You would have to be well over 80 to directly remember anything about the 1930s. The nearest thing to real experience of that time, for those in the succeeding generation, was listening to our parents who preferred to forget about them. Tales of the Means Test, of going hungry, lacking shoes, not being able to afford a doctor and the shadow of unemployment and war are not the stuff of bedtime stories. The impact of that on their consciousness perhaps would be a discussion all on its own but it does raise the question about how historical experience, whether we like it or not, shapes our current understanding and perspectives. It might be worth examining this methodological issue before we get into the comparison of the 1930s with today.

History Lessons

Many people know the famous opening of Marx’s article “The 18th Brumaire of Louis Napoleon” in which he alleges “Hegel remarks somewhere that all great world-historic facts and personages appear, so to speak, twice. He forgot to add the first time as tragedy the second time as farce”. Leaving aside the issue that Hegel did not actually say this, it remains a great image which has been deployed many times (and often by ourselves) to make comparisons between historical events. What Marx goes on to add though is more significant for our discussion today

The tradition of all past generations weighs like a nightmare upon the brains of the living. At the very time when they appear to be engaged in revolutionising things and themselves, in bringing about what never was before, at such very epochs of revolutionary crisis do they anxiously conjure up into their service the spirits of the past, assume their names, their battle cries, their costumes to enact a new historic scene in such time-honoured disguise and with such borrowed language.

There is a warning for us here about the use, and abuse, of history. We cannot avoid history – it is the collective memory of humanity and, apart from our direct personal experience, it is the only basis for informed thinking about the future we have to go on. We can though be misled in our interpretation of it since we try to look at history through the discernible patterns of the past. This runs the danger that we don’t always grasp the significance of what is new in the epoch we live in. Something may be happening which unknown to us sets a new pattern for the future.

We have a concrete example of this in our own past. In the 1970s the ideas of the communist left first came to the UK. This was itself no historical accident as it coincided with the end of the post-war boom and the beginning of the decline in the cycle of capital accumulation. The reappearance of the crisis vindicated those Marxists (like Paul Mattick Sr) who had argued throughout the 1950s and 1960s that the post war boom was not the end of all capitalist crises. They had argued that the boom was predicated on the massive destruction of capital values during the Second World War and, sooner or later, the tendential fall in the rate of profit would reassert itself, and the world would be plunged into crisis once again.

From this work, those of us who formed the CWO, could see that the cycles of accumulation of capital, which in Marx’s day had lasted about every ten years or so, had been altered by the gradual centralisation and concentration of capital so that cycles were lasting longer. When they did reach their peak the simple devaluation by bankruptcies of a few firms was no longer adequate to start a new cycle of accumulation. Only the massive devaluation of a generalised warfare was sufficient. Thus since 1914 the capitalist crisis had led the major capitalist states to all-out war on two occasions. Our early conclusion was that if the third cycle of accumulation was coming to an end either the working class had to overthrow the system or we would be facing a new war in the not-to-distant future.

This turned out to be a big mistake. The root of it was that we had always assumed that every capitalist state would fight to control the so-called “commanding heights of the economy”, necessary for “national security” such as steel, shipbuilding and energy. What we did not see was that this was no longer seen as so important in a Cold War world where whole blocs operated together. Thus it was possible for states not only to write off some investment and restructure industry but they could also actively encourage the investment of capital in cheap labour countries rather than in the home country. A system in crisis had stumbled on a new direction in order to keep the system afloat (a new direction which also had the advantage of taming the class struggle in the heartlands of capitalism). This was exactly what happened in the 1980s and 1990s. For a time it helped check the fall in the rate of profit but when this, once again, seemed to be under threat, globalisation became “financialisation”. The real returns were now to be made in setting up financial instruments which ensured a constant revenue flow to banks and financial institutions. There was no limit to this creativity of money-spinners from futures and hedges, to the more opaque collateralised debt obligations and credit derivatives. Here hubris took over and our rulers conveniently forgot the lessons of history by abandoning all the regulations introduced in the 1930s (Glass-Steagall etc) to prevent another Wall St Crash. Thus banks were allowed to get involved in developing “new financial instruments” which basically recycled debt, and in the end, became pure speculation. What had happened was that instead of resorting to war, the system had found a new way of postponing the consequences of the crisis, via speculation. However as Marx makes clear in Capital Volume 3 the speculative phase where fictitious capital is created is the final phase of the cycle. Even here, in the 1990s, we saw clearly that the speculative bubble would have to burst some time but could not believe that the system could hang on until 2007-8.

The response of the capitalist states around the world to the new manifestation of the crisis was more predictable. Allowing capitalist laws to operate unchecked would have led to the collapse of the entire financial system and hence to a collapse of the capitalist system. This would have made the aftermath of the Wall Street Crash look like a minor blip. States were thus forced to act. Massive bail-outs followed by quantitative easing were the only solutions. These measures dealt with the symptom but not the disease. A decade on, they have only increased global indebtedness (which is now approaching $250 trillion and rising). The main change is that much of this is now owed by states. The crisis has not gone away but we are in an entirely new situation which the world has not experienced before.

2018 is not the 1930s

Which means talk of “going back to the 1930s” is misplaced. However, there are plenty of reasons why some commentators have been saying this for at least the last two years. When Hitler came to power in 1933 he took Germany out of the League of Nations, withdrew from all pacts intended to promote peace, and withdrew from all disarmament talks. Trump’s first meaningful acts were to withdraw from the Paris accord on climate change and the Trans-Pacific Partnership, whilst his officials have spent a great deal of time demeaning the United Nations. Trump has not only threatened military action against perceived enemies of the US but has actually carried out several military sorties to back up those threats. Some can find other similarities. Mass unemployment, and fascist dictatorships may not be with us today but economic stagnation, declining living standards for many, and a rise of an authoritarian and increasingly racist nationalism across the world could be seen as their modern day counterparts.

And of course behind it all there was the unsolved matter of an economic crisis. In 1930 the US Congress introduced the Smoot-Hawley Tariff which put duties up to 60% on 20,000 goods. This provoked retaliation right across the globe starting with Canada. In Germany “equalising tariffs” were introduced by the Brüning government in January 1932, exactly a year before the Nazis came to power. Tariffs were not the only beggar-my-neighbour policy introduced by states at the time. Competitive currency devaluations had come first as countries came off the gold standard, but all this added up to trade war which made the economic crisis worse. As such it was the prelude to the Second World War.

One concrete factor is missing compared to the 1930s. Hitler came to power on the promise to revise all the treaties imposed on Germany after WW1. Inside Germany his economic strategy was autarky which was aimed at total self-sufficiency. It included some ruthless economic policies, like selling machinery to a country and then refusing to sell the spare parts unless the country in question imported more from Germany. These, and other strategies, were obviously short-term measures but they were intended to be. The entire economic programme of Nazism depended on waging successful war and in the short term. Once Hitler had got away with rearming, and had survived the gamble of remilitarising the Rhineland in 1936, his whole policy was one of pursuing conflict.

Today the nearest thing to a revisionist state like Nazi Germany is Putin’s Russia which has already annexed Crimea, re-established its foothold in the Middle East and is ready to annex the two Eastern provinces of Ukraine. But Putin is still constrained by the economic and military weakness of Russia. It is his strategy of careful calculation which has enabled him to reverse some of the losses made by the old USSR, not massive and open military strength. He knows too that to go too far too soon might provoke a more concerted response than he has faced hitherto.

It was always a bit of a myth that the USSR was somehow an equal rival to the US in the Cold War and, in fact, the effort to keep that myth up helped to destroy it. However the notion of blocs orbiting around two “super-powers” who had done well out of World War Two did create a new world order. Looking at it now it seems that this bipolar world of blocs was an aberration in history and we have returned to the world of individual nation states, as was the norm under capitalist imperialism previously. First the USSR imploded and its bloc collapsed. Since 1990 the US has become the unchallenged dominant power on the planet. But within the US ruling class there has been a constant debate between those that want the US to be the world leader in coordination with its allies, and those who have wanted the US to pursue a more aggressive foreign policy. As our article in this issue, shows the current US administration is in the latter camp. When the power which emerged in 1945 as the most powerful in history starts to denounce all the institutions it set up itself to guarantee its dominance of the world, we know we have entered an entirely new situation.

The US has a lot more leverage than just military might but we should note that it spends $600 billion a year currently on defence (which is more than the next 14 powers put together, and it is ten times more than China), and Trump wants to raise this by 25%. With over 700 bases around the world there is no power or even coalition which could resist them. Trump is using this, plus US economic power, to denounce a world which has been “ripping off the USA” for decades. It does not matter whether this is true or not. The point is that this has become the mantra of “America First”. To start with he is threatening sanctions to anyone trading with Iran. This aggressive agenda though is only a sideshow for his real target, which is China.

China has openly announced that it intends to become the world’s number one power by 2049 in terms of “national power and international influence”. By that time the slow stealthy Chinese strategy may indeed put them in a position where the US would have to accede to a new world order (see our article “China: Long Held Us Fears becoming Reality?” in our previous issue). The problem the US ruling class is how to prevent that and, more importantly when. Trump’s threatened tariff war may bring China to some deal but, given that the Chinese state has $3 trillion in reserve, a trade war is likely to create more problems for the US economy first.

The sine qua non of our present condition is that are still immersed in a global economic crisis. Thanks to the actions of governments it is not as apparently dramatic in its current consequences as that of the 1930s. However, as in the 1930s the masters of the capitalist universe have no economic solution. Speculation may give the appearance of a kind of recovery but this only presages the bursting of the next bubble.

Lacking real economic solutions, political choices smack of desperation (and we have decided not to mention Brexit in this issue!). Trump’s tax cuts might have given a short term boost to investor confidence (long enough to last until the November Congressional elections) but in the long term they guarantee that US deficits will continue to rise, and with it the annual cost of servicing of its debt. At the moment the US is kept afloat because enough international investors have enough confidence in the US, and its institutions, to regard it as a safe bet when buying bonds. The current turmoil may not guarantee this for ever, in which case a new, more drastic, crisis of the system will be inevitable.

When that happens what is the likely consequence? The consequences are likely to be dire with nationalist and militarist forces dictating the agenda. The current unending conflicts around the planet will take on new force and the notion of a more generalised war cannot be excluded eventually.

The only force that is capable of altering the situation and saving the planet is the international working class but right now it is not in great shape. It was not in great shape in the 1930s either. By then it had long been defeated in its first international attempt to overthrow capitalism. As a consequence of that defeat the class was divided and deluded – some in illusions that Stalinist Russia was socialism, others were still loyal to the social democrats who had saved capitalism in 1914 and 1919. The revolutionaries in the class had been reduced to small fractions trying to make sense of the counter-revolution or were in the prison camps of the fascists or Stalinists.

One thing though the Communist Left came to recognise was that “anti-fascism”, far from being about the defence of the working class had come to be a rallying cry to get workers to support the “war for democracy”. It had become the official position of the Stalinist Communist International after 1935 and was used to mobilise workers to go to Spain, not to fight for “the Spanish Revolution, but to fight for the interests of the Soviet union in an inter-imperialist war against Germany and Italy. In time it was adopted by the Western democracies in the Second World War. Fighting fascism seemed a much more progressive notion to die for than fighting for “King and Country” or the “patrie” as in the First World War and the ruling class in Russia and the West were not slow to play on it. Anti-fascism became their mobilising slogan for imperialist war.

Most of the comparisons of the 1930s with today are made by the defenders of capitalist democracy. They do not support proletarian autonomy or the fight for a communist society. All they worry about is the possible revival of fascism. For them mention of the 1930s is always a scare story. Ironically this is just how their political antecedents in the 1930s also talked. Instead of pointing the working class to the real issue, which is the ongoing crisis of capitalism, they turn the debate on to which capitalist faction are we for. Obviously the horrors of fascist dictatorship, with all their genocidal consequences, have to be fought too, but that is not what our anti-fascists of then, and now, argue. They still argue, like Paul Mason did a couple of years ago, for a defence of the globalised democratic world

We have – and must defend – a resilient global system. theguardian.com

This “resilient global system” operates only for one class and we have no interest in defending it. We need to defend ourselves, not just from fascists but also from those who are deluded that this system has a “concept of universal and inalienable human rights”. In a world where Syrian children are gassed, where Congo women are routinely raped as an act of war, and where 22 million Yemenis are facing malnutrition over one of the most pointless wars on the planet, and so on, where can you find these “inalienable human rights” today?

With the working class in retreat right across the globe in the face of lowering wages, worse working conditions and a smaller share of the national wealth in each country we are still in a dire predicament. Inequality today is rising and in statistical terms is worse than the 1930s. Even though the indicators of poverty may not be as dire as the 1930s, 80 million people in the richest nation on Earth are living at third world levels. The only bright spots in this are that most of today’s workers have not shared in the defeats of the past and, at last, new struggles are beginning to break out across the world. At the same time there are small nuclei of genuine communists, who don’t buy into all the old myths about Stalinism being communism, appearing more and more around the world with each year that passes. It is likely that things will get worse before they get better, given the rise of nationalism and racism, but just as history has seemed to be taking one direction in the past, only for it to take another, it would be a mistake to write off those whose labour actually provides the basis of our human existence. The historic choice a decaying capitalist system offers us is still “socialism or barbarism”.

The above article is based on the introduction to our public meeting in Newcastle upon Tyne on July 24 2018. It was the editorial in Revolutionary Perspectives 12 which came out on August 8.