On August 1, 2023, a Washington, D.C., grand jury, at the urging of special prosecutor Jack Smith, indicted Donald Trump on four felony counts. The counts center on Trump’s illegal attempts to remain in office after he’d clearly lost the 2020 presidential election in both the popular vote and, what legally counts, the electoral college. On August 15, a Georgia grand jury indicted Trump and 18 supporters on racketeering charges. The charges involve the alleged attempt by Trump and his supporters to steal Georgia’s electoral vote and, in effect, suppress the African American vote. More on this in coming posts as the situation unfolds.
As I explained last month, in the U.S., the transfer of power from one president to the next involves both written and unwritten laws. One unwritten law is that the defeated presidential candidate, either Democrat or Republican, concedes the election after The New York Times declares their opponent the winner in the electoral college. The defeated candidate then offers their support to the new president-elect. Trump defied this law. Instead of congratulating Joseph Biden, the electoral college winner — and the popular vote winner — Trump claimed he had won the election by a “landslide” and that the official vote tallies were false. Many of Trump’s Republican supporters, as well as some non-supporters who needed the votes of his base to win their reelection — claim that Trump’s latest federal indictment, as well as the latest indictment in the State of Georgia, is an attack against the right of free speech.
Now it’s true that the U.S. Constitution’s First Amendment guarantees the right to free speech. U.S. residents and citizens have the right to lie, except to police officers, federal agents, or under oath. They do have the right to refuse to talk to police officers and federal agents under the Fifth Amendment, which protects persons from having to provide testimony against themselves. Police officers and federal agents, though, have the right to lie to suspects, though not the right to lie to jurors — which, of course, doesn’t mean they never do. This is one reason why defense attorneys are almost unanimous in advising people to never talk to a police officer or federal agent in the absence of an attorney. (1)
Trump cannot be legally prosecuted for violating an unwritten law. Nor can he be prosecuted for knowingly lying to the public with his claims that the election was stolen from him. This is free speech protected by the First Amendment. He can only be prosecuted for violating written laws and face prosecution in the criminal courts.
But Trump was protected from his violation of written laws by another unwritten law: that no sitting or former president can be indicted by a state or federal grand jury. The Department of Justice has adopted a policy of never indicting a sitting president. This, in effect, creates de facto immunity from prosecution in a criminal court that no other U.S. citizen or subject enjoys. This unwritten law of immunity from prosecution was extended by President Gerald Ford in 1974 into life-long immunity when he pardoned Richard Nixon for any violations of U.S. laws he may have committed as president.
This unwritten law that sitting or former U.S. presidents can’t be charged with a crime encouraged Trump to violate written laws in his attempt to remain in office after he had lost the 2020 election. He figured that if his illegal attempts to remain in office succeeded, he would have enjoyed at least four more years in the White House. But if it failed, he would not be prosecuted.
This same logic applies to any future president who, for whatever reason, aspires to remain in office beyond his constitutionally defined term by seizing dictatorial power. For many years the U.S. ruling “Party of Order” of leading Democrats and Republicans has hailed Ford for pardoning Nixon. But now the Party of Order has decided that giving presidents lifelong immunity from criminal prosecution wasn’t a good idea and has decided to abandon it.
Until 2023, Trump got away with his criminal law violations to remain in office. Despite the events of January 6, 2021, he faced no criminal charges. Just because a person violates a written law doesn’t mean they’ll be prosecuted by the state. It’s up to prosecutors whether or not to prosecute. With the precedent of Ford’s pardon of Nixon, Trump had every reason to assume that neither a state nor the federal government would charge him with a crime. But there’s a major difference between Richard Nixon after 1974 and Donald Trump after 2021.
After Nixon resigned the presidency in disgrace — the only U.S. president to ever do so — in August 1974, there was no question of him running for the presidency or any other elective office again. But the same cannot be said of Trump, who’s announced his presidential candidacy, and polls have shown he’s the Republican primary favorite. The Party of Order hoped that Trump would politically fade away after the January 6, 2021, events as Nixon did after August 1974. But this hasn’t been the case.
Trump continues to enjoy broad support in the Republican base for another presidential run. He announced his intention on November 16, 2022, to run for the Republican presidential nomination in the 2024 election. Before any moves were made to charge him in criminal court, the Party of Order tried to build up a rival candidate. That rival was Florida’s arch-reactionary Republican Governor Ron DeSantis. It now appears that the DeSantis candidacy was a miscalculation. DeSantis was popular among the reactionary Republican base — until he announced his run in opposition to Trump. His candidacy was seen as treason to Trump by the Republican base. Since declaring, he’s been sinking in the polls while Trump has been rising. It’s been the same story for other Republicans who have made the same attempt registering low numbers in the polls.
Mike Pence versus Trump
Among the Republican candidates registering little notice in the polls is Trump’s vice president, Mike Pence, Trump‘s natural political heir. Pence is a far-right Republican known for his extreme fundamentalist Christian views. Combine the economic laws of capitalism best analyzed in Marx’s “Capital” with the most fundamentalist, bigoted interpretation of the Christian bible possible, and you get Pence. He has announced his candidacy for reasons best known to himself.
Pence seems to have little chance of winning the nomination because the Trump base hates him. They think he betrayed Trump when he refused to block the Electoral College’s Congressional certification of Biden’s win on January 6, as they stormed the Capitol chanting, “Hang Mike Pence.” These were not mere words: the mob constructed a scaffold and noose to do just that. Trump hinted that he wouldn’t be upset if Pence had been hung. Pence is unacceptable to the Trump base, and he is also unpopular among anti-Trump “moderate Republicans.” His testimony could be crucial to the prosecution if and when Trump is tried on the charges that were unsealed on August 1 this year.
Pence told Face the Nation, “From sometime in the middle of December, the president began to be told that I had some authority to reject or return votes back to the states.” He explained to Trump, “I had no such authority.” For a sitting U.S. president to demand that the vice president “reject or return votes back to the states” violates U.S. written law. This is not a matter of “free speech.”
“I truly do believe,” Pence added, “that, you know, no one who ever puts himself over the Constitution should ever be President of the United States.” From the viewpoint of the Party of Order, of which Pence is a member in good standing, the dictatorship of capital is one thing, but the personal dictatorship of Trump is quite another.
A fourth criminal charge involves Trump’s attempt to throw out the popular vote result. Legally this comes down to his attempt to throw out the vote for the pro-Biden electors and seat pro-Trump electors in their place. Since the votes for Biden and against Trump were disproportionally cast by voters of color, especially African Americans, it represents an attempt to disfranchise them.
As Marxists, as long as the majority of the working class and the people, in general, do not understand the need for the higher form of democracy called the dictatorship of the proletariat, we have to defend and, where possible, expand bourgeois democracy and democratic rights. This includes the basic principle that whoever wins the majority of votes takes office and that people, especially the most exploited and oppressed sections of the working class, have a right to vote and have their votes counted. Trump’s attempt to override these rights has nothing to do with his right to exercise free speech.
However, we defend democratic rights by our own methods and do not rely on officials of the capitalist state to do so. We have to oppose demands by liberals and progressives that social media monopolies censor “fake news.” We must defend freedom of speech in social media as well as printed and other media from both the government and corporate media monopolies. We can be sure that if they can censor Trump, they can all the more easily censor the views of liberals and progressives, not to speak of Marxist representatives of the working class!
The Party of Order has now painted itself into a corner. For Democrats, the unpopular eighty-year-old Joseph Biden has announced his candidacy for re-election. Unlike their Republican counterparts, Biden’s Democratic base lacks enthusiasm for “Corporate Joe Biden.” However, no major Democratic politician has moved to challenge Biden for the nomination. On the contrary, all major Democratic politicians, including Bernie Sanders, have made it clear that they are supporting Corporate Joe for a second term. It looks that unless the blizzard of criminal indictments forces Trump to cop a plea and drop out of the presidential race, the 2024 election will be between Corporate Joe and an even more rabid, racist, and homophobic version of Trump.
Will ‘Corporate Joe’ be able to beat Donald Trump in 2024?
Polls show that if the election was held today, the popular vote could go either way, though the Electoral College’s vote decides the election, not the popular vote. The Electoral College favors the Republican candidate, so if a Democrat is to win the White House, they’ll have to win with a considerable margin in the popular vote. For example, in the 2016 presidential election, Hillary Clinton won the popular vote by a margin of some two million votes but lost the electoral college and the election to Trump.
Considering that the majority of the population hates Trump, if the U.S. economy avoids recession and inflation continues to moderate, a Biden victory would appear possible but by no means a certainty in 2024. Corporate Joe is very popular in the Party of Order, though not among the people of the U.S. His vice-president, and replacement if his health doesn’t hold, Vice President Kamala Harris, is acceptable to the Party of Order but is even more unpopular. And there’s no Democrat in sight who could be expected to do better against Trump.
Economists explain that this time is different
Recently the media and economists have become more optimistic about the prospects of a “soft landing” for the U.S. and world economy. The optimism is based on a falling rate of inflation combined with relatively strong readings on the real economy.
Their story is that inflation is declining, employment and hiring are holding up, and the consumer is still spending while business is boasting about its capital spending plans. The only problems are in the monetary-credit side of the economy.
The hope is that as inflation continues to moderate, the Federal Reserve System will begin to lower its target for the federal funds rate — and then the recession danger will be passed. The expectation that the Fed will ease before a major recession develops is reflected in the rising trend of stock market prices this year in contrast to the bear market in 2022. The improved economic prospects — if they really are improving — increase the chances that Corporate Joe can win in 2024.
But are economic prospects improving? All the financial indicators continue to point to a major recession soon. If the indicators are correct, a sharp rise in unemployment before November 2024 is likely.
One of the financial indicators pointing to a near-term recession is the yield curve. The yield curve is the relationship between short-term and long-term interest rates. Usually, long-term rates are higher than short-term rates because lending money for more extended periods is more risky than for short periods.
Historically just before a recession, short-term interest rates rise above long-term rates. When this happens, the yield curve is said to be inverted. The relationship between long- and short-term interest rates remains inverted — it’s rarely been as inverted as it is right now.
In addition, the broader money supply — essentially the quantity of paper money plus commercial bank-created credit money — has contracted. A significant slowdown in the growth of the money supply indicates an approaching recession.
These financial leading indicators indicate an imminent crisis of overproduction before the real economy — employment and production — turns decisively down and turns into a recession. But many economists insist that it’s different this time.
Why, according to the economists, does the yield curve become inverted before a recession? When investors — money capitalists — expect a recession, the economists explain, the expected fall in inflation that comes with it makes them willing to buy long-term securities at lower interest rates. Money capitalists still insist on higher short-term interest rates due to ongoing high inflation. The ordinarily optimistic economists explain an inverted yield curve indicates a high likelihood of recession, but this time is different, say some.
Jan Hatzius, chief economist at Goldman Sachs, provides one example of this thinking. Hatzius just cut his recession-probably forecast from an already low 25% to only 20% because of the declining rate of inflation shown in the government’s July price data. However, declining or no inflation doesn’t indicate a recession isn’t coming. An extreme though not unique example, there was little inflation in 1929, though the yield curve was, like today, inverted.
One apparent exception to this rule is 1967. The yield curve inverted, but there was no official recession. But this exception proves the rule and has important implications for the current conjuncture.
In 1967 there was a so-called mini-recession in the U.S., and the economy contracted for one quarter. The recession of 1967 was aborted by the rising Vietnam War spending. However, the post-1967 upswing didn’t last long.
It was aborted by a run on gold that caused the gold pool created by the U.S. and European imperialist countries to stabilize the dollar price of gold during the 1960s to collapse. After that, the yield curve inverted again, leading to the recession of 1969-70. Though the stimulative policies by the U.S. federal government and the Federal Reserve System limited that recession, the yield curve inverted again, followed by the more serious recession of 1973-75.
So in 1967, the inverted yield curve accurately forecasted major economic trouble. But Hatzius and numerous other capitalist economists making the same arguments believe that the inverted yield curve doesn’t matter this time. The argument is that with inflation falling, the Federal Reserve System will be able to reduce interest rates before a recession sets in.
According to Hatzius and other capitalist economists, the inverted yield curve reflects the expectations that a recession is on the way, causing them to accept lower interest rates on long-term investments than they should. These economists blame unjustified pessimistic forecasts for having confused the money capitalists. Money capitalists expect a recession, but they shouldn’t. The economists know better. Hatzius concludes that “the argument that the inverted curve validates the consensus forecast of a recession is circular, to say the least.”
The real reason the yield curve inverts before a recession
In reality, the yield curve inverts because the accumulation of unsold commodities forces commercial and industrial capitalists to borrow more money to finance their unsold commodities. They usually finance their ongoing expenses through revenues from sales. But when unsold commodities pile up in warehouses more than usual, the capitalists have to borrow money against their unsold commodities to meet bills coming due.
This increased borrowing at the short end of the yield curve then inverts it. This inversion is also reflected in the interest rates on short- and long-term government bills. Because an inverted yield curve reflects an accumulation of unsold commodities, it’s been a reliable indicator of approaching recession since the 19th century.
This time optimistic economists expect the Federal Reserve System will come to the rescue. The Fed might try to do so this, but this is where the “metal barrier” — the demand for gold, the money commodity — comes in.
In 1967, the Fed did come to the rescue and aborted the recession. But the result was the collapse of the gold-dollar exchange standard, also known as the Bretton Woods system, that began with the collapse of the gold pool in 1968. This collapse led to the stagflation of the 1970s. As I explained last month, the Federal Reserve System working with the Biden administration, can delay a recession until sometime after November 2024, especially if they’re willing to sell some of the U.S. Treasury’s gold reserve. But the cost would be great.
Normally the exact time when a boom gives way to a recession is unimportant. However, during periods of greater political stress, the exact time of the turn in the industrial cycle up or down takes on political importance.
Washington, D. C.’s policymakers must be asking themselves if it’s worth this cost and the dangers of taking the measures necessary to prolong the current prosperity until November 2024 just to reelect Corporate Joe. If Biden runs against any other Republican politician except Trump, the answer is no. Jerome Powell, the current chairman of the Federal Reserve System, is a Republican. Why risk the future of the dollar just to elect a Democrat?
If Trump is the Republican candidate, the question will become: Are the risks that come with the measures necessary to keep the economy going through November worth it to keep Trump out of the White House? That’s a different question. Sections of the capitalist class still support Trump. But the politically dominant vanguard of the ruling capitalist class that I call the Party of Order is united on keeping Trump out of office.
Despite the risks of an unprecedented criminal trial(s) of a former president and current Republican presidential candidate, using the criminal justice system to force Trump to withdraw from the presidential race seems the safer bet relative to the steps necessary to ensure prosperity through November 2024.
Of course, this depends on Trump’s willingness to agree to a plea deal where most of the felony charges against him will be dropped with no jail time and no fines he cannot pay in return for his agreement to withdraw his candidacy for the presidency. If he continues to hold firm, the chances increase that the Federal Reserve System and Biden administration will follow policies designed to revive the COVID aftermath boom. If they decide to do this, chances of a far more serious stagflation crisis ending in a deeper recession after the election rise considerably. We will examine in coming posts how this situation develops in real-time.
The separation of money capital, real capital, productive capital, and the financial oligarchy
This month I want to examine two crucial aspects of Lenin’s theory of imperialism. One is the separation of money capital from productive capital that in the course of capitalist development leads to the growth of a layer of idle money capitalists who do nothing but collect interest and dividends. This develops into the dominance of finance capital and the financial oligarchy that owns but does not manage finance capital or the real economy.
Second, and this has crucial political importance, is sharing super-profits with a layer of privileged workers. Privileged workers, sometimes called the aristocracy of labor, support imperialism and form the material base of political opportunism within the workers’ movement. In Lenin’s time, this led to the collapse of the Second International, and it later played a crucial role in the end of the Third International and, after that, to the collapse of the more loosely organized International Communist Movement that had succeeded the Third International.
“It is characteristic of capitalism in general that the ownership of capital is separated from the application of capital to production, that money capital is separated from industrial or productive capital, and that the rentier who lives entirely on income obtained from money capital, is separated from the entrepreneur and from all who are directly concerned in the management of capital. Imperialism, or the domination of finance capital, is that highest stage of capitalism in which this separation reaches vast proportions. The supremacy of finance capital over all other forms of capital means the predominance of the rentier and of the financial oligarchy; it means that a small number of financially “powerful” states stand out among all the rest. The extent to which this process is going on may be judged from the statistics on emissions, i.e., the issue of all kinds of securities.” (V.I. Lenin, “Imperialism, the Highest Stage of Capitalism,” Chapter 3 Imperialism “Finance Capital and the Financial Oligarchy”)
Notice that Lenin refers to the fact that “money capital is separated from industrial or productive capital.” This separation is rooted in the contradictions of commodity production itself that are brought to the highest stage during the monopoly stage of capitalism.
Side by side with the accumulation of industrial or productive capital, as well as commodity capital — all these forms are called real capital — but separate from it, the accumulation of money capital proceeds. This is characteristic of all phases of capitalism. And as we’ve seen throughout this blog, this fact is important in the studies of the nature and cause of capitalist crises of overproduction. But it has other consequences as well.
In the course of capitalist development, money capital develops into finance capital, and the owners of finance capital become a financial oligarchy. The financial oligarchy subordinates the whole of capitalist society to itself.
In the age of dominance of finance capital, giant universal banks command huge amounts of money capital that exceed the capital their stockholders own, let alone the amount the people who manage the banks own. The centralized money power of the banks and other large financial institutions that are sometimes called “shadow banks” leads to a merger of bank and industrial capital.
Giant universal banks command amounts of money capital that far exceed the capital their stockholders own, let alone the people who manage the banks own. For example, Mr. Jamie Dimon, CEO of JPMorgan Chase, the world’s largest bank by deposits, is estimated to have a personal fortune of some $1.6 billion U.S. dollars as of June 2023. A nice enough nest egg.
However, the total assets of JPMorgan Chase as of 2022 are estimated to be almost $4 trillion, with two trillion in total domestic deposits. A man who is worth a “mere” $1.6 billion — if we believe the estimate in Forbes magazine — commands a total money power of $2 trillion in U.S. domestic deposits alone. The centralized money power of the banks and “shadow banks” leads to a merger of bank and industrial capital. Bankers are well represented on the board of directors of the largest industrial and commercial corporations, and the large industrial and commercial corporations are well represented on the board of directors of the largest banks.
Centralization of bank capital since the time of Lenin
Since Lenin wrote “Imperialism” more than a century ago, the centralization of bank capital has proceeded beyond what was the case in Lenin’s time. Then, in the U.S., the two largest banking groups were centered around the Wall Street J.P. Morgan and Company banking partnership and John D. Rockefeller’s Standard Oil empire. Various commercial banks were allied with the two rival financial groups.
Later, the Morgan banks merged, forming the Morgan Guarantee Trust Company. In 1930, the banks associated with John D. Rockefeller took over New York’s Chase Manhattan Bank. (2)
Since then, the centralization of banking has continued. During the crisis of 2007-09, JPMorgan Chase swallowed up Washington Mutual, the largest savings and loan in the U.S. On May 1, 2023, JPMorgan Chase announced it had acquired the failed First Republic Bank, which catered to Silicon Valley tech firms like the smaller Silicon Valley Bank. Supposedly U.S. law prohibits any single banking company from having more than 10% of U.S. total deposits. But the law allows exceptions, and this year’s (2023) banking crisis allowed them.
What further exceptions will be allowed if the current banking crisis intensifies? What will be allowed in future crises? Where is this all headed? The centralization of banking capital creates the highly computerized organization of universal bookkeeping that will be necessary to administer the economic affairs of a communist society run by and for the associated producers. But to unlock the potential the economic evolution of capitalism is making possible, the power of the financial oligarchy — called these days the 1% — must first be replaced by the political power of the working class and its allies.
Reactionary progressives
Progressives represented by such figures as Senator Bernie Sanders of Vermont and Senator Elizabeth Warren of Massachusets give a different answer. They want to return to the days when commercial and investment banking were separate and break up the giant banks into smaller independent banks. Rather than looking forward toward a communist society of the associated producers, they look backward toward an idealized past when small capitalists and banks competed with one another. This is a past that the development of capitalism itself has left behind. This is why I call them reactionary progressives. Instead of progressing toward the communist future, they want to return to the past of small-scale businesses ruled by free competition.
Baran and Sweezy’s 1966 “Monopoly Capital” claimed that banks’ power had declined since the early 20th century when Hilferding and Lenin wrote. Marxist writers, including Ernest Mandel, expressed similar ideas. The belief that the power of banking capital was declining was based on the temporary effects of the Great Depression. During the Depression, the accumulation of real capital came to a standstill for several years. But the accumulation of money capital in the form of gold production was stimulated by the Depression. This phenomenon is observed in every recession/depression cycle but not to the extent it was in the 1930s recession/depression cycle.
The Depression’s accelerated accumulation of money capital combined with the prolonged stagnation of real capital meant that a large quantity of idle money capital accumulated in the commercial banking system. As a result, the world went many years without a banking crisis. The power of the banks in the latter years of the Depression and the decades that followed was not expressed as brutally as during the crises of 1907, 1931-33, or again in 2008. To emphasize the allegedly reduced role of the banks, the financial oligarchy and finance capital, Baran and Sweezy titled their book “Monopoly Capital” in contrast to Hilferding’s “Finance Capital.” The title “Monopoly Capital” indicates the authors’ failure to understand the role and the nature of money and money capital.
To be fair to Sweezy, who lived many years beyond the publication of the book, he later modified his views on the alleged decline of the power of the banks. Today’s Monthly Review uses the expression “monopoly-finance capital.” But the Monthly Review School has failed to get to the root of its earlier error, which lay in its failure to understand the separation of money capital and productive capital. This separation is inherent in capitalist commodity production and the commodity character of money and reaches its highest point under monopoly capitalism.
The false and utopian concept of non-commodity money — that claims it’s possible to abolish its commodity character while retaining capitalist commodity production — leads to the idea that the value of the money commodity is just a passive reflection of the value of real capital. This leads to the inability to understand the separation of money capital from real productive capital and the power of finance capital.
In analyzing the evolution of capitalism, we must distinguish between the successive phases of excessive accumulation of real capital relative to money capital. This is marked by rising interest rates ending in a shortage of money capital, followed by a period of accelerated accumulation of money capital relative to real capital marked by a fall in interest rates and the accumulation of a mass of idle money capital. It’s during crises that mark the end of a period of excess accumulation of real capital relative to money capital that the extraordinary power of the biggest banks over other capitalist enterprises, the state itself, and the whole of capitalist society is fully revealed.
In contrast, in the period following a crisis, the accelerated accumulation of money capital relative to real capital is characterized by falling interest rates, and the great abundance of idle money capital masks the power of the banks. Leaving aside these cyclical shifts that will continue as long as capitalism exists, the long-term tendency of capitalist development is leading toward the centralization of the entire economy in the hands of a super bank.
This will be transformed into the bookkeeping apparatus of a communist society of the associated producers. Today we are at a stage in the history of production where the ideal of the Sanders and Warrens is in the rearview mirror, and we are approaching, though not yet reached, the stage when the centralized system will be transformed into the bookkeeping apparatus of the communist society of the associated producers.
The question of super-profits and the labor aristocracy
Lenin’s “Imperialism” has two main themes. One is a restatement of Marx’s view that the centralization of capital is a basic tendency of capitalist development. The concentration of production and workers in large enterprises combined with the increasing centralization of capital creates the material foundation of a future communist society. The difference between Marx and Lenin was that Lenin wrote at a time of a higher stage of capitalist development. He uses statistics and the writing of contemporary bourgeois economists to document how far the centralization of capital had progressed since the days of Marx.
The other theme involves super-profits and the labor aristocracy that shares in them. In the Marxist critique of bourgeois political economy, super-profits are those above and beyond the average profit rate. The biggest political problem confronting Lenin in 1916 involved the collapse of the Second International in August 1914. Lenin, like other Marxists of his generation, had dedicated his life to building the International. The failure of the Second International when confronted with the supreme test of the imperialist world war represented the collapse of the hopes of an entire revolutionary generation.
The only other event in the history of the workers’ movement that compares — and exceeds — is the betrayal by the USSR’s Gorbachev leadership of its socialist and anti-imperialist allies, the Communist Party of the Soviet Union, and finally, of the USSR itself. Parallel with this was the failure by most of the Trotskyist movement that was created specifically to oppose Stalin’s replacement of revolutionary proletarian internationalism with “socialism in a single country” to defend the USSR and other workers’ states. (3) The theory of socialism in one country, which contradicts all the political economy and the writings of Marx, Engels, Lenin, and other Marxists, was bureaucratically imposed after 1924 on the Communist International. The consequence of the theory of socialism in one country was the dissolution of the Communist International in 1943.
Meanwhile, the Trotskyist movement gradually moved away from its promise to defend the USSR and other workers’ states, no matter how degenerated or deformed, against external imperialist aggression and internal bourgeois counterrevolution. When the Russian counterrevolution reached its climax in August 1991, most of the Trotskyist movement was metaphorically on the “Yeltsin barricades,” and some were literally there.
Those of us of the older generation who lived through these betrayals but remained loyal to our communist and internationalist principles have some idea of what Lenin and his comrades went through following the betrayal of the German Social Democrats and other parties of socialist internationalism when World War I broke out in August 1914.
Hopefully, the new generation will not face a similar betrayal in the future. However, as the saying goes, to be forewarned is to be forearmed. There’s no task more important for the rising generation than to study the economic, social, and political roots of these two great betrayals. As in the days of Gorbachev, at the start of World War I, renegades were everywhere. Starting in August 1914, countless men and women who had dedicated their lives to the struggle for socialism renounced their internationalist socialist principles and went over to the side of their own warring imperialist states.
It’s easy to denounce Gorbachev, Yeltsin, and the other renegades found in the Communist and Trotskyist movements as horrible human beings for their roles in and justification of the events of 1989-91. After August 1914, Lenin also denounced the leaders of the Social Democratic parties who either supported their own warring imperialists or covered up for those who did. Above all, Lenin denounced Karl Kautsky. Before August 1914, Lenin had greatly admired and learned much from him. But afterward, he hated these men. But betrayals such as those in 1914 and again in 1989-91 cannot simply be blamed on treacherous individual leaders, though personal weaknesses of individuals do play a role. However, behind these leaders stand hundreds of thousands of people guided by material interests deeply rooted in economic reality. For Lenin, explaining the roots of these material interests was necessary.
Lenin found the root of the Second International’s collapse in imperialist super profits. If a particular capitalist enjoys a partial or total monopoly, they can sell their commodities at prices above the price of production and realize a super-profit. As we know, profit is surplus value realized in money form. But surplus value arises in the sphere of production, not circulation. Super-profits that are due to monopoly pricing can only redistribute surplus value that’s already been produced.
In “Imperialism,” Lenin isn’t interested the surplus profits made by some capitalists at the expense of other capitalists. This is just an example of thieves stealing from other thieves. In Lenin’s opinion, capitalists stealing from other capitalists didn’t explain the sorry end of the Second International.
Lenin was interested in another kind of super-profit. If a capitalist can pay a part of the working class less than another, either because the value of their labor power is less or because circumstances allow the capitalist to pay some workers less than the value of their labor power, the capitalist doing this makes a super-profit — this type of super-profit interested Lenin.
Individual capitalists, through the mechanism of the equalization of the profit rate, don’t appropriate in the form of money profit the surplus value produced by their workers. They appropriate a portion of the total surplus value produced by the entire global working class in proportion to the total size of their capital.
For example, if super-profits are produced by paying a section of the global working class less than the value of their labor power, the resulting super-profits will be distributed among various capitalists. Such profits can also be shared with a portion of the working class by paying that section a wage above the value of their labor power. There are various mechanisms by which such super-profits are distributed to sections of the working class, and a whole book could be dedicated to this one topic. I will only touch on a few of these mechanisms below.
The phenomena of paying some sections of the working class more than the value of their labor power to win them over to the capitalists in a struggle against the world working class should not be confused with a rise in the value of labor power through the struggle of the working class as a whole against the capitalist class. (4) In contrast, sharing super-profits with certain sections of the working class involves improving the living standards of some workers at the expense of other workers. For this reason, the bribing of the labor aristocracy, as Lenin called it, can never be generalized to the working class as a whole.
Nowhere has the practice of bribing sections of the working class by sharing super-profits squeezed out of the global working class been carried further than in the United States. There’s even an expression for it: the “American Dream.” Today a new generation of workers moves to revive the U.S. labor union movement that’s been in decline for many decades. However, in doing this, the new generation of unionists will run up against the ghost of Samuel Gompers (1850-1924) and his American Federation of Labor — AFL. (5)
Gompers was interested in organizing skilled workers only along craft lines, not industrial. Known as “job trust craft unionism,” workers are organized by their specific job, rather than by the industry in which they work. Not only did you have to be skilled in some trade like plumbing, fitting, or carpentry to get into an AFL union, you had to be white. The only exception was the railroad porters, and they didn’t receive a charter from the AFL until after Gompers died in 1924.
Depending on the trade, you had to be a member of a certain ethnic group. It also helped if your father or other close relative was a union member. Members of the radical opposition to Gomperism within the U.S. labor union movement formed such groups as the Industrial Workers of the World — IWW. The left wing of the U.S. Socialist Party had a word for Gompers-type unions: they called them “job trusts.”
AFL leaders were often more interested in organizing bosses than workers. They organized in industries where capital was still decentralized, such as the building trades. In these industries, there were many competing bosses. They were too decentralized to organize themselves into cartels as was happening in large-scale industries.
So Gompers-type unions organized small bosses into cartels. In return, the bosses were expected to share a portion of the cartel super-profits with the top union officials and the skilled workers making up the membership of these craft unions. Any individual boss who attempted to undersell the cartel was made an offer “they could not refuse” and, if they persisted, could end up “sleeping with the fishes.” The Gompers school of unionism divided the working class along racial and ethnic lines.
At the turn of the century, Gompers took a pacifist position toward U.S. imperialist wars. But by World War I, he’d become an enthusiastic supporter of U.S. participation in the war. He bitterly opposed the Russian Revolution. After he died in 1924, Gompers’ successors continued his policy of supporting imperialist war and opposing the Russian Revolution and the Communist International. Though the Congress of Industrial Organizations — CIO, that split with the AFL on the question of industrial organization as opposed to craft organization and the need to organize unskilled and semi-skilled workers as well as skilled workers, it by and large, continued the AFL policy of supporting U.S. imperialist wars. The CIO, representing a break with Gomperism, stopped halfway.
At the beginning of the Cold War, better described as a global class war, union leaders allied with the U.S. Communist Party (the chief builders of the CIO) were told to either break with the CP and join the anti-communist crusade or face expulsion from the CIO. A handful of CIO unions refused to purge the communists and were expelled, but most unions went along. In 1955 the CIO, purged of communists and other radicals, was merged back into the AFL, forming the AFL-CIO under the leadership of George Meany (1894-1980). Meany, a member of the plumbers’ craft union, was a typical Gompers-type craft unionist. He was pro-capitalist, pro-imperialist, racist, anti-communist, and a staunch supporter of every war fought by U.S. imperialism. He once boasted he never walked a picket line.
The movement against Jim Crow segregation in the U.S. South — the Gompers craft unions were organized along Jim Crow lines — and then the movement against the U.S. war on Vietnam began to turn many young people against U.S. imperialism and the capitalist system. As a result, during the 1960s, interest in Marxist ideas was growing among the youth.
In May 1970, things came to a head. Nixon announced the U.S. “incursion” into Cambodia, and college campuses across the U.S. exploded as students walked out of classes and protested the war. Many conservative students who had previously supported the war and opposed campus radicals now joined the historic protests. At Kent State University in Ohio, the National Guard killed four students, and eleven days later, at the largely African American Jackson State University in Mississippi, police killed two students. These killings further enraged students and spread the campus rebellion. But what about the U.S. working class?
Many workers and some unions expressed sympathy with the students. But on Wall Street, a different scene unfolded. Student anti-war demonstrators protesting the war were attacked by a mob of unionized construction and longshore workers supporting the war. Wearing their “hard hats,” these workers appeared to many students to be typical industrial workers that, according to Marx, were supposed to make the revolution. But these workers were supporting the war and beating up anti-war students. How could Marxism be correct if the workers were so reactionary?
The New York City building trades craft unions and the International Longshoreman Association (ILA) — on the West Coast the International Longshore and Warehouse Union (ILWU) under pro-communist Harry Bridges had broken away from the gangster-ridden ILA after the 1934 San Francisco General Strike — were typical Gompers style unions. To get construction and longshore jobs, workers not only had to belong to the right ethnic groups — that did not include African Americans or Latinos — but often, you also had to know your local mob-connected person as well. But by 1970, these unions were coming under pressure to allow African Americans and Latinos to join.
Against this background, Peter Brennan (1918-1996), head of the New York building trades, a unionist of the Gompers school, supported by ILA president “Teddy” Gleason (1900-1992), organized their members to attack the anti-war students on Wall Street. Nixon, representing U.S. imperialism, rewarded them by opposing the desegregation of these unions, protecting them a little longer from competition from African American and Latino workers who needed jobs. May 1970 provides a perfect example of the Gompers school of trade unionism in action.
Job trust craft unionism is one example of how super-profits are shared with sections of the organized working class. Another method developed in the U.S. encouraged workers to own their own homes — or rather, the equity in the home defined as the difference between its market price, including the value of the land under it, and the unpaid portion of the mortgage.
As U.S. imperialism extracts super-profits from the Global South countries, the super-profits that flow into the U.S. are often invested in real estate, including residential real estate. This causes the price of the land to rise. Homeowners can cash in these shared super-profits represented by the rising value of the home — really the land under it — either by selling the home and land with a considerable gain, borrowing money against the home and land, or renting out a room or two within the home. Workers who own their own home and the land under it have an interest in rising real estate prices translating for non-homeowning workers into higher rent.
The rising value of the land under the homes (the building itself depreciates with time) is seen as building wealth through home ownership. It is important to realize that this is different from increasing the value of the home building by adding additional structures to the home or by attractive landscaping, gardens, swimming pools, etc., all of which require expenditures of value-creating labor.
Instead, “building wealth through homeownership,” in the sense I’m using here, refers simply to the rising price of the land. This doesn’t mean that the rising home value doesn’t represent expended labor. It just means that it doesn’t represent labor expended by the homeowner. It refers to the rising price of the land.
Since land in the economic sense is not created by human labor, it has no value defined as embodied abstract human labor. When homeowners in the U.S. or other imperialist nations build wealth through the rising value of the equity in their homes, they’re appropriating surplus value — unpaid labor — produced by other workers who are located increasingly in the so-called Global South. This doesn’t make them small capitalists, but it does tie them to U.S. imperialism.
The struggle for a classless communist society versus building the ‘middle class’
In the United States, the concept of “middle class” is often defined as a person, not a capitalist or a large landowner, who owns significant equity in their home. U.S. labor union leaders often boast that they built the middle class. By raising the wages and benefits of the workers in their unions, they made it possible for them to purchase — on credit, of course — their own homes and build wealth in their homes through a combination of gradually paying down the mortgage and the rise in real estate prices that reflect the growing power of U.S. imperialism.
Labor unionists who have accumulated significant equity in their homes and proletarians who are forced to rent their homes — or at least the land under them — find themselves on opposite sides of the real estate market. (6)
Rising real estate — land — prices mean rising rents for renters — mostly proletarians — that, at best, threaten their standard of living and, at worst, can render them homeless, forcing them to live in their cars. Or if they can’t afford a car, on the streets. Those who have built up significant equity in their homes can benefit from a favorable business climate in the form of rising home equity — though not as much as the capitalists and large landowners.
In the U.S., homeownership is called “the American dream.” However, the other side of the coin is the nightmare of super-exploitation and national oppression carried out by U.S. imperialism, making the American dream possible for some. Many workers in other parts of the world seek to emigrate to the U.S. in the hope that they too, or maybe their children, can obtain part of the “American dream” and build wealth in their homes. But the American dream is inseparable from the nightmare U.S.-NATO imperialism inflicts on the world through economic super-exploitation and war, not only military but economic as well, that are necessary to defend that super-exploitation.
There are other methods of sharing super-profits. Lenin’s “Imperialism” pointed out that the stocks of various corporations are issued in small denominations, so workers might be able to afford to buy a few shares. Or workers might invest in mutual funds that invest in the stock, bond, commercial paper, or real estate markets. Retirement funds are often invested in the stock market. The hopes of many U.S. workers for a happy and secure retirement are thus tied to hopes for rising land and stock market prices, which are in turn tied to hopes for the success of U.S. imperialism. This way, sections of the working class, particularly the better-paid workers organized in Gompers-style trade unions, are detached from the interests of the world proletariat.
Communist labor union and Gompers-style trade union leaders differ not so much by the communist leaders being more militant when fighting for higher wages, shorter hours, and better working conditions but by their ultimate aims. Many Gompers-style leaders are “sellouts,” but some have been very militant in fighting for higher wages, benefits, and better conditions for at least some of their members. Where these leaders and communist union leaders differ is that the communists fight to build a global communist society by liberating their class, while the Gompers-style leaders hope to raise their members into the middle class.
Gompers, early in his career, leaned toward socialism and was more radical than Eugene Debs, who started as a conservative craft unionist. But while Debs became more radical through his experience in the class struggle, Gompers became increasingly conservative as he grew older. He described himself as “a trade unionist pure and simple” whose slogan was “more.”
In other words, Gompers had given up on his youthful dreams of a socialist society and simply sought to improve his personal position and the position of craft union members within capitalist society, often at the expense of other workers. Gompers and his successors, such as Meany, Brennan, and Gleason, who have dominated U.S. labor unions over the decades, also gave up any youthful socialist dreams, if they ever had any. They instead concentrated on improving their own and their members’ position within capitalist society.
Over the decades, leaders of first the Social Democratic parties of the Second International (1889-1914) and then the Communist parties of the Third International (1919-1943) came under the same pressure that transformed the young radical unionist Gompers into what he became. Taken individually, many working-class leaders are neither pure Gomperites nor pure communists — but something in between. Many start as communists dreaming of liberating the entire world working class and all oppressed people from the oppression of capital. But no trade union, party leader, or even state leaders, in the case of workers’ states, can afford to ignore the immediate material interests of their members. This is true whether or not the immediate interests of their members coincide with or contradict the general needs of the global working class.
From the viewpoint of capital, the best solution would be to pay all workers the lowest possible subsistence level of wages. This would mean the highest possible ratio of unpaid labor to paid labor and would yield the highest possible rate of profit. However, the capitalists have learned through centuries of class struggle that if they pay all workers the lowest wages biologically possible, the working class will unite against their class rule.
To remain on top, capitalists have to share some of their super-profits with certain sections of the working class and thereby use super-profits to detach them from the interests of the global working class as a whole. These bribed workers, the term used by Lenin, then became a kind of Trojan horse for the capitalist class, operating within the working-class movement. This creates the basis for a layer of functionaries, bureaucrats operating within the labor unions and workers’ parties based on the bribed layer.
This may take the form of building “job trust craft unions” that limit union membership and the possibility of working in a given trade to skilled white workers belonging to a given ethnic group. This makes possible incidents such as that of May 1970 when craft unionists attacked student youths protesting the Vietnam War. Or it might mean supporting the U.S. against the Soviet Union and communists in the Cold War. Or it might mean voting for war credits in the German Reichstag on August 4, 1914. Or finally, it might mean creating a social-democratic government that crushes the soviets and hands power back to the capitalists while murdering — with the help of extreme right-wing proto-Nazi German nationalists — Rosa Luxemburg and Karl Liebnecht in January 1918.
But, cultivating the labor aristocracy costs the capitalists a portion of the surplus value they’d prefer to pocket for themselves. It lowers the profit rate they receive on their capital. To make up for these lost profits and raise the rate again, the leaders of the imperialist nations need to super–exploit other layers of the working class and crush workers organizing in other countries.
Imperialism must suppress and super-exploit the people of the majority of the countries of the earth (nowadays called rather bloodlessly the Global South). Imperialism is willing to share super-profits with the middle class, including the aristocracy of labor, because this is the price imperialism pays to maintain political stability in its own country.
When U.S. imperialism was thrown out of Vietnam by the Vietnamese people in 1975 and out of Afghanistan by the Afghani people in 2021, U.S. imperialism was not overthrown. (7) Far from it. They merely lost control — they hope temporarily — of what they view as outlying provinces of their world empire. But if the ruling capitalist class lost control of the United States, it would mark its end as a class. For this reason, the U.S. ruling class is obliged to share some of its super-profits with the middle class, including the better-paid workers of the labor aristocracy, to safeguard their control of their national base, the USA.
The age of imperialism has turned out to be rich in struggles against imperialism. During the 20th century, the existence of labor aristocracies in the countries with the industrial might necessary to construct a communist society on a world scale were able to block socialist revolutions in their own countries.
This brings us to a crucial part of Lenin’s politics. It’s necessary to back every struggle against imperialism, even when they’re led by outright reactionary forces such as the Afghanistan Taliban. In addition, those seeking to build communist parties must concentrate on the most oppressed parts of the working class — the opposite of Gompers’ strategy. We must take up the struggle of all oppressed people. The more the democratic struggle against imperialism progresses, the more the rug is pulled from under the super-profits that make the pro-imperialist labor aristocracies possible in the first place. Only in this way can conditions be created that will make it possible for the working class to conquer political power and begin the process of building a classless communist society of associated producers. (8)
Next month I’ll summarize my criticism of the work of Anwar Shaikh, in my mind, the best academic Marxist economist of the post-World War II period. It will contrast his views to the Monthly Review School and examine what I believe are Shaikh’s mistakes, limitations, and shortcomings.
(1) U.S. defense lawyers urge people never to talk to police officers not only because the police are often corrupt but because of the nature of the U.S. legal system. This system is based on the same principles as the exchange of commodities.
A commodity is sold at a price close to its value, not because either the seller or buyer wants this but because their conflicting objectives cancel each other out. The seller’s interest is selling a commodity above its value, and the buyer’s interest is buying the commodity below its value. Assuming conflicting objectives cancel each other out, the commodity then sells near its value.
U.S. criminal law, descending from Anglo-Saxon law, is based on the same principle. It’s assumed that the state represented by the prosecution will twist the facts to favor conviction, while the defense will twist the facts to obtain an acquittal.
Neither the state nor the defendant has an interest in the truth. Out of the conflict between the two parties, the truth is supposed to emerge. That’s the theory. In reality, the resources at the command of the state exceed those of the defendant, especially if the defendant is not a member of the ruling class (almost always).
The Trump case is one of the exceptions. This is recognized in the law to the extent that the defendant is given certain advantages. The defendant doesn’t have to prove their innocence; rather, the state has to prove the defendant guilty beyond a reasonable doubt, but not beyond all doubt.
It is a basic principle of the law that the defendant is considered innocent until proven guilty. In addition, the defendant does not have to provide testimony against themself. But the police, as representatives of the state, can lie to suspects, and suspects cannot legally lie to the police. Suspects have the right to remain silent, and defense lawyers are almost unanimous in saying that you should always use these rights if you have to deal with the police without an attorney being present. Overall, however, the disparity in resources — especially of defendants who don’t belong to the ruling class — is overwhelmingly on the side of the state.
Only a small percentage of all criminal cases in the U.S. go to trial. Instead, during what’s called a pretrial conference, the defense and prosecution attempt to reach a plea deal. The prosecutor “overcharges” while the defense attorney attempts to convince the prosecutor to drop some charges and settle for a light punishment.
This process is a direct reflection of the haggling between buyer and seller over the price of a commodity. A compromise usually emerges, and trial is avoided. If the defendant insists on their right to a trial and loses — given the advantages the state posses, this is what usually happens — the defendant is punished in effect for the crime they were convicted of but more so for excising their right to a trial. In the overwhelming majority of criminal cases, criminal defense lawyers advise taking the plea deal.
In Trump’s case, the Party of Order hopes that with Trump buried in both state and federal felony charges, he’ll agree to a plea deal where most of the charges will be dropped, he’ll serve no jail time, and pay only a modest fine on the few charges he’ll have to plead guilty to. In return, he’ll have to agree to withdraw his candidacy from the Republican presidential nomination. Whether or not he’ll agree to a plea deal along these lines remains to be seen. (back)
(2) The Standard Oil bank was originally the National City Bank of New York. However, John D. Rockefeller had a falling out with his brother William. As a result, Standard Oil shifted its deposits to Equitable Trust Company which took over Chase-Manhattan in 1930. Then in 2000, Chase Manhattan merged with Morgan Guaranty Trust Company to form the present-day JPMorgan Chase. Today’s JPMorgan Chase represents the merger of the historical Standard Oil John D. Rockefeller interests with the JP Morgan interests.
William Rockefeller, after he fell out with his brother John, allied with National City Bank and its president James Stillman. The two families intermarried, forming the Stillman-Rockefeller family. National City Bank evolved through a series of mergers into today’s Citigroup. Citigroup owns Citicorp, a holding company that owns Citibank originally known as City Bank. Citibank is one of four megabanks towering over the U.S. economy, the others being JPMorgan Chase, Bank of America, and Wells Fargo. The total assets owned by Citigroup as of March 31, 2023, are 2.3 trillion dollars. Before the Civil War, the original City Bank was heavily involved in financing African slavery. During the crisis of 2008, Citigroup became insolvent but was saved at the taxpayer’s expense because it was judged too big to fail. (back)
(3) Trotskyists over the years have often said that it’s impossible to build socialism in a single country. This is not, however, what Trotsky said. The working class can seize power in a single country, organize a nationalized planned economy protected by a monopoly of foreign trade and then expand the scale of nationalized production, that is, build socialism within a single country alone. Of course, the ability of the working class in power to do this depends on the resources of that particular country. The possibilities of engaging in socialist construction were far greater in the Soviet Union with its natural wealth, territory, and population than they are, for example, in Cuba today. But it’s not possible to build a complete socialist society in a single country.
I don’t much like the term “socialist society” because it has so many definitions. Rather than determine what the correct definition of a socialist society is, I think we can recognize three main phases in the transition from capitalism to full communism.
First, the working class must win “the battle of democracy,” in the words of the Communist Manifesto, and win political power that first occurs within individual nation-states. It’s then in a position to begin the transition from capitalism to a communist society. However, a nationally isolated workers’ revolution will come up more and more against the pressure of the world capitalist economy and the monopoly of the capitalist class on the production of consumer goods, especially luxury consumer goods. Those who know about the concrete history of the Soviet Union know the role that the thirst for consumer goods produced by the global capitalist industry played in undermining the Soviet Union, progressively corrupting its ruling Communist Party and preparing the way for Gorbachev’s “perestroika.”
The only lasting solution to this problem is the victory of the world revolution, making it possible to build a communist society on a world scale. Only then can it build a classless society where commodity production, including commodity money, is eliminated.
Even once this process is completed, we have a communist society, but it is an imperfect form of communism. One reason this communist society is imperfect is that what Marx called the “enslaving division of labor” persists. The producers will still be paid more or less according to their work, not according to their needs. The communist society still bears the birthmarks that it has inherited from the capitalist society it emerged from. Because of the “enslaving division of labor” reflecting the development of the productive forces that are still too low, it is still impossible for people to work according to their ability and receive according to their needs.
In the sphere of distribution, “bourgeois right” — payment according to labor performed — still prevails. A full communist society demands a still higher development of the productive forces that will finally make it possible to overcome the “enslaving division of labor.” With the full development of automation and artificial intelligence — people will finally be able to work to their full ability and receive according to their needs — not equally because individuals are different, have different abilities, and have different needs.
The Stalin/Bukharin tendency in the Soviet Communist Party and Communist International began to claim starting in 1924 that a socialist society — by which they meant the first phase of communism where people receive according to their work rather than according to their needs — could be fully achieved within in the borders of the Soviet Union.
In 1939, Stalin went further and claimed that a fully communist society where people receive according to their needs and the enslaving division of labor was overcome could be fully built on the territory of the USSR even if the rest of the world remained capitalist. The sole qualification Stalin made was that the state could not wither away before the victory of the world revolution because the full communist society in the USSR would be threatened by external military attack from the surrounding capitalist world.
History has now resolved this question. The Soviet Union had amazing successes in industrialization, raising the culture of the people, establishing health care as a human right, eliminating unemployment, and launching the first earth satellite, the first man to orbit the earth, followed by the first woman. It was the Soviet Union that defeated Nazi Germany on the field of battle. Despite these towering achievements, the Soviet Union couldn’t achieve a classless society, still less eliminate the enslaving division of labor nor could it suppress or meet the thirst for more consumer goods. These problems only increased as the Soviet Union advanced. These contradictions ultimately led to perestroika and the return of capitalism.
The tragedy of the Stalinist tendency was that it sacrificed the Communist International in an attempt to buy peace from the capitalist world in the illusionary hope that this would allow it to build a fully communist society first within the Soviet Union. In pursuit of these policies, the Stalinists first imposed the doctrine of socialism in a single country on the Communist International and then dissolved it altogether in 1943.
Most of the Trotskyist groups gradually abandoned any meaningful defense of the USSR and other workers’ states in the name of overthrowing the “Stalinist bureaucracy” with the help of pro-capitalist tendencies. To paraphrase Trotsky, those unable or unwilling to defend old conquests prove unable to win new ones.
If we are to do better in the future, we must get to the economic, social, and political roots of the joint collapse of Stalinism and Trotskyism that occurred at the end of the 20th century if we are to rebuild the communist movement on a sound basis in the 21st century just as Lenin and his comrades had to get to the economic and social roots of the collapse of the Second International to build the Third International. (back)
(4) We should remember that the historical direction of the value of labor power is downward. Even if the working class’s standard of living rises, the productivity of labor means that the value of the commodities that go into the reproduction of labor power falls. In practice, union struggles aim to defend the value of labor power rather than increase it. (back)
(5) Gompers’s AFL faced the opposition of the Industrial Workers of the World (IWW), which rejected Gompers’ job trust craft union approach and attempted to organize all workers on industrial principles into one big union. The U.S. capitalists bitterly opposed the IWW, but sometimes capitalists were willing to tolerate the AFL and cut deals with it — especially if these deals kept the IWW out. (back)
(6) Poor people often own trailers (mobile homes) and have to rent land in trailer parks. They are often called “trailer park trash” to differentiate them from people who own small amounts of landed property on which their homes are built and get to share in some of the super-profits of U.S. imperialism. “Trailer park trash” is essentially another word for proletarian. (back)
(7) There’s, of course, a difference between the program of the Vietnamese resistance and the reactionary policies of the Afghan Taliban. However, the defeat of the imperialists in both countries made it harder for them to squeeze super-profits out of these countries. Super-profits that are not made cannot be shared. This is why Marxists support all struggles of oppressed nations and peoples against imperialism regardless of the leadership. (back)
(8) Because Russian imperialism was weak, the labor aristocracy was also weak, and the resistance it offered — largely represented by the Menshevik Party — was relatively easily defeated by the correct politics of the Bolshevik Party under Lenin’s leadership. However, because Russian capitalism-imperialism was so weak, it was difficult to build socialism in the former Russian Empire after the seizure of power. In the United States during the 20th century, Marxists operating within the labor movement were unable to overcome the resistance of the labor aristocracy, though if they had somehow done this, the construction of a communist society would have proceeded much more smoothly than it could have done in Russia. To overcome these difficulties, imperialism must be defeated on a world scale. (back)
A Critique of Crisis Theory