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From Labor Action, Vol. 10 No. 51, 23 December 1946, p. 2.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
There are a hundred signs to show that the capitalist system is headed for an economic crisis. Not in the next few months, to be sure, but in the next few years, we are going to witness here in the United States another acute crisis of the sort that sent business crashing in 1929, when you had to walk with care through the financial canyons of the big cities to avoid being hit by the hurtling bodies of the bankers committing suicide.
Not all the capitalists understand this. Indeed, few of them do. It is a fact that the capitalists and their front men – the teachers, preachers, editors and economists – do not understand their own system.
Let us look back to 1928 and 1929, just before the crash that laid bare the decaying body of capitalism. What were the capitalists telling us then?
Charles E. Mitchell, president of the National City Bank of New York, said:
“A revolution in industry has been taking place that is raising all classes of the population to a more equal participation in the fruits of industry, and thus, by the natural operation of economic law, bringing to a nearer realization the dreams of those Utopians who looked to the day when poverty would be banished.”
Listen to James H. Rand, president, Remington-Rand, Inc.: “The economic revolution of the 1920’s will appear as vital as the industrial revolution in England and it will likewise mark the beginning of a new era.”
Listen to Andrew W. Mellon, Secretary of the Treasury and a powerful financial capitalist: “America has adjusted herself to the economic laws of the new industrial era, and she has evolved an industrial organization which can maintain itself not only because it is efficient, but because it is bringing about a greater diffusion of prosperity among all classes.” (A few years later there were 20 million unemployed.)
Or Melvin A. Traylor, president, Continental National Bank of Chicago: “We need not fear a recurrence of conditions that will plunge the nation into the depths of the more violent financial panics such as have occurred in the past.” (A few years later Traylor’s pal, Samuel Insull, was fleeing to Europe from the ruins of his midwestern utility empire.)
As Lewis Corey, author of The Decline of American Capitalism, put it:
“Captains of industry and finance appear Jovelike in prosperity and bewildered in depression, but at no time do they really understand the movement of the economic forces they exploit. Their pre-1929 invocations to the ‘new era’ expressed sheer misunderstanding; but they also expressed, if partly unconsciously, the defensive, self-justifying ideology of predatory capitalism.”
Those words of Corey’s came back to me as I listened to the fat boys spiel at the recent convention of the National Association of Manufacturers. Their words were a mockery of reality, revealing vast areas of ignorance and unawareness of the economic forces that are irresistibly marshalling to launch the next crisis.
Here is what the retiring president of the NAM, Robert R. Wason, said: “It is conservative to say that ... we are on the threshold of the most glorious period of man’s eternal struggle to improve his economic wellbeing.” ... And here is what the executive vice-president, Walter Welsenburger, crooned: “The future is so promising ... only a spinster could have any legitimate reason for not being interested.” ... The servants of capitalism in Washington see not a whit clearer than their masters. Here is what Civilian Production Administrator John Small wrote Truman in his letter of resignation:
“Still higher levels of production will pave the way to an even higher standard of living for the American people.”
Are these people trying to fool themselves, or are they trying to fool us, I asked myself. Cannot they see what is occurring: The unprecedented currency inflation in the United States, the mountainous national debt that will never be paid, the swollen profits of the rich (and the other half of the picture, the low wages of the people which do not permit them to buy back what they produce, and thus insure a glutted market); Europe and Asia bankrupt; the people groaning under the heaviest tax burden in history; billions still being squandered in an effort to police the world with the U.S. Army and Navy. Can’t they SMELL the decay in the air? ...
The Bantus, an African tribe, have a proverb: “Breadfruit is obtained from the breadfruit tree.” Yes, and from the tree of capitalism grows depression and war, and mass misery and death. So long as the people of the United States permit capitalism to endure, new depressions and wars are inescapable. The capitalists may fool themselves. Do not let them fool us.
The giant installment finance corporations are jittery at the lack of dough in the pockets of the American people. They say that new autos will be choking retail salesrooms before the end of the next year unless the government repeals present restrictions requiring purchasers to make a down payment of one-third upon a new car, with full payment in 15 months. The people haven’t got that kind of dough, say CIT Financial Corporation and Commercial Credit Corporation ... Frozen foods are rapidly glutting the market, with cold storage warehouses bulging with 860,000,000 pounds of frozen fruits and vegetables, 50 per cent above a year ago and four times the pre-war high. Before the war there were 35 frozen foods brands, today 450 commercial firms are freezing food. One frozen food official predicted “fire sales in strawberries before next spring.” ... Farm commodity prices are drifting lower. Wheat tumbled 20 cents a bushel the week of December 7; corn, 13 cents; hides, 7 cents; lard, recently selling as high as 55 cents a pound, went to 28 cents; cotton dropped a dollar a bale.
At least a third of farm staples are now selling below “parity,” parity prices, being those theoretically giving farmers a buying power equal to that of 1909–14. In Louisville at the fall tobacco auction, prices tobogganned, with an average of $37.50 a 100 pounds, compared with $48.13 last year, a decline of $10.63. Do you think the cigarette companies, which have’ recently boosted cigaret prices, will now lower their prices? I don’t either ...
Landlords in Flint, Michigan, have raised rents 10-15 per cent, through a ruling of the City Commission, over objections of CIO representatives. OPA officials say they are helpless because of a 1942 rent agreement with the city of Flint, whereby all rent control matters are handled by the municipal courts ...
The oil monopoly is indignant because a recent public, opinion survey showed that one of every three persons believes the oil business is a monopoly. Recently the American Petroleum Institute announced it would spend $1 million to tell the people “it ain’t so.” ... While farm prices are declining, the prices of semi-manufactured products bounced up 11 per cent in November.
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