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A Labor Party
From Labor Action, Vol. 12 No. 33, 16 August 1948, p. 4.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
THE truth is that something new has been added to American life, something that our grandfathers and great-grandfathers did not have to put up with: the growth of monopoly in all fields of life.
Beginning in 1900 with the organization of the first billion-dollar corporation, U.S. Steel, industry after industry has been captured by monopoly, until today there are more than forty billion-dollar corporations exercising a controlling interest in almost every important field – banking, insurance, railroading, steel, auto, rubber, aluminum, shipping, food, liquor, farm machinery, etc.
The system has grown old. Capitalism, which at one time permitted a progressive development of the nation’s resources, has today turned into a fetter to further development.
Free land has disappeared. New inventions, unless they have a military value, are suppressed by the hundreds. The national debt has increased to more than $250 billion. The nation is being more and more saddled with a military hierarchy. The fingers of the big banks are everywhere.
The federal police apparatus has grown enormously, together with repressive laws against the people. Transportation and distribution costs each year take a larger share of the nation’s income, swallowing up 58 per cent of the consumer’s dollar. The dollar itself becomes of less and less value as prices rise to the highest in history. Corporate profits in the opening months of 1948 are at an all-time high.
But there is no prosperity for the masses.
Liberal capitalism, based upon free trade and competition, has receded into the past, never to be recalled. It has been succeeded by monopoly capitalism, the rule of the banks, and by bureaucratic government “planning.”
The United States, which from 1790 to 1890 appeared to the world as a great progressive force, the enemy of every tyrant and the friend of every free man, has turned into its opposite. The U.S. appears today in Europe and Asia and Latin America and Africa as a reactionary force. There is no anti-democratic gangster government anywhere on the earth outside the sphere of its Russian rival but cannot be assured of support from Washington – whether it be in China, Indonesia, Iran, Egypt, Greece, Turkey, South Africa, Italy, France, Colombia or Brazil.
By all odds, the one most important factor bearing upon the lives of every person in the United States is the spread of monopoly. Steadily since 1900, monopoly has imprisoned segment after segment of the American economy, removing it from competition, lifting it above the people.
Under both Republican and Democratic administrations, monopoly has quietly advanced. Never did it grow so swiftly as under the administration of Franklin D. Roosevelt, from the days of the Blue Eagle to the war. With the post-war gift of the war factories to the monopolists, the latter may be said to have virtually completed their conquest of the United States. They have within their iron grasp all the most important industries of this nation, and can only grow further by gobbling up each other or by expanding their grip beyond the borders to other continents.
How hypocritical was big business in 1946 when it ordered its politicians to end price control, with the sly lie that “the play of natural supply-and-demand factors” would bring down prices!
Here is the point. Once monopoly controls an industry, that industry is lifted above “the play of natural supply-and-demand factors.” Supply and demand, the old “law” of competitive capitalism under which our grandfathers lived, no longer operates in a monopolized economy. The monopoly, through its control of the supply, can charge any price it wishes, usually selecting that price at which its profits will be largest.
Monopoly pricing factors disregard the needs of the people. The monopoly takes its toll from the entire nation, forcing not only consumers but other less strongly organized industry to pay it ransom.
How much of our economy is now within the kingdom of monopoly?
In many industries (according to the government’s Temporary National Economic Committee) concentration has reached the point where one or two companies control nine-tenths of the supply. A partial list of industries where there is only one dominant company (in 1937) would include: aluminum, shoe machinery, glass container machinery, optical glass, nickel, molybdenum, magnesium, magnesium alloys, telephone service, international communications, Pullman cars, transoceanic aviation, beryllium, etc.
Summaries of corporate income-tax returns for 1937 (the last “normal” year) showed that the 394 largest corporations in this country – less than one-tenth of one per cent of the total number reporting – owned about 45 per cent of the total corporate assets.
A special Securities and Exchange Commission study prepared for the TNEC showed the distribution of ownership in the 200 largest non-financial corporations in the United States. These 200 giants owned 40 per cent of the assets of all non-financial corporations, and accounted for nearly 45 per cent of the dividends distributed by such corporations. Their capital stock was valued at 65 per cent of the total of all non-financial corporations listed on the New York Stock and Curb Exchanges at the end of 1937. The SEC study showed that, in 1937, 75,000 persons owned fully half of all corporate stock held by individuals in this country.
Since the above figures were compiled, monopoly has walked in seven-league boots, impelled by the war during which 100 large companies held 76 per cent of all war supplies contracts in excess of $50,000.
Those industries not already controlled by monopoly achieve economic results similar to a monopoly through secret nationwide price-fixing agreements by which all pledge not to cut prices below a certain figure. A tremendous extension of the price-fixing racket, covering even small items sold in drug and grocery stores, is the “Fair Trade Practice” law, whereby retailers are refused permission to handle an item unless they pledge, under penalty, not to sell it below a certain figure – that is, to hold up the public.
The monopolists today hold in their hands the threads that control the economy and the politics of this nation, and that determine the life of every person in America – what price we shall pay for the commodities we must have to live, whether we shall go to war, and where we shall go to war.
Where were the Republican and Democratic parties when the monopolists were taking over the economy? – the outraged “innocent” may ask.
The answer is simple: One of the fields where monopoly holds sway is the field of politics. The Republican and Democratic parties are the political servants of the monopolists, as we shall shortly show. These parties protect the monopolists and guard them from the charge of evading the law.
Oh, to be sure, the Department of Justice prosecutes the monopolists. It is forever filing anti-trust suits against the monopolists. But nothing happens.
The monopolists control the courts, from the Roosevelt-packed Supreme Court on down. Occasionally (and more and more seldom as the monopolists wax stronger) light fines are levied, which the monopolists pay as easily as you pay your carfare to work. For the monopolists can gouge the amount of the fine from the public in an hour of business.
How long has this been going on? Since 1900 and before, when U.S. Steel and Standard Oil were formed. Under Theodore Roosevelt, under Taft, Wilson, Harding, Coolidge, Hoover, Franklin Roosevelt, and Truman.
Time and again the parties of capitalism have investigated the trusts. The facts have been recorded. The most notable of these investigations were the Trust Investigation of 1900; the Armstrong Committee of 1906; the Stanley Committee of 1911; the Pujo Money Trust investigation of 1912; the Industrial Commission of 1916; the belated exposure of war profiteering by the Nye Committee in the 1930; the O’Mahoney Monopoly Committee (Temporary National Economic Committee was its official title); and the Truman Committee of the Senate. But nothing has ever been done.
Just as the conquest of the American economy by monopoly has made for artificially high prices at home, so has it made for war abroad.
Most of the American trusts have large financial stakes in other countries, in Latin America, Europe, Asia, Africa. They own factories abroad, obtain raw materials abroad, have large investments abroad, have markets abroad, and they all hope with good reason (under the bipartisan foreign policy of their political agents) to further enlarge their foreign holdings.
Whenever a war begins anywhere in the world – even such a “little” war as in Palestine – it immediately threatens the interests of American big business. The bankers go to work on the State Department, the State Department goes to work on the warring powers, and if the private investments abroad of U.S. capitalists are not protected, the State Department and the White House find means of provoking “incidents” which demand the intervention of the U.S. army and navy. The country is in the war. It was thus in 1917, it was thus in 1941, it will be thus tomorrow.
Why are American warships and marines in the Mediterranean today, why is President Truman giving hundreds of millions of dollars to the tyrannous rulers of Greece and Turkey, why is Washington pursuing a double game in Palestine and waging a “cold war” against its imperialist rival, Russia? It should be crystal-clear to anyone with an elementary knowledge of the world’s resources that a large part of the answer lies in the fabulous oil reserves of the Near East, in the huge stakes in those reserves by U.S. oil companies, and in the threat to those investments from Russia and from the Palestinian hostilities.
Long before Marx saw the light of day, American political philosophers like James Madison and Alexander Hamilton understood very clearly that politics is but a reflection and extension of economic interests, and that the dominant economic interests in any nation dictate the policies of that nation.
So it has proved with the monopolists, as the next chapter will show. Just as the economic wealth of the nation has become concentrated in the hands of fewer and fewer individuals commanding immense wealth, so have these same individuals extended their monopolist sway over the politics of the nation.
It is no exaggeration to say, for instance, that one corporation such as Standard Oil and its sister companies and subsidiaries swings a thousand times more weight in Washington than the 16 million members of organized labor.
Big business since 1900 has monopolized the politics of the nation, as it has monopolized the nation’s economy.
This booklet presents a plan and a program to the workers and farmers of America to break the political monopoly of big business and to build a labor party which can take over the federal government and the state governments and place the political control of the nation in the hands of those who produce the nation’s wealth, not in the hands of those who exploit the wealth and the people for their own narrow interests.
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