Re: The economy - a new era?

[Louis Proyect <lnp3@xxxxxxxxx>]

Jeff Sommers wrote:
> I too would expect GE to go right rather than left, today.  But, Thomas
> Ferguson in his _The Golden Rule_ showed how in the US the experience was
> very different in the 1930s into the post war. GE and capital intensive
> industries tended to go New Deal, while the small and labor intensive
> businesses representing the NAM crowd, supported the right....


From Trotsky's 1939 "Marxism in Our Time":

Two methods for saving historically doomed capitalism are today vying
with each other in the world arena -- Fascism and the New Deal, in all
their manifestations. Fascism bases its programme on the demolition of
labour organisations, on the destruction of social reforms and on the
complete annihilation of democratic rights, in order to forestall a
resurrection of the proletariat's class struggle. The fascist state
officially legalises the degradation of workers and the pauperisation of
the middle classes, in the name of saving the "nation" and the "race" --
presumptuous names under which decaying capitalism figures.

The policy of the New Deal, which tries to save the imperialist
democracy by way of sops to the labour and farmer aristocracy, is in its
broad compass accessible only to the very wealthy nations, and so in
that sense it is American policy par excellence. The government has
attempted to shift a part of the costs of that policy to the shoulders
of the monopolists, exhorting them to raise wages and shorten the labour
day and thus increase the purchasing power of the population and extend
production. Léon Blum attempted to translate this sermon into elementary
school French. In vain! The French capitalist like the American, does
not produce for the sake of production but for profit. He is always
ready to limit production, even to destroy manufactured products, if
thereby his own share of the national income will be increased.

The New Deal programme is all the more inconsistent in that, while
preaching sermons to the magnates of capital about the advantages of
abundance over scarcity, the government dispenses premiums for cutting
down on production. Is greater confusion possible? The government
confutes its critics with the challenge: can you do better? What all
this means is that on the basis of capitalism the situation is hopeless.

Beginning with 1933, i.e., in the course of the last six years, the
federal government, the states and the municipalities have handed out to
the unemployed nearly fifteen billion dollars in relief, a sum quite
insufficient in itself and representing merely the smaller part of lost
wages, but at the same time, considering the declining national income,
a colossal sum. During 1938, which was a year of comparative economic
revival, the national debt of the United States increased by two billion
dollars past the thirty-eight billion dollar mark, or twelve billion
dollars more that the highest point at the end of the World War. Early
in 1939 it passed the 40 billion dollar mark. And then what? The
mounting national debt is of course a burden on posterity. But the New
Deal itself was possible only because of the tremendous wealth
accumulated by past generations. Only a very rich nation could indulge
itself in so extravagant a policy. But even such a nation cannot
indefinitely go on living at the expense of past generations. The New
Deal policy with its fictitious achievements and its very real increase
in the national debt, leads unavoidably to ferocious capitalist reaction
and a devastating explosion of imperialism. In other words, it is
directed into the same channels as the policy of fascism.

full: http://www.marxists.org/archive/trotsky/works/1939/1939-cri.htm

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