TRENDS AND PROSPECTS
OF THE WORLD ECONOMY
1. INTRODUCTION
In the course of the last ten years, the world economic situation has been dominated by the following factors: a) The rapid economic growth of the workers' states, first of all the Soviet Union, and later, more and more, People's Republic of China. Not only has Soviet industry become the second greatest in the world; but the possibility that it will surpass the industrial might of the United States at a given point in the future has become for the first. time a tangible one and is seriously examined by the US bourgeoisie itself. From now on, the share of the capitalist cconomy in the world economy is diminishing in an irresistible way. b) Although slower than that of the workers' states, the economic growth of the imperialist countries of Western Europe has been more rapid and lasting foreseen — especially if it is compared with the period following World War I. This is especially the case for the of the European Common Market and — to a lesser degree — for Austria and Norway. Contrary to all predictions, both by Marxist economists, the capitalist economy of the United States and that of Western Europe have not experienced a very grave economic crisis since 1938, i e, for more than 20 years. None of the three postwar recessions, of 1949, 1953, and 1957, has prevented a relatively rapid recovery and a new boom after 12 to 18 months. c) The permanent crisis in which the colonial and semi-colonial countries exist - which, in the capitalist world, is only the other side of the coin of the relative prosperity of the imperialist countries. It is caused by the contradiction between, on the one hand, imperialist exploitation through investments and trade if not by direct colonialist intervention, and, on the other, a deep and widespread mass movement toward political independence the expulsion of imperialism, the overthrow of the old oligarchie regimes, agrarian reform, and industrialization. This contradiction of the imperialist system is expressed by: 10) the gradual liquidation of the colonial empires and of the division of the world among the great powers, as large areas of the world attain political independence; 2°) the economic measures of expropriation of imperialist enterprises adopted by the colonial revolutions in last decade: expropriation of the Anglo-Iranian Oil Comparalist enterprises in Egynes expropriation of Datch em- the Bolivian tin mines, the Suez Canal and imterprises in Indonesia; nationalization of the economy Cuba; development of national oil enterprises in various
Bolivia and Cuba; in addition to the figures comprised in these there are the crisis of imperialist domination and the insecurity of investments. 3°) the break-up of the feudo-capitalist superstructure various areas of the world as a result of the rising process of the colonial revolution — regimes on which imperialist domination was based.
Although the industrialization of the colonial and semi-colonial countries has made advances under the favorable conditions of the Second World War and the "Korean War boom," their economic growth has not only not been in proportion to that of the capitalist states of Western
(not to speak of that of the workers' states), but scarcely followed the rhythm of growth population; it has not even allowed of neutralizing the unfavorable evolution of the terms of exchange. The result is that the gap that separates the degree of industrialization and the standard of living of the colonial and semi-colonial countries from those of the industrialized countries is today more pronounced than 10, 20, or even 50 years ago.
Certain special cases — like that of Japan, which for thr moment is experiencing an exceptionally rapid industrial expansion — do not enter into this diagramme, which nonetheless summarizes world economic developments in their main outlines and fundamental trends. The present document specifies to what degree these trends will be maintained, to what degree they will be changed, in the next ten years, and what will be the principal economic, political, and social consequences thereol.
A warning, however, is necessary. nedium- and long-term economic trends, it is necessary to leave aside social and political changes, outbursts of revolutionary violence, in the field of economy. The Fourth International is more convinced than ever that these bursts are necessary and inevitable. It is convinced that the coming ten years will be no more years of status quo than were those of the 10 or 20 years thai have just gone
In this sense, any Communist policy centred around the idea of "economic competition between the two bloes" is both utopian and demobilizing:
workers' movement must not be that of encompetition, overthrowing imperialism and capitalism. of the present resolution, furthermore, present objective and subjective reasons to confirm this thesis.
Nevertheless, as Marxists, we must study the trends of the evolution of capitalism and of the bureaucratically degenerated or deformed workers' states in the hypothesis thai these regimes will still continue to exist during a certain historical phase. It is only in this way that we can know the objective forces that underlie all political developments. Without this hypothesis and this study, it is not possible to have an overall view of reality, and to draw up an effective revolutionary strategy, in order to neutralize certain of the objective forces thus revealed, or to use certain others as a basis.
The theses on International Economic and Political Perspectives adopted World Congress already stated that they wished to distinguish the general trends, in the years to both in the capitalist economy and in that of the workers' states, insofar as they can be deduced on the basis of the current situation and dynamics of both types of economy, and in the purely theoretical eventuality of the lack of any major conflict during this period [...].
They specified in addition that "this method of proceeding by extrapolation, taking as starting-point the current situation and dynamics, and ignoring the possibility of major disturbances is the only possible method if it is desired to determine general trends and perspectives."
By applying the same method and by furthermore confirming in their main outlines the conclusions of the Vth Worid Congress, we are emphasizing the need for a scientific understanding of the objective forces which, in the last analysis and in the long run, determine world developments an understanding without which any judgment about the prospects for revolutionary action run the risk of being tinged with subjectivism.
At the same time we perfectly understand — just as, for thai matter, the theses of the Vth World Congress also
FOURIH INTERNATIONAL specified — that real developments will not be a simple reflection of these long-term economic trends, but will be the result of the interaction of these trends and the conscious intervention of men (both the revolutionary action of the anti-capitalist forces and the conservative action of the possessing classes and of other social forces
1
19 that fear the revolution) — an interaction that can profoundly modify and sometimes even totally reverse objective trends revealed by such a process of extrapolation.
these extra-economie factors, the revolutionary action of the masses is playing, and will increasingly play in the coming years, a decisive role.
ECONOMIC GROWTH OF THE WORKERS' STATES
2. THE ECONOMY OF THE WORKERS' STATES IS
GROWING MORE RAPIDLY THAN THAT
OF THE CAPITALIST STATES
In the last ten years, the rate of growth of the workers' states has been very rapid, even if it has varied from country to country, period to period, and economic sector to economic sector. It has been more than double that of the capitalist economy as a whole. Comparison with the capitalist states that have experienced the highest growth (West Germany, France, Italy, Japan) is a little workers' less Ilattering for the states; it nonetheless resharp difference in rhythms of growth, veals a still especially long-term ones.
From 1950 to 1959 the average annual rate of growth of industrial production has been:
11.8% in the USSR
13.3% in
Poland
10.8% in the German
| Democratic Republic
10.7% in
Czechoslovakia
24.8% in the People's Republic of China as against
14.0% in Japan
10.0% in the German
Federal Republic
8.5% in Italy
5.8% in France and
2.8% in the USA
2.5% in
Great Britain
(Sources: Etudes sur la situation écono.
mique de l'Europe en 1956, by the United
Nations
Economic Commission for Europe, and Thirtieth Annual Report of the Bank of International Settlements, 1960.)
From 1955 to 1959, the average annual rate of growth of industrial production works out as follows:
13.5% in Jugoslavia
•
10.8% the USSR
10.4% in
Czechoslovakia in
Poland
10.0%
8.2% the German
Democratie Republic as against in Japan
11.8%
8.2% in the German
Federal Republic in Italy
8.0%
6.7% in
France and
3.3% in the USA
2.1% in Great Britain.
3. CAUSES OF THIS SUPERIORITY
The superiority of planned economy over capitalist economy thus appears in a striking way. The reasons for this
- superiority are worth being recalled:
a) To the contrary of the capitalist economy, the economy of the workers' states experiences a growth that is uninterrupted by crises, recessions, abrupt drops in industrial production. It experiences permanent full employment of the toilers and of the means of production (though this does not necessarily imply optimum employment).
b) Centralization of the most important decisions about investment permits the avoidance of useless repetition of work, of excess capacity, and of the waste and unproductive overhead generally caused by capitalist competition "free enterprise" even in the epoch of monopoly capitalism, although bureaucratic administration partly neutralizes these advantages. emoves the powerful brakes on technical progress const I the means ot produchol iuted in capitalist countries by the private interests of the owners of fixed capital still to be amortized.
d) Nationalized ownership of the means of production permits a more rapid standardization of production, the application of mass production techniques to such products machine-touls which, under the capitalist regime, are as subjected to jealous surveillance by patent-holders, etc.
e) Planned economy and nationalized ownership of the means of production permit a distribution of the national income that reduces certain wastes from the viewpoint of economic growth (excessive distribution costs, excessive spending on luxuries, etc). The bureaucratized regime, however, still maintains these unproductive and useless expenditures at too high a level.
In addition, the genuine cultural revolution which the U SSR and most of the other workers' states have carried out has paid high dividends in the field of economic expansion. The US SR has at its disposal today an army of engineers, inventors, technologists, and technicians, which considerably surpasses in numbers that of the United States. As a result it keeps up a rhythm of industrial innovation that is superior to that of all the capitalist states.
Normal access to higher studies for all gifted elements does away with the waste of talents inherent in the capitalist regime. Higher expenditures for teaching, and a thirst for knowledge systematically aroused and encouraged, permit the formation of a higher number of university teachers. Ihus, in quality as in quantity, technological innovation is far more strongly stimulated in the USS R than in the advanced capitalist countries — not to mention the colonial and semi-colonial countries.
In the coming years, there is no reason to foresee a fundamental change in these rates of growth - or in their lead over those of the most important capitalist countries. It is true that the rates of industrial growth have been sharply reduced between 1950-55 on the one hand and 1955-1960 on the other, 1 and that even this lower rate of expansion could not be maintained in the USSR - the reason why the Sixth Five-Year Plan had to be abandoned. 1 Percentage of growth of industrial production for the whole of the period envisaged:
1950-1955 1955-1960 (1955 plans) Czechoslovakia 70% 50%
German Democratic Republic 90% 55%
Hungary 102% 48%
Poland 118% 53%
Soviet Union 85% 65% (Source: Study of the Economic Situation of Europe in 1956, by the United Nations European Economic Commission.
20
On the one hand, pressure by the masses had obliged the bureaucracy to make a more constant effort to increase consumption by the people, though without more democratic administration that could simultaneously stimulate expansion — which would have permitted maintaining or even increasing the rate of growth. On the other hand, bureaucratic administration and especially overcentralization of the economy had contributed to slowing down these rates of growth. These latter obstacles have been partially overcome by Khrushchev's reforms, which have permitted again achieving the rates of industrial growth foreseen for the Sixth Five-Year Plan, except in certain sectors.
4. CHINA, CABEST WORLD POWER FOURTH
Under these conditions, the most important new factor that will produce changes in the economy of the workers' states during the next decade will be the appearance of the People's Republic of China as a first-rank industrial power. Even if we retain a certain skepticism toward Chinese statistics (since the revision of the figures about the results of the "great bound forward"), we can accept the fact that the current rate of growth of the national income in China is two to three times higher than in the US SR. This very high rate is explained partly by the fact the base from which it started was much lower, and that the creation of new enterprises in various sectors, cially heavy industry, permits increasing production therein right away by high percentages.
It is, however, also explained by two contributory causes: the aid from the USSR and the other workers' states, which, though it is still plainly insufficient, nonetheless constitutes a measurable contribution that was lacking to the USSR at the period of its first Five-Year Plans; the possibility of avoiding a series of negative experiences, especially concerning the extreme bureaucratization of the management of the enterprises and the fall in agricultural production, which had braked the rise of Soviet industry. The fact that Chinese agriculture has been able to avoid the long phase of stagnation which in the US S R, because of forced collectivization, accompanied the stage of rapid industrialization, has permitted eliminating an importani brake on a more rapid industrial growth in the Chinese P R.
Even though in coming years the rate of growth of Chinese industry will be reduced — a phenomenon that is inevitable as soon as a first substructure of heavy industry has been created — it is probable that it will remain higher than that of Soviet industry, aud considerably higher than that of the most advanced capitalist countries. parison with India and the other semi-colonial or colonial countries on their way to industrialization, the gap will be particularly striking. Whatever may be the avoidable sacrifices that certain bureaucratic methods have imposed and will continue to impose on the Chinese laboring masses, the Chinese example of rapid industrialization will exert, as during recent years, an exceptional power of attraction on all colonial and semi-colonial peoples.
It can be foreseen that in the coming decade Chinese industrial production will considerably outstrip that of Japan and of Great Britain. The Chinese PR will thus become the fourth-ranking industrial power in the world. It will still, however, remain below that of the European Economic Community (Common Market), the US S R, and the US A. Under these conditions, it seems hardly realist to predici thal the overal! production of the workers' states would exceed half the world's industrial production in 1965, unless of course capitalism were abolished in new and important industrial powers.
It must not be forgotten, furthermore, that, despite al le successes attained on its way to industrialization. China which has more than 600 million inhabitants, remains a very poor country if per capita production is taken into
FOURTH INTERNATIONAL consideration. For it to attain Japan's present level of industrialization, its steel, electric, machinery, and textile productions would have to exceed Japan's by six times (i e, reach the level planned for the Soviet Union in 1970-72). Ii is unlikely that this goal could be reached before at least two or three decades. 2
5. SPECIFIC PROBLEMS OF THE ECONOMIES OF THE WORKERS' STATES
The faster growth of the economy of the workers' states compared to that of the capitalist countries is its most fundamental, its dominant, feaure. It is not the only one, however. The advance of the economy of the workers' states is marked by an uneven rhythm of development in the different sectors, which, together with structural defects due to these states bureaucratic deformation or degeneration, raises a series of problems to be solved, creates difficulties or tensions during economic growth, or even causes the appearance of a series of bottlenecks. The uneven development among the different sectors of the economy is first of all an uneven development between industry and agriculture. Agriculture remains more than ever the Achilles's heel of the Soviet economy. blem is still not solved, either by Khrushchev's tactic of "getting round" the peasant by cultivating the "virgin lands," or by the very serious concessions granted the peasantry (sale of tractors and farm machinery to the kolkhozes). As a result of the special agronomic and meteorological conditions of central Siberia, the virgin lands produce only one good harvest out of two — which causes Soviet grain
1958 1959 139.4 1103
The two major obstacles to a definitive solution of the problem of agriculture's falling behind industry in the U S S R are the insufficient interest of the kolkhoz members in a steady growth in production, and the inadequacy of investments in agriculture (especially the limited use of fertilizers). These result in an average productivity in farm labor that is very much lower than that of the United States, not to mention that of western and central European countries, with their intensive agriculture.
Khrushchev's reforms, especially the revision of prices received by the kolkhozes in return for products furnished to the state, and the sale of tractors and farm machines to the kolkhozes, have unquestionably permitted a certain increase in agricultural production. They have simultaneously given birth to a new problem, that of the accumulation of huge sums of money by the kolkhozes. income has grown from 50,000 million rubles 95,000 million in 1956 and to 150,000 million in 1959, i e, they have tripled in six years.
As the supplying of the villages with means of consumption has certainly not increased in the same proportion, kolkhozes have in fact accumulated an enormous purchasing power with nothing to offset it. Khrushchev has partly absorbed it by the sale of tractors and farm machines. The sale of certain industrial means of production is also made more and more easy to kolkhozes, which establish light industry plants, develop an industry for building materials, and sometimes even start selling the products to the townspeople. A new element is thus introduced in the 2 China is currently producing 14 million (metric or long) tons of steel; to attain Japan's present per capita production, would have to produce 102 million tons (six times 17 million). 3 If population growth is taken into account, this production is, per capita, lower than that of 1937!
FOURTH INTERNATIONAL economic structure of the USSR: the state plants lose vidently a purely marginal problem which does not affec neir de lacto monopoly of industrial production. heavy industry and represents only a very small fraction of current production.
The uneven rate of development among different industrial sectors — and between industry and the transportation system - remains also very pronounced. in the new plans drawn up since 1955, the rates of growth of light industry have got very close to those of heavy industry, though without reaching them. But in carrying out the plans, priority is still granted to the sectors of heavy industry, thus producing a delay in the development of the textile industry and the durable consumers' goods industry, compared to forecasts, both in the USSR and in the majority of "people's democracies."
The inequality of development between the basic indus tries (power and metal ores) and the manufacturing sectors had produced dangerous bottlenecks in a great number of the countries of Eastern Europe, especially in the 19531956 period. These bottlenecks have been eliminated by nieans of the forced development of lignite in Eastern Germany and the mass supply of oil-products of Soviet origin to the region (the network of pipelines which is being built will encourage the trend towards the replacement of coal by oil in the majority of these countries). 6. ECONOMIC INTEGRATION OF WORKERS' STATES
AND THE PRESSURE OF CONSUMERS
The problem of the integration of the economies of all the workers' states (or even European workers' states), has not yet been solved. The COMELON is not a tool for economic integration: it is satisfied to deal with the specialization and division of labor in certain branches (automobiles, machines, and machine tools) and in foreign trade. Il does not even coördinate investments (see Gomulka's recent complaints in this regard) or overall planning programmes for all the workers' states together. This deficiency is due to the special interests of each national bureaucracy, including the Soviet bureaucracy.
The pressure of objective forces (for example, risks of competition in the field of power resources) and subjective forces (pressure of consumers) will be such in the years to come that the Soviet bureaucracy will be obliged to move and will weaken the "monolithie" myth in the direction of the economy.
This trend toward developing international planning of the economy of the workers' already expressed in the COMECON, will grow greater, as is proved by the agreements arrived at on this subject at Bucharest and the resolution of the Conference of the 81 Parties at Moscow. This development will raise again, and on new bases, the question of the participation of the masses in the administration of the economy, with all the consequences that arise therefrom.
This pressure from consumers, morever, will steadily increase both in the US SR itself and in the majority of the other workers' states. This was already the case in the early fifties. But now that the first wave of Khrushchev's reforms has had its effect, and people are better fed and clothed, this pressure will again increase considerably. It will be centred in three fields: quality especially of clothes, but also of foodstuffs); durable consumers' goods; and the housing problem.
"Buyers' strikes" occur more and more frequently (the Soviet press has just acknowledged a recent specimen of these in the field of plastics), and the pressure of consumers is today the strongest threat to bureaucratie dictatorship, as was shown by the Kazakhstan riots in 1959, when thousands of young people rebelled against the lack of minimum comfort and consumers'
Khrushchev's propaganda, promising "to catch up with and overtake" the average standard of living in the United will increasingly boomerang on him, stimulating mass demands concerning the supply of durable consumers' this pressure, especially with a view to obtainprivate cars, gets too strong during the next decade, entirely new problems will arise for the Soviet steel industry, only a negligible fraction of whose production is now destined for the auto industry (contrary to the situation in the US A and Western Europe).
On the other hand producers' pressure with a view to greater participation in the management of enterprises increases at a slower pace. But the improvement in standard of living and especially the reduction of working
(general introduction of the 7 - hour day) and the improvement of the average level of culture and skills will strengthen it in the years to come.
7. A FEW PARTICULAR CASES
Some workers' states in Europe are experiencing special economic problems: Jugoslavia: This country has loday the highest rate of growth, both of industrial production and of national income, among all the workers' states in Europe. This can be explained by the special characteristies of its economie policy: a weakening of bureaucracy due to the self-management of enterprises, which gradually becomes genuine; agricultural policy which avoids both forced collectivism and markets dominated by private peasants; a more harmonious integration in the world market which allows it to take more advantage of the world division of labor.
The quantity and quality of durable consumers' goods supplied to the Jugoslav toilers is increasing faster than in most of the other workers' states. The Jugoslav economy, however, will run up against two dangers: excessive spread of the market economy in the industrial sector, which in. volves a danger of a growth of social inequality (efr the recent lining up of rents to the "real cost price, " which has ended up in a redistribution of the best housing in favor of the privileged strata at the expense of the workers); excessive integration in the world economy, which can involve a growing dependence (in credits and foreign exchange) on the international capitalist economy, and its prolonged isolation (through the fault of the Soviet bureaueracy) from the increasing international planning of the workers' states. German Democratic Republic: Although it is likely that the inhabitants of this country already enjoy the highest standard of living of all the workers' states in Europe, the gap between it and that of West Germany remains very noticeable, even though it is lessening little by little. Given the relatively high rate of growth of the West German economy, the total abolition of this gap is unlikely in the near future, unless West Germany should be stricken by a grave economic crisis.
This gap plays a key role today, not only on the polirical plane, bur even on the social plane: it causes East Germany to be a real breach in the whole set up of the "people's democracies." It is one of the causes that produces the steady exodus of skilled elements (workers and intellectuals) — an exodus that is a real drain on the economic resources of the German DR.
Ulbricht's pressure with a view to "solving the Berlin question" is explained to a large extent by his determination to put a stop to this drain. The narrow dogmatism bureaucratic brutality of the leadership of the SED, moreover, has further aggravated this situation, especially by the forced collectivization of all agriculture (even though il be a "collectivization" that formally maintains the private property of a good part of the peasants).
22 Czechoslovakia: The Czechoslovak economy has the most diversified and best balanced structure of all the countries of "people's democracy." After a slowdown around 195355, it has renewed its rapid upsurge. But since the demand for certain products seems to be amply saturated in this country, there are now being experienced, for the first time
FOURTH INTERNATIONAL in a workers' state, problems of adjustment of supply and demand of durable consumers' goods. To be solved in a harmonious and progressive way, these problems require a much more active participation of producers and consumers in drawing up plans, both within the enterprises and within the local collectivities (cities or distriets).
ECONOMIC GROWTH OF INDUSTRIALIZED CAPITALIST COUNTRIES
Contrary to what Marxist and non-Marxist economists had foreseen before the end of World War II, it was not followed by a grave capitalist crisis of overproduction of the 1929 or 1937 type, but by a period of reconstruction, then by a period of economic boom, interrupted only by recessions of rather short duration and of less gravity than the between-war crises. This economic boom is currently continuing in Western Europe and in Japan, although in the United States it has given way to a situation where the economy has been for several years just marking time.
8. CAUSES OF THIS BOOM AND OF THE ABSENCE OF GRAVE CRISES
The causes of this new boom of the capitalist economy in the industrialized countries cannot be brought down to one single main factor. The boom is the result rather of a concourse of circumstances, of a series of transformations, either in the policy of the bourgeoisie (and of the bourgeois state), or in the structure of the capitalist enterprises. The main factors that explain this relative stability and stimulate this unforeseen growth are:
a) The growing role of the state, which limits the cu. mulative process of economic crises, and stops them at a first level (U S statisties indicate that in 1957 the first stage of the recession was almost as dramatic as the first stage of the 1929 crisis; what distinguished 1957 from 1929 was the fact that it was stopped at this first stage, whereas the 1929 crisis was constantly aggravated by its own effects during three years). 4
It is necessary to distinguish between the growing role that the bourgeois state plays in a permanent way in the capitalist economy, and its possibility of intervening abruptly in order to allay the shock of crises.
Public expeditures loday absorb from 15 to 35% of the national income in most of the industrialized capitalist eountries. The state is therefore one of the main sources of investments (especially in the military sector, and, in a subsidiary way, in those of transportation and power), and one of the main sources of the income of worker and white-collar consumers (the army of publie functionaries, workers in nationalized or municipalized enterprises, etc). It simultaneously carries out payments of important transfers which reduce the losses in purchasing power suffered by the toilers as a result of the basic insecurity of being proletarians (payment of pensions, unemployment beneinsurance toward the costs of illness or industrial It is true that these payments are for a large part covered by contributions coming from the work-
Nevertheless most of the industrialized capitalist states also contribute thereto by subsidies.
Taken as a whole, these public expenditures, practically independent of the momentary conjuncture, tend to ensure a more stable volume of consumers' investments * During the first nine months of the 1957-8 recession in the US A, industrial production fell 13.1% as against a fall of 15.9% during the first nine months of the 1929 crisis. In the 1957-8 recession, orders for durable goods dropped 20.1% as against a drop of 26.5% during the equivalent period of the great economic crisis.
and therefore play a permanent anti-cyclic role.
In addition, the bourgeois state has at its disposal a whole arsenal of instruments for absorbing the shock of crises right from the moment they occur: increase of transfer expeditures in general (deficit financing); reduction in the cost of credit; subsidies and bonuses to private investments, to exports, etc.
In the last analysis, this growing role of the bourgeois state in the economic life of the capitalist countries means that in the social and political worlduide crisis that capithrough today, non-economic factors are playing and will play a growing role in the economy. That implies that the bourgeoisie, collectively, ficing the interests of the stability of its currency and the future of its long-term profits (as well as the immediate interests of certain sectors), to the interests of immediate self-defense of the system, independently of its longer-term lessening in acuteness, this factor will play es meally in me United Sates, ls a reset comthe sears. a more and more the correlation of forces on the world scale at capitalism's expense.
far from approving the revisionist thesis according to which capitalism mighi now be able "to avoid crises," confirms on the contrary the Marxist thesis according to which the alternation of good and bad conjunctures, of booms and crises, is on inherent and incurable ailment of the capitalist economy. The only thing the bourgeois state can bring about is to limit the extent of this ailment for the moment (at the cosi of aggravating it in the future), but not to eliminate the ailment itself. It must furthermore be added that this possibility itself is not unlimited, that it can neither avoid the recession's outbreak itself, nor, despite growing state intervention, prevent recessions from becoming gradually great explosion of technological innovation (essentially prepared by the Second World War) which has ended up in a fixed rate of investment in private industry that is much higher than in the between-war period, has contributed to a shortening of the capitalist cycle (recessions are breaking out every 4 to 5 years, and not every 7 to 10 as in former times), and continues to be stimulated in part
This rec
arms production (nuclear and electronic technies). This technological revolution, which finds its most striking expression in the advances in automation, is at the same time the fundamental answer that the capitalists are able in make to the strengthening of the workers' trade unions and the rise in wages in the first postwar years: increase of relative surplus-value and growth of the army of industrial reserves due to a frantic increase in productivity and by means of technological unemployment.
In the United States, this social aspect of the technological drive has already appeared the most clearly: unemployment no longer drops million, even in a period of good conjuncture. In Great Britain and in the Common Market, this phenomenon is a little late (in the Common Market especially because of the high rate of still higher than the very substantial increase in productivity). But it is likely that what is going on in the -
FOURTH INTERNATIONAL United States today is announcing the future evolution of the capitalist states of Europe.
c) The demand for consumer goods by the toiling masses has undergone a structural change. The centre of gravity is more and more shifting from food and clothing to housing and durable consumers goods. This evelution is partly the result of a prolonged first stage of full employ. ment and a relative rise in real wages. of the more and more unbridled use of consumers' credit of advertising pressure (ie, it also a matter of a replacement of spending on the first category by spending on the second, e g, a certain qualitative degeneration in food consumption in certain cases).
As a result, the purchasing power available for durable consumers' goods is going up much faster than that available for the textile industry, while the purchasing power for agricultural products is diminishing relatively if not absolutely. Also due in part to the increase in the standard of living, the consumption of heavy products like grains, and pork is beginning, furthermore, to lessen in an absolute way.
The shift in demand by the toilers, at first the result of a certain period of relative prosperity and a high level of employment, later becomes a main support of that prosperity, by the boom in the durable consumers' goods industry that it brings about. This is well translated by the quite different indices of growth in the different sectors of the Common Market economy:
(1953 production = 100) In 1959.
automobile production 340 total industrial production • 158 textile production 122 agricultural production
The very high rate of growth in the "new" (durable consumers' petroleum products, plastic products, electronic apparatus, automatic machines, etc) definitively explains the rather high average rate of expansion industrialized capitalist economy, especially Western Europe and Japan.
The shift in purchasing power is further expressed by more or less permanent crisis of agricultural overproduction in the advanced capitalist countries. To keep up an income, even a decreasing one, in face of the general tendency of agricultural prices to fall due to a stagnation in especially for grains, potatoes, and pork, the peasants have considerably increased agricultural productivity, by an extreme mechanization of farm tasks, an increased investment in fertilizers, and more and more improved agronomic techniques. This increase in productivity would normally have eliminated the weakest farms and led to abandonment of the more mediocre land. But the of artificial price support followed capitalist governments for essentially electoral and social purposes (the peasantry generally forms the most conservative social stratum in the advanced capitalist countries) has artificially kept up the exploitation of these lands, exodus, and has thus translated increase in productivity into conditions of stagnant demand and more or less permanent overproduction. Only the more
(high-quality meats, citrus fruits, ete) still escape this trend.
d) As for the industrialization of the colonial and semi-colonial countries, despite the limited character of their industrial development, has taken place through this process, with its limitations, a broadening of the market for capital goods, which has partially replaced the export of consumers' goods, threatened by this industrialization.
While the industrial products of the imperialist countries have increased in price, there has been permanent
23 pressure on the prices of the raw materials exported by the colonial and semi-colonial countries.
This labor not paid by the imperialist countries to the colonial and semi-colonial countries is another element that contributes to the prosperity of the imperialist countries, who thus cast off some contradictions that fall on the backward countries.
9. PROSPECTS OF THE CAPITALIST ECONOMY IN THE NEXT DECADE
What will be the short- and medium-term evolution of these four factors? What conclusions might be drawn about the future of the economic growth of the industrialized capitalist countries?
The intervention of the state - of non-economie the capitalist economy will continue stronger than ver: it will have a tendenc to become more pronounced. the imperative demands of "economic competition" witt the workers' states will oblige the great capitalist powers to expand the production capacity of their key sectors, by means of state guarantees, even when it seems that this expansion will not "pay off" (in view of an already considerable to steel and ol is du already pee rally among the big monopolies to draw up long-term " investmore independent than formerly of the specific short-term conjuncture, facilitates this in-
The evolution of the correlation of class forces, which the evolution of the correlation of forces between the colonial revolution and imperialism depends, will defere stat will beef the austerity tyin financent on type (financing of investments at the cost of the toilers), as in France under the Debré-Pinay government, or of the inflationary "patype (sharing the fruits of growth between profits and wages), as in the postwar US A and Great Britain until about
The wave of technological innovation will roll on, though slowing down in the United States (except in certain seclors like steel). In Europe, technical backwardness pared to the United States still allows of a considerable increase in productivity and a high volume of investment during the first part of the coming decade. «echnological The history of capitalism, however, explosions " cannot be indefinitely prolonged, for an terval has to be inserted between two "explosions" in order to permit the new fixed installations to be fully and entirely developed, as well as amortized. Toward the second half of the next decade, the wave can gradually become flattened out. That will doubtless make itself felt with the beginning of the second recession of the '60s.
The change in the structure of mass consumption has ceased to play the role of a stimulant in the United States. On the contrary, the importance taken on by the sector of durable consumers' goods is toduy a growing factor of instability, for the demand for these products fluctuates much more strongly than the demand for non-durable consumers' goods. It is in this sector that excess produc5 The exports of Western Europe to the backward countries in 1958 had increased to 150% by value over 1953, while imports of raw materials increased only to 112% in the same period. The United States, during the same period, increased exports by 41%, while the value of raw materials imported in 1958 was 2% below that of 1953. This phenomenon is in fact older than this. Argentine prices, for example, since the world depression of 1930-33, are 19% below the average prices of the period extending from the beginning of the century up to the depression. This means a loss of annual average profit of $238 million, according to the calculations of the CEP AL.
24 tion capacity exists in the most striking way, and even increases from cycle to cycle.
In Europe there is doubtless some time still before this situation is reached. But if it is observed that automobile production capacity at present reaches 5 million cars a year in Western Europe (including Great Britain, Sweden, and Austria), and that this capacity, in full expasion, will be raised to an annual production of 7 to 8 million cars by 1963 — and this for a population scarcely larger than that of the US A, which produced a maximum of 7 million cars in 1955, for consumers having an average income 250% higher than the average income in Western Europe! — it is to be foreseen that during the next decade, in the field of durable consumers' goods, the same state of saturation will be reached in Europe as that which the US A is experiencing today. factor will therefore gradually lose its role as a stimulant to relatively rapid industrial growth in Western Europe.
The fourth factor (investments in the colonial and semi-colonial countries, as well as trade with these areas) is the one tied up with the most profound and lasting changes for the imperialist system immediate future, degree that imperialist "aid" tends to increase, its effects as a stimulant to the imperialist economy will also increase, owing to increased export of machines, industrial equipment, etc, to the colonial and semi-colonial countries. But the gradual transformation of the colonial revolution into a proletarian revolution will, on the contrary, strike heavy blows at imperialism.
For all these reasons, the most probable variant in the short run is therefore a much faster rate of growth in Western Europe and in Japan than in the US A, and, in the medium-long run, a general slowing down of the growth of the capitalist economy, a growth furthermore interrupted by frequent recessions, which will have a tendency to become deeper and deeper, and to leave behind them growing residues of technological unemployed on the one hand and excess capacity on the other.
The rhythm and scope with which this slowing down of economic growth in the capitalist countries will show itself and the phenomena of heightened competition and the pressure on wages in which they will end up, will dctermine to a large extent the objective conditions of the struggle of the working class, both in Western Europe and in North America, even though they are not conditions sine qua non for a revival of the workers' movement in these parts of the world.
10. CHANGE IN THE INTER-CAPITALIST CORRELATION OF FORCES
It is within the limits of these prospects that the very important changes in the inter-capitalist correlation forces in these last years must be placed.
As a result of the growing gap between the respective rhythms of economic expansion in the US A and in Western Europe, and as a result of the setting up of the European Economic Community, the absolute supremacy in the capitalist camp which American imperialism had attained just after the Second World War and which it had kept during the whole early postwar period (the reconstruction period, then the period called " the Korean
War boom" is begiming to be brought inta question
This relative decline of the supremacy of US imperialism within the capitalist camp is the result of a large number of indications. Here are a few examples: Steel Production (in millions of metric or long tons)
1929 1946 1953 1959 US A 57.3 61 101.3 84.7 Common Market 35.6 11.8 39.7 62.3 Great Britain • 9.8 12.9 17.9 20.5
FOURTH INTERNATIONAL Automobile Production (in millions of units)
1937 1950 1953 1955 1959
USA. 3.90 6.70 6.10 7.95 5.60
Common Market 0.51 0.58 0.90 1.50 3.10
Great Britain 0.38 0.52 0.60 0.90 1.20 Exports (in thousand millions of dollars)
1913 1928 1938 1950 1955 1957 1959 USA 2.4 5.0 3.1 10.1 15.3 20.9 17.4 Common Market . 5.1 7.3 4.8 9.5 18.2 22.4 25.2 Great Britain . . 2.7 3.5 2.3 6.0 8.0 9.3 9.8
As the rate of growth in industrial production is at present at least twice as high in the in the US A and in Great Britain, the gap between production in the EE C and in the US A will be rapidly reduced, in view of the already rather high starting level of the Common Market. In the coming decade, the EE C might be able to catch up with and even surpass American production capacity for most durable consumers' goods. But this movement will be partly braked by a relative sag in the purchasing power of European toilers.
At the same time, it emerges from the above-mentioned figures that, compared to the "Big Three " in world industrial production (USA, USSR, Market), Great Britain is in danger of becoming a fourthrank power, even though its per capita exports still slightly surpass those Common Market. In the coming decade the Chinese PR, and even Japan, might be able to surpass British industrial production. The pressure that certain capitalist circles are exerting on the Conservative government for Britain to join the Common Market is consequently comprehensible. It is at the same time comprehensible why US imperialism, favorable especially for political motives to the creation of the Common Market, opposes Great Britain's entering it: the industrial power tha: would be created by such a fusion would exert an enormous pressure on the world market (it would buy more than 50% of world exports), and might soon be able if not surpass, the industrial power of the US A itself.
An important reaction of US imperialism to this change in the correlation of inter-capitalist forces has the growing export of capital toward European countries, in the first place toward Great Britain and West Germany. This trend aims simultaneously at twn goals: to use European wages, lower than American wages, in order to beat its European competitors by taking advantage especially of more advanced technological procesSES: 10 build up the army of industrial reserves in the United States, which would permit exerting a growing pressure on American wages. 6 This trend will be kept up for several years; it will, furthermore, contribute 1o giving the economy of Western Europe a rate of investment and a rhythm of growth higher than that of the US A.
It is true that very grave political or social crises in Europe (a new Berlin crisis, a still possible new upsurge of the mass movement, revolution in the Iberian peninsula with international repercussions, fall of the Gaullist regime, ete) might be able to modify this situation, slow down the accumulation of capital in Western Europe, and even set off vast exodus of capital toward overseas countries. New springs forward of the world revolution — e g, victories of historie scope in India, Argentina, Japan — would also be able to shake the growing confidence that the bourgeoisie of Western Europe is for the moment showing in its destinies. But in case of such changes in the correlation of forces, catastrophie from the viewpoint of capitalism, 6 Already US firms like Remington Rand and Ford and General Motors have decided to carry out the whole of the production of certain of their products in Europe, whence they will be reexported to the US A.
FOURTH INTERNATIONAL the danger of war could become major, and a new and augmented wave of arms production might be able partially to offset this lack of confidence of the capitalists and private enterprises. 11. POSSIBILITIES AND LIMITS OF THE EUROPEAN
COMMON MARKET The pre-Congress document, "Situation and Prospects of the European Labor Movement, and Our Tasks,"7 has already sketched out the essential reasons for the birth and development of the European Common Market. It corresponds both to the needs of development of the productive forces in general, which have for long rebelled against the limits of the small national states in Europe, and to the logic of the development of the great capitalist monopolies, which had irong siner exended their power beyond the national frontiers, and were seeking ways to "normalize" and legalize
But to this dual origin there corresponds also a dual dynamic. On the one hand, the liberation of exchanges and the creation of a broader market contribute to more rapid - although more differentiated — expansion of industry in general. On the other hand, the alliances and interpenetrations of the capitalist monopolies corner the profits of this expansion, intensify competition in the branches and groups of enterprises that have been left behind, and even prepare, for a later stage, far-reaching battles within the groups of monopolies for domination over the Europe of "the Six" ruptions in the generalized expansion.
It is the West German economy which was in the best position to profit by the possibilities of expansion created by the Common Market. The Gaullist regime in France, however, personifies the dynamic and aggressive wing of French employers who are also seeking to ensure themselves a vigorous expansion within it. In many fields, a Franco German co-leadership is thus set up, which in practice finds its expression in the Paris-Bonn political axis that today dominates the Common Market. In Italy the Fanfani-Mattei tendency also represents the bourgeoisie's most dynamic wing, which is attempting a maximum exploitation of the Common Market's possibilities to its own situation will remain basically established as long as the high rate of expansion of the European economy as a whole raises the problem only on the level of the sharing up of profits. But already in several "lagging" industrial sectors — coal, textiles, and, tomorrow, various branches of metallurgy and heavy chemicals — excess productive capacity is appearing in the Common Market as a whole. From this point on, it is the sectors and countries working with the highest cost prices that are first to undergo losses: Belgian and German coal industries; French shipbuilding; Loire steelmaking; Italian iron as the investments for modernization shall have lost their drive, and the market shall be gradually rated with durable consumers' goods, the "competition and rationalization" tendency will get the upper,
"expansion and good understanding" The struggles in which the various monopoly groups will engage among themselves, and the repercussions of these struggles on the living standards of the toilers, will facili struggles — at first defensive and, in case of success, offensive — of the in Western in a general revival of the workers' movement around the transitional demands sketched out in the European document.
whole prospect presupposes maintenance, at least during the transitional phase, of an economie struc7 Soe our Winter 1959-60 issue, p 43
25 ture still marked by the maintenance of predominantly "national" private property in each of the six countries of the Common Market. At the end of this transitional phase, the interpenetration of capitals oughi to take the upper hand over mere alliance. But these prospects will Le permanently brought into question by new blows struck at capitalism by ever more critical recessions, the revolution throughout the world, and the struggles of the European workers' movement, such as they have been characterized above.
12. SOME SPECIAL SITUATIONS
US A: Political, economic, and social developments, which have, on the world scale, become more and more unfavorable, face the US bourgeoisie choices which have been clearly demarcated during the 1960 presidential election campaign.
To face up to the growing competition capitalisi powers on the world market, the US bourgeoisie ought to exert growing pressure on wages, refuse any new social reforms, concentrate on the effort to increase productivity, and use the growing mass of unemployed to reserve the profits of this productivity exclusively to the employers and the strengthening of the stability of the dollar. In order to defend its long-term interests, it ought also to rationalize new investments to the limit, oppose any new increase in public spending, and, in case of an increase - from its viewpoint, "inevitable" - in military expenditures, to reduce civilian expenditures in the same pro-
The attitude of the steel bosses showed that a fraction of the bourgeoisie is ready for such a policy. But the reaction of the Republican administration, however, has clearly indicated that the majority of the responsible leaders of the US bourgenisie, both in the Democratic and Republican Parties, understand that such a policy would, on the pretext of consolidating the regime in the long run, destroy it in the medium run.
Indeed it is clear that a virulent attack against the rights of the trade unions, accompanied by a blocking or lowering of wages, at the very moment when the USSR is ready, for the first time in its history, to introduce new and daring social reforms (the 7-hour day, then the 35-hour week), would immediately produce a violent reaction by the workers (as the steel strike demonstrated), shake up the political apathy and indifference that have paralyzed the labor movement for many long years, and prepare a grave social crisis in the US A.
Furthermore, a policy centred around "budget stability," with military expenditures kept at a very high level, would limit not only social expenditures inside the United States but also the aid to underdeveloped countries, would dangerously slow down the US economy's rate of growth, and would run the risk of causing US imperialism to within a short time what remains of the influence it still possesses with the colonial bourgeoisie.
The Eisenhower administration has partly followed such a policy; that is the reason it is entirely discredited. After the 1957 recession, there was only a semblance of a boom, and already in 1960 worried economists are wondering whether we are witnessing a leveling-off of the economy or a new recession. Through Rockefeller's mouth, through Kennedy's, the most representative circles of the big American monopolies are calling for — and, beginning with 1961, will carry out a reversal of policy. For the conservative poliey of "stabilization of the dollar" policy that is not anti-crisis but anti-cyclic, and which causes the economy to mark time — they will again substitute a policy of increase in public expenditures, main stimulant of faster economic growth. They will increase both military public expendi-
ture and aid to the colonial and semi-colonial countries, in a last effort on a great scale to reverse a worldwide evolution that is condemning the world capitalist system to destruction within a time that is no longer very far off. A country which has at its disposal a national income of $ 500,000 million and is still able to dip into immense reserves can risk such an adventure without fear of immediate collapse. In so doing, the US bourgeoisie will deliberately sacrifice long-term stability to short- and mediumpalliatives. But, the world situation today, has in reality no other choice.
Nevertheless, at the same time, the imperative requirements of competition force US employers to harden more and more their opposition to increases in real wages (the increase in social expenditures by the state can cushion the shock of this policy among certain strata of the working class). Hostility toward the trade-union movement, attempts to wear down its forces, will increase. Objective conditions will thus become more favorable to a certain vanguard in the unions. These conditions will be aided by the influence that the colonial revolution exerts on certain sectors of the American laboring population (the African revolution on the Negroes, the Cuban revolution on the Puerto Ricans and the intellectuals, etc). The attempt in Canada to found a abor party based on the trade unions would, in case it succeeds, be able to serve as an example for the US
Japan: The Japanese economy is marked by the combination of a sector of very modern big industry, which manufactures capital goods and durable consumers' goods for the domestic and foreign markets, and a sector of home and handicraft industry, working with archaïc and and continuing to exist exclusively because of its ferocious exploitation of very cheap labor. The coexistence of these two sectors explains both the strength and the weakness of Japanese capitalism, which the MacArthur agrarian reform, despite its limita-
FOURTH INTERNATIONAL tions and inadequacies, did unquestionably create a vaster
In periods of international high conjuncture, this capitalism has at its disposal practically unlimited reserves of manpower (besides the manpower employed in handicraft industry, it can also mobilize those masses suffering from actual underemployment in agriculture). The pressure of this potential reserve army on wages keeps them at a very low level, even in a boom period. As a result, the rate of accumulation can surpass everything normally known in Western Europe or the US A.
But in another respect the contradiction between industrial power in rapid development and the almost stagnant purchasing of the Japanese people renders capitalism still more dependent on its exports before the Second World War. Now it has lost some of its classic markets, and its attempts to broaden its positions on the world market run up against the violent opposition of its competitors, either old ones (Great Bri-
West Germany) or new ones (India, Hong Kong, and the Chinese PR, especially for textiles). As a result, the Japanese economy is more unstable than that of the European Common Market or of Great Britain, more subject to serious recessions, and obliged to carry out vast structural reconversions (development of a powerful export industry in capital goods; relative decline of the textile industry; beginning of a decline of the coal industry, ete).
This instability does not automatically favor the work-
Under conditions of trade-union split, of growing fear of unemployment among the workers of the big factories, and of lack of consciousness among the workers of primitive temporarily even cause a relative decline in the workers' movement. But the inevitable awakening of the most exploited masses, together with greater economic instability, creating in Japan a situation that is the most explosive of all the capitalist countries.
THE CRISIS OF GROWTH OF THE COLONIAL AND SEMI-COLONIAL COUNTRIES
All the partial, conjunctural phenomena of the economies of the colonial and semi-colonial countries are overshadowed by a general phenomenon: the commencement of the liquidation of the imperialist and semi-feudal renomic and social strueture, a movement for agrarian the beginning of a transformation of the old reform and industrialization.
Just as, in the imperialist countries, the governments try to sustain the economic conjuncture by direct and permanent intervention, in the colonial and semi-colonial countries, it is the masses who sustain the process of structural change, who force nationalizations, or who simply prevent the stabilization of imperialist and capitalist domination.
Since the end of World War II, this already given birth to the workers' states of China, North
North Vietnam, and Cuba, and it never stops spreading and deepening. It is that which gives drive to the crisis of imperialism, beyond any temporarily favorable conjuncture in the imperialist countries themselves, and which definitively gives drive to the crisis of the capitalist regime as a whole.
While the workers' states and the advanced capitalist states have to various degrees been experiencing and are still experiencing a rapid economic growth, the colonial and semi-colonial countries observe an increase in their lag behind the production and consumption levels of the advanced countries. As a result, they are passing through a real economic and social crisis which underlies the colonial revolution - the dominant fact of the last decade, which will doubtless still dominate the coming
Granted, if we speak of an economic crisis, we must specify that it is a matter of a crisis sui generis, a crisis insufficient growth, and not one of classic overproeven though certain symptoms (slump in the sales of certain products, mass unemployment, drop in the real wages of the toilers, ete) are common to both types of crisis. Despite this crisis sui generis, the increase industrial production, lization, goes on, but at a rhythm inferior to that of the totally insufficient to modify the country's structure, all impotent to improve the masses' standard of living.
Thus industrial production in Latin America has risen from the index number 91 in 1950 to 100 in 1953 and 136 in 1958. This increase, however, remains very much lower than that of the Europe of the Six, not to speak of Japan or the USS R and China. Most underdeveloped in the world, moreover, have had an increase production less Latin America; especially the case for the Indian peninsula and South-
The more and more inadequate growth that has marked the economy of the colonial and semi-colonial countries has both conjunctural and structural causes. The first concern the trend to a fall in the prices (and sometimes even in the volume) of exported rau materials, which form
FOURTH INTERNATIONAL the main element of export for these countries. The second concern the main consequences of the feudo-capitalist strucof these countries, which acts as a powerful brake on a rapid industrialization.
13. THE IMPERIALIST SYSTEM AND THE COLONIAL REVOLUTION
The profits reaped by imperialist capital invested in the backward countries, which play an important role in the metropolitan countries, prevent possible primitive accumulation in the colonial and semi-colonial countries. To the contrary of what is currently said by the propagandists of imperialism, it is the backward areas of the world which partly finance the advanced zones.
Traditionally, it is the export of raw materials which has enabled the economies of backward countries profit partly from the resources of the capitalist world market. The unfavorable evolution of the terms of exchange, however, limit even this possibility. 8 The situation is aggravated by the development of the production of raw materials in the imperialist countries themselves (oil and synthetic oil; synthetic rubber; rayon, nylon, and other synthetic fibres; ete), and by the development of raw materials in new zones such as Africa (especially coffee, cotton, cocoa, copper, tin, aluminium, etc).
Furthermore, there was, especially after the Korean war, a conscious and organized effort by imperialism to drive down the prices of raw materials. The United States, as a means of pressure, used mainly its own internal resources, especially agricultural surpluses, products of the unheard-of growth of the productivity of farm labor, together with its own mine and oil production, etc. For the raw materials which the United States and the other great imperialist powers do not produce in the metropolitan countries themselves, they resorted to the organization of big consumers' markets to impose their conditions and prices on the producing countries. Such is the case of the International Tin Council, § the International Sugar Agreement, and agreements about coffee, cotton, etc.
Some of the counter-measures decided on by the bourgeois or petty-bourgeois nationalist regimes of the semi-colonial countries were to limit the repatriation of the profits on foreign capital, to establish different foreignexchange systems, and to take protectionist measures in favor of local industry, particularly to raise the prices of imported manufactured products. But imperialism actively intervenes io force open the gates that are closing against its expansion. It profits by the crises, the bottlenecks, and the threatening deficits in the balance of payments of the semi-colonial countries impose a "freedom" from all economic and financial controls. In Latin America especially, the Eder Plan (Bolivia), the Klein-Sachs Plan (Chile), the Prebich Plan (Argentina), and then the direct intervention of the International Monetary Fund, by forcing the liquidation of foreignexehange controls, showed to what a degree imperialism considers it necessary to keep these economies open to its exploitation, and to what a point it needs this in order to defend the dollar.
When imperialism tries to pacify the contradictions thus exacerbated, by means of alleged plans of "aid," it 8 According to information issued by the G A TT, between 1953 and 1958, the proportion of the manufactured articles that the non-industrialized regions whole could pay for by means of their exports fell from 90% to 64%.
cases like that of tin, the United Etates resorted to the formation of big stocks at low prices, which are kept down by foreign-exchange operations and the pressure of these stocks on the market when prices tend to rise.
27 can in reality solve none of the problems raised. The aid of imperialism is the equivalent of only a small part oi the surplus-value that it is itself extracting from the backward countries. To ensure their industrialization and their overall economic development, the colonial and semi-colonial countries would need not only to capitalize all the surplus-value produced in the country and obtain fair prices for their raw materials, but also to receive aid in the form of net investments of an amount at least ten times greater than the total sum of the "aid" given annually today by all the imperialists and all the workers' states.
Certain regions of the "third world" have received investments and undergone a not unimportant industrial development: such as the Union of South Africa, the two Rhodesias, the ex-Belgian Congo, Argentina, Brazil, Mexico, and Chile, as well as India and other areas of Asia. Venezuela and the oil-producing countries of the Near East have received very important royalties which, however, have not calmed social contradictions, but have rather accentuated the polarization of the classes, and the explosiveness of their internal situation.
Agrarian reform or the struggle for agrarian reform raises the problem of the incorporation of more than half of humanity in eivilized life. It is shaking the power of the native landowners or white settlers who hold the best lands (especially in Algeria, Kenya, Southern Rhodesia, and South Africa), it enters into direct conflict with the system of capitalist plantations, and knocks age-old partitioning walls that cut the communal or tribal communities (in Tropical Africa, Peru, Bolivia, and India) from the rest of the world.
The awakening of these populations, who generally comprise the majority of the peasants in these countries and occupy most of the lands (though not the most productive ones), requires great investments to bring them out of their backward state. The long stagnation of the Bolivian agrarian reform is a proof of this. The reform itself and the problems of economic development that it raises cannot be solved within the framework of the capitalist regime. It requires the expropriation and expulsion of the presen: masters, a wide-scale plan of investment based on the millions of small peasants to whom the land they till is granted. The development of the agrarian reform for this reason accentuates the crisis of the imperialist system and and offers an objective — and to a growing degree, even a subjective — support to the proletarian and revolutionary forces that are driving toward the worldwide liquidation of capitalism. colonial revolution is industrialization andoing by the The other great economic process set general econemie development. Like agrarian reform, it has its roots in the masses' deep desire to change their living conditions. And, like agrarian reform, it soon runs up against capitalism itself, the one-sided division of labor imposed by imperialism, the narrowness of the internal market, the Balkanization of Latin America, the Arab world," and Tropical Africa, the penury of capital, and the repatriation to the imperialist countries of an important part of the surplus-value produced in the colonial and semi-colonial countries. Capitalism is unable to incorporate broad strata of the population in the internal market by wrenching them out of their vegetative existence by means of the agrarian reform.
Only accumulation by the state can partly solve this problem, especially by the expropriation of the foreign of the native landowners. Thus social surplus production can be concentrated in the hands of and peasants' government, both for economic development and for the improvement of the masses' standard of living, by means of a large-scale mobilization of the productive forces that are drowsing in the immense masses of unemployed or insufficiently
28 employed toilers. This is the alternative that is posed to the colonial revolution, which has already entered on his road through the Chinese revolution, which today is reaching Cuba, and is beginning to open up paths for itself in some areas of Africa.
14. FEUDO-CAPITALIST STRUCTURE, AN
OBSTACLE TO RAPID INDUSTRIALIZATION
Beside the conjunctural factor represented by the reversal of terms of exchange at the expense of the colonial and semi-colonial countries beginning with 1952-53, the feudocapitalist social structure of these countries remains the principal brake on rapid industrialization. In general, especially in Negro Africa and in Southeast Asia, the extreme poverty of the peasants who form the overwhelming majority of the population and who either still live under primitive conditions or have the blood squeezed out of them by the alliance of landowners, usurers, and tradesmen — produces the lack of a sufficiently broad domestic market to stimulate the private development of big industry. The Balkanization of these regions — Latin America, Negro Africa, and the Arab countries — still further limits the domestic market. It follows that the resources available for accumulation, not always limited, are invested especially in land speculation, trade, and usury, or else are
Such is the explanation of the mystery of countries such as those that are big oil producers (Venezuela, Iraq, Saudi Arabia, Koweit, Qatar) which in the last decade have accumulated thousands of millions of dollars in royalties without for all that having gone through a genuine process of industrialization. Most of this considerable capital has gone on works of substructure or on prestige building (at Caracas, Teheran, and elsewhere), on the mass importation of luxury products, and on the creation of industries that are simply complementary to oil production (refineries, ports, chemical plants). In countries like South Vietnam, South Korea, Turkey, and Pakistan, which during the same period received several thousand millions of dollars in American aid for essentially strategic reasons, this waste has been repeated on an even vaster scale.
The initiatives taken by the native national bourgeoisie, even in countries where it is relatively strongest (India, Argentina, Brazil, Mexico) have been limited to the sector of consumers' goods. The effort to create a national heavy in direct opposition to and competition with the imperialist countries, has generally had to be entrusted to
It runs up against more and more powerful social and economic obstacles as the shift is made from plans or preparations to carrying them out in reality, and is frequently brought into question again by fractions dominant classes (Turkey under Menderes, gentina under Frondizi,.
In countries such as Mexico, Egypt, Indonesia, or Boimperialism been expropriated but where the capitalist management of economy has been maintained, this nationalized property is tending to become the business domain of private property and the source of private enrichment of functionaries and bureaucrats— which sows failure and casts discredit upon the nationalized property, and unfits for being a source of accumulation for economic growth.
The agrarian reform contemplated by these regimes, in Egypt, Mexico, Betancourt in Venezuela, or Nehru in is only a capitalist repurchase of lands and attempt to alleviate contradictions in the countryside without solving the fundamental problem of conveying the land to those who till it, and without making investments aimed at developing agricultural production. The bourgeoisie itself, under the pressure of imperialism, is shaken by internal contradictions. Frondizi's attempt to develop heavy industry by leaning upon imperialism has been
FOURTH INTERNATIONAL perhaps achieved at the cost of the short-term prospects of light industry — which was developed during Perón's to the extent that it tends toward the accumulation of capital by means of an increased exploitation of the working class and of the popular strata, i e, a limitation of the domestic market for light industry.
I: is the working class which has simultaneously led a permanent struggle against these plans of industrial demobilization and really defended against the bourgeoisie itself the level of industrialization already reached.
The attempts to overcome Balkanization through gional agreements are only ineffective measures — as were the previous agreements concerning Central America and Greater Colombia, or the present "free trade" zone Latin America, which only serve to maintain some privileges of regional trade that existed prior to the agreements with the IMF. Generally speaking, even among semi-colonial countries, the differences are so great that regional agreements will mean privilege developed countries, which would be in a position to block the attempts of industrialization of the
15. ECONOMIC EFFECTS OF THE COLONIAL REVOLUTION
The colonial revolution has not failed to influence the capitalist economic system as a whole, and it will continue to undermine it in the coming years. Its effects are felt both directly in the colonial and semi-colonial countries and in the metropolitan countries themselves.
In the underdeveloped countries, the colonial revolution, by stimulating the masses' aspirations for well-being, hinders or prevents capitalist financial and economic "stabilization," undermines the rate of profit, and renders any long-terin investment more and more speculative and risky. By exerting a powerful pressure in favor of the industrialization of this zone, the colonial revolution tends to reduce the outlets still open to the metropolitan capitalist countries, which have for that matter already suffered amputations from the destruction of capitalism over a vast zone of the world. It likewise stirs up new competitors to the metropolitan industrial producers, to the degree that it spontaneously tends to ally itself with the workers' states, it threatens other capitalist outlets which will be taken over by exports from the US SR, the German D R, Czechoslo-
In the advanced capitalist countries, il reduces the possibility of finding in exports to overseas countries the safety valve against a tendency to overproduction inherent in capitalist production. By lessening or wiping out the income from capital investments exported to the colonial and semi-colonial countries, it shakes the equilibrium of the balance of payments, reduces the bourgeoisie's margin of manœuvre in its struggle against the proletariat, and tends to force it to a policy of austerity that runs the risk of setting off a social crisis.
These economic effects of the colonial revolution, however, make themselves felt only in the long run, and precisely to the degree that it succeeds in detaching the colonial and semi-colonial countries from the world capitalist economy as a whole. Now during the whole first phase, imperialism has tried to conserve what is essential in its positions in underdeveloped countries by transferring the power there to the national bourgeoisie. Such a transfer is a very hard blow for imperialism only in the sole case that it is accompanied by a nationalization of foreign capital invested in the country and by a basic reorientation of its foreign trade. ! Despite some spectacular nationalizations the last decade (Iranian oil industry, Suez Canal), in general most countries drawn into the colonial revolution have not by-and-large detached themselves from the world capitalist economy. This is the main factor that has up till
FOURTH INTERNATIONAL now limited the immediate economic effects of the colonial revolution on the economy of the metropolitan capitalist
In this connection, the experience of the Cuban revolution opens a new stage in the colonial revolution. For the first time, this revolution, before even giving itself a proletarian leadership, has ended up in the nationalization of the principal foreign capital invested in the country, well as in a fundamental reorientation of Cuba's foreign trade toward the workers' states. If the immediate economic effects of these developments on the US or European capitalist economy are insignificant, they are nonetheless of historic importance as a sketch of a future general tendency. To the degree to which, in the coming decade, the colonial revolution goes beyond the stage of bourgeois-democratic leadership in several countries, its economic effects on the metropolitan capitalist countries will become more important. And if entire blocs of the "Third World" (India, Brazil, the Middle East) were to escape from the capitalist world market, these effects would become disastrous.
The colonial revolution today is expressing in an acute form the world crisis of the capitalist system. But this crisis is transformed into a crisis of the world capitalist economy only to the degree to which it undermines the economy of the most important industrial capitalist countries: the US A, the Common Marker, Great Britain, Japan. Experience permits us to declare that in the short run this degree is determined more or less exactly by the degree to which the colonial revnlution goes beyond democratic-bourgeois lender-
16. FACTORS WHICH HAVE HERETOFORE LIMITED THE ECONOMIC EFFECTS OF THE COLONIAL REVOLUTION
The main paradox of the last decade lies precisely in the fact that, despite a capitalist world market that unites the underdeveloped zone with the industrialized zone, despite the enormous advances of the colonial revolution, and despite the global evolution of a correlation of forces unfavorable to capital (which more and more undermines the long-term security of investments), the advanced capitalist countries have been able to enjoy relatively rapid industrial growth. In the last analysis, this can be explained only the fact that there enter into play a series of factors which momentarily limit the economic effect of the colonial revolution on the metropolitan capitalist economy. Most of these factors have already been pointed out by the World Congress theses on economic and political perspectives:
La) The maintenance of important imperialist positions in the countries where the colonial revolution has begun. This applies both to capital investments and outlets for
IV
29 industrial products. The most striking case is that of Iraq, despite the beginning of the revolution, dividends are still flowing to the City. In all, Great Britain continues each year to get income of some £ 350 million ($980 million) from its foreign investments. As for outlets, in 1959 53% of British exports, 44% of French exports, 27% of Italian exports, and 25% of West German exports, still went to colonial and semi-colonial countries and the British b) The replacement, inside the underdeveloped zone, of lost outlets by new Thus the losses suffered by Great Britain, France, and the Netherlands in their former colonies have been in part offset by a boom
"associated" territories (for Great Britain, especially Australia, South Africa, Canada, and the Central African Federation; for France, especially Negro Africa and Algeria; for the Netherlands, the Dutch Wesl Indies) or to the colonial or semi-colonial zones of their c) The replacement of exchanges with the colonial and semi-colonial countries by exchanges among the industrialized countries. in a general way, since 1953, the exchanges aniong the industrially advanced capitalist countries been developing more rapidly than the exchanges between advanced capitalist countries and underdeveloped countries. Two phenomena have often been striking in this connection:
The US A has become an important market for most of the colonialist powers which have there found again part of the outlets lost elsewhere:
Percentage of Total Exports Sold to the US A Country 1928 1938 1950 1959 Great Britain 6% 4% 5% 11% France 6% 6% 4% 8%c Italy 11% 8% 6% 12% Netherlands 4% 3% 5% 6%0 Belgium 8% 7% 9% 14% As for Japan, it is currently sending 30% of its exports to the USA.
Exchanges within the Common Market are developing more rapidly than between the Common Market and the rest of the world.
d) The replacement of formerly imported products by domestic products (and outlets). This applies both to the development of synthetic or nationally new raw materials industries (oil in Italy, France, Germany, the Netherlands; methane gas in Italy and France; uranium in the US A, and France, etc) and to the steady replacement of purchases abroad of foodstuffs or textiles by national manufacture of synthetic textiles and durable consumers' goods industries.
PROSPECTS OF THE WORLD ECONOMY IN THE COMING DECADE
From the analysis of the basic economic tendencies of the colonial and semi-colonial countries, worked up here and in the resolution on the colonial revolution, it clearly appears that these countries are for the moment continuing and will doubtless continue for a whole period to evolve in the opposile direction to the rest of the world. While, in the industrialized areas of the world, production and per capita income have already atiained a high level, or aro in growth that is very rapid (workers' states) or rapid (Western Europe and Japan), in the colonial and semi-colonial countries per capita income and product continue stagnate or to raise themselves very slowly, starting to out from a very low level.
The industrialized capitalist countries and the workers' 3 states, confronted by this situation, are trying to face up to it according to the resources that they have at their disposal and according to the class forces that they incarnate. The prospects of the capitalist economy will nevertheless be more and more dominated by the deepening crisis of imperialism, especially to the extent that the colonial revolution comes under proletarian and semi-proletarian leaderships.
17. COMPETITION IN AID TO UNDERVELOPED
COUNTRIES
From the purely economic viewpoint, the capitalist states today have at their disposal resources superior to those of the workers' states for being able to launch a greater movement of aid to the colonial bourgeoisie. Not only are they far richer, able to make their reserves in ma-
30 chines and men bear fruit for this purpose, and able to dip into a more abundant current production of capital goods, but also they are not, like the U S S R, under constant pressure from a powerful ally of the dimensions of the Chinese PR that wants to drain off most of the available resources for the benefit of its own development.
The advantage of the workers' states is fact that their aid, even if lower granted for political reasons, is generally directly connected with movements and enterprises which tend to transform the backward structure of this help is much more important and fruitful and will be increasingly so in the coming years. ample has as the examples of Egypt and other countries have already, that this aid serves to escape from the reprisals and attempts at economie blockade on the part of imperialism.
It is true that the Republican administration in United States, alarmed by the unfavorable evolution of the American balance of payments, has for a certain time been even putting the brake on the movement of grants and credits to underdeveloped countries, this blackmail to force its allies in Western Europe — first of all, West Germany — to make greater sacrifices. But this policy — which finally ended up in political passivity and immobilism, and leaves the US bourgeoisie the choice only between systematic military intervention in face of any new spread of the colonial revolution and just plain capitulation — is causing more and more irritation in the leading circles of world capitalism, both in the US A itself and in Western Europe.
It is probable that in the near future this policy will be changed, and that we shall observe an American aid to underdeveloped countries far greater than in the past. This aid will very likely be selective according to which zones Washington considers the most critical and the most strategic: Latin America (first of all Brazil, Mexico, Ve: ezuela, and perhaps Argentina), India, Turkey, Iran, and perhaps Indonesia.
But this concrete possibility for imperialism to carry out this plan nevertheless runs up against serious difficul riesalim, financially weakening especially regarding the condition of American imunder the tremendous loads of armaments and preparation for war.
In addition, it runs up against different social obstacles in the colonial and semi-colonial countries themselves, which in the last instance will strongly limit the effect of these plans of "aid."
a) Private capital is little inclined to create in colonial and semi-colonial countries conversion industries that enter into competition uith metropolitan industry. The aid granted for this purpose will be to a large extent state aid (and limited by the resources of the states), for the US government can, in the collective interest of the capitalist class, go beyond the narrow economic interests of certain sectors of this class, as it already did after 1945 in Western Europe.
b) The very scope of such a plan is not sufficient to change within a short time the destitution and dissatisfaction of the masses and to check the revolutionary upsurge in the colonial and semi-colonial countries. It is only in cerlain limited cases, and alter a certain time, that it might be able to raise the masses' standard of living — which, furthermore, does not have an automatically demobilizing effect upon those masses.
c) In most colonial and semi-colonial countries, there is not a broad enough bourgeois social stratum to be able to channel the whole of this aid in a productive way toward a genuine economic upsurge. Examples, not only old ones like Chiang Kai-Shek, Syngman Rhee, and In Seoud, but even more recent ones like Iran, Turkey, South Vietnam, and Laos, are significant in this matter.
In any case, the "aid" programmes will not in any way
FOURTH INTERNATIONAL succeed in stabilizing economic situation of these countries, due to the revolutionary process and to the fact that whatever be the nature of the capitalist stratum which receives this help, it will in the last instance always find itself in opposition to the movement of the masses.
Indeed, the attempts of imperialism to reach an agreement with the national bourgeoisies which are transi: tionally leading the movement of the masses are made at the expense of the achievement of the progressive tasks: they avoid as much as possible the expropriation of enterprises; they replace the agrarian reform by inadequate measures; they favor the accumulation of capital at the cost of an overexploitation of the workers, which leaves all the contradictions untouched, and contributes to separating the revolutionary movement from the nationalbourgeois leadership.
Under these conditions, therefore, the most probable eventuality is the following: in the coming years, American, capitalist, aid, as well as Soviet aid, to the underdeveloped countries, will go on increasing, and U S imperialism will make an exceptional effort thus to tie up to itself certain by making important concessions to them. But this aid, in the present social and political context of these countries, will not be able to check the colonial revolution in the short or medium run.
18. ECONOMIC COMPETITION BETWEEN WORKERS' STATES AND CAPITALIST COUNTRIES
As for direct competition between the USS R and the US A, and between the workers' states and the capitalist states as a whole, supposing that the present trends roughly continue, it can be concluded that it is extremely improbable that Soviet production will, in 1970-72, surpass current American per capita production, und that it is even more improbable that, already in 1965, the production of the workers' states will surpass that of the capitalist states, as Khrushchev stated in his report to the XXIst Congress of the Communist Party of the Soviet Union. These two predictions could become real only on the very improbable condition of a total stagnation of the economy of the US and the other capitalist countries. Soviet sources themselves admit, for example, that in 1959, power production in all the workers' states had reached only 20%, and steel production 31%, of world production. These figures give the measure of what would have to be accomplished in six years to fulfill Khrushchev's not very serious prediction.
Granted, it is not excluded that in this or that field the production of the USSR may catch up with US per capita production, especially if the year in question (either
1971, or 1972) is one of grave recession. But it would be deluding oneself to deduce therefrom that either the economic correlation of forces between the two countries or the living standards of the two peoples would already be equal.
economic correlation of forces, duction capacity and not current production that must be taken into account. As for living standards, it is the mass of durable consumers' goods accumulated over one or several decades which must be added to current production. For all these reasons, the coming 10 to 20 years give promise of being the last historical period during which the capitalist states will keep a certain lead over the economy of the workers' states. But this lead will steadily shrink. As, gradually, the recessions grow broader, belween production capacity and current production gets wider in a growing series of branches of industry, and the colonial revolution pulls more and more countries out of the capitalist world market, this superiority could be puetuby brief stages during already pull themselves up to the same level of current production as the capitalist states.
FOURTH INTERNATIONAL
It must be further considered that the economic dynamies of the workers' states, imperialist countries, and colonial and semi-colonial countries are supported by extra-economic factors: state policy and the mobilization of the masses for building the first category of countries, the intervention of the state in the second, intervention of the revolution in the third.
The success of the nationalized and planned economy, in contrast to the capitalist economy, is measured not only by its growth rate and its present successes, even under bureaucratic leadership but also by the fact that in raising the level of experience is showing that it is really the only system which allows the colonial and semi-colonial countries — ie, three quarters of humanity - to get out of their backward condition, have access to modern economy, and be in a situation to utilize their resources in accordance with the masses' needs. This is confirmed by the comparative examples of China on the one hand, and, on the other, India and all other countries that have attained their political independence. This fact becomes a concrete stimulus for the revolutionary movement of the masses.
The competition between the workers' states and capitalism in the next period will be carried out, not only through the Five-Year Plans of the USSR and China, and the resources which the imperialist states can mobilize to avoid worse crises and maintain a favorable conjuncture, but also through the capacity demonstrated by one regime or the other to solve the needs of growth of the colonial and semi-colonial masses.
It must be added that the American bourgeoisie is conscious of the decisive stakes in this competition. It will bring into play all the resources at its disposal to raise the rate of expansion of US industry, to keep up a certain technical and technological superiority of its industry over that of the USSR, and to force a showdown before it has lost its last strong card.
19. POLITICAL CONCLUSIONS
The new upsurge of the colonial revolution, of the imperialist system, and the narrowing of the economic lead which the capitalist states still enjoy workers' states mean a new and important change in the correlation of forces between the capitalist and anticapitalist forces in the world, in favor of the latter and at the expense of the former. This change in the correlaforces will successively social to the politico-military plane, and end by moving over also to the economic plane. Our movement, which, already in 1950, was the first to lay the emphasis on this fundamental change, has no reason to abandon this evaluation just because the leaders of the Soviet bureaucracy and the beads of the Stalinist parties throughout the world are - years late — taking it up in their turn.
The alliance between the workers' states and the colonial revolution may, in the coming years, increase by leaps and bounds this change in the correlation of forces. This alliance has at its disposal incalculable possibilities through the mobilization of human resources unknown in past history, and through the mobilization on a world scale of economic resources for the first time on a non-capitalist basis. combined development -revolution and workers' states — is operating against both bureaucratic transitional bureaucratic forms may powerful revolutionary jeopardizing the rule of imperialism the coming years the possibility increasing influence, scientific solution, on the problems of economic development, on the basis of control and leadership by workers and exploited masses. The preparation of a
31 transitional programme for economic transformation the management of the economy development will be greatly needed for guiding these revolutionary movements in the next period.
What distinguishes our evaluation, however, from mechanist one of Khrushchev and the C Ps is that it is dialectic, i e, thai it includes the whole of the contradictory of today's reality. We understand that, despite this change in the correlation of forces in favor of the anticapitalist forces in the world. American imperialism still possesses a real economic superiority and enormous potential reserves, and that capitalism has experienced and is experiencing a new upsurge in Western Europe that is translated by the increased self-confidence of the bourgeoisie (sometimes exceeding even the self-confidence of certain sectors of the American bourgeoisie).
Under these conditions, it is absolutely illusory and dangerous to expect a radical change in the world situation through the lessening (or even the wiping out) of the economic lead of the United States over the US S R.
To cut down this lead would not take away from American imperialism any of the weapons which permit it and will permit it to set off a war of suicide-defense at any decisive moment of the process of change in the correlation of forces.
In addition, given the economic development that capitalist Europe is now going through, it is equally improbable that the economic advances of the US S R would automatically change the relationship of social forces there in favor of the proletariat, not to mention the Communist Parties.
The so-called "peaceful coexistence" strategy, which ex pects wondrous results just from the economic advances of the workers' states, is therefore based on two totally unrealistic hypotheses. It expresses less the determination by broad layers of Soviet society to have "peace at any price" (a determination that unquestionably exists after decades of uninterrupted sufferings and sacrifices) than the fear of the Soviet bureaucracy in face of the new advances of the world revolution. It is deeply conservative and demobilizing, for it tends more than ever to reduce the role of the international workers' movement (including the masses of the colonial countries) to that of simply bringing pressure on imperialism and the colonial bourgeoisie, in order to lead them to accept "coexistence."
Granted, there can be no question of requiring the Soviet government to use in its turn a "nuclear strategy, " to profit by its superiority at the moment in nuclear-headed missiles to smash capitalism in this or that country, or even in the entire world. Such a policy would end up, not in the world victory of communism, but in the disappearance of civilization or even of all humanity itself.
It is a question of understanding that the danger of nuclear warfare will continue to exist as long imperialism shall have at its disposal the forces which it still has today — and that no developments inside the workers' states will be able to take those forces away from it in the two coming decades. As a result, it is a question of using to the maximum the favorable conditions that exist today in a certain number of countries, in order to strike blows at world capitalism, from within, by the laboring masses of those countries, movement in the countries where it is momentarily stopped. This is the only means of definitively disarming imperialism and preventing nuclear catastrophe.
Those who assert that such a policy by the workers' parties would "provoke" imperialism forget to explain why they are not also in favor of putting a stop to the economic growth of the USS R and the Chinese PR, which is
"provoking" imperialism in the same way.
Only victorious revolutions in the most powerful capitalist countries can definitively make a world war "avoidable." The fear of this war, far from demobilizing the mas-
32 ses, can become one of the principal forces of radicalization of the toilers of the capitalist countries (as is already the case in Japan and Great Britain). To transform this fear the overthrow of capitalism does not necessarily presuppose the existence of a grave crisis of overproduction; it can be put on the agenda by political and social crises that permit the revolutionary mobilization of the masses despite the absence of catastrophic economic circumstances.
FOURTH INTERNATIONAL To spur the colonial revolution by every means to new victories over capitalism and imperialism is increasingly to undermine the relative stability of the capitalist economy, and thus also to contribute to the revival of the movement in the capitalist countries. It is this strategy — revolutionary, realistic, and respon sible — that the Fourth International sets up against the myth of "peaceful coexistence," which sows demoralization and passivity among the ranks of the toilers and which leaves capitalism the forces to hurl them sooner or later into the nuclear holocaust.