DISCUSSION OF TROTSKY'S REPORT ON THE WORLD ECONOMIC SITUATION

SACHS(Alexander Schwab): The expositions that I have to give here do not simply concern comrade Trotsky's discourse here; they concern, all the same, if not more so, the theses that he jointly presented with comrade Varga. In my opinion and that of the friends of my party, these theses are not the appropriate document for representing the way in which the Communist International considers the world economic situation today, and, in connection with it, the political situation. We believe that these theses need a fundamental revision if they are to walk through the world under the name and responsibility of the Communist International. If the point of departure of these theses derives – and we will have to recognise informally — from the necessity to polemicize with the reconstructers of the 2nd International and of the 2 ½ International, this does not mean that to simply reprove, on its own account, the alternative of the reconstructors has been an effectively correct and polemically successful idea. This alternative — reconstruction of capitalism or collapse of capitalism – has been renewed in the manner of posing the problem at the beginning of the theses. We have certainly seen here in detail, as comrade Trotsky — and all those here who will be, I think, in agreement with him – produced, the relationships between, on the one side, the minor crises and minor periods of cyclical and momentary
progress, and, on the other side, the problem of the progress and decline of capitalism, envisaged over great historical periods. We will all be in agreement that the great curve that was going to the top now goes irresistibly to the bottom, and that within this great curve, when it was going up as well as now that it descends, oscillations occurred.

But what has not been expressed in these theses, what has not found a well-moulded formulation in them, is exactly the fundamentally different character of this epoch of decline vis-a-vis the previous epoch of progress of capitalism considered in its totality. The theses in their presentation, in their economic examination of the situation, start from the basis of national wealth (or else the wealth in property in the world) and of the question of productivity. These are certainly some important and decisive viewpoints for the well-being of men, of the labouring masses. But for the analysis that we have to conduct, this viewpoint is not sufficient. It must be completed, I might even say surpassed, by the superior viewpoint that the economy, today more than ever, is not directed towards production, but towards profit, and that production is only the fortuitous result, only the means to the goal: profit. The characteristic of this decadent epoch of capitalism considered in its totality, disregarding any particular oscillations, is that the character of profit economy, the character of class struggle of this economy itself is reaffirmed in a manner doubly more accentuated than in the epoch of its flowering; the importance of these characteristics finds its level in the epoch when capitalism was beginning to build itself. And if one wants to express this fact to agitational ends, that is to say in an exacerbated and accentuated fashion, but also in an easily verifiable fashion, then he must say that even now capital is reconstructing itself, that it preserves its profit, but at the expense of productivity. This rebuilding of the power of capital which is something different from, almost opposite to the reconstruction of the economy, this set-up of the power of capital, which can only be paid for naturally by the large masses of the population. For what is reconstructed is only the solid kernel of capital, that is, in short, the great monopolies of heavy and extractive industry.

It is after all the great monopolies of heavy industry that constitute the stronghold of capital for the simple reason that all the other capitalists, all the other industries depend more or less on their deliveries. For the hardest kernel of capital it no longer arises today, in the goal of preserving profit, to produce regularly, to get capital to make its rotation according to the slow and regular rhythm of normal production, and to extract profit by this process; what is essentially at stake for them, is monopoly profit. This is the second characteristic of the economic situation in the descending period of capitalism. Monopoly profit has become preponderant. It is the proletariat that pays the cost of this reconstruction of the hard kernel of the capitalist edifice. To be sure, large layers of the bourgeoisie also bear the expenses of the situation, these being the industries that depend on the deliveries of raw materials, that are not connected to the monopolies of Stinnes, Thyssen, etc. or else the industries where this monopoly of raw materials can not find any profitable valorisation. Thus some factories are placed in abeyance, others are forced into partial unemployment. Gold, even if the individual capitalist very often cannot escape the loss and is thus cast aside, we nevertheless knew that capital itself can always escape this lot, as much as the capitalist form of economy subsists in its fundamental forms. But what it cannot be saved from is after all the proletariat. And if we consider the present unemployment figures in Germany, England and America, we must, I think, see that it no longer arises from the industrial reserve army as in former times. At, the bottom of the expression "industrial reserve army" is found the idea that the masses of unemployed used to be able to be occasionally called back by capital into the process of production; in part in order to put pressure on the wage-labourers still working. But with the present unemployment figures this idea is absurd. The masses of unemployed are not a reserve army, they are without labour, in great part, in order to perish by inches, to die of hunger, not solely themselves, but also their descendants. Capital does not openly starve people, but this occurs under the masked and attenuated form of unemployment benefits, unemployment benefits of which it used to be promised would have a destructive action on capital. Unemployment benefits have today become a means of masking the real state of things, have therefore become a defense of capital.

On the subject of unemployment benefits I want to point out that the theses also completely leave out an essential point. That is the role that the financial apparatus of the state plays today, and today more than before. The state finances whose present action consists in a large part in creating a detour, a series of outside markets that render the fleecing of the working masses and the popular masses in general by the masters of the monopolies less visible. Of course the payment of taxes, of particular taxes can be refused. At least it has been up till now. It still remains to be examined whether the old theoretical dispositions on the refusal of tax payment meet in all details with the present predominance of monopolist tendencies. At any rate, even if there are some taxes whose payment can be refused, it remains a fact that the finances have today three quarters realised their goal through detours, camouflages, outside markets, the pillage of the large masses by the capitalist monopoly, and this is the means employed in order to avoid the more difficult direct means. And when comrade Trotsky says that the most ruined states will sooner or later have to proclaim bankruptcy, and when, in the theses as well, the perspective of state bankruptcy is posed in very clear terms, there is, I believe, a very great error. Who would have an interest in the state bankruptcy of the prostrate countries, the weakest countries, whose financial situation is the worst? Who are the debtors, who are the creditors? There are two groups of creditors. The one is some private capitalists who have in their hands state bills, the others are the governments who want to receive war indemnities. The private capitalists have absolutely no interest in any bankruptcy that may be. For — as the theses also say — state bankruptcy introduces a struggle for a new division of the national wealth. The capitalists, who dominate the greatest part of the national wealth, or who, at least, control it, have no interest in unleashing this struggle, they have on the contrary an interest in suppressing it. Moreover they find the satisfaction of their requirements under other forms. Of course this is not seen in the totality of the figures that are marked as credit and debit in the account books. And this is a point on which I should want to stand in opposition to comrade Brand (Delegate of the Polish Communist Party). It is true that all the interests that exist today, as state or private title, can not be paid to the last penny, as is written on the right and the left of the account books. That isn't important. Today capitalism is no longer in a period where it must take into account absolute figures that go to infinity. It is today in a period where everything for it reverts to conserving power, if only in a relative way and being able to satisfy its interests, while the interests of the large masses are not.

And if one must climb down in the accounts, if for a longtime still one cannot receive everything and if credit terms must be postponed, all this is not important for the capitalists who hold the reins of power in their hands; this for them is completely equable; what counts for them is winning the class struggle, is maintaining the economy as class struggle. That is why I think that if private capitalists have no interest in state bankruptcy — and they have no interest — this bankruptcy will not occur. For the ministers and secret councillors must there be an interest? This will not be the case. And the creditor states who perhaps have an interest. But again these are not the states -- who, seen from an economic point of view, hardly exist -- these are not the states, but the capitalists of the creditor states, who have to decide whether or not they must push for the bankruptcy of the debtor states, Germany and Austria. But it is very doubtful that these capitalists have an interest in state bankruptcy. The comrade who will speak after me will show that the capitalists obtain the satisfaction of the requirements in a completely different manner.

If I have said that capital, taken from the point of view of domestic policy, has reconstructed itself economically, that is to say preserved its profit in a concentrated nucleus of capitalist power, I can still add that the state power no longer plays the same role vis-a-vis capital as in the past. Comrade Seeman will be able to say more things on this subject because they appear more distinctly at the international stage than at the national stage.

SEEMAN(Bernhard Reichenbach): Comrades, the developments by comrade Sachs, as well as the critique he has made of the theses that we must adopt, have shown that a new era is beginning to happen. The question for the capitalists is quite clear: we find ourselves in a catastrophic crisis of the world economy, how one can succeed in parrying this crisis whose equivalent we have never seen and to attain a stabilisation and a reconstruction of the capitalist world economic apparatus. At the same time it appears that these new realities, the reality of new economic relations, such as have never yet existed, have themselves also found their new form. It appears that capitalism has completely conceived the difficulty of the task and of the struggle and is opposed to us with new means of struggle that we must correctly analyse in order to be able to do what Trotsky demands almost at the beginning of his theses: "We have to decide if a revision of the program or tactic of the Communist International is necessitated by the situation". In effect it is an unfortunately irrefutable fact that capitalism has again become everywhere the master of the situation, and this not only on the national scale but also on the international scale; and already the national scale and the international scale find themselves completely intermixed. The network of the Versailles peace begins to unravel and is reduced to its realisable possibilities. How can capitalism go about it then? “We know quite rightly that the process of impoverishment of the last five years cannot be surpassed for capitalism if it does not happen at the expense of the labouring masses. This fact is at the bottom of the capitalist tactic of reconstruction. Capitalism has understood that all 'national limitations, all chauvinism and national imperialism (phenomena that are, as it were, inherent to its nature) must for the moment be relegated to the second rank, that it must fight the enemy in resolute fashion, and this enemy is the proletariat, is the most advanced, the most active part of the proletariat, represented by the communists. Naturally it is perfectly exact, and it remains always exact, that the capitalist economy must sooner or later be destroyed. But we do not absolutely have to consider this truth which goes by itself. That would mean that we do nothing different than the Independents and the majoritary socialists. For that we have no need of a world communist congress. The question that we must resolutely deal with, is the following: how we smash capitalism, how we conduct this process, in what manner we must conduct it in order that in the process the proletariat keeps the reins in its hands. The capitalists have thus recognised that the principal enemy is not the competitor but the proletariat. They have recognised that the community of interests between the capitalist states is so great that it must also determine the tactic of the capitalists. And this is already a fact through the international interlacing of the economy. In the first place by the fact that in the broadest measure, English, French and American capital is invested in the German trusts in which the German national economy has already been reassembled. Things are already so advanced that objectively and subjectively the English or French capitalist desires that the capitalist reconstruction of Germany succeed. When one has 25 or 30% share in a business, he desires that this business trample on his feet. Now it is true that every process of national or international capitalist concentration bears within itself the germ of its death, in the very fact that is the foundation of capitalist economy in general, in the fact that profit-egoist interests are at the base of all private economy. For this concentration itself is based on a confluence of private egoist interests. That the coming world political conflict takes place between England and America, we consider, with Trotsky, as likely. But we do not believe that this may be the immediately next stage. In any case we do not think that one can foresee this conflict with a mathematical precision. At first this is the case, make that the question: war or no war depends always on imponderables which become decisive at the last moment, fortuitous phenomena that nothing foreshadows for the moment. But before all other things, this blow is not yet ready to be brought about for quite another reason. It is not yet towards this that we communists must direct our attention. It is rather properly towards the fight that is directed against the proletariat.

What leads the capitalist economy to become a communitary economy of intergrown interests, is the fact that everyone can relatively gain a lot. This pressure that weighs on these capitalists, these reunited capitalists, searches for a safety-valve. Russia made part of these safety-valves. And it seems to us that not enough account has been taken of this in the theses. The safety-valve that appears nearest to us is Russia; this is the problem for the Eastern European states. East European capital wants to realise the reconstruction of Russia. And Russia is above all for a certain time indeed the safety-valve where the outlets necessary to capitalism were created.

Our task is to investigate how Russia attains its reconstruction. Russia has the [task] to realise its reconstruction with the aid of the capitalist states, this would only be because the proletariat has left it in the lurch for three years. We must seek to achieve a synthesis between Russia, its legitimate vital interests, and the task which consists of not harming revolutionary thought and progress in creating this outlet for capital. We would go too far if we spoke on this here, in full meeting, and at this point on the agenda. But this is a fact, of which we have proof, that the tendency of the unified capitalists is directed toward this goal. The fact of a community of interest of the great English industries that are united under the protection of the English government is one example. Likewise for the conclusion of the negotiations between the English capitalist directors and the German trust magnates. The object of this common labour is already fixed. This object is soviet Russia. It will be necessary to speak on this at another time and in a more detailed manner.

I will point that the theses have for their function what Trotsky said at the beginning, but which he didn't touch in the final account, that is to say, to consider in a clear and incisive way the tactic of the Communist International in consequence of this economic basis for the fight. Naturally it is not the task of this meeting to speak on tactics, but this report must as it is give an approximative direction. One would have to take into due consideration the fact that capital has found new forms in its struggle against the proletariat, in which it has apparently adapted itself to the proletariat, for example the factory councils, the election of factory councillors to the administration councils, things which no one would have thought even a few years ago. Faced with these new methods of struggle by capital, new forms of organisation, new methods of vigourous struggle must be opposed by the proletariat's side, in order to suppress this attack which has opened up against it.

This is why we propose to not yet conclude on these theses, through discussions that will take place today and tomorrow, and to return these theses once again to the commission. It will perhaps be posssible that comrade Trotsky take part in this session in order that we examine some complements to his work, but we do not want to only criticise, but, on the contrary, to furnish an excellent material on the whole of the economic situation. We know what inspired application is hidden in this work. Perhaps then the commission that has been charged can once again occupy itself with these theses. I ask that this proposal be approved.