Library:Toward Soviet America

This is the full text of William Z. Foster's 1932 publication, Toward Soviet America.

Preface

THERE is a great and growing mass demand in this country to know just what is the Communist party and its program. The masses of toilers, suffering under the burdens of the crisis, are keenly discontented and want to find a way out of their intolerable situation. They are alarmed at the depth, length and general severity of the crisis. They begin to realize that “there is something rotten in Denmark,” that there are fundamental flaws in the capitalist system. Their growing realization of this is further strengthened as they see the spectacular rise of Socialism in the Soviet Union. The masses are beginning rightly to sense that Communism has an important message for the human race, and they want to know what it is.

Capitalism is deeply anxious that the masses do not get this message. Hence, from the outset it has carried on a campaign of falsification of the Russian revolution entirely without parallel in history. There has been a veritable ocean of lies in the capitalist press against the U.S.S.R. The American Federation of Labor leadership and the Socialist party, defenders of the capitalist system, have outdone even the capitalists themselves in this wholesale vilification. The effort of the capitalists and their labor lieutenants has been to set off the Communists as willful enemies and destroyers of the human race. But the masses begin to see through this misrepresentation and they want to know the truth.

The present book is an attempt to meet this mass demand by a plain statement of Communist policy, avoiding technical complexities and theoretical elaboration. It outlines simply the program, strength, strategy and perspectives of the Communist party of the United States. It undertakes to point out what is the matter with capitalism and what must be done about it. It indicates where America is heading and it makes a practical application of the lessons of the Russian revolution to the situation in this country. Its central purpose is to explain to the oppressed and exploited masses of workers and poor farmers how, under the leadership of the Communist party, they can best protect themselves now, and in due season cut their way out of the capitalist jungle to Socialism.

WM. Z. FOSTER

New York City

May 1, 1932

I. The Decline of Capitalism

THE MOST striking and significant political and social fact in the world today is the glaring contrast between the industrial, political and social conditions prevailing in the capitalist countries and those obtaining in the Soviet Union. Throughout the capitalist world, without exception, the picture is one of increasing chaos and crisis. The capitalist industrial system is paralysed as never before. Tremendous masses of workers are thrown into unemployment and destitution. The standards of living of the producing masses have declined catastrophically, mass starvation existing in every capitalist country, including the United States. War is already here in Manchuria and preparations go ahead upon an unprecedented scale for future wars against the Soviet Union and among the capitalist powers themselves. To enforce their regime of hunger and intensified exploitation, the capitalists everywhere are increasingly developing their dictatorship from its masked form of bourgeois democracy into open systems of Fascist terrorism. And against all this the revolutionary upsurge of the workers and poor farmers becomes worldwide; revolutionary struggle growing acute in many countries. Capitalism is manifestly in serious crisis.

On the other hand, the Soviet Union, born in the midst of the capitalist world slaughter of 1914-18, presents a picture of growth and general social advance. The Russian industries and agriculture are expanding at an unheard-of rate, the Soviet Union being the only country in the world not prostrated by the economic crisis. The masses of producers of factory and farm are all employed; their standards of living and culture are rapidly rising. They are building a new and free proletarian democracy. In short, as capitalism goes deeper and deeper into crisis, the Soviet Union forges ahead faster and faster upon every front.

The meaning of all this, as will be developed in the course of this book, is that the capitalist system is in decline and is historically being replaced by a new social order, Socialism. Capitalism, based upon the private ownership of industry and land and the exploitation of the toiling masses, has exhausted its social role; the revolutionary forces, under the leadership of the Communist International, are gathering to sweep it away and to build in its place a social system based upon the common ownership of the means of production and the carrying on of production for social use. Out of the welter of crisis and mass misery and war, a new social system is born. We are living in the historical period of the revolutionary transition from capitalism to Socialism.

The Present Economic Crisis

LIKE a tornado the present economic crisis struck the capitalist world. It is a crisis of over-production. The first signs of this threatening over-production manifested themselves in Germany and central Europe generally in the latter part of 1928. The industrial decline began in the U.S. towards the middle of 1929, followed by the great October Wall Street crash, after which every capitalist country was swiftly drawn into the vortex. The inevitable result is the worst economic crisis, by far, in the whole history of capitalism. It is the deepest, the most far-reaching and the longest. Every branch of industry, every capitalist country is affected. Only the Soviet Union is immune. And as Stalin says, “The crisis has struck deepest of all at the principal country of capitalism, its citadel, the U.S.A.” The crisis is setting in motion forces that threaten the very existence of the capitalist system.

Statistics constantly pile up to indicate the entirely unparalleled severity of the economic crisis. In industry the drop in production has been catastrophic and, after 30 months of crisis, it still declines. Production in the basic industries has fallen more than 50% below 1929 levels and more than 30% below 1930. Steel has dipped to 20% of capacity and “even order inquiries for tacks are seized hopefully.” Building is off about 70% since 1928, notwithstanding “emergency” building programs, etc. In 1931 American exports declined about one-third, or $1,418,000,000. The total national income fell from 89.5 billions in 1929 to 52.4 billions in 1931, or 41%. The drop in wholesale prices, 24% between 1929 and 1931, is wholly unprecedented, the previous record being 7% in the crisis of 1873-75. New financing decreased from 6½ billions in 1929 to 2½ billions in 1931. The general business index, at this writing registering 60, a drop from 113 in Aug., 1929, is the lowest in American economic history, the nearest low to this being 72 in 1894.

Internationally there is a similar picture, world production levels at this time being about those of 1913. According to League of Nations’ figures, world trade has fallen off 40% from the Spring of 1929 until the end of 1931, a decline entirely without precedent.¹ In England production is at 65, or far below pre-war levels. In Germany, says the German Institute for Business Research, “Industrial production is about as large as it was in the years 1900-03.” Production in France has dropped 20% since the middle of 1930. Poland and Austria have declined 28% and 31% respecitively since 1929. The Balkans are deep in crisis, Japan’s industries have been similarly paralysed.

Unemployment has developed internationally upon an unheard-of scale. In Great Britain there are 3,000,000 unemployed, in Germany 6,500,000, in France unemployment registers an all-time record, and in the United States over 12,000,000 are unemployed. There are almost as many more part-time workers. Throughout the capitalist countries there are not less than 40,000,000 unemployed and the number constantly increases.

In agriculture the crisis is no less ravaging and general. According to the Department of Agriculture bulletin of Dec. 16, 1931, the value of farm products declined from $8,765,820,000 in 1929 (which was already about 50% below 1919) to $4,122,850,000 in 1931, as against a decline of only 10% in prices of commodities that farmers must buy. The terrific fall in the prices of agricultural products is graphically illustrated by the fact that on Oct. 4, 1931 wheat reached 441/2 cents a bushel on the market, the lowest point since the Civil War, with farmers getting as low as 25 cents. And world agriculture in the capitalist countries is in a similar crisis, prices received by the peasants having fallen from 40% to 70% for the great staples, wheat, cotton, rice, rubber, silk, coffee, etc.

In finance the world economic crisis also manifests itself with devastating effects. Whichever way one looks there is a spreading ruin and wreckage. The whole financial system of capitalism is tottering. Internationally, there is a great wave of bankruptcy, many of Europe’s oldest and greatest banks and industrial concerns collapsing. Great Britain, Japan and various other countries have been driven off the gold standard. Stock exchange prices in many countries have dropped 50% to 75%, the general average in France declining from 437 in 1930 to 230 at the end of 1931. Huge deficits exist in all the national government budgets. Repudiation of international debts is the order of the day, with the United States standing to lose, counting war debts and other loans now in default, from 10 to 15 billion dollars.

The United States, home of the world’s strongest capitalism, presents a similar picture of financial crisis. During 1931, 2,290 banks with deposits of $1,759,000,000 closed their doors, and 17,000 retail stores failed. In 1931, bank deposits declined by seven billion dollars. From the middle of 1929 to the end of March, 1932, the average prices of 30 leading industrial stocks on the New York Stock Exchange dropped from $381.17 to $61.98.² The total loss in security “values,” according to B.C. Forbes, was 75 billions. New York, Chicago, Philadelphia, Detroit and hundreds of smaller cities are bankrupt. The Federal government faces a deficit of about two and one-half billion dollars. And, most significant of all, the Federal Reserve Bank system, a financial fortress of supposed Gibraltar strength, has manifestly proved unable to stand the strain, the Hoover two billion dollar Reconstruction Finance Corporation being an attempt to buttress up the reserve bank system by a further concentration of the State power behind the great bankers and by a policy of inflation. Mazur says: “1931 has witnessed a substantial debacle of both the orthodox currency basis and the established banking system of the world.”³And the end is not yet, with the crisis deepening internationally.

The Mass Impoverishment of the Toilers

“We in America today are nearer to the final triumph over poverty than ever before in the history of any land.”—President Hoover, Aug. 11, 1928.

THROUGHOUT capitalism the policy of the ruling class is to try to find a way out of the crisis by throwing its burden upon the shoulders of the working class, the poor farmers and the lower sections of the city petty bourgeoisie. This is being done by a vast system of starving the unemployed, wage-cuts, speed-up, inflation schemes, taxes directed against the masses, etc. In consequence, with the development of the crisis, there has been an enormous increase in the impoverishment of the toiling masses.

Wholesale starvation, spreading like a plague, is the order of the day in all capitalist countries. The bourgeoisie, intent only upon its own pleasures, cynically shrugs its shoulders at the whole terrible misery, when it does not hypocritically direct the masses towards religion for consolation. Nor are there “scientists” lacking to justify this mass starvation. Thus Prof. E. G. Conklin of Princeton University says: “Some of the weaker, according to the law of nature, will naturally die under the stress of the times. Others will not propagate their kind. The strong and hardy will survive and reproduce, and thus the human race will be strengthened.”⁴

Since the onset of the present economic crisis American workers and poor farmers, through unemployment, part-time work, wage-cuts, reduced prices for agricultural products, tax increases, etc., have suffered a general decline in their living standards of at least 50%. Prof. Leiserson estimates that the total income of industrial and office workers was about 22 billion dollars less in 1931 than in 1929, and this is supported by the figures of Business Week (Feb. 10). This is by no means offset by the decline in living costs which, according to the U.S. Dept. of Labor, amounted to 11.7% from June, 1929, until June, 1931. On the farms, the Alexander Hamilton Institute says, the average income per household has dropped from $887 in 1929 (already a crisis year in agriculture) to but $367 in 1931.

By these gigantic reductions in their real income masses of toilers of field and factory have been forced down to actual starvation conditions. Even before the crisis the working masses stood at the very threshold of destitution. The average wage of industrial workers during the height of “prosperity” did not exceed $23.00 per week. Consequently, the vast body of American toilers existed from hand to mouth. They had very little reserves. Paul Nystrom says that 9,000,000 people in the United States lived below the subsistence level.⁵ Then came the economic hurricane.

The result is real destitution, verging into actual starvation, on a broad scale in the United States, “Only in countries like India and China are there today larger numbers of workers suffering from mass unemployment, hunger, semi-starvation, disease and other manifold evils of wholesale poverty than in the United States—the richest country in the world,” says the Statement of the National Hunger Marchers to Congress, Dec. 7, 1931. “One-third to one-half of our population is at various stages ranging from hunger to the pressing danger of losing homes and farms,” says Governor LaFollette. The New York American, (Feb. 21, 1932), says: “Food is lacking in 81 per cent of the New York City homes that have been stricken by unemployment, the Emergency Unemployment Relief Committee reported last night.” William Hodson, executive director of the Welfare Council of New York City, informs us: “Relief in New York City is now on what might be called a disaster basis . . . the spectre of starvation faces millions who never were out of work before.” The Baltimore Post, (Mar. 11, 1932), declares; “40,000 face starvation in Baltimore.” An Associated Press dispatch of Mar. 23, 1932, from Tulsa, Okla., says: “Ten thousand persons have been living here since Nov. 1 on a charity ration costing six cents a day per person.”

So it is all over the country. The cities are full of “Hoovervilles” and breadlines, where tens of thousands of homeless, hungry workers are compelled to exist in tin can shacks and to stand for hours to get a miserable bowl of soup. Workers fall famished in the streets in front of stores and warehouses that are crammed with the necessaries of life. Daily we read in the capitalist press of families actually starving to death. No longer is it “news” for a confused and desperate unemployed worker to blow out his brains or to do away with his family.

The workers are losing wholesale the houses, radios, furniture, etc., that they so laboriously got together during the upward swing of American capitalism; thousands of farmers are losing their farms to the usurers. The Nation, (Mar. 23, 1932), says that in Detroit alone 50,000 workers lost their life savings in the collapsed banks, and similar huge losses have been suffered all over the country. In 1931, according to the New York Journal, (Jan. 28), 198,738 workers’ families were evicted from their homes in New York City for non-payment of rent. The worker’s life has become an endless round of worry and misery. The jails are filled to overflowing, thousands preferring prison rigors to life under the Hoover regime of “rugged individualism.” Prostitution spreads like a poison weed in every American city. Tuberculosis runs riot among the half-starved masses, and the hospitals are packed with sufferers of diseases bred of under-nourishment, etc., etc. To such a debacle has come the Hooverian pre-election promises of the “abolition of poverty,” “a chicken in every pot” and “an automobile in every garage” for the workers. And daily the whole maze of poverty, starvation, misery and death gets worse.

Manifestly, a fundamentally necessary measure against actual starvation among the workers is the establishment of a system of federal unemployment insurance, financed by the government and the employers. This must be of a permanent character, because what we have to deal with is not a temporary condition of unemployment, but a huge mass unemployment on a permanent basis. This, however, has not been done. The capitalists and their government have forced the workers into wholesale starvation which is now infesting the country like a plague.

The entire question of unemployment relief has been reduced to a charity basis. Although the worker has spent his life producing the wealth of the country, now when the capitalist system has broken down he is treated as a mendicant and a criminal. He is thrown a beggarly handout like a starving dog. Mr. Gifford, head of Hoover’s Emergency Employment Committee, boasted that in the 1931 Fall relief drive about $150,000,000 had been raised in the various localities. So far as the Federal government is concerned, this money (what the workers get of it after the grafters are through) has to last the unemployed for the whole year. Thus it figures out at about $1.00 per month for each of the 12,000,000 unemployed. In New York, richest city in the world, after a disgusting campaign of begging, $18,000,000 of Gifford’s fund was raised. This would give about $1.50 per month to each of New York’s 1,000,000 unemployed.

The unemployed relief program of the Hoover Government is a real hunger plan. It is the policy of the capitalist class and it has the support of both big parties and the A. F. of L. That the Progressives also agree fundamentally with it is shown by the new unemployment insurance law in Wisconsin. This law adds insult to injury. According to its beggarly provisions unemployed workers can receive only a maximum of $100 yearly. And this applies only to those now employed, for whom insurance funds will be gradually built up. As for the masses of those totally unemployed now and part-time workers, they are left out of consideration altogether.

If the capitalists have callously forced the toiling masses into starvation conditions they have, however, very carefully looked after their own interests. “During the first nine months of 1930, our national industrial and business system was able to and did pay $432,000,000 more in dividends and $191,000,000 more in interest than it did in 1929; in the first nine months of 1931, the second year of the depression, it paid $347,000,000 more in dividends and $338,000,000 more in interest than it did in the first nine months of 1929.”⁶ The Publishers Financial Bureau, (New York American, Mar. 19, 1932), states that the industrial dividends paid in 1931 are “the largest for any year previous to 1929.” Anna Rochester says: “In September, 1931, the New York Times reported that of 5,000 companies, 50% had continued dividend payments without reduction; 20% were paying smaller dividends; and only 30% had omitted payments entirely. . . . For October, 1931, the total dividends plus bond interest by a large group of corporations were only 4% below the high record of October, 1930.”⁷ Besides, every appeal of the bankers and other capitalists to the government for assistance has met with immediate response. The two billion dollar Reconstruction Finance Corporation has been organized and the Glass-Steagall inflation bill is being prepared to absorb the worthless paper of the banks and to underwrite the dividends of industrial corporations. And in the new Federal taxes the capitalists are further shielded from the economic effects of their own bankruptcy.

In the other capitalist countries starvation conditions also grip the masses. In Germany, with wages down 30% since the hunger period of 1929 and millions getting no unemployment benefits, actual famine exists in many cities. The great masses in England are almost as badly-off. In Poland miners got 69 cents a day and have recently had another wage-cut. And the offensive to cut wages and reduce unemployment benefits and social insurance in general goes on ever faster throughout Europe. In the colonial and semicolonial countries crisis conditions also prevail. Famine stalks in China and India. In Brazil, says E. Penno, Brazilian Public Health Director, “30,000,000 people are slowly dying of starvation, malaria and syphilis.” The world over, the bankrupt capitalist system is physically destroying the producing masses. The general crisis bids fair to outdo in numbers of human victims even the murderous World War itself.

All this is a picture of a society in decay. Great mills and factories standing idle and warehouses piled full of goods, while millions of toilers starve and lack the necessities of life—that is plain bankruptcy. Never until capitalism appeared upon the world scene was such an anomoly possible—starvation in the midst of plenty. The present great crisis is not only a glaring exhibition of the decline of capitalism, it is a crime against the human race.

Capitalist Fear and Confusion

THE WORLD economic crisis has dealt a shattering blow to capitalist complacency. Greatly alarmed, the capitalists dimly perceive its seriousness, without understanding its causes. Chadbourne, the sugar expert says: “Those who speak about these world depressions coming in cycles and this being one of these cycles are talking sheer nonsense. This is a depression for which there is no precedent.”⁸ Judge Brandeis says: “The people of the United States are now confronted with an emergency more serious than war.” Pope Pius XI declares: “The international crisis is too general to have been the work of men. It is evident that the hand of God is being felt.”

Over the world system of capitalism there grows a brooding fear of revolution. The capitalists cannot cure their deepening crisis and have been unable to check its progress. The old tricks and slogans for making capitalism “go” are no longer potent. Pessimism and confusion begin to appear in the ranks of the bourgeoisie. They start to see, not prosperity, but the revolution, “just around the corner.” Spengler asserts: “It is no mere crisis, but the beginning of a catastrophe.”⁹ The chief economist of the Stock Exchange, Dr. Irving Fisher of Yale, in a speech cited by the United Press on Jan. 3, of this year, issued “a warning to capitalism ‘to clean the dirt of depression’ from its foundation or be devoured by some form of Socialism.” In the recent debates in the House on the sales tax Rep. Rainey declared that the American people “are right up against Communism.” Mr. Raymond Fosdick, (New York Times, Dec. 27, 1931), shrinks at the prospect of a revolution, stating that: “Western civilization (read capitalism, WZF) has begun to look furtively around, listening behind it for the silent tread of some dread specter of destruction.” W. F. Simms, Scripps- Howard Foreign Editor, in a dispatch of Oct. 5, 1931, says:

“The object of these epochal comings and goings (the various international conferences), it is admitted behind the scenes, is nothing more or less than to prevent, not merely the collapse of this or that particular country, but of the white man’s universe as a whole. For recent events have driven Washington, London, Paris, Berlin and Rome to the startling realization that only some sane accord on international finances, economics and armaments and that promptly can prevent a general smash.”

Such elements among the bourgeoisie become especially lugubrious when they think of the Soviet Union. They begin to sense Communism as a higher and inevitable order of society. They more and more realize, as their own society goes deeper into crisis, that the U.S.S.R., forging ahead, is having a profoundly revolutionary effect upon the masses of starving workers and poor peasants still under capitalism. Prof. Pollock, a bourgeois scientist, at the 1931 World Congress for Social Planning, said:

“The Soviet Union has filled millions of workers and peasants with hope and belief in a better future and of the possibility of further progress. With us, on the contrary, things get worse every year. If capitalism is not capable of arousing equal enthusiasm and readiness for sacrifice in the masses, then there can be no doubt that they will finally choose the path of the Soviets.” It is well known, of course, that the European bourgeoisie, animated by such fears, are taking many precautions for their personal safety. But it is “news” that American capitalists feel the need for similar measures. In Liberty, Jan. 2, 1932, Cornelius Vanderbilt, Jr., says, speaking of the ultra-rich: “They see the possibility of long vistas of hungry faces in breadlines again this winter, and they fear the red specter of revolution. . . It is interesting to note that since the beginning of the depression the yachts of society millionaires (in New York Harbor) have invariably been anchored in places where their owners could board them on short notice.”

These dark forebodings are true expressions of the fear eating at the consciousness of the capitalist class. They serve to stimulate the offensive against the workers. But, of course, the general policy of the capitalists does not limit itself to spreading such pessimism. On the contrary, especially in the United States, they systematically cultivate optimism. As the capitalists intensify their drive against the workers’ standards of living, they at the same time increase their propaganda about the impending return of prosperity. The burden of their song is that this is “just another crisis,” that the crises of the past have been overcome and have been followed by “prosperity,” and that the same thing must happen again. The cultivation of such prosperity illusions is one of the principal methods of the capitalists to break the resistance of the workers against wage-cuts, starvation, relief systems, etc.

This pollyanna propaganda is best illustrated in the policy of the federal government. President Hoover started out, at the time of the Wall Street crash) by assuring everyone that this was only a financial bubble, that the great “prosperity” was safe. Then, when the industrial crisis was upon us on all sides, he assured us, March 8, 1930, that “the depression will be over in 60 days.” And from that time on every department in the government has harped upon a similar string. Undoubtedly, the effect of sowing such illusions has been to facilitate the wholesale cutting down of the workers’ living standards that has taken place. The theory that the crisis will cure itself and that all will be well again, is further classically illustrated by Prof. Taussig, who advises us: “Don’t spend too much; don’t hoard; don’t worry; just live normally and everything will right itself in due time as it has always done.”¹⁰

The capitalist optimists are wrong; the fears of the pessimists are justified. What we have to deal with is not “just another crisis,” which will soon liquidate itself and be followed by a higher and worldwide wave of “prosperity.” It is a profound economic crisis developing on the basis of a rapidly deepening general crisis of capitalism. Arising out of fundamental weaknesses of the present social system, it is setting on foot forces that are drastically undermining the very economic, political and social foundations of capitalism, and hastening that system ever faster towards the proletarian revolution.

II. The Rise of Socialism

III. Capitalist Attempts to Liquidate the Crisis

IV. The Revolutionary Way Out of the Crisis

V. The United Soviet States of America