apple and General Motors are hoarding almost 30 percent of their total value in cash. Why are companies not investing those staggering sums in new plants, machinery and additional workers? The obvious answer is that they lack confidence that such investment would generate an acceptable rate of return.

Meanwhile, the Democrats do not even pretend to offer a policy alternative that might significantly increase the rate of growth. Paul Krugman, probably the country’s best-known “progressive” economist because of his regular column in the New York Times, defended Hillary Clinton during the presidential campaign on the grounds that government policy has little effect on economic growth, a supposedly mysterious process beyond the ken of his profession to understand, much less change:

“What do we know about accelerating long-run growth? According to the [Congressional] budget office, potential growth was pretty stable from 1970 to 2000, with nothing either Ronald Reagan or Bill Clinton did making much obvious difference. The subsequent slide began under George W. Bush and continued under Mr. Obama. This history suggests no easy way to change the trend.”

—New York Times, 15 August 2016

The Falling Rate of Profit

A recent, book-length version of the “there’s not much we can do about economic growth” school of thought is Marc Levinson’s An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy (2016). A former economics and finance editor of the Economist, house organ of Anglo-American bankers, Levinson strikes a contrarian pose, gleefully debunking the economic policy doctrines of both wings of the bourgeois political spectrum: Keynesianism on the left and monetarism and supply-side economics on the right. He contends that the relatively high rates of growth experienced by the advanced capitalist countries in the three decades after World War II amounted to a fortuitous historical accident that cannot be replicated by any kind of government policy.

A much weightier expression (in every respect) of historical pessimism with regard to the American economy is a recent book by a prominent liberal academic economist, Robert J. Gordon, The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (2016). Unlike An Extraordinary Time, which has a slapdash, journalistic quality, Gordon’s book (a 700-plus-page tome) is a work of serious scholarship. While Gordon’s argumentation differs somewhat from that of Levinson, as does the historical scope of his study, his conclusion is basically the same:

“This is a book about the drama of a revolutionary century when, through a set of miracles, economic growth accelerated, the modern world was created, and then after that creation the potential for future inventions having a similar impact on everyday life of necessity was inevitably diminished. The implications for the future of U.S. and world economic growth could not be more profound....

“The economic revolution of 1870 to 1970 was unique in human history, unrepeatable because so many of its achievements could happen only once.”

Gordon’s use of the term “miracles” underscores his belief that mere mortals cannot consciously control the quantity and content of the material wealth created by their labor.

In the introductory section of An Extraordinary Time, Levinson defends Obama against a charge leveled by right-wing scribe George F. Will, who stated: “Making slow growth normal serves the progressive program of defining economic failure down.” To this Levinson replies, “as if the rate of economic growth were a matter of presidential discretion.” It is, of course, true that in capitalist America the policies of a given administration usually have a marginal effect on economic growth.

The expansion (or contraction) of the production of marketable goods and services under capitalism is mainly determined by the extent to which the executives of large corporations and Wall Street financiers invest profits in new productive facilities, especially those embodying more advanced (labor-saving) technologies. What drives capitalist investment is not the impulse to maximize output or labor productivity but rather to maximize the rate of profit (i.e., the ratio of profit to the market value of the means of production).

However, Marx, in one of his key insights, demonstrated that there is an inherent tendency for the rate of profit, the driving force of the capitalist system, to decline over time. By prompting capitalists to cut back their investments, a falling rate of profit generates periodic crises, usually triggered in financial markets. The result is a contraction of output and increased unemployment.

Marx’s explanation for the falling tendency of the rate of profit flowed from his understanding that surplus value—the unpaid portion of workers’ labor—is the source of profit, not the capitalists’ expenditures on the means of production (e.g., machinery and raw materials). Marx observed that especially in periods of economic boom, when workers can feel emboldened to demand higher wages, individual capitalists invest an increased amount of capital in plant upgrades and such in order to cut labor costs. By doing so, the capitalist gains a competitive advantage. However, as all capitalists follow suit, the total amount of surplus value generated per amount of capital invested—i.e., the average profit rate—declines.

Capitalists invest in expanding productive capacity on the assumption that they will be able to sell the goods produced at a particular rate of profit. However, as the profit rate drops, they find themselves unable to sell their products at the expected profit rate. They cut back investments and slash production, resulting in an economic downturn. Workers are thrown out onto the street; entire factories become rusted relics.

Bourgeois economic ideologues, from Keynesians to monetarists and supply-siders, identify the laws governing the capitalist mode of production with the laws governing production as such. In the absence of a revolutionary working-class alternative, the appeal of Trump’s right-wing populist demagogy is enhanced by the fact that both liberals, like Krugman and Gordon, as well as centrists on the bourgeois political spectrum, like Summers and Levinson, insist that it is not possible to overcome the decades-long stagnation in the living standards of American working people.

From Kennedy’s “New Economics” to Obama’s “New Normal”

In the past, Democratic politicians, especially those on the more liberal wing of the party, promised to deliver a new era of economic prosperity. John F. Kennedy’s successful 1960 presidential campaign against Richard Nixon, who had been vice president in the Republican Eisenhower administration (1953-61), was dominated by Cold War tensions with the Soviet Union and fears among the ruling class that the U.S. was falling behind in science and technology. In its economic message, Kennedy’s campaign resembled Trump’s. His platform called for boosting economic growth and dynamism under the slogan “Let’s get this country moving again.” He pointed to the sluggish economic performance, punctuated by two recessions, during Eisenhower’s second term. In this respect, the campaign tactics used by Kennedy against Nixon and Eisenhower were similar to those used by Trump against Hillary Clinton and Barack Obama.

In An Extraordinary Time, Levinson retrospectively criticizes liberal Keynesians like Walter Heller, chief economic adviser to both the Kennedy and Lyndon Johnson administrations. Heller claimed that fiscal policy (taxation and government expenditure) could be fine-tuned so as to maintain full employment and maximize economic growth. By the late 1970s, Democratic politicians and their intellectual apologists were singing a different, more downbeat, tune.

Capitalizing on the downfall of Nixon resulting from the Watergate scandal, in 1977 Jimmy Carter, a centrist Southern Democrat (like Bill Clinton), entered the White House. A few years later, the hapless Carter administration confronted an unusual condition termed “stagflation”: rapidly rising prices combined with a recession. Levinson describes the widespread economic insecurity that propelled the right-wing Republican Reagan to the presidency in 1981: “The conservative ascendance came only as mortgage interest rates above 11 percent made young people despair of ever buying a home and as layoff notices went out to ironworkers on construction sites and toolmakers in auto plants.”

Surveying those dismal times, a mainstream liberal academic economist, Lester C. Thurow, published a book in 1980 on the state of the U.S. economy titled The Zero-Sum Society: Distribution and the Possibilities for Economic Change. As indicated by the title, Thurow argued that it was no longer possible to substantially increase the size of the economic pie so that everyone would get a somewhat bigger piece. Economic policy now involved recutting the existing pie such that some people would get a larger slice and others a smaller one:

“For most of our problems there are several solutions. But all these solutions have the characteristic that someone must suffer large economic losses. No one wants to volunteer for this role, and we have a political process that is incapable of forcing anyone to shoulder this burden. Everyone wants someone else to suffer the necessary economic losses, and as a consequence none of the possible solutions can be adopted.”

In fact, the almost four decades since Thurow wrote those lines have seen an unremitting war by the bourgeoisie to force workers, minorities and the poor to “suffer the necessary economic losses” to bolster capitalist profits. That one-sided war on workers has been facilitated by the trade-union bureaucracy, which maneuvers for crumbs while peddling a mythical “partnership” of labor with the bosses and their parties, particularly Democrats who falsely pose as “friends of labor.”

Technological Innovation and Capitalist Investment

The main theme of Levinson’s An Extraordinary Time is that economic growth, based on increasing labor productivity through technological innovation, is impervious to government policy. After listing several explanations offered by academic economists for the slower growth of labor productivity in the advanced capitalist countries since the 1970s, Levinson concludes:

“None of these explanations sufficed to explain the productivity bust afflicting countries with vastly different economies and divergent approaches to economic policy. The more deeply the scholars mined the data, the more confused they became. What the data could not yet show was that the world had moved to a new stage of economic growth, one that would develop in a far different way....

“Future advances in well-being would depend heavily on developing innovations and putting them to effective use.”

The last statement is manifestly true. Increases in labor productivity under capitalism are determined by two main factors: the extent to which capitalists invest their profits in new productive facilities (plant and equipment) embodying more advanced technology and the degree to which the new technology increases output per unit of labor input.

Levinson does recognize a causal link between the slowdown in the growth of labor productivity and a decline in the rate of capital investment:

“Across the wealthy economies, business investment, which had increased an average of 5.6 percent per year between 1960 and 1973, grew at a far slower rate, barely 4 percent per year, for the next two decades. Sluggish investment left steel mills operating antiquated blast furnaces and insurance offices using high-speed computer printers to spit out form upon form for clerks to organize in file cabinets. Technological innovations usually arrive in the business world incorporated in new equipment and facilities. With firms deferring such investments at every turn, their workers’ productivity improved at less than half the rate in the decades after 1973 as in the decades before.”

However, Levinson makes no effort to explain why the rate of investment has declined to such an extent. In particular, he does not consider the interrelationship between capital investment, technological innovation and the rate of profit.

As Marx underlined, capitalists will invest in new facilities incorporating more advanced technology if, and only if, they believe the increase in profit per worker will be greater than the increased market value of capital per worker. If capitalists discover that their investments are not generating a competitive rate of profit, they will halt or cut back their investments, often triggering an economic downturn.

Marx thus proved that capitalist production increasingly puts the brakes on historical development, at the same time that it creates capitalism’s own gravedigger, the proletariat. He and Friedrich Engels explained that the only way to end the boom-bust cycles inherent to capitalism is for the working class to take control of the means of production through socialist revolution and institute a planned, collectivized economy.

[TO BE CONTINUED]

Workers Vanguard No. 1126	26 January 2018

Ideologues of Decaying Capitalism

The Bankruptcy of Liberal Economists

By Joseph Seymour and Bruce André

(Part Two)

This part concludes the article, Part One of which appeared in WV No. 1125 (12 January).

Economist Marc Levinson in An Extraordinary Time and his more liberal counterpart Robert J. Gordon in The Rise and Fall of American Growth both address the slowdown in the U.S. growth rate since the 1970s. Levinson at least recognizes that the slowdown was rooted in a decline in investment, although he provides no explanation for that decline. Gordon provides an explanation that is more apologetic for the capitalist system and even more pessimistic regarding future prospects.

Gordon’s implicit premise is that all progressive technological innovations—in the spheres of both production and consumer goods—have been and will be transformed into new, widely marketed (that is, generally affordable) commodities, although in some cases with a lengthy time lag. To paraphrase Voltaire’s parody of the German philosopher Gottfried Leibniz, with regard to technological innovation Gordon views American capitalism as the best of all possible worlds. If the possibilities for growth have diminished in recent decades, it is because the intrinsic character of technological innovations has changed in a way that diminishes their effect on productivity.

The structure of Gordon’s historical study of U.S. economic growth is based on the concept of three successive industrial revolutions. The first industrial revolution (IR #1) derived from inventions developed between 1770 and 1820, primarily the steam engine and its offshoots—railroads, steamships and the shift from wood to iron and steel. The second industrial revolution (IR #2) derived from technology developed in the late 19th century, particularly electricity and the internal combustion engine. The third industrial revolution (IR #3), beginning in the 1960s, was centered on new information and communication technology (ICT), such as computers and smartphones.

According to Gordon, the root cause of the slowdown in U.S. economic growth in recent decades was the diminishing effects of the second industrial revolution and the insufficient potency of the third:

“This decline in productivity growth by almost half reflects the ebbing tide of the productivity stimulus provided by the great inventions of IR #2. Its successor, the ICT-oriented IR #3, was sufficiently potent to cause a revival in the productivity growth trend to an average of 2.05 percent during the decade 1995-2004. But the power of ICT-related innovations to boost productivity growth petered out after 2004.”

Gordon never considers the possibility that some progressive technological innovations might not be transformed into widely marketed commodities because it is not profitable to do so. Later we will address his insistence that computerization and new digital technologies in general cannot significantly increase labor productivity in the future. In fact, he maintains that these technologies have pretty much exhausted their potential.

Here we will consider Gordon’s implicit assumption that all new, widely marketed commodities were more efficient than those they replaced and improved the living standards of the populace. In particular, let’s consider the partial replacement of electrified streetcars and subway and elevated trains by the automobile, which began between 1910 and 1930. Gordon analyzes the transition from one means of personal transportation to another in some detail. However, he does not attempt to measure their comparative techno-economic efficiency. Did electrified subways and elevated trains expend greater or lesser economic resources per passenger mile than Model T Fords? And if lesser, wherein lay the advantages of the automobile?

Gordon does acknowledge that the ascendancy of the automobile was not just the result of the workings of “free market” capitalism. Government policy was a very important causal factor:

“Government policies encouraged urban sprawl and undermined the financial viability of urban transit and passenger railways. Even before World War II, public policy was skewed in favor of the automobile by building streets and highways with public funds while leaving urban transit and interurban electric railways to operate as self-sufficient private companies. Many of the early roads were built by issuing bonds on which the interest was paid by local property taxes, so the automobile owner and transit rider paid equally to build a road system that made the automobile ever more attractive than transit.”

However, Gordon offers no judgment on whether government policies that favored automobile travel at the expense of public mass transit were economically rational and socially beneficial. Nor does he address why state and local governments pursued auto-friendly policies. The answer, of course, is primarily rooted in the capitalist drive for profits: The bourgeois politicians involved were beholden to the owners of the big car companies, like Henry Ford and Alfred P. Sloan of General Motors, and also the rubber and oil companies that provided tires and gasoline.

Class Struggle and a Shorter Workweek

Gordon states: “This book is about not just the standard of living from the viewpoint of the consumer, but also the quality of working conditions both outside and inside the home.” In keeping with his main theme, that the American people experienced a qualitative improvement in everyday conditions of life during the first half of the 20th century, Gordon cites the reduction in the average workweek from 60 hours at the turn of the century to 41 hours by 1950. But his liberal worldview blinds him to both the fundamental cause of that important change in the lives of working people and the inherent limitation of its impact on their quality of life.

According to Gordon, the decrease in the average workweek resulted from an interest shared by business owners and their workers in having a rested and healthy workforce:

“Interpretations of the movement for shorter hours center on the widespread belief on the part of both firms and labor leaders that a reduction in hours would improve work performance and increase production. Higher productivity and higher real wages made possible a gradual reduction of hours of work, for the onerous demands of sixty- and seventy-two-hour work weeks had created an exhausted male working class.”

To back up his view, Gordon cites legislation passed during the Progressive Era in the early 20th century and the New Deal in the 1930s.

In fact, the 40-hour workweek was won through decades of hard-fought and often bloody class battles by the workers movement. Agitation by the nascent industrial working class for the eight-hour day and for unions led to the Great Rail Strike of 1877, which was brutally suppressed by the Army. In the 1886 Haymarket massacre, Chicago police attacked workers rallying for the eight-hour day and arrested eight anarchist labor organizers who were subsequently framed up and imprisoned or executed. In the 1937 “Little Steel” strike, whose demands included a 40-hour week, police killed ten workers near the gates of Republic Steel in South Chicago in what became known as the “Memorial Day Massacre.”

Today, after decades of one-sided class warfare by the bourgeoisie and givebacks by the hidebound trade-union bureaucracy, the 40-hour workweek has been substantially eroded. The average workweek for full-time U.S. workers has risen to about 47 hours, nearly a full extra eight-hour day per week. About one in five full-time workers toil 60 or more hours a week, while millions are unemployed or forced to work part-time.

Workers need to fight for a shorter workweek with no loss in pay, linking the fight for decent working conditions to the struggle for jobs for all. A 30-hour workweek at 40 hours’ pay, with the available work divided among everyone, would go a long way toward addressing both unemployment and the serious safety problems resulting from fatigue and understaffing.

The capitalists would, of course, reply that such demands are not practical—at least, not if they are to maintain their obscene wealth. Indeed, the felt needs of the working class run right up against the inability of the capitalist system to satisfy them. The solution will not be found in the struggle, however necessary, by workers for a slightly bigger share of society’s wealth against a capitalist ruling class determined to maximize its profits. The goal must be a wholly different type of society, a workers America where the productive wealth has been ripped out of the hands of the tiny capitalist elite and put at the disposal of the vast majority. Such a society can be achieved only when the working class, led by a revolutionary party, overthrows capitalist class rule through a socialist revolution and establishes a workers government.

On Labor and the Quality of Life

Like the class battles that won the 40-hour week, the steady erosion of this historic gain for labor since the late 1970s is for Gordon a closed book. Yet even if we accept his focus on the first half of the 20th century, when the workweek was reduced from 60 to 40 hours, this gain actually constituted something less than a qualitative change in the lives of American working people. While deploring growing income inequality in the U.S. in recent decades, Gordon does not address or even recognize a more fundamental inequality in all capitalist societies in all times: between the vast majority who have to perform what Marx called “alienated labor” to secure the means of subsistence for themselves and their families and the privileged few who can engage in creative, satisfying work.

In the preface to The Rise and Fall of American Growth, Gordon recounts that his interest in the changing rates of economic growth and labor productivity over the course of U.S. history goes back to his days as a graduate student in economics at the Massachusetts Institute of Technology in the mid 1960s. The research for this book was undertaken to satisfy his intellectual curiosity, not because he had to do so to earn a living. But very few people have the luxury of working to satisfy their intellectual curiosity or express their creative impulses.

Consider, for example, the employees of Princeton University Press, who transformed Gordon’s manuscript into the printed pages of a book. True, they use technology that is radically different from that used by their predecessors in the 1920s, who set type for books by prominent academic economists of the time like Irving Fisher and Wesley C. Mitchell. And they work in more comfortable facilities. Nonetheless, they do the same kind of work for the same personal reason, to earn a livelihood.

Reading Gordon’s book, one would conclude that the 40-hour workweek and 11-plus-month work year, as in the U.S., is the highest possible level of organized society with regard to the necessary labor time expended by its members. However, in a planned socialist economy it would be possible, through a progressive, self-reinforcing increase in labor productivity, to radically reduce the total labor time necessary to produce both the means of production and articles of consumption. Within no more than a few generations, people would only be working, say, 20 hours a week and six months a year. Everyone would then have both the available time and access to material and cultural resources to acquire the scientific and technological knowledge that is now the province of a privileged elite. Projecting a future communist society, Marx wrote more than a century and a half ago:

“Free time—which is both leisure and time for higher activity—has naturally transformed its possessor into another subject; and it is then as this other subject that he enters into the immediate production process. This process is simultaneously discipline, with respect to the developing human being, and application, experimental science, material creative and self-objectifying science, with respect to the developed man, whose mind is the repository of the accumulated knowledge of society.”

— “Outlines of the Critique of Political Economy” (1857-58)

In a future communist society, there would be a vast expansion of the number of people capable of developing technological innovations on the order of Gordon’s heroes of the past, like Thomas Edison, Karl Benz (inventor of the automobile) and Guglielmo Marconi (a developer of the radio).

World War II: An Instance of State Capitalism

For Marxists, the most valuable part of Gordon’s book is his analysis of the “great leap forward” in labor productivity that occurred during the Second World War (1939-45) and carried into the first few decades of the postwar era. Gordon concludes: “World War II saved the U.S. economy from secular stagnation, and a hypothetical scenario of economic growth after 1939 that does not include the war looks dismal at best.” This was the one moment in modern American history when the expansion of productive facilities embodying new, more advanced technologies was not determined by the profit-making calculations of corporate executives and Wall Street financiers. In order to defeat its capitalist-imperialist enemies, the U.S. government—the executive agency of the American ruling class as a whole—directed and financed the unprecedented construction of industrial plant and equipment.

A standard economic history of the Second World War states:

“The period 1940 to 1944 saw a greater expansion of industrial production in the United States than any previous period.... Between 1940 and 1944 the total output of manufactured goods increased 300 per cent and that of raw materials by about 60 per cent. Investment in new plant and equipment, much of it direct investment by the government, is estimated to have increased the productive capacity of the economy by as much as 50 per cent.”

— Alan S. Milward, War, Economy and Society 1939-1945 (1977)

Government-funded factories and other productive facilities were turned over free of charge to corporate capitalists, thereby greatly increasing their profits both during and after the war. Gordon comments in this regard: “Though private capital input stagnated during 1930-45, the amount of capital input financed by the government surged ahead throughout that fifteen-year interval. Of particular interest was the creation of new plant facilities paid for by the government but operated by private firms to produce military equipment and supplies.”

Franklin D. Roosevelt and the other political directors of the U.S. imperialist state (for example, Secretary of War Henry L. Stimson and Secretary of the Treasury Henry Morgenthau) were intimately familiar with the workings of industrial corporations and banks. They knew from firsthand experience that they could not depend on the normal mechanisms of the capitalist market to maximize the output of armaments in the shortest possible time. Big industrialists like Henry Ford and Henry Kaiser were therefore guaranteed profits through the cost-plus method of setting procurement prices. Their firms were paid whatever they claimed it cost them to build battleships, bombers, tanks, etc., with an additional markup for profit. Over the course of the war, the after-tax profits of industrial firms increased by 120 percent.

Far more important in its long-term economic effects was direct government financing of the construction of factories and other industrial infrastructure. Gordon emphasizes that the number of machine tools—the core component of an industrial economy—doubled from 1940 to 1945, and “almost all of these new machine tools were paid for by the government rather than by private firms.” Ford’s gigantic bomber-building plant in Willow Run, Michigan, was government-financed. Likewise were major pipelines, still in use today, conveying petroleum from the Texas oil fields to the Northeast. Moreover, the basic technology underlying what Gordon termed the “third industrial revolution,” beginning in the 1960s, also originated in the U.S. military during the Second World War. The prototype of the mainframe computer, ENIAC (Electronic Numerical Integrator and Computer), was developed by scientists and engineers, employed by the war department, at the University of Pennsylvania.

When the American capitalist-imperialist state maximized production, labor productivity and technological innovation, it was in order to bring death and destruction to other peoples. Arguably the most important scientific and technological breakthrough in the 20th century, the unleashing of nuclear energy, was used to incinerate the civilian populations of the Japanese cities of Hiroshima and Nagasaki.

Gordon Versus the “Techno-Optimists”

Gordon’s main foil in his book is an intellectual current he deems “techno-optimists,” who foresee new technologies such as robotics and artificial intelligence placing the American economy on the cusp of a wave of economic growth. Like Gordon, these techno-optimists (including Joel Mokyr, Gordon’s colleague at Northwestern University, as well as Andrew McAfee and Erik Brynjolfsson at MIT, among others) believe that it is technological innovation above all else that determines the course of society. The dispute involves two very different questions. One concerns the sphere of consumption in the present, the other the sphere of production in the future.

Gordon argues that the effect of the new information and communications technologies on the quality of everyday life has been relatively meager compared to the major innovations and inventions in the century between 1870 and 1970. Those ranged from indoor plumbing, electric lighting and central heating to automobiles, airplanes and television. Gordon writes:

“Though there has been continuous innovation since 1970, it has been less broad in its scope than before, focused on entertainment and information and communication technology (ICT), and advances in several dimensions of the standard of living related to food, clothing, appliances, housing, transportation, health, and working conditions have advanced at a slower pace than before 1970.”

At another level, the dispute between Gordon and the techno-optimists is over the “futurology” of the likelihood of dramatically transformative new technologies developing and being put into widespread use in the near future. Both sides implicitly treat capitalism as a system that best fosters technological innovation. Both, of course, write off the perspective of a collectivized planned economy as not meriting serious consideration.

In a 2014 essay titled “The Next Age of Invention: Technology’s Future Is Brighter than Pessimists Allow,” Mokyr rhapsodizes about supercomputers, 3-D printing, genetic engineering and the like. There is, however, no mention of wages, production costs, markets or profits. These basic categories determining capitalist production and investment in new technologies are likewise absent from his brief polemical response to Gordon’s recent book, “Is Our Economic Future Behind Us?” (29 November 2016). In the unlikely event that Mokyr becomes CEO of Apple or General Electric, these companies would likely face bankruptcy. If he followed his own prescriptions, Mokyr would use the most advanced and therefore most expensive equipment, irrespective of whether this elevated production costs above those of competing firms.

In his 2014 essay, Mokyr does advance an economic argument in the service of techno-optimism: “A second reason technological progress will continue unabated has to do with the emergence of a competitive global marketplace, which will encourage the spread of new technology from its originating locations to other users who do not wish to be left behind.” In fact, the extension of international trade and capital export hardly represents an unambiguous encouragement to the development of technology. In the imperialist epoch, the international economy runs up against the very nation-states upon which the imperialists base their power, constituting an obstacle to the further development of humanity’s productive forces. Production in Europe, Japan and some spots in Asia may use modern methods. However, the vast pool of cheap labor available in South and East Asia and Latin America tends to inhibit investment in laborsaving technology in both the Third World and the imperialist centers.

When U.S. and European industrial firms shift manufacturing operations to poor countries, they often tend to use less capital-intensive methods of production. Consider clothing manufacture. While the technology exists to perform this in capital-intensive, highly automated plants, it remains cheaper for companies to pay workers in oppressed neocolonies like Bangladesh pennies on the dollar to sew clothing in conditions that are closer to those of the 19th century than the 21st.

In First World countries, too, current scientific and technological knowledge is not used in a rational and socially beneficial way, and in many cases is willfully misused. Consider the field of medical research, where major efforts are made to treat baldness and erectile dysfunction while only a pittance is invested in new drugs and vaccines for potentially fatal tropical diseases.

In the U.S. alone, some 23,000 people die every year of infections from antibiotic-resistant bacteria. A study commissioned by the British government reported that by midcentury as many as ten million people a year globally could die from drug-resistant bacteria if new treatments are not discovered. Yet despite the critical social need, most of the world’s largest pharmaceutical companies long ago stopped developing new antibiotics, citing low returns on investment.

Likewise, some 25 million people in the U.S. suffer from so-called rare diseases, such as Lou Gehrig’s disease and cystic fibrosis as well as sickle cell anemia, which overwhelmingly affects black people. Yet investment in research on treatments and cures for such diseases is notoriously meager, even though rare-disease research has often uncovered fruitful pathways for treating and curing some of the most prevalent ailments. The Center for Health Journalism at the University of Southern California explained the reluctance of pharmaceutical companies: “Most say investing in treatments for rare diseases—ones that affect tens of thousands of people—does not make for good business sense.”

Disregarding the laws governing the capitalist mode of production, Mokyr, McAfee, Brynjolfsson & Co. project a quantum leap in productivity in the near future through the use of “brilliant technologies.” Gordon implicitly accepts the limitations of the capitalist system in denying the very possibility of such a development. With regard to robotics, he writes: “The exponential increase in computer speed and memory has apparently raced far ahead of the capability of robots to duplicate human movements.” Gordon offers no argument for why this gap could not be greatly reduced by future advances in scientific and technological knowledge. He makes no assessment of the resources currently expended on robotics research.

Most of the vast amount of scientific research conducted by universities is directly funded by the federal government, and the biggest chunk of federal funding is directed toward military ends. The U.S. budget last year directed $6.5 billion in R&D to the National Science Foundation, while the R&D budget of the Air Force alone totaled almost $27 billion. Research in the physical sciences, including robotics, even if at some layers of remove, tends toward the ultimate end of building better drones and other machinery to blow up things and kill people in the interests of capitalist imperialism. Mathematics funding tends toward algorithms for securing state secrets and operations while hacking into the secrets of others. The National Security Agency is widely thought to be the largest employer of mathematicians in the U.S.

At every turn, despite its thirst for technological innovation, capitalism is not the ally of scientific advance but its opponent. From intellectual property laws and the perverse incentives of the market to the tens of billions spent on more effective weaponry, capitalism directs research in the interests of the ruling class and its state apparatus. If those same resources were directed toward advancing human knowledge, furthering human happiness and putting mankind in control of its destiny, what could be accomplished is nearly unimaginable. This requires overturning the capitalist-imperialist system through a series of proletarian revolutions, laying the basis for a globally planned socialist economy. It is to lead the proletariat in that fight that the International Communist League seeks to reforge the Fourth International, world party of socialist revolution.