Michel Pablo

XXth Plenum of the International Executive Committee:

The Turn in the International Situation,
the Perspectives, and Our Tasks

Report Presented by Comrade Michel Pablo

(February 1958)

From Fourth International (Paris), No. 2, Spring 1958, pp. 51–59.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

The international situation is engaged in a turn which may prove to be the most important since at least the Korean War.

We are witnessing the combination, the interaction, of various facts and processes: the evident end of the boom in the capitalist economy which had lasted since 1953–1954, and the beginning of a stage of economic decline; a new advance of the colonial revolution in Indonesia, in the Arab countries, in Central Africa, and in Latin America; sensational successes of the Soviet economy and technics, guaranteeing the military superiority of the USSR; confusion and crisis in the ranks of imperialism, and this time particularly in American imperialism. The resultant among these factors is a new grave deterioration for imperialism in the global relationship of forces.

This turn in the international situation naturally opens new revolutionary perspectives which it is a question of understanding so as the better to define our tasks and activity in the coming months.

The Evolution of the Economic Situation

Our evaluations, prognoses, and apprehensions at the time of the Fifth World Congress, and of its documents, have been confirmed. Opinion is now general that we are witnessing an evolution of the capitalist economy from boom to recession. The only question is that of the scope and duration of the economic slump that has begun.

This slump is above all marked, as we had emphasized, in the United States itself. From August to December 1957, US industrial production declined 6%. The steel industry is working at 60% of capacity; the other industries, at about 80%. Industrial inventories have been reduced only very little, remaining at a level of $1,600 million more than in 1956.

For as long as it takes to reduce them, they will continue to have a rather depressing influence, since industrialists prefer to dip into their existent inventories rather than produce more.

In the auto industry alone, inventories at the end of 1957 were 200,000 units higher than at the end of 1956. [1]

A decrease is foreseen in investment expenditures in the neighborhood of 7% on the average; in the cases of industrial firms, properly speaking, it will reach an average of 16%. That would mean a reduction in the total demand for goods and services in 1958 of more than $6,000 million.

Complete unemployment reached about 4,000,000 at the end of December, and this month threatens to go beyond 5,000,000. [2]

The industrial crisis is aggravated by the persistence of the chronic agricultural crisis, the falling off of exports, and – a special feature – the persistence of inflation.

Naturally this last feature, a very important one, can be explained only as a manifestation of the excessive indebtedness of the state, occasioned by the inordinate swelling of non-productive expenditures, and in the very first place by military spending.

In spite of the reduction of the farm population by another million farmers and in spite of crop restrictions, agricultural production in 1957 set a new record, and the state was obliged to double (compared to 1956) its aid to agriculture, which reached $1,000 million dollars.

This turn of the American economy toward depression gives the lie to all the optimistic predictions of its defenders, such as Fortune, which in July 1957 foresaw a sustained expansion of the economy during all of 1957 and even 1958. It constitutes, furthermore, a very important element in the formation of the current political conjuncture in the United States and in the capitalist world as a whole.

Naturally the capitalists are trying to react to this turn in the economic conjuncture, and means therefor, particularly in the United States, are not wholly lacking. We shall examine them further on.

Let us for the moment turn our attention to the capitalist economy of Europe and of the semi-colonial and dependent countries.

“Economic expansion in Europe as in England,” The Economist recently (11 January 1958) noted, “is slowing down. Outside of England, it is in Germany that this slowing down is the most marked” – where industrial production in 1957 was only 5% higher than in 1956, i.e., a rate of increase considerably less than that of preceding years. [3]

The investment boom in Europe has also slowed down everywhere. This is particularly visible in such industries as steel and machine-manufacture, and in countries sensitive to fluctuations in such industries, like Belgium and Germany. In other countries, such as Holland and Sweden, which have been forced to adopt restrictive measures to improve their balance of payments, their rate of expansion has perceptibly lessened.

Even France and Italy seem in these last months to have been affected by this decrease in the rate of expansion. Industrial expansion in Italy, however, increased 9% in 1957 compared to 7.6% in 1956. Agricultural production on the contrary stagnated. In France production increased 10% in 1957, but the country experienced on the other hand a grave financial crisis due principally to the cost of the war in Algeria. The loans granted by the United States and Germany, however, have given it a respite.

European production is now marking time, unemployment is reappearing and increasing here and there, exports are sagging, as are also investments in industry and for building. A new stimulant must intervene to stop a greater contraction. In the case of the United States, that might be a serious increase in military expenditures. In the case of European countries, except perhaps Germany, a top limit has been reached in this field, beyond which there is the risk of being precipitated into inflation.

The prospects of the European economy certainly do not encourage optimism. The progress of inflation is weakening the stimulant of internal consumption. The depression in the United States and the difficulties of the colonial and dependent countries, which arise principally from the fall in raw-material prices, weaken the stimulant of exports.

Under these conditions we can foresee an aggravation of the depression of the European economy, keeping pace and in interaction with the depression in the United States and in the colonial and dependent countries. For certain of the latter, the situation can rapidly become critical as a result of the exhaustion of their reserves and the impossibility of renewing them under the conditions of the continued drop in the prices of raw materials.

Countries dependent on their exports run the risk, in this case, of suffering the most. Take the example of Japan. The situation in that country has abruptly and rapidly worsened in these last months. Industrial inventories have risen 50% over 1956, while industrial production begins to sag (6% in steel during the second half of 1957) as well as investments (10 to 15% less foreseen for 1958). Unemployment is rising rapidly: 500,000 full unemployed in October 1957; 1,500,000 predicted in mines, textiles, and metallurgy this year.

There is much talk, including in official spheres, about the “overproduction” crisis in Japan in 1958, a year in which the industrial plant-expansion of the preceding years will have its effect. Only an increased export drive can alleviate Japan’s situation. But this effort runs the risk of failure precisely from the fact that the general conditions of the capitalist economy are becoming difficult this year.

Other exporting countries like Germany, Britain, Austria, Italy, etc., run the risk of experiencing the same difficulties.

I shall lay further stress on the case of semi-colonial and dependent countries:

As is known, their main revenues come from the sale of raw materials and of their agricultural production. The fall in the prices of these products, apart from the repercussion that this may have on exporting industrial countries, can lead to an especially serious situation for the producing countries by setting brakes to their industrial development and by aggravating inflation. This is already the case.

Let us dwell a moment on some examples:

India. For this country 1957 was “a year of despair,’’ observes the New York Times for 7 January 1958. There were “fewer new factories, fewer development projects, more unemployment, and a lesser purchasing power” than in the previous year, expenditures having exceeded receipts and, with inflation contributing, the Second Five-Year Plan begun in 1956 soon found itself out of balance.

If in the next 18 months India does not obtain $1,500 million, it will be caught between “bankruptcy and” a considerable “slow-down” of its rhythm of development. True, industrial production increased further in 1957 (13%), but on the other hand agricultural production stagnated, and in certain regions of the North some 80,000,000 people are at present faced by a real famine.

In order to check unemployment and increase resources, the Congress government imposed new restrictions on imports, and aggravated taxation, especially indirect taxation. Without serious foreign aid, Nehru’s India is at the end of its experiment in “state capitalism” and “free” “mixed” economy. [4]

Indonesia has suffered from the fall in the prices of the raw materials that it exports (apart from oil) and from the poor rice crop. It ended the year with a very serious budget deficit (3,775 million rupees – 1,000 million more than in 1956) and an aggravated inflation. The half-measures of the present Indonesian government seem to be running the risk, by prolonging the sufferings of the masses, of aiding the projects of reaction and of imperialism against the Indonesian revolution that has begun.

Latin American countries have generally had a very difficult year, their resources having been decreased by the fall in the prices of what they produce – non-ferrous metals, coffee, cotton, wool – while their imports have been increasing. Thus the deficit of their trade balance with the United States alone has gone well beyond $600 million in 1957, or half as much again as the total of loans received from the United States, the Import-Export Bank, and the World Bank.

Brazil this year has experienced a serious trade deficit. Both industrial production and, especially, agricultural production remain far behind the development (62 million) and the needs of the population – hence also a continued inflationary pressure.

In Argentina, production, with the exception of agriculture, has in reality been stagnating since 1955, and inflation is still causing its ravages.

This is also the case in Chile, Colombia, Peru, and Bolivia. The last-named is currently staking everything on oil (investments and production) to improve its finances.

The only exceptions where the situation is better are those of Venezuela and, in part, of Mexico and Cuba.

In case the depression of the world capitalist economy hardens, the Latin American countries will have to face a still more difficult year which, at certain places and times, can create a genuine revolutionary or counter-revolutionary crisis.

The reversal of this economic conjuncture of capitalism is currently possible only if the economy of the United States finds the means to stop the deepening and the spreading of the depression and to set forward again thanks to a new stimulant. If not, what is threatened is a process of cumulative interaction of the different depressing factors that aggravates the whole situation and, by affecting for example the mechanism of financing international trade – based in all these last years on credit – provokes at a certain moment a genuine crisis and not simply a “recession.”

But before examining the reactions of capitalism, let us say a few words about the economy of the workers’ states.

In contrast to the depression that is getting hold of the economy of capitalism, the economy of the workers’ states in general is experiencing a continuing upsurge, although at a slower rhythm of expansion.

It is the Soviet economy that is still in the lead, having experienced in 1957 a productive development of about 10% instead of the predicted 7%, followed by that of Czechoslovakia, China, and Poland. It must be noted, however, that agricultural production in all these countries always runs behind, both in comparison with the comparative progress of industry and especially in comparison with the needs of a population that is growing and is more demanding than in the past about food supplies and consumers’ goods.

The national and international planification of the workers’ states, on which these demands weigh, is in a state of transition. Its new orientation will be the result not only of economic requirements in themselves but also of the pressure currently being brought to bear by the masses in these countries, and of the relationship of forces with the bureaucracy.

The tendency that is discernible in all plans under preparation – to lower the rate of expansion of heavy industry and to give more importance than in the past to agriculture, and thus to be able better to satisfy the production of consumers’ goods – naturally reflects the increased pressure of the masses in these countries and their new relationship of forces with the bureaucracy.

“Anti-Crisis” Measures Of Imperialism and Their Effectiveness

In what way does imperialism think of reacting against the “recession” that has begun and preventing it from being transformed into a genuine crisis?

We now have sufficient indications to answer this question, and they confirm the main ideas developed on this matter in the Fifth World Congress document, International Economic and Political Perspectives. Imperialism’s principal means for correcting the situation on the economic plane is naturally to check the deepening of the “recession” in the United States itself, whose economy very closely determines that of the capitalist world as a whole.

The present case is much more characteristic than during the 1953–1954 recession, when the European economy could for a certain time develop in spite of the recession in the American economy, and to some extent help the latter to straighten out more quickly. At present, even the immediate prosperity of the European economy depends on its possibility of continuing to export to the United States and Canada, as well as to the semi-colonial and dependent countries.

On the other hand, the latter would be able to maintain their exports only if their trade balance with the United States improves thanks to a rise in the prices of raw materials and agricultural products, a rise which only the restored dynamism of the American economy could bring about.

Now a deepening of the recession in the United States, threatens to limit American imports and keep up the deflationary pressure on the prices of raw materials and agricultural products.

Thus the question of the immediate future of world capitalist economy boils down to that of the American economy. Now the principal means by which the latter is at present trying to escape from the grinders of the “recession” is that of a new important increase in budgetary expenditures, principally military expenditures.

Thus the proof is once more made that the American “miracle” is viable only thanks to artificial injections, from time to time, and in doses that in reality are ever-increasing.

The new American budget for 1958–1959 foresees an increase of $2,100 million in expenditures, but the figure that we should keep in mind is that of an increase in military spending of more than $4,000 million, thanks to “economies” elsewhere, which include the decrease in building of schools and hospitals, the abandonment of various public works, the reduction of aid to farmers, the increase in postal rates, etc. More serious reductions in all sorts of expenditures of a social nature are, furthermore, recommended for coming years. “Economy” and “discipline” in the sector of civil and social expenditures are the characteristics of the new war budget of the Republican administration. As for the advisers most harkened to by the Republican administration, à la Rockefeller, they did not hesitate to propose a gradual increase in the military budget involving $30,000 million additional in the next four years (3+6+9+12)! (Recommendations of the Rockefeller Commission)

Another important figure to keep in mind for economic predictions in the United States this year is that of cash military spending in the form of production orders that are counted on for 1958: $6,000 million compared to those of 1957 (or the equivalent of the losses occasioned by the lessening of production in the last quarter of 1957, or of the reduction in the total demand for goods and services resulting from the sag in 1958 investments). Parallel to this stimulant, we are witnessing a new “liberalization” of credit policy, an easing of stock-market margins, as well as an increased aid to export ($400 million for 1958).

It is naturally difficult to predict with certainty whether all these measures, already important in scope, will be sufficient to check the “recession”. [5] As for us, we think that they are still insufficient and that they will not adequately offset the decrease in purchasing power which results from the already serious spread of unemployment, from reduction ,of aid to farmers, and in general from new and inevitable advances of inflation – all the more so in that the hosses, aided by the government, are preparing to reject wage increases.

Furthermore, the special military effort concerning rockets (to the detriment of all other arms), though it aids certain branches of industry, threatens to aggravate the decline of others which employ more personnel and use more raw materials.

Also the attempt of American imperialism to “export” to some extent its industrial and agricultural crisis can only aggravate the difficulties both of European industry and of the agricultural and raw-material economy of the semi-colonial and dependent countries.

For all these reasons we think that the “recession” that has begun can prove to be much more difficult to overcome ivith the same relative rapidity as in the past, and in any case to be more serious than that of 1949–1950 or that of 1953–1954.


The Aggravated General Crisis of Imperialism

What gives a quite special character to the current economic difficulties of imperialism is that they arise at a moment when imperialism has also a political crisis as a result of Soviet economic and technical successes and of the new advances of the colonial revolution.

The intercontinental guided rocket and the interplanetary rocket (which confirms the reality of the former) have given the USSR, on the strictly military plane, a superiority that it may be able to maintain for at least several years.

In reality it is not excluded that this advance may prove to be henceforth irreversible (on the plane of military armament). That is a fact of considerable and perhaps historic scope, whose consequences we have not yet finished deducing.

The psychological effect on the masses and on imperialism of these successes of the statified and planified economy, which we hail with all our hearts, is already immense. The masses are realizing the inferiority of the imperialist side in the relationship of forces and are interpreting the changes in a revolutionary way, as a stimulus to new struggles and victories over imperialism. This effect can only increase by bounds in the coming period.

This inferiority is realized also by imperialism, including this time, for the first time, by American imperialism. That is also a fact of historic importance.

It would however be wrong and dangerous to draw as conclusion the possibility of seeing imperialism let itself be paralyzed by a sort of unswerving propagation of a defeatist current (which unquestionably exists and is growing stronger). The leading and still decisive circles of the international bourgeoisie are in practice reacting, in the last analysis, by strengthening their military potential and preparations.

That is the conclusion we must draw from what is now going on and being prepared both in the United States and in NATO. The disarmament discussions, the Rapacki Plan, a new top conference, etc., which are going to continue, the always possible and even inevitable partial compromises, must not hide from us the practical achievements of imperialism in the direction of a super armament, with the generalization of atomic arms, the construction of rockets, and soon of anti-rockets, and the multiplication throughout the world of military bases and launching ramps.

In this field there has been no retreat since the Korean War. There is on the contrary an ever broader and more intense practical preparation. Imperialism has replied to the Soviet sputniks by creating a genuine hysteria for superarmament in the shortest possible time, a hysteria which in the United States has spared nobody, including the “liberals,” the ‘”democrats” à la New Republic, The Reporter, etc., who have “thanked sputnik” for having awakened the “healthy” reactions of the “nation.” As for more prudent men like Kennan or Lippman, taken to task so vehemently by the Democrat Dean Acheson, they are far from being opposed to the effort to “catch up with” the USSR. They ask only that this effort be combined with a diplomacy that is less ambitious and less provocative, more realistic and more cautious, which avoids a premature clash with the workers’ states, in a relationship of forces that is plainly unfavorable to imperialism.

(They furthermore propose diplomatic ripostes to the Kremlin’s “peace” offensive, aiming to seize the initiative in this field and to drive the Kremlin back, if the occasion should arise, on to the defensive.)

Such, however, might well not be the opinion of the American leading circles which expressed themselves through the still secret reports of the Gaither, Rockefeller, and other commissions. By insisting on a gradual serious increase in the military budget, as well as on the idea that time for still several years threatens to work against the United States, and on the advantages of a “surprise” offensive, these commissions are toying to some extent with the idea of a preventive war.

We must nowise minimize the dangers of such a situation We must on the contrary concentrate our policy on denouncing them and on putting forward and into practice our own solutions, revolutionary solutions, whose realistic character it is also neces sary to demonstrate, ie, that it is a question of the only genuine realism.

Let us approach the question in its full scope. It is unquestionable that the unbridled race for atomic arms, itself the cause of sensational technical achievements on both sides,, will soon bring humanity into “the era of automatic push-button war.” That is the expression already used by Dr Pickering, director of the rockets laboratory at the California Institute of Technology. That is to say that, in order to save time, to intercept the enemy’s rockets before they reach their objectives and to launch reprisals, there will soon be machines to determine whether the radar signals come from enemy rockets, and to trigger the offensive. The whole process threatens to become automatic and to escape from the control of men, including isolated individuals and groups of soldiers – who, themselves cut off from any broader democratic control, constitute a feeble guarantee of avoiding errors of panic or simply of madness.

Furthermore, an atomic war at the rocket level, set off in any manner at all – automatically or after “mature” reflection – would not fail to be immensely catastrophic for humanity. Consequently it is infinitely correct not to take the question lightly and to do everything to avoid this disaster.

But the question of war is not a question of logic, of reasoning; it is a social question, and all current practice shows that imperialism is capable of anything, except of “peacefully” abdicating. It is necessary to take that as our point of departure, and, as realists, to envisage what is the most effective manner to reduce if not eliminate the risks.

Our movement unhesitatingly replies: the propagation of the effective revolutionary struggle everywhere; the overthrow of capitalism over the greater part of the globe.

And this for the following two main reasons. It is evident that imperialism, first of all that of the United States, will try to compensate for its military inferiority and increase its chances of success by means of a strategy of multiplying bases throughout the world which would disperse the military action of the USSR and render its territory more vulnerable. This clear strategy of imperialism must be answered by the neutralization of its bases, above all those in Europe and Asia, and if possible also those in Africa. This neutralization can be guaranteed only by the victory of workers’ regimes.

Furthermore, the use of atomic arms in a revolution, by native reactionary forces or by imperialism, is infinitely more difficult than in the case of a general war.

To encircle American imperialism by continents and regions in which it has ceased to have bases and support-points is the only realistic manner of envisaging the possibility of avoiding atomic war, or of disarming American imperialism with relative ease, without colossal destructions, in case of an attempt at war on its part.

The policy of the Kremlin, or of centrists and reformists of every kidney, which aims at “pacifying” the world on the basis of the present status quo, is in reality utopian, since the status quo is constantly altered by the progress of technical and human revolutionary forces, and since capitalism is organically bound up – as the example of the USA best demonstrates – with a war economy and war preparations.

Naturally, while reasoning and in practice acting in this way, we must not have a negative or ultimatistic attitude toward transitional slogans, struggles, or forms. First of all, when we speak of the need of revolution in each country, we are not speaking of the ultimate form of the dictatorship of the proletariat, but of its first steps, under the transitional form of a workers’ government of workers’ parties applying a minimum programme.

It is the task of each section to put forward the transitional form of workers’ power adequate to its country, and to work up very realistically its minimum programme. What differentiates us from the Stalinists and reformists on the question of power is that, for us, firstly, no matter what minimum but truly anti-capitalist and anti-imperialist programme can be applied only by workers’ political formations; and secondly, that such a workers’ government can be formed and above all can last only if it is supported in an extra-parliamentary way by the masses organized in committees and armed.

As for the programme, we can and we must show ourselves to be very realistic, for example by taking economic necessities into account in a very concrete manner in each case so that economic life is not dislocated. For example it can very well be envisaged in the case of semi-colonial and dependent countries to form capitalist businesses under control of the workers’ state, and even to permit imperialist businesses working under the same control, but under new conditions profitable also to the workers’ state (examples of Chilean copper, Bolivian oil, etc.).

The moment and form of certain nationalizations are not questions of principle but of tactics, according to a given relationship of forces. Only the question of the political power is a question of principle and is really determinant.

The question of a transitional and realistic concrete solution to face up to both the threat of war and the situation that can be created by a possible deepening of the “recession” already begun must concern all our sections. On the basis of such a solution, we can and we must conclude practical agreements with left centrist tendencies that may develop in the mass organizations where we are active, in order to push them in such a direction, the essential being to present ourselves not only with our ultimate programme but with a realistic immediately applicable programme.

For the struggle for workers’ power, under this form and in this sense, can in places rapidly become, in the new conjuncture, a very immediate and very urgent question.

Furthermore, there is an even longer echelon of the transitional struggle currently possible and necessary: that of a struggle by our forces rooted in mass organizations against atomic arms and tests, against launching ramps, for the Rapacki Plan and any sort of propositions aiding “disarmament.” Our forces in mass organizations can very well give critical support to all these propositions, and, along the road, find the opportunity to clarify them by the perspective of a workers’ and peasants’ government.

We must even try to promote the broadest possible workers’ united front, on the international scale, around such propositions, and make their achievement, to whatever extent it be effected, depend on workers’ control, on the control of workers’ organizations.

In the NATO countries in particular, the struggle against atomic arms and tests and the launching ramps must be at the centre of the immediate activity of our forces active in the Socialist Parties.

We can even envisage to what extent it is possible to raise the idea of an international workers’ conference bringing together the Communist and Socialist Parties and other workers’ organizations, the associations of scientists, and the organism of the Cairo Conference, in order to organize and synchronize an effective struggle for forbidding atomic arms and tests, and against launching ramps and military bases in Europe, Asia, and Africa. Such a conference could be visualized as the end-product of other preliminary conferences, beginning for example with an international conference of the Socialist Left.

To act with imagination, audacity, and energy means to raise oneself to the level of a thorough understanding of urgent necessities, but also of currently immense possibilities.

New Advances of the Colonial Revolution

The economic and political difficulties of imperialism are aggravated by new important advances of the colonial revolution in Indonesia, the Arab countries, Central Africa, and Latin America. We are witnessing a new upsurge of the colonial revolution. While India is struggling with the economic difficulties already described, which threaten the achievement of the Second Five-Year Plan, and the Congress Party is showing itself to be more worried than ever about political evolution in the country (as clearly emerges from the last session of this party), in Indonesia the revolution has begun. It has taken the form of the seizure, on the initiative of the working masses of the SOBSI trade unions, of the industrial, agricultural, trading, banking, and transport enterprises of Dutch imperialism.

The seizure had as its pretext a nationalist reaction concerning Western Guinea (Irian), still under Dutch domination. But in reality the masses thus found an opportunity to push forward their revolutionary positions, stimulated since the elections of last summer which confirmed a great victory for the Indonesian Communist Party. In reality the masses spontaneously created committees, embryos of dual power, installing workers’ control and in places even workers’ administration over the seized enterprises.

Sukarno’s bourgeois Bonapartist government, which is supported by the PKI [Indonesian Communist Party], found itself faced with a fait accompli, and overwhelmed by the revolutionary initiatives taken by the masses. In order to get the situation back in hand, it put forward the army, which it interposed between the masses and imperialism. Since then, the situation has remained uncertain, the masses not having received the leadership they were expecting from the PKI to complete the revolution, but the government not daring to undo the seizure of the imperialist enterprises, either.

As for imperialism itself, it was caught off guard and with no practical possibility to react by force. The importance of the economic consequences for imperialism of the seizures in Indonesia can be measured by pointing out that 15% of the cultivated area of the country belongs to foreign plantations and that half the area reserved for technical agricultural products destined for export (coffee, tea, rubber, sugar-cane) belongs to foreign capital (of which 70% is Dutch capital). The principal extractive industries (the only ones in reality that exist in Indonesia, the rest of industry being insignificant), of oil, coal, and tin, also belong to Dutch capital and to foreign capital in general, as well as the main banking, trading, and transport enterprises.

Without non-indemnified nationalization of all these enterprises, with the exception of those whose immediate functioning requires that they simply come under the control of a workers’ state, it would be quite futile to speak of the possibilities of harmonious and profitable economic development for the country. Furthermore, the agrarian question in Indonesia has a very acute form both because of the fact that 70% of the peasants own no land (or less than half a hectare), and that the cultivation of food crops, especially that of rice, was relatively blocked in favor of the technical crops in which imperialism was interested.

Imperialism’s rule has produced other imbalances that aggravate the situation in this country and at present require radical solutions. Thus Java was overpopulated, with 54 (out of 82) million poor peasants and pauperized urban masses, while the technical crops and mining production flourished on other islands of the archipelago, considerably less populated. It is, furthermore, the relative wealth of these islands, and principally of Sumatra, coming from coprah, rubber (Indonesian production is 40% of world production), and oil, that feeds the separatist tendencies of the local feudalists – which imperialism is currently encouraging. [6]

The future of the Indonesian revolution that has been begun naturally depends on the attitude of the PKI. It is not excluded that, subjected to the very strong pressure of the masses who are now hoping for a radical solution, this party may see itself obliged to behave in the long run in the Jugoslav or Chinese way. But the danger also exists that its shillshallying, its hesitations, its complicated game of ruses with the bourgeois Bonapartisl staff of Sukarno – which is trying to keep the country to a middle-of-the-road regime – may play into the hands of the reactionary forces of the country, represented by the army, and of politicians such as Hatta, who are aspiring to a sanguinary dictatorship, entering into new compromises with imperialism.

It is particularly up to the revolutionary Marxist elements working inside the PKI, who are not lacking in the country, to help the revolutionary current polarized in this party to go forward and complete the revolution that has been begun.

The Arab revolution has also made serious progress recently. I shall briefly mention: the creation of a federated state of Egypt and Syria, which will not fail to prove to be a very powerful stimulant to Arab unity and to the revolution in the Middle East; the successes won by the Moroccan Army of Liberation against the Franquists at Ifni; the growing political maturity and the renewal of military activity of the forces of the Algerian revolution, numerically reinforced and now endowed with medium-heavy materiel, the handling of which, as soon as it has been learned by the young revolutionary fighters, will qualitatively transform the military aspect of the struggle.

As for tropical Africa, we must mention the rising movement of the trade-union vanguard, both in the French and in the English and Belgian colonies, for attainment of genuine independence, with such advanced points as the guerilla begun in the Kamerun territory by the forces of Um Niobé, former Communist trade-union leader.

A high point illustrating this new upsurge of the colonial revolution in Asia and Africa was unquestionably the Cairo Conference which brought together about 500 delegates and representatives from some 50 Afro-Asiatic countries. The progress achieved over the Bandoeng Conference can be measured by observing that the Cairo Conference put the accent on some highly explosive ideas and resolutions: Nationalization of foreign firms; economic and technical aid, without conditions, to be asked from the workers’ states; active support of the Algerian revolution, as concretized in a well-known resolution. I now come to the recent progress of the colonial revolution in Latin America. I shall briefly mention only the salient points in this situation:

In Argentina, on the approach of the elections, labor activity was renewed with an impressive wave of new strikes. It is unlikely that the extreme instability with which this country is still struggling will end with the elections.

In Chile, the presidential candidacy of the socialist leader Allende, backed by the Communists, has had great success. Our comrades, both inside the SP and outside, are very actively participating in this campaign.

In Bolivia, the polarization of the worker and peasant masses around a new leadership hostile to the MNR is becoming accentuated. The activating nucleus of this new leadership is unquestionably our party, as you comrades have been able to verify by reading the information we provided in a recent Internal Bulletin of the International Secretariat.

In Cuba, the Fidel Castro rebellion, which is operating in the maquis, is spreading and having new successes; sparked by an anti-capitalist and anti-imperialist programme, it has a good chance of overthrowing, by means of a popular uprising, the hated regime of Batista. [7]

In Venezuela, the magnificent popular revolt of the masses won out over the sanguinary dictatorship of Jimenez, the straw-man of the North American oil trusts, who had been ruling the country for now ten years by means of repression and terror. The dictatorship was weakened by dissensions in the armed forces, by the rebellion of the air force and the navy, but above all by the growing discontent of the masses, the students, workers, and petty-bourgeoisie, a discontent which determined the attitude of the army. The Jimenez regime was overthrown only thanks to a heroic popular uprising that produced hundreds of dead and thousands of wounded, for the masses/of Caracas hurled themselves recklessly against the tanks and the nests of Jimenez’s police assassins barricaded in the offices of [the Venezuelan equivalent of the FBI or CID], of the political police, and against the prisons to free the prisoners. [8]

The revolutionary Marxist forces, operating inside the Accion Democratica led by ex-president Romulo Bethencourt, have a good chance, under the new conditions created by the smashing popular victory, of developing a worker’s left wing, to which belongs the future of this fabulously rich country, pillaged up till now by imperialism and the limited native comprador circles.

The evolution of the economic and political situation in Latin America opens great revolutionary possibilities for our sections and lays urgent duties upon us. In Argentina, our organization is fighting audaciously to broaden its base and its influence, to recruit on a large scale, to obtain its legalization, [this has already been done], and make itself known to the country’s extensive proletarian masses who are looking for new leadership. To win these masses, especially the most radicalized of them, who were formerly polarized around the myth of Peron, with the help of a big labor party based on the trade unions, is the central political task of our organization.

In Chile and in Uruguay, it is the work inside the SPs that must be carried on in a broader and more systematic way, while avoiding a premature clash with the bureaucratic leaderships which would try to expel the genuine left. In Chile, furthermore, the unification of all Trotskyist forces in one organization cannot fail to increase very considerably the effectiveness of our work as a whole in this country.

In Bolivia, the International must tend to giving all practical support to the application of the line of the Fifth World Congress resolution on this question, a line which is proving itself to be generally correct and which is already beginning to have a successful application.

The Situation in the USSR, in the Other Workers’ States, and in the Communist Parties

In appearance at least, the Zhukov crisis opened a period of relative stability in the political leadership of the Soviet bureaucracy. The success of the sputniks, and the evolution of the international situation, generally unfavorable to imperialism, seems to be reflected in the USSR to the profit of the current Kremlin leadership.

This evaluation is partly correct. But we must not forget that the very serious problems which are at the basis of the crisis of the Soviet bureaucracy have never found a satisfactory solution. The Soviet economy is at present in full transition. Very thorough-going reforms have been introduced in it, which aim at checking its bureaucratic sclerosis, at increasing its elasticity, at rationalizing it and rendering it qualified to absorb rapidly and without shocks the new productive forces of automation and nuclear energy.

This is the purpose of the decentralization into broadly autonomous economic regions and groups of regions, from the industrial and even agricultural point of view, of the sovknarkhozes – a decentralization that Khrushchev is now trying to extend also even to the agricultural field.

This decentralization is not a purely economic operation (or influenced by the prospect of atomic war) but a highly political and social operation. It upsets the social structure of the USSR and raises fundamental political problems. It involves a structural recasting of the bureaucracy, to the disadvantage of the layers of the central administration for the benefit of more technical layers more directly connected with production. But at the same time it raises the question of the distribution of roles within each enterprise, making more imperative than ever the need of a democratic association of the productive masses with the working up and carrying out of the plan.

In all this, the political leadership of the bureaucracy is acting in a Bonapartist way, playing one against another and yielding to sometimes contradictory pressures. The very latest developments seem, however, to be continuing concessions under pressure from below, by increasing the powers attributed to the plant committees not only toward the directors but even toward the trade-union bureaucracy that strangles them.

One gets the impression that “destalinization,” temporarily stopped in the strictly political and cultural fields, is continuing and deepening in the field of the economic and social powers attributed to the proletariat and the local mass organisms (factory committees, Soviets).

In this category of ideas there also enters the very important measure whereby from now on the “correction camps,” much reduced in number and in the number of their inmates, will be dependent not on the Ministry of the Interior, on the police, but on the local Soviets.

The economic concessions to the peasants continue and broaden. Khrushchev’s proposal to give the kolkhozes the ownership of tractors and farm machinery is a new “Bukharinist” concession, but which, under the present conditions of Soviet agriculture and of the relations between the peasants and the state, might prove to be necessary and useful. It comes about naturally as a result of the persistent comparative stagnation of Soviet agriculture, in such contrast to the advances in the industrial field (or to the successes of American agriculture).

The year 1957, Khrushchev said in his 24 December 1957 speech, “was unfavorable”: wheat stocks about equal to those of 1955, a mediocre year, in spite of the considerable extension of areas under cultivation in the “virgin lands,” as well as of cotton. As for livestock-raising, the figure of 31,500,000 milch-cows at the end of 1957 remains still lower than that of 33,200,000 in 1928 before collectivization and was increased by only about 600,000 head between 1956 and 1957 (a figure which allows it to be supposed that it will be hard to reach by 1960 the 40 million head foreseen by the Sixth Five-Year Plan).

In the appeal that it made on January 21st to agricultural workers, the party’s Central Committee and the government admitted that the year 1957 had been a difficult one, and that meteorological conditions in the Lower and Middle Volga regions had been worse “than in 1921,” a famine year in the USSR.

But the basis of the still insoluble difficulties in agriculture is to be found elsewhere: in the willful non-cooperation of the peasants with the state, as a result of the way in which collectivization was carried out, and in the uneconomic conditions of exchanges with the state and with the cities.

Khrushchev’s reforms are an attempt to bet on the material interests of the peasants and to restore a balance on that basis. It remains to be seen under what economic conditions the machines and tractors will be sold to the kolkhozes, whether the peasants will rid themselves of their distrust toward the “exploiting” state, and under what juridical conditions these freedoms given to the kolkhozes may not end up by accentuating the economic and social contradictions among the kolkhozes and within each of them; and also the repercussions of such market forces on the planned economy as a whole. [9]

It is hard to say along what exact lines all these reforms are reconstructing the bureaucracy, and what attitude the different bureaucratic strata will take toward the present leadership. What is clear in any case is that Khrushchev has alienated the support of representatives of important bureaucratic strata without having found a stable popular base. The whole situation in the USSR is still in tumultuous evolution, from which “surprises” are not excluded – indeed, quite the contrary.

The situation in the “Popular Democracies” and in China is also not without repercussions for the stability of the Khrushchev regime. First of all, their needs of economic aid from the USSR are hardly diminishing but continue to increase. This weight, added to that of the diplomatic aid needed for a series of semi-colonial and dependent countries, must currently lie heavily on the Kremlin. Then there are the political difficulties arising from the maintenance and even the renewed accentuation of a quite Stalinist rigidity in East Germany, in Hungary, in Czechoslovakia, and in the other European “People’s Democracies.”

In these countries tension is great and explosions always possible. In Poland, the persistent economic difficulties – which have no prospect of serious rapid improvement (especially in case of a more widescale world recession, which keeps the price of Polish coal down to the $14 a ton to which it recently fell from $25, and shrinks its markets in hard-currency countries) – only aggravate the political uneasiness resulting from the neo-bureaucratism of a Stalinist hue into which ‘”Gomulkaism” is settling (the Po-Prostu affair; purging of the best October 1956 elements from the CP; censorship of writers; strike movements in Wroclaw, etc.). It is only in Jugoslavia that the atmosphere is less tense, due to a considerable extent to the concessions (and not only economic ones) which the regime is making to the masses (including that of letting strikes break out, and not repressing them). [10]

As for China, we must note a new rectification of the famous “rectification” campaign, which consists of putting the accent back on the struggle against “bureaucracy, subjectivism, and sectarianism” in the leading apparatus of the government and of the party, and of considering this struggle as forming part of the category of “contradictions in the ranks of the people” – whence the need to treat such contradictions, not by repression, but by education and persuasion, in a manner as “gentle as a breeze, or mild rain” (Hsi-Chung-Hsun, General-Secretary of the State Council, at the XVIIIth extended Plenum of the party committees and organizations of the central government, 17–18 January)! [11]

The economic difficulties, the discontent of the masses, and the fear of completely alienating the sympathies of the intellectuals, spurred the Chinese leadership to come back, to some extent, to the initial themes and goals of the campaign. But this leadership has – perhaps for the first time since the coming of the new power to China – lost much of its prestige during this campaign, which overwhelmed it and which it had to carry on in abrupt and contradictory zigzags.

As for the situation in the different Communist Parties, there is naturally much to be said. Let us note that several of these parties have lost more than their plumage in the “destalinization” crisis opened by the XXth Congress. Certain of them are quite simply dislocated and reduced to sects: this is the case particularly for the American CP, the British CP, the Belgian, Danish, Swiss CPs, etc. But in a general way the CPs of the capitalist and dependent countries have seen a grave deterioration in their relations, first with the intellectuals and then with their working-class base and with the working class itself.

Something seems to be broken in the relations between the Stalinist leaderships and their base and with the working class in general. The Stalinist leaderships’ loss of prestige, of confidence, and of contacts, among the masses, is enormous and very deep-going. Everything is happening as if we were witnessing a quasi-qualitative change in the relations of these leaderships with the masses.

True, we are not witnessing the formation of a current behind a new leadership; we cannot speak even of a disaffection of the masses toward the Stalinist political and trade-union organizations manifested for example in political or trade-union voting. But we are unquestionably witnessing a rupture of the bonds of confidence and enthusiasm between the leaders of these organizations and the masses. The masses are trying to go beyond these leaderships, not along any reformist or centrist road, but along a road that they cannot yet see clearly but which can be only an authentically democratic revolutionary communist one. This is what gives the measure of the chances for our movement in this continuing and deep-going crisis in international Stalinism.

Only an accentuation of our sui generis entrist tactic, of combined entrist and independent work, carried out with force, audacity, and drive, can prevent hundreds and thousands of communist cadres from becoming demoralized and giving up the fight, and enabling them on the contrary to find a perspective of struggle for the renewal of communism and the triumph of the revolution.

We must be deeply conscious of the fact that the present situation of the CPs includes both great possibilities and great dangers. Everything depends on our action, more decisive and extensive than ever.

In entrist work properly so called, we must try to polarize the uneasiness and discontent and to fight against defeatism, around a left-opposition organ that makes the Stalinist leaderships responsible for the stagnation and the liquidationist course- that these organizations run the risk of experiencing, and that audaciously presents an alternative policy to that of the bureaucratic, bankrupt, and treacherous leaderships.

The question of such a press, much needed, written by elements who are well acquainted with the milieu of these organizations, and with their members’ aspirations, worries, complaints, and criticisms, and who are capable of expressing them in terms that touch these members, is at present a primordial one. This press must not be the pure and simple duplication of our independent organs, but something more adapted to the specific milieu of these organizations, to their political level, to their language. It must be composed of articles which criticize in clear terms, in a direct style, “à la Marty,” the general policy of the CPs (campaigns of mere signatures “for peace” without class action lighted by the perspective of working-class political solutions; class-collaborations; the tactic of partial strikes; the lack of democracy, etc.), and which sketch out an alternative policy; more short articles written by militants, with a bearing on all sorts of questions, complaints, criticisms, concrete experiences, as well as letters from correspondents, readers, etc. Editorials should make clear the immediate platform on which the left opposition is currently fighting.

From these articles and the paper as a whole there should stand out a line of absolute distrust toward the leaderships who have failed, who are betraying and liquidating the party, and who continue to rule bureaucratically.

The slogan of a special congress, with a right for tendencies, to liquidate the crisis by liquidating the leaderships, has a general scope. The line and the tone of the paper will be in each case the product and reflection of the political breaking-in process of the left in formation, of its importance and of its experience. But what can and must be avoided right from the beginning is to bring out an organ of partial criticism, that lacks conviction, bite, and a gust of deep revolt.

The CPs are at present going through an unprecedented crisis, and only an internal press capable of arousing the patriotism and anger of their members against the responsible leaderships can prove to be a valid instrument of polarization of a current for a well-defined fight, with clear perspectives, for the democratic revolutionary straightening out of these parties.

Together with this internal work, the independent work, properly so called, must go forward, by the improvement of our press, its daring and wide distribution in Stalinist circles, independent interventions in the factories and trade unions, as well as by seizing on the crisis in student and intellectual circles, where henceforward we have the possibility of playing a leading role.

The directive of the Fifth World Congress, to behave, in thin period of great revolutionary possibilities everywhere, not so much as a critical opposition, but as a positive leadership, must be concretized.

Without exaggeration, we must feel the breath of the situation and show ourselves capable of translating it into activity broader and more audacious than ever.

That is the most central meaning of this report on the present international situation and its perspectives.

1 February 1958


1. Automobile production in January 1958 was only about 500,000 units, as against 642,000 in January 1947, 612,000 in January 1956, and 659,000 in January 1955.

2. At the end of January, unemployment was more than 6% of employed labor in 45 key industrial centres of the country, with a tendency to increase further. The industries most affected are those of automobiles, aviation, and metallurgy.

3. According to the data provided by The Economist (25 January 1958), the condition and perspectives of the German economy work out as follows:

The rate of production of several metallurgical articles (machine-tools, office equipment, electric generators) has gone down this year compared to the previous year. Profit margins also, and certain important firms, like Henschel locomotives at Kassel, have had financial difficulties.

It is a more general case that led the Bundesbank to lower the interest rate by 0.5% on January 16th.

Since Spring, the rate of building has also gone down. Despite the fact that Germany still needs two million new dwellings, there will be a rate of only 500,000 new units per year, as since 1951. Reconstruction has also been completed in such industries as steel and shipbuilding, as well as that to replace the industries of East Germany.

As Germany receives one fifth of its national income from exports, a world recession threatens to affect it very much, in view of the slowing down also of internal demand. There are, however, military expenditures, especially those of rearmament, which can absorb some 55,000 million marks between now and 1961 (instead of the 45,000 million foreseen). An international recession, and the danger of inflation in case of new internal expansion, are lying in wait for the German economy.

4. The United States seems disposed to grant India a loan of $225 million. India’s reserves are currently of only $580 million. The achievement of the Second Five-Year Plan in its entirety is already abandoned. An effort will now be made to complete only the essential part of the Plan, the three new steel works and the means of power, transport, and ore necessary for them to function. If the aid of the United States is confirmed, it will lower the resultant deficit of expenditures for carrying out the limited plan to about $1,000 million (Japan and Germany having already lent sums that lessened the initial deficit).

5. Eisenhower’s economic message to Congress notes the falling-off of expenditures for investment, as well as export, and places all his hopes in the stimulant of new state spending to offset the forces of “recession”. The recession is attributed more especially to the existence of big inventories, which are being liquidated at the rate of only $3,000 million per year, which has caused a reduction in new production. It is also to be noted that the message implicitly accepts the serious probability for this year of the recession’s being accompanied by inflation – which would oblige the government to limit the use of “stabilizers” that are inflationary by nature.

6. The press (e.g. The Observer of 26 January 1958) has been talking of a conference of separatists held at Padang, in Central Sumatra, with a view to creating an independent Moslem state under the presidency of Brigadier Daud Bereuch, vice-president of the reactionary movement Darul Islam.

The Indonesian government, furthermore, has just confirmed (on January 24th) that Lubis, former head of the general staff, and other persons, have taken part in a “plot” aiming at the creation of an independent State of Sumatra.

It is in any case unquestionable that the present situation favors separatist tendencies nourished by the geographical and economic structure of the country. The dislocation of communications and the difficulties in supplying the country with foodstuffs stimulate direct trade of each island with foreign sources (for example, Singapore). This naturally threatens to dislocate the national economy completely.

Java contributes only 6% to exports, whereas it needs, out of a million tons of imported rice, 700,000 tons. Borneo and Sumatra, on the contrary, which have a population of less than 20 million, contribute 85% of exports.

In case of the secession of these islands, the financial resources of the central government would be very considerably diminished – hence the efforts of this government to maintain the centralized structure of the country by ordering the military to help build “National Front Committees for the Liberation of Irian” (order of General-Staff Chief Nasution dated 23 January 1958). The “National Front” is an organization that has been active since 11 January, aiming at promoting a civil-and-military movement all over the country so as to offset separatist tendencies.

7. Fidel Castro – according to information provided by the American press – now controls the Sierra Maestra region.

From there his men make raids into the whole country, recently using even bazookas. One of these raids led them to the momentary possession of the Radios in Havana, from which they called on the population to act “à la Caracas.” A people’s administration has been set up in the regions controlled by Castro, having at its disposal tribunals, schools, and hospitals. The rebels often confiscate or destroy certain capitalist agricultural enterprises and distribute the spoils to the poorest elements of the population.

8. It was the Junta Patriotica, an united-front organization including the Communist Party, that played the dominant role in the Venezuelan events. Its underground leader, till recently still unknown, was Fabricio Ojeda, 29, a journalist, from the left wing of the Union Democratica.

The junta was organized in committees of three: strike committees, factory committees, students’ committees, and also “committees of violence” possessing incendiary bombs and other weapons. It was the junta that launched the general strike, as a result of which the army (on the second day) decided to intervene.

The junta was created as a united front on the rank-and-file level last summer, including the Union Democratica, Accion Democratica, the Christian-Democratic Party, and the Communist Party.

9. There are at present 8,500 MTS (with about 3 million members) having at their disposal some 750,000 tractors (of 15hp) for some 82,000 kolkhozes (with 35 million members).

Khrushchev justifies the reform by insisting on the bad maintenance and the bad utilization of the machines, the weight of the extra charges on the production costs of agricultural products (sometimes, he said, as much as two-and-a-half times) caused by the administration of these stations, the bureaucratic snafu arising from the fact of the “coexistence of two masters on the same land.” He seems furthermore to have confidence in the presidents and other party members in the kolkhozes (30,000 presidents named ex officio in 1956 by the party) to control the kolkhozes.

The following questions are raised by this reform: on what terms of payment will the kolkhozes buy the machines, and on what terms will they make their purchases of new machines and spare parts, so as to avoid falling under a greater than ever dependence on the state; on what basis will the machines be distributed among rich and poor kolkhozes, without accentuating their economic and social differentiation; under what juridical conditions will the purchase (and not the exchange) of means of production by non-statified commercial groups which the kolkhozes – at least partially – are, combined with the trading activity of these groups, not set free uncontrollable Nepist forces?

10. The uneasiness among the industrial workers of Jugoslavia seems to have as its cause, among others, their low salaries compared to those of white-collar workers and functionaries in the commercial sector of the enterprises.

According to the new legislation on “workers’ councils,” these participate in the sharing of the profits of the enterprises among their members. In this sharing the productive workers seem to be very unfavorably treated compared to the commercial sector, sometimes receiving scarcely a month’s basic wage (as was the case, confirmed by Tito, in the recent strike of the miners of Trbovlje, in Slovenia), and a maximum of a month per year, while the “commercials” succeed in getting up to 27 months’ wages in a period of nine months!

11. See also the note on this question published in the January 1958 issue of Quatrième Internationale.

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Michel Pablo
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Marxist Writers’

Updated on: 4 August 2015