Leon Trotsky

Europe and America

(Part 1)

(February 1926)

Delivered: 15 February, 1926
First Published: In Russian, official anniversary volume issue in 1926 by the Bureau of Party History.
Source: Fourth International (New York), Vol.4 No.4, April 1943, pp.120-126.
Translated: John G. Wright (for Fourth International).
Transcription/HTML Markup: Einde O’Callaghan.
Copyleft: Leon Trotsky Internet Archive (www.marxists.org) 2008. Permission is granted to copy and/or distribute this document under the terms of the GNU Free Documentation License.

EDITOR’S NOTE: The myth that America “isolated” itself from Europe after the Versailles Treaty, and that this “isolation” made possible the present war, is today a central doctrine of Washington’s mythology. America’s real role in Europe after World War I is described in the following document of that period. Nor is this document merely an archive; it throws a clear light on America’s role in the coming postwar period.

By the beginning of 1924 the defeat of the German revolution posed point-blank the question of America’s new role in Europe and the consequences flowing from the altered relations between Europe and America. The theoretical analysis of this all-important development and the programmatic position on it had to be elaborated by the Bolsheviks while Lenin was on his death-bed and, in fact, after Lenin’s death. This task was fulfilled by Leon Trotsky.

Two documents comprise Trotsky’s main work in this field in the period prior to his expulsion from the Communist International and exile to Alma-Ata. The first is a speech he delivered July 28, 1924 and later published (Izvestia, August 5, 1924) under the title The Premises for the Proletarian Revolution. The second, a speech delivered February 15, 1926, was issued, together with the first, by the State Soviet Publishers as a pamphlet, “Europe and America”.

Trotsky’s introduction (February 25, 1926) follows:

“This pamphlet contains two speeches made two years apart. What joins these speeches together is unity of subject: both are devoted to a characterization of the economic and political world situation. The speeches are also bound together by unity of the basic idea: both proceed from the relation of the USA to Europe as the basis for evaluating the world situation.

“Needless to say, the essential character of the world situation is by no means exhausted in these reports. The question of the colonies, of the national-revolutionary struggle of the Eastern peoples is touched upon in them only to the extent that this was necessary in order to clarify the fundamental proposition: the hegemony of the United States in the capitalist world and the consequences flowing therefrom. The question of the position and perspectives of the East under the radically altered interrelations between America and Europe is a subject that demands a special and independent analysis. Such an analysis, however, cannot change the basic formulation of the question in this pamphlet. Without submitting the Eastern problem to a detailed analysis, this problem, in its gigantic historical scope, is throughout taken into account in these speeches.

“The staggering material preponderance of the United States automatically excludes the possibility of economic upswing and regeneration for capitalist Europe. If in the past it was European capitalism that revolutionized the backward sections of the world, then today it is American capitalism that revolutionizes over-mature Europe. She has no avenue of escape from the economic blind alley other than the proletarian revolution, the destruction of ‘the tariff and state barriers, the creation of the Soviet United States of Europe and the federative unification with the USSR and the free peoples of Asia. The inevitable development of this gigantic struggle will unfailingly inaugurate as well the revolutionary epoch for the present capitalist overlord, the United States of America.”

The basic ideas here outlined by Trotsky represented at one time the official position of the Communist International. But shortly after the publication of Trotsky’s pamphlet, these Ideas were rejected by the Stalin-Bukharin leadership. America’s role vis-à-vis Europe, the impasse of European economy, and even the slogan of the Socialist United States of Europe were among the central issues in the struggle of the Russian Left Opposition against the Stalinist revisionists.

In the 17-19 years that have elapsed since these views were first elaborated by Trotsky, the form of presentation has of course become dated, but not the basic ideas, nor the method whereby these ideas were arrived at.

We begin the publication of Europe and America with the February 1926 speech. This translation by John G. Wright is from the Russian original.

The Two Poles of the Labor Movement – The Most Perfected Type of Conciliationism

Comrades: The contemporary world labor movement is polarized: two poles determine, with unprecedented clarity, the two basic tendencies within the world working class. One of them, the revolutionary pole, is in our country, the Soviet Union; the other, the conciliationist pole, is in the United States. Never before have there been such perfected forms and methods of reformism, that is, politics of compromise with the bourgeoisie, as are to be found in the American labor movement for the last two or three years.

Politics of class compromise has been observed in the past; we have observed it through the eyes of history and with our own eyes. We estimated – and this was correct so far as the past is concerned – that opportunism in its most perfected form was furnished in the pre-war epoch by England where the perfected type of conservative trade unionism was produced. But today it is necessary to say that English trade unionism of the classic era, that is, of the latter half of the nineteenth century, bears the same relation to existing American opportunism as handicraft production does to an American factory. In the United States there is now a vast movement of the so-called company unions, that is, organizations which, in contrast to the trade unions, consist not only of workers but also of the bosses, or rather representatives of both. In other words, the phenomenon that occurred at the time of the guild organization of production, and which disappeared after feudalism, has now assumed unprecedented and entirely new forms in the most powerful capitalist country. If I am not mistaken, Rockefeller was the initiator of this movement before the war. But this movement spread to the most powerful concerns of North America only recently, beginning with 1923. The American Federation of Labor, the official trade union organization of the labor aristocracy, has adhered with certain reservations to this movement which signifies the complete and absolute recognition of the identity of interests between labor and capital, and consequently the rejection of the need for independent class organizations of the proletariat, even in the fight for immediate objectives.

Along with this, we find at this very time in the United States the development of labor savings banks and insurance societies where representatives of labor and capital sit side by side. Needless to say, the widespread notion that American wage levels assure a very high standard of living is extremely exaggerated; nevertheless, this wage level does permit the upper layer of the workers to make certain “savings.” Capital siphons off these savings through the medium of labor banks and puts them at the disposal of enterprises in that branch of industry where the workers are able to save from their wages. In this way the bosses increase their circulating capital and, above all, reinforce the interests of workers in the development of industry.

The AFL has recognized the need of introducing the sliding scale of wages on the basis of a complete solidarity between labor’s interests and those of capital: Wages should vary in correspondence with the productivity of labor and profits. The theory of the solidarity of the interests of labor and capital is thus sealed in actual practice and we get a seeming “equality” of benefits from the national income. Such are the main economic forms of this new movement which must be carefully examined in order to be understood.

The AFL (whose leader was Gompers) has lost during these past few years a large part of its membership. It now, has no more than 2,800,000 members, which represent an insignificant fraction of the American proletariat when we take into consideration the fact that industry, commerce and agriculture in the United States employ at least 25,000,000 wage earners. But the AFL has no need of a larger membership. Its own official doctrine is that problems are not settled by mass struggle but by conciliation between labor and capital. To the extent that this idea has found its highest expression in the company unions, the trade unions can and must limit themselves to the organization of the aristocratic summits of the working class, who act in the name of the entire class.

Nor is collaboration limited to the industrial and financial fields (banks, insurance societies). It is transplanted lock, stock and barrel into the sphere of domestic and world politics. The AFL together with the new company unions, to which it is closely linked and on which it leans directly or indirectly, carry on an energetic fight against socialism, and generally against European revolutionary doctrines, among which it includes those of the Second International and of the Amsterdam International. [1] The AFL adapts the Monroe Doctrine, “America for Americans,” in a new way by interpreting it as follows: “The European rabble can and will be instructed by us but they must keep their noses out of our affairs.” In this the AFL only echoes the bourgeoisie. Whereas formerly the latter declared: “America for Americans, Europe for Europeans”; today the Monroe Doctrine signifies a prohibition to others not to meddle with America’s affairs but in no wise prohibits America from interfering in the affairs of the rest of the world. America for Americans, and Europe too!

The AFL has recently created a pan-American Federation, that is, an organization extending to South America and preparing the way for North American imperialism in Latin America. Wall Street could not find a better political instrument. But at the same time this means that the struggle of the South American peoples against US imperialism that is crushing them will also be a struggle against the degenerating influence of the pan-American Federation.

The organization created by Gompers remains, as you know, outside the Amsterdam International. In the eyes of the AFL the latter is an organization of decadent Europe, an organization too much poisoned by revolutionary prejudices. The AFL remains outside Amsterdam just like American capitalism remains outside the League of Nations. But that does not prevent American capital from manipulating the strings of the League of Nations; nor the AFL from drawing behind it the reactionary bureaucracy of the Amsterdam International. Here too a perfect parallelism is to be observed between the operations of Coolidge and those of Gompers’ heirs. The AFL supported the Dawes Plan when American capital installed it. In all parts of the world it fights for the rights and pretensions of American imperialism and, consequently, first and foremost against the Soviet Republic.

This new conciliationism is of a much higher type than any seen before; it is conciliationism drawn to its ultimate logical conclusion, organically sealed by “inter-class” institutions like company unions, coalition banks and insurance societies; and this conciliationism has attained at one stroke American proportions. Large capitalist enterprises have been created which organize by contract factory committees on equal footing with the bosses, or along the lines of Lower and Upper Houses, etc. Conciliationism is standardized, mechanized and produced by large capitalist concerns. This is a purely American phenomenon – a sort of social conveyor line for the mass production of conciliationism by means of which the subjugation of the working class is automatically strengthened.

The Economic Power of the USA as the Basis of Conciliationism

One might ask why capital has need of this. The answer is obvious if one takes into account the actual power of American capital and the plans that it is capable of projecting. For American capital, the USA is no longer a shut-in field of action but a drill-ground for new operations on a gigantic scale. The American bourgeoisie must insure its security in this drill-ground by means of conciliationism in its most complete and perfected form, in order to be able to expand more securely abroad.

Another question arises: How is it possible to realize now in the second quarter of the twentieth century this standardized conciliationism in practice, after the imperialist slaughter in which the USA participated, and after the great experiences of the workers of all countries? The answer to this question is to be found in the power of American capital, to which nothing in the past can compare.

No few experiments have been made by the capitalist system in different countries of Europe and in different parts of the world. The whole history of mankind can be viewed as a tangled chain of attempts to create, remodel, improve, raise the social organization of labor: from patriarchy, through slavery to serfdom and, finally, capitalism. It is with capitalism that history has carried out the greatest number of experiments, first of all and in the most varied manner in Europe. But the most colossal and “successful” attempt appears on the North American continent. Just think of it: America was discovered near the close of the 15th century, after Europe had already passed through a rich history. During the 16th, 17th and even 18th centuries, and in large part throughout the 19th, the United States was a distant self-sufficient world, an immense, god-forsaken backwoods area nourished with the crumbs of European civilization. In this interim, a country of “unlimited possibilities” was taking shape and developing, for here nature had created all the conditions for a mighty economic expansion. Europe cast across the ocean wave upon wave of the most awakened and most tempered elements from among its population, elements best qualified for developing productive forces. All the European movements of religious-revolutionary as well as political-revolutionary character – what did all these signify? They signified the struggle of the most progressive elements, first of the petty bourgeoisie and then of the working class, against feudal and clerical rubbish which impeded the development of the productive forces. Everything that Europe cast out crossed the ocean. The flower of European nations, her most active elements, all those who wished to make their own way at any cost fell into an environment where this historic rubbish did not exist but where virgin nature with its inexhaustible abundance reigned. Such is the basis of America’s development, America’s technology, America’s wealth.

What inexhaustible nature lacked was – man. Dearest of all in the USA was labor power. Hence, the mechanization of labor. The principle of production by means of the conveyor line is not an accidental principle. It is an expression of the tendency to replace man by machines, multiplying labor power, bringing and carrying away, lowering and lifting by automatic means. All! this must be accomplished by a conveyor line and not by human backs. This is the principle of the conveyor system of production. Where was the elevator invented? In America, in order to dispense with a man bearing a sack of wheat on his back. And pipe lines? They were invented in the United States which has 100,000 kilometers of pipe lines, that is, conveyors for liquids. Finally, the conveyor line, which furnishes the transport within the factory and whose supreme model is the Ford organization, is known to the whole world.

America knows very little about apprenticeship; time is not wasted there on training apprentices because labor power is dear; apprenticeship is replaced through a subdivision of the labor process into infinitely small parts that require little or no training. And who brings together all the parts of the labor process? It is the endless belt, the conveyor line. And it also serves as the instructor. In a very short time a young peasant from southern Europe, the Balkans or the Ukraine is transformed into an industrial worker.

Serial production as well as standardization is bound to American technology: that is mass production. Goods and articles intended for the upper layers, adapted to individual tastes, etc., are manufactured much better in Europe. Fine cloth is furnished by England. Jewelry, gloves, cosmetics, etc., come from France. But when it is a question of mass production intended for a vast market, America is far superior to Europe. That is precisely why European socialism will learn technique at the American school.

Hoover, the most competent statesman in the economic field, is carrying on an intensive campaign for the standardization of manufactured goods. He has already concluded several score contracts with the biggest trusts for the production of standardized articles, among them the baby carriage and the casket. It turns out that an American is born standardized and dies standardized. I do not know how convenient this is, but it is at least 40 per cent cheaper.

The American population, thanks to immigration, numbers many more elements (45 per cent) fitted for work than the European population. First of all, the relation between the age groups is different. The whole nation is thereby rendered more productive. This higher coefficient of productivity is further multiplied by the greater output per worker. Because of mechanization and the more rational organization of the labor process, a miner in America extracts two and a half times more coal and ore than in Germany. The farmer produces twice that of Europe. We see what the results are.

It was said of the ancient Athenians that they were free men because there were four slaves to each Athenian. Every inhabitant of the USA has fifty slaves, but mechanical ones. By calculating the available machine power [2] and translating horse power into man power one will obtain this figure that every American citizen, including suckling babes, possesses fifty mechanical slaves. Obviously, this does not prevent American economy from resting on living slaves, that is, hired workers.

The annual national income of the USA amounts to 60 billion dollars. Annual savings, that is, the sum remaining after all obligations are paid, total between six and seven billion dollars. I speak only of the United States, i.e., the area so labelled in old textbooks. Actually, the USA is greater and richer. Canada, without offense to the British Crown, is an integral part of the United States. If you consult the Annual Report of the US Department of Commerce, you will discover that trade with Canada is entered under internal trade; and that Canada is politely and somewhat evasively referred to as the northern prolongation of the United States, without the blessing of the League of Nations. Besides, the latter was not evn consulted, and for good reason: there was no need here for this Zags [Soviet registry of civil acts of state, especially marriages]. The economic forces of attraction and repulsion are already operating almost automatically; English capital holds hardly 10 per cent of Canadian industry; American capital holds more than a third of it; and this proportion is steadily growing. English imports into Canada are valued at 160 millions while those of the USA are almost 600 million dollars. Twenty-five years ago English imports were five times those of the United States. Most Canadians consider themselves Americans, with the exception, ironically enough, of the French section of the population which considers itself profoundly English.

Australia is passing through the same process as Canada but at a slower tempo. Australia will take her stand alongside of the country whose navy will defend her against Japan and will perform this service most cheaply. In this competition victory is assured to the United States in the near future. At all events, should a war break out between the US and Great Britain, Canada, “the British Dominion,” would serve as one of the reservoirs of man power and food supplies for the US against England.

Such, in its main features, is the material power of the United States. It is this power that permits the American capitalists to follow the old practice of the British bourgeoisie: fatten the labor aristocracy in order to keep the proletariat shackled. They have entered into this practice to such a degree of perfection as the British bourgeoisie would never even have dared to consider.

The New Roles of America and Europe

These last years, the economic axis of the world has been radically displaced. The relations between the USA and Europe have become drastically altered. It is the result of the war. Naturally, this change was prepared long since: there were symptomatic indications of it, but it has become an accomplished fact only recently, and we are now trying to account for this gigantic shift that has taken place in mankind’s economic life and, consequently, in human culture. A German writer has recalled in this connection Goethe’s words describing the extraordinary impression made on contemporaries by the Copernican theory according to which not the sun revolves about the earth but, on the contrary, it is the earth, a modest and middle-sized planet, that revolves around the sun. There were many who refused to believe it. Their geocentric patriotism was outraged. The same is true now in regard to America. The European bourgeois does not want to believe that he has been shoved to the background, that it is the USA that rules the capitalist world.

I have already pointed out the natural and historic causes that have prepared this gigantic world shift of economic forces. But it required the war in order at a single blow to raise America, lower Europe and lay bare the abrupt shift of the world axis. The war, as an enterprise for the ruination and decadence of Europe, cost America around 25 billion dollars. If we recall that American banks now hold 60 billion dollars, that sum of 25 billion is relatively small. Furthermore, 10 billions went as a loan to Europe. With the unpaid interest these 10 billions have now become 12, and Europe is beginning to pay America for its own ruination.

Such is the mechanism whereby the United States was able to rise at one stroke above the whole world as the master of its destinies. This country with a population of 115 million [3] has Europe entirely at her command, with the sole exception, of course, of the USSR. Our turn has not yet come and we know that it will not come. But leaving our country out of it, there still remain 345 million Europeans, that is, a population three times as large as that of the USA.

The new relation of roles of nations is determined by the new relation between their respective wealths. The estimates of the national wealth of the various countries are not very exact, but approximate figures will suffice. Let us take Europe and the USA as they were fifty years ago, at the time of the Franco-German war. The wealth of the United States was then estimated at 30 billion dollars, that of England at 40 billions, that of France at 33 billions, that of Germany at 38 billions. As is apparent, the difference) between the respective levels of these countries was not great. Each possessed from 30 to 40 billions, and of these four richest countries in the world it was the US that was the least rich. This was in 1872. But what is the situation now, half a century later? Today, Germany is poorer than in 1872 (36 billions); France is approximately twice as rich (68 billions); likewise England (89 billions); but the wealth of the US is estimated at 320 billion dollars. Thus, of the European countries which I cited, one has regressed to its former level, two others have doubled their wealth, and the United States has become 11 times wealthier. That is why in expending 15 billions for the ruin of Europe, the United States has completely achieved its purpose.

Before the war America was Europe’s debtor. The latter served as the principal factory and the principal depot for world commodities. Moreover Europe, above all England, was the central banker of the world. All these three leading roles now belong to the United States. Europe has been relegated to the background. The US is the principal factory, the principal depot and the central bank of the world.

Gold, we know, plays a certain role in capitalist society. Lenin wrote that under the regime of socialism gold would be used as building material for certain public places. But this will be under socialism. Under capitalism there is nothing more important than a bank vault filled with gold. How do matters stand on this score in America? Before the war, the American gold reserve, if I am not mistaken, amounted to 0.9 billions; on January 1, 1925 it rose to 4½ billions, which represents one-half of the total world reserve; today this proportion is not less than 60 per cent.

Now, what was happening to Europe while America was concentrating in her hands 60 per cent of the world’s gold? Europe was declining. It had been plunged into war because European capitalism was suffocating within the narrow framework of the national states. Capitalism tried to extend these limits, to create for itself a larger arena and in this the wildest pressure was exerted by the more progressive German capitalism which set the “organization of Europe” as its aim. But what was the outcome of the war? The Treaty of Versailles has created in Europe about 17 additional, independent new states and territories. Europe has added 7,000 kilometers of new frontiers, customs barriers and, on each side of these new customs barriers, a corresponding number of fortifications and armies. Europe now has one million more soldiers than before the war. To arrive at such achievements Europe destroyed an enormous mass of material values, devastated and impoverished herself.

But that is not all. In return for all her misfortunes, her economic ruin, her new and senseless customs barriers that disorganize commerce, her new frontiers and armies; for her dismemberment, ruination and decadence, for the war and the peace of Versailles, Europe must pay to the US the interest on her war debts.

Europe is impoverished. The quantity of raw materials that she works up is 10 per cent lower than it was before the war. The specific weight of Europe in world economy has diminished by many times. The sole stable thing in present-day Europe is – unemployment. And curiously enough, in their search for avenues of escape, bourgeois economists have exhumed from the archives the most reactionary theories from the epoch of primitive accumulation. They see remedies for unemployment in Malthusianism and emigration. During the period of its expansion, triumphant capitalism had no need for these theories. But now that it has reached decay, senility and arterio-sclerosis, it becomes childish in the realm of ideas and returns to the old witch-doctor remedies.

The Imperialistic Expansion of the United States

From the power of the United States and the weakening of Europe flows the inevitability of a new division of world forces, spheres of influence and world markets. America must expand while Europe is forced to contract. In precisely this consists the resultant of the basic economic processes that are taking place in the capitalist world. The US reaches out into all world channels and everywhere takes the offensive. She operates in a strictly “pacifist” manner, that is, without the use of armed force as yet, “without effusion of blood” as the Holy Inquisition said when burning heretics alive. She expands peaceably because her adversaries, grinding their teeth, are retreating step by step, before this new power, not daring to risk an open clash. That is the basis of the “pacifist” policy of the United States. Her principal weapon now is: finance capital backed by its billions of gold reserve. This is a terrible and overwhelming force in relation to all parts of the world and particularly in relation to devastated and impoverished Europe. To grant or to refuse loans to this or that European country is, in many cases, to decide the fate not only of the political party in power but of the bourgeois regime itself. Up to the present time, the US has invested 10 billion dollars in the economy of other countries. Of these 10 billions, two have been granted to Europe in addition to the ten billions formerly supplied for its devastation. Now, as we know, the loans are granted in order to “restore” Europe. Devastation, then restoration: these two aims complement each other, while the interest on the sums appropriated for both keep flowing into the same reservoir. The US has invested the most capital in Latin America which, from the economic standpoint, is becoming more and more a dominion of North America. After South America, Canada is the country which has obtained the most credits; then comes Europe. The other parts of the world have received much less.

Ten billions is a very small sum for so powerful a country as the United States, but this sum is rapidly increasing and to understand this process it is most important to take into account its tempo. During the seven years following the war, the US invested abroad around six billion dollars; nearly half of this sum has been supplied these last two years; in 1925 the investments have been much greater than in 1924.

On the eve of the war, the US still needed foreign capital, received this capital from Europe and placed it in industry.

The growth of American industrial power led at a certain stage to the rapid formation of finance capital ... Once begun, this process proceeds with ever greater acceleration. What two or three years ago was still in the field of conjecture is now taking place before our eyes. But this is only the beginning. The campaign of American finance capital for the conquest of the world will actually begin only tomorrow.

An extremely significant fact: in the course of the past year, American capital has more and more abandoned governmental loans in favor of industrial loans. The meaning of this is clear enough. “We have given you the opportunity of reestablishing the national currency in Germany and in England; we will consent to do it in France on such and such conditions, but for us this is only a means to an end. And our end is to lay our hands on your economy.”

I have recently read in Der Tag, organ of German metallurgy, an article entitled, Dawes or Dillon. Dillion is one of those new condottieri whom American finance sends for the conquest of Europe. England gave birth to Cecil Rhodes, its last colonial adventurer on the grand scale, who established a new country in South Africa. Such figures are now being born in America, not for South Africa but for Central Europe. Dillon’s task is to buy up German metallurgy at a low price. He has collected only 50 million dollars for this purpose – Europe is not now selling herself dearly – and, with these 50 million dollars in his pocket, he is not deterred by such European barriers as the frontiers of Germany, France and Luxembourg. He must combine coal and metal; he wishes to create a centralized European trust; he does not bother with political geography – I even believe that he is ignorant of it. What does it matter? Fifty million dollars in present-day Europe is worth more than any kind of geography. His intention, as I said, is to group in a single trust the metallurgy of Central Europe, then to oppose it to the American steel trust, whose king is Gary. Europe’s “defending herself” against the American steel trust comes down in action to this, that two American octopuses fight each other in order to unite at a given moment for a more planful exploitation of Europe. That is precisely why the organ of German metallury weighs the alternative: “Dawes or Dillon.” The choice is limited, there is no third. Dawes is a creditor armed from tip to toe. With him there is little else to do than to submit. But Dillon is in some ways an old lady’s companion. To be sure, of a very special type, but, who knows, perhaps he will not strangle us ... The article ends with this remarkable sentence: “Dillon or Dawes, that is the most important question for Germany in 1926.”

The Americans have already secured, by purchasing stock, control of the so-called “D banks,” the four most important banks of Germany. The German oil industry is obviously hanging on the tails of American Standard Oil. The zinc mines, formerly the property of a German firm, have passed into Harriman’s hands who obtained thereby the monopoly control of crude zinc on the world market.

American capital does business wholesale and retail. In Poland, the American-Swedish match trust is taking its first preparatory measures. In Italy they go further. The contracts which American firms sign with Italy are very interesting. Italy is given charge, so to speak, of managing the Near East market. The US will supply semi-finished articles to Italy in order that the latter may adapt them to the taste of the Oriental consumer. America hasn’t the time to bother with details. She furnishes standardized products. And the omnipotent trans-Atlantic business man comes to the artisan of the Appenines and says to him: “Here is all that you need, but paint it up and polish it up to the taste of the Asiatics.”

France has not yet come to this. She is still obstinate and resists. But she will give in. She will have to stabilize her currency, that is, put her head in the American noose. Each State awaits its turn at Uncle Sam’s counter.

How much have the Americans spent to secure such a situation? A very small sum. Investments abroad, without counting the war debts, come to 10 billions. Europe has received all in all 2½ billions, and America is already beginning to treat her as a conquered country. American investments in European economy represents only a hundredth, and even less, of the total wealth of Europe. When a scale is swinging, only a slight tap of the finger is necessary to tip it to one side. The Americans have given this tap of the little finger, and they are already masters. Europe lacks the necessary capital for the work of restoration and the necessary circulating capital for the part of her economy already restored. She has buildings and equipment worth hundreds of millions but lacks ten millions to set the machine going. The American arrives, gives the ten millions and lays down his conditions. He is the master, he issues the orders.

I have received an extremely interesting article on one of those new Cecil Rhodes that America is now giving birth to and whose names we are obliged to learn. It is not very pleasant, but it can’t be helped. We have learned quite well the name of Dawes. Dawes is not worth a pin’s head, but all Europe can do nothing against him. Tomorrow, we will learn the name of Dillon or that of Max Winkler, vice-president of the “Financial Service Company.” Gobbling up everything within reach on the globe, that is called financial service. Max Winkler speaks of financial service in poetical language, even biblical poetry:

“We occupy ourselves,” he says, “with financing governments, local and municipal authorities, and private corporations. American money permitted the restoration of Japan, after the earthquake; American funds permitted the defeat of Germany and Austria-Hungary and have played a very Important role in the raising up of those countries.”

First you destroy, then you restore. And for both operations you collect an honest fee. Only the earthquake in Japan manifestly took place without the intervention of American capital. But listen to the following:

“We grant loans to Dutch colonies and to Australia, to the government and cities of Argentina, to South African mining industries, to the nitrate producers of Chile, to the coffee planters of Brazil, to the producers of tobacco and cotton in Columbia. We give money to Peru for the realization of sanitary projects; we give some to the Danish banks, to the Swedish manufacturers, to the hydro-electric stations of Norway, to the Finnish banks, to the factories of mechanical construction of Czechoslovakia, to the railroads of Yugoslavia, to the public utilities of Italy, to the Spanish telephone companies.”

You may like it or not, but this has a genuine ring. This rings with the sound of those 60 billion dollars that are now in American banks. We will have to hear this symphony again in the approaching historic period.

Shortly after the war, when the League of Nations was in the process of establishing itself, and pacifists of all European countries were lying each in his own tongue, an English economist George Paish, presumably a man of the best intentions, proposed the floating of a loan to the League of Nations for the pacification and reconstruction of all mankind. He estimated that 35 billion dollars were needed for this worthy enterprise and proposed that the US subscribe 15 billions, England five billions, and other countries the remaining 15 billions. According to this splendid plan, the US had to provide nearly half of this great loan, and as the remaining shares would be divided among a great number of states, the US would obtain the controlling share. This all-saving loan did not materialize, but what is happening at the present time is by and large a more effective realization of this same plan. The US progressively gobbles up the shares which will give her control of the human race. Assuredly, a great undertaking. But a risky one. The Americans will not be long in convincing themselves of it.

Pacifism and Muddleheads

Before continuing, I must dispel a certain confusion. The world processes under study are developing with such rapidity and on such a scale that our minds can only with great difficulty grasp, comprehend and assimilate them. It is not surprising that there has recently appeared a lively discussion on this subject in the international press, proletarian and bourgeois. In Germany various volumes have been published, devoted especially to the role of the US vis-à-vis Balkanized Europe. In the international controversy that has arisen over this question, reference was made to a report delivered by me from this platform two years ago. I have in my hand an American labor review that I recently opened at precisely the page devoted to the relations between America and Europe, and my eyes fell by chance on a reference to “rations.” Naturally, that interested me; I read the article, and here, comrades, is what, to my great astonishment, I learned:

“Trotsky is of the opinion that we have entered into the period of pacific Anglo-American relations; the influence of Anglo-American relations (according to Trotsky) will contribute more to the consolidation than to the decomposition of world capitalism.”

Not bad, is it? MacDonald could hardly improve on it. And further:

“The old theory of Trotsky of Europe being put on rations [Why old? It is hardly two years old. – L.T.] and made a Dominion of America was linked to this appreciation of Anglo-American relations.” And so forth and so on. (J. Lovestone [4], Workers’ Monthly, November 1925.)

On reading these lines, so great was my astonishment that for three minutes I rubbed my eyes. Where and when have I said that England and America maintained pacific relations and that, owing to this, they were going to regenerate European capitalism and not cause its decomposition? Generally speaking, if any communist past the Pioneer age said this or something similar, one would simply have to expel him from communist ranks. Naturally, after having read these absurdities attributed to me, I re-read what I had occasion to say on that subject from this platform. If I now refer back to the speech I made two years ago, it is not to explain to Lovestone and his like that if one wishes to write on any subject – whether in English or French, in Europe or in America – one must know what he is writing about and where he is leading the reader. No, I do so because the way in which the question was then posed by me still holds good today. That is why I must read you several excerpts from my speech:

“What does American capital want? What does it seek?” I asked two years ago. And I replied:

“It seeks, we are told, stability. It wishes to re-establish the European market. It wishes to make Europe solvent. To what extent and how? Under its hegemony. What does that mean? That Europe will be permitted to rise again, but only within well-defined limits; that restricted sectors of the world market will be reserved for her. American capital now dominates; it commands the diplomats. It is likewise preparing to give orders to the European banks and trusts, to the entire European bourgeoisie.”

Two, years ago I said, “It commands the diplomats (in Versailles, in Washington) and is preparing to give orders to the banks and trusts.” Today I say: “It already gives orders to the banks and trusts of various European states and it is preparing to give orders to the banks and trusts of the other European states.”

I continue the citation: “It will divide the market into sectors, it will regulate the activity of European financiers and manufacturers. If one wishes to answer clearly and succinctly the question what American capital wants, one would say: It wishes to put capitalist Europe on rations.” I did not say that it has put Europe on rations or that it will put her on rations but that it wishes to do so. That is what I said two years ago.

Lovestone claims that I spoke of the “pacific collaboration” of England and America. Let us refer to the minutes where the speech is recorded.

“It is not only a question of Germany and France; it is also a question of Great Britain. She too will have to prepare to submit to the same fate ... It is often said, to be sure, that America now walks along with England, that an Anglo-Saxon bloc has been formed; one speaks of Anglo-Saxon capital, of Anglo-Saxon politics ... But to speak in this way is to show one’s lack of understanding of the situation. The main world antagonism proceeds along the line of the interests of the United States and Great Britain. That is what the future will show more and more clearly ... Why? Because England is still, after the United States, the richest and most powerful country. It is the principal rival, the main obstacle.”

I developed this same idea somewhat more forcefully in the Manifesto of the Fifth World Congress of the Communist International, but I will not weary you with texts. Let me cite again from my speech that which pertains to the “pacific” relations established by America:

“This American ‘pacifist’ program of putting the whole world under her control is not at all a program of peace; on the contrary, it is pregnant with wars and with the greatest revolutionary convulsions. It is not very likely that the bourgeoisie of all countries will consent to be shoved into the background, to become vassals of America without at least trying to resist. The contradictions are too great, the appetites are too monstrous, the urge to preserve old rulership is too great, the habits of world domination are too powerful in England. Military conflicts are inevitable. The era of ‘pacifist’ Americanism that seems to be opening up at this time is only a preparation for new wars of unprecedented scope and unimaginable monstrosity.”

That is what I said two years ago about “pacific” relations.

Finally, this is what I said from this platform concerning the cessation of European contradictions owing to America’s influence:

“It is absolutely incontestable that those contradictions which prepared the imperialist war and turned it loose on Europe ten years ago, those contradictions aggravated by the war and diplomatically sealed by the Versailles Treaty, continue to exist like open wounds and have been intensified by the subsequent development of the class struggle in Europe. And the United States will run up against these contradictions in all their acuteness.”

Two years have passed. Comrade Lovestone is perhaps a good critic, as good as those about whom the Russian proverb says that they point a finger at the sky and always hit the bull’s eye. But time is a still better critic.

Let me conclude with the advice that Engels once offered to one Stibelling, also an American: “When one wishes to occupy oneself with scientific problems, it is necessary first of all to read books as the author wrote them, and especially not read into them what does not exist.” These words of old man Engels are excellent and they are good not only for America but for the entire five continents.

(The second half of this speech will appear next month.)


Editorial Footnotes

1. The International Federation of Trade Unions.

2. According to 1926 figures.

3. Apparently an estimate for 1926, The 1930 census figure was 122 million.

4. Lovestone, a follower of the Bukharin right wing of the Russian party, was then a leader of the American Communist Party. His deliberate falsification of Trotsky’s ideas was part of the international Stalin-Bukharin pogrom against Trotsky. Lovestone is now a follower of the pro-war Union for Democratic Action.

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Last updated on: 26.2.2023