From Socialist Review, Vol. 1 No. 1, November 1950.
Transcribed by Mike Pearn.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
The war in Korea serves the great Powers as a rehearsal for their intended struggle for the redivision of the globe. The fate of the Korean people is a grave warning to all humanity what sufferings the march of aggressive imperialist Powers will entail. To understand the real aims of the Powers and how they affect the interests of the international working class is a prime duty of every Socialist.
As a result of the Second World War only two imperialist powers remain to contend for world mastery – America and Russia. The other five imperialist powers which formerly vied for the right to control the economic resources of the world, to rob its natural wealth and exploit its toilers, lost their competitive position. Germany and Japan were defeated and are now occupied countries. British imperialism forfeited a great part of its overseas investments, was weakened industrially and financially as against its giant competitor across the Atlantic, and was challenged by the movements for national liberation in its colonies (India, Burma, Malaya, etc.). French imperialism with its large empire in Africa and Asia and its pre-war spheres of influence in east and south-east Europe, proved to have been too weak an industrial basis to stand up against its German opponent and was wrecked by the class tensions in French society and by the rising national liberation movement in its colonies. Italy was never a major imperialist power, and now its relation to the American conqueror is not very different to that of any South American republic. The erstwhile proud western European imperialist powers are now standing, hat in hand, waiting for the dole of the young, sturdy American rival.
Producing nearly two-thirds of world industrial production, owning three-quarters of world gold, US capitalism, whose self-confidence was so deeply shaken in the slump seems to be rejuvenated and more vigorous than ever. Its unprecedented superiority in world production and world politics is nourished by the war economy of the last war and the preparation for the future one; it thrives on the agony, the decline of western European capitalism. The belatedness of the Socialist revolution in Europe, the division of the continent into numerous antagonistic national states, gives the American imperialist giant the opportunity of tying each of these countries to itself with golden chains.
The motive force of American imperialist expansion is the greed for wealth of the big US corporations. In 1929 there were 20 corporations in the United states which had assets of a billion dollars or more. By 1941 their number rose to 56. These, together with another 200 smaller corporations, control the wealth of the United States. As the well-known economist Fritz Sternberg put it:
“... these 250 huge corporations control two-thirds of American industry. They are able to produce as much as the whole of American economy before the war, when the United States produced almost half of the world’s goods. Today with European industry hampered by lack of material, plant and buying power and by the destruction of capital values, the 250 American giants can produce as much as the rest of the world industries within and outside the United States.” (The Nation, June 28, 1947).
These giants are the driving force of American imperialism.
These rich and powerful American monopolies invade the economies of the backward Asiatic, African and Latin American countries, as well as those of western Europe. Economic penetration is supplemented by political-military pressure. Marshall Aid is only a means of accommodating the political regimes of the different American colonies, satellites and Dominions to the needs of American Big Business. The Marshall Plan and the North Atlantic Pact are two facets of American imperialist policy.
The end of the Second World War saw US imperialism at the peak of its power. Nevertheless it could not reap the fruits of its power in peace and quiet. There are a number of reasons for this. The crisis of the western European countries was the US’s opportunity, but it was also the opportunity of the Asiatic nations. India, Burma, Indonesia and indo-China becam, not fertile fields for American investments and exploitation, but hotbeds of anti-imperialist struggles. The same crisis of western European capitalism made the countries of western Europe, not a happy hunting ground for US capital, but a volcano, even if latent, of working class, socialist, evolutions. In addition to the national and social liberatory, progressive urges of the toilers, there is another factor preventing US imperialism fro enjoying the fruits of its victory in the last war. This is the rivalry with the only imperialist competitor which today dares to vie with the United States for world mastery – Russian imperialism.
In the USSR itself the state-capitalist exploitation of the oppressed nations – Ukrainians, Uzbeks, Tadjiks, etc. (making up more than half the population of the USSR) – by Russian imperialism, calls forth a struggle for national and social liberation, even if for a time it is successfully suppressed by the iron hand of the MVD.
The traditional imperialist countries exploited their colonies in three ways: by buying the products of their colonies or low prices, by selling them the products of the “mother” country for high prices, and by establishing enterprises owned by the capitalists of the “mother” country and employing “natives”. Russian state capitalism uses the same three methods to exploit its colonies. This is well hidden by official statistics as regards the relation between the Russian bureaucracy and the nationalities of the USSR itself, but it is less well hidden as regards the relationship between Russia and the “People’s Democracies” – Poland, Czechoslovakia, Hungary, Rumania and Bulgaria.
There are numerous statistics proving that Russia pays very low prices for the products she buys from the “Peoples’ Democracies”. I give four examples. The Russo-Polish agreement dated August 16, 1945, stipulated that from 1946 onwards, Poland was to deliver to Russia at a special price (said to be 2 dollars per ton) the following quantities of coal: 1946 – 8 million tons, from 1947–50, 13 million tons each year and subsequently 12 million tons annually as long as the occupation of Germany goes on. This coal is not to be paid for by Russian products, but by reparations taken from Germany by Russia. As far as is known, Poland did not get anything on this account. Anyhow, 12–13 million tons of coal at 2 dollars a ton, when the price of coal in the world market is 12–16 dollars a ton, gives a net profit to Russia of 10–14 dollars a ton, or altogether 120–180 million dollars a year (a sum comparable with the maximum annual profits of British capitalists from their investments in India). Borba of 31 March, 1949, writes that a ton of Molybdenum, a essential ingredient of steel, that cost Yugoslavia 500,000 dinars to produce, was sold to USSR for 45,000 dinars. The former Bata Plants in Czechoslovakia had to supply Russia with shoes (the leather for which was supplied by Russia) for 170 Czech Crowns, although the actual cost price per pair was 300 Crowns. A particularly flagrant case of capitalist exploitation was that of Bulgarian tobacco: bought by Russia for 0.5 American dollars, it was resold by her in western Europe for 1.5–2.0 American dollars.
A clear example of overcharging the “People’s Democracies” for Russian products is the following: in 1948, when, because of the drought, Czechoslovakia had to buy 600,000 tons of grain from Russia, she paid more than £1 a bushel, when the world market price was only 12/6.
The position of Russian-owned enterprises in eastern Europe shows up most blatantly the third means of capitalist exploitation carried out by Russia: exploitation of the “natives” employed in the enterprises owned by foreign capital.
In the Russian occupation zone of Germany the Russian state took outright as its property about 30–33 per cent of all industry. This is owned by what is called “Soviet Shareholding Companies” (SAG’s). the importance of the SAG’s is very great. Nearly all the large-scale enterprises are owned by them. Every SAG employs on the average 2,400 workers, as against 139–146 in the LEB’s (enterprises owned by the local German States) and about ten in the private industries. Their importance will be even clearer if we take into account that they control heavy industries entirely. All the products of the SAG’s are taken by Russia as her own property. In addition she takes part of the products of other industries as reparations. The Two-Year Plan (1949–1950) fixes the reparations deliveries from current production at 17 per cent of the net output of industry plus 8 per cent for the upkeep of the Occupation Forces, making a total of 25 per cent. If to this is added the output of the SAG’s, the Russian bureaucracy appropriates 55–58 per cent of the total output of the industrial workers of eastern Germany. It is difficult to find a colony of a western imperialist country where a higher proportion of the industrial product is taken as surplus value by the capitalists of the “mother” country.
Rumania and Bulgaria also had to pay very high reparations. Not to overburden the article with figures, just one thing need be said about the amount of these reparations: measured in relation to the national income, to the national income, to the Government budget or to foreign trade, the amount of reparations Rumania and Hungary had to pay to Russia was much greater than what Germany paid to the western imperialist powers after World War I. In addition to the reparations there are the Mixed Companies, in which Russia owns 50 per cent, but which in reality are completely under her control. These companies are particularly important in Rumania. Mention must first be made of the Sovrom Petrol Company, which controls the richest oil fields in Rumania. Then there are Sovrom companies for shipping, air communications, timber, chemicals, tractor production, steel, engineering, coal mining, the exploitation of natural gas deposits, building, glass; Sovrom Banco (where the Russians have a share larger than half) which controls nearly all the light industries; a Sovrom insurance company – all in all making up far ore than half the industries, transport, banking and insurance of Rumania.
In Bulgaria there are Soviet companies and mixed companies in certain mines and transport undertakings. When the USSR took over the assets of the German companies in Bulgaria, they did not take over their liabilities, the biggest of which wee their debts to the state. Thus while a large part of the assets of the German companies came from the sheer open robbery of the Bulgarian people in the past, these assets were now transferred to Russia, but the liabilities fell upon the shoulders of the Bulgarian tax payer. This was revealed in the Kostov trial (December 1949) by the accusation brought against Prof. Stefanov, Minister of Finance, of opposition to this state of affairs. He was accessed further of wishing to impose the same taxes on the Soviet enterprises as the Bulgarian enterprises had to pay. The Prosecutor took it for granted that Russian enterprises in Bulgaria must enjoy special privileges as regards taxation.
Yugoslavia had two mixed Soviet-Yugoslav companies, “Jusped” and “Justa”, formed on February 4, 1947, with the intention of “contributing to the recovery and development of productive possibilities of Yugoslavia”. They were liquidated after the rupture with Moscow. After this some light was thrown on the working of the companies. Joze Vilferan, Yugoslav delegate to the United Nations Economic and Social Council, cited the example of the two mixed companies in his speech before the Council. The participation of the two governments in the companies was to have been equal. However, in practice, it was found that the companies did not do what they were intended to do. Thus, for example, although by May 1949 the USSR had paid up only 9.83 per cent of its participation in Juspad, while Yugoslavia had paid up 76.25 per cent, only 40 per cent of the production of both companies went to Yugoslavia, the remainder going to other countries. While Yugoslavia was charged 0.40 dinars per kilometre-ton, the USSR was charged only 0.19 dinars, and other countries 0.28 dinars. With the liquidation of both companies, Yugoslavia took over all the liabilities though the USSR drew its share of the capital, as far as it was paid up, in full. (Tanjug, 11 October 1949).
Under the banner of “Defence of Democracy” American imperialism wages its struggle for world domination. The democracy it speaks about looks bizarre indeed. Chiang Kai Shek and Syngman Rhee are the representatives of American democracy in the Asiatic Continent. The bloody house of Glucksburg and a monarchist-fascist regime which relies on the ex-Quislings of Mussolini and Hitler are the symbols of this “democracy” in Greece. The catholic hierarchy in Italy, which blessed the “mustard general” during his “civilising” campaign in Abyssinia, and blessed the Franco mercenaries, is another pillar of the same “democracy”. as an embodiment of its spirit it is only necessary to quote one member of the catholic hierarchy, Father Ricardo Lombardi, a Jesuit radio priest (in a speech in Turin cathedral, December 1948): “The Jews are revengeful, they must be destroyed; Communism and the Jews must be destroyed. And blood will flow, maybe much blood ... We must fight Communism to-day, just as a century ago did the Pope, the tsar, Metternich, Guizot, and as yesterday did the Pope, the Mikado, Hitler and Mussolini”. In Japan, the Emperor Hirohito and the Zaibatsu monopolists and in Germany, the monopolist magnates who financed Hitler and were the backbone of German militarism, are another two pillars of this same “democracy”. And if not for American money and arms what future could the “democratic” militarist cliques in Latin America have had, who overthrow any popular regime which dares to introduce some reforms, and even worse, dares to impose taxation on “democratic” American companies? The toilers of the world can gain nothing from the victory of this “defender of democracy”.
The “Peace” campaign of Stalin’s Russia is not less hypocritical than Truman’s “Defence of Democracy”. Pax Stalin looks like this: an agreement with Hitler to divide Poland, a proposal to divide all Europe and the British Empire among Russia, German and Japan, an imperialist annexation of Poland, Czechoslovakia, Rumania, Hungary and Bulgaria, and impotent rage against Yugoslavia which “threatens world peace”. No worker could desire that the SAG’s and Mixed Companies should exist not only in eastern Germany and the “People’s Democracies”, but in western Europe as well. No worker could desire the victory of Stalinist imperialism which unfurls the banner of “Peace”.
In their mad rush for profit, for wealth, the two gigantic imperialist powers are threatening the existence of world civilisation, are threatening humanity with the terrible suffering of atomic war. The interests of the working class, of humanity, demand that neither of the imperialist world powers be supported, but that both be struggled against. The battle-cry of the real, genuine socialists today must be:
Neither Washington nor Moscow, but International Socialism.
Last updated on 16 February 2017