From For A Lasting Peace, For A People’s Democracy
#2 (62), January 13, 1950

Gloomy Prospect of the Capitalist World for 1950

R. Palme-Dutt,
Member, Political Bureau
Communist Party of Britain

The rulers of the shrinking world of Capitalist and Imperialist domination cannot look back with satisfaction on the record of 1949, and have strong grounds to regard with anxiety the prospect of 1950.

1949 has seen the further relentless advance of the signals of maturing economic crisis throughout the capitalist world. While the Soviet Union has achieved a new record triumph of production, reaching by the third quarter to 17% above the previous year, and 50% above pre-war. United States production has continued to decline, and by October was 18% below the 1948 figure. Retail sales for January to November 1949 were 6% below the level for the same period for 1948. Unemployment was estimated by the United Electrical Workers in October to amount to 5.52 millions or double the number of a year ago, apart from 11 millions on short time.

The attempt to camouflage this picture of economic decline as a temporary "recession" or "re-adjustment" has had to give way to recognition of the inescapable deeper factors which point to the further advance of conditions making for economic crisis. The prospect for 1950 is underlined by the fall of new capital expenditure in 1949 by 15%. The artificial prop of high government expenditure is only able temporarily to modify the immediate picture but not arrest the fundamental advance of decline. In the words of the New York Times (10.6.49) "In the absence of a cold war the demand for goods by the Government would be many billions less than it  now is." But the Wall Street Magazine (11.9.49) warned that "care should be, taken not to attach false significance" to any temporary rises in the production index since such ''will mean neither the end of post-war re-adjustment nor the starting point of: a new boom" and "will hardly change the fundamentals of the business picture." The U.S. Bureau of Agricultural Economics indicated at the end of October its expectation that "economic activity will continue to decline slowly through 1950... consumer spending may slacken further."

Even more gloomy is the picture of the Marshall countries and the rest of the Capitalist world. The fiasco of the Marshall plan is now admitted by its sponsors. There is no longer any question of “recovery by 1952". On the contrary, unemployment has extended on a mass scale in France, Belgium, Italy and Western Germany, and is beginning to extend in Britain. The schemes for closer economic association of the Western European countries, brought forward by American Imperialism in order to unify the market for its goods or of special groups of countries (Benelux, Fritalux, etc.) come up against insoluble contradictions of conflicting interests.

Agriculture in the Capitalist world is already under the shadow of "over production." Surpluses of sugar, fats, cereals, and meat are piling up (United Nations Committee on World Commodity Prices). The United States Government has told farmers to reduce their cotton acreage by 24% in 1950. This developing crisis of primary production is hitting especially hard all the colonial countries.

Thus the economic perspective of 1950 points to the further development of the advance of economic crisis over the capitalist world.

These conditions of maturing economic crisis of the capitalist world led to a sharp increase of economic contradictions and Imperialist antagonisms. The measures of devaluation, imposed by the pressure of the dollar on sterling and the European currencies, have not eased or diminished the economic conflict, but have on the contrary led to intensified trade war. The fight for the market grows more ferocious as the market shrinks. The “United States News" has predicted that American foreign trade, which had already fallen from 15.3 billion in 1947 to 12.3 billion in 1949 is likely to drop to 9.9 billion by 1952. American manufacturers have conducted large scale publicity campaigns against the “imports menace" of cheap British goods. Similarly British manufacturers are also quite alarmed at the menace of the impending full scale American offensive in the world market. Thus the chairman of the British firm, Tube Investments Ltd., on December 14th, stated: “Marshall Aid has masked the full implications of the fact that the United States could single handed supply much of the world with a great part of its manufactured needs. Will these resources now represented by Marshall aid be used to swamp the vital markets of other industrial countries. In any price war Britain and other countries might lose much of their overseas trade."

This conflict of the interests of British and American Capitalism is also strongly shown in the American manoeuvres for monopolist control of the development of Western Germany and Japan as American bases in Western Europe and Asia, and especially in relation to China where the opposition of British and American policy has been unconcealed.

Thus the perspective of the sharpening economic situation of 1950 points to the perspective of intensified economic conflicts and Imperialist antagonisms of the leading capitalist powers, and especially, of the British-American economic conflict, which develop alongside the counter-revolutionary alliance and subordination of British to American Imperialism.

In the political sphere the Imperialist camp has had to suffer a series of defeats in 1949. While the Atlantic Pact has imposed the war strategy of the Anglo-American bloc and American domination on the European peoples, this war strategy, which was based entirely on the assumption of the American monopoly of the atom bomb, has been thrown into complete confusion by the belated realisation on the part of the Anglo-American strategists that this American monopoly is a myth.

The subsequent contradictions and confusion of current Imperialist strategy have been shown in the discussions and negotiations accompanying the visits of the American Service Chiefs to Europe, and the open difference over the questions of the conditions of American Military "Aid."

While Anglo-American Imperialists endeavour to claim with pride that they have succeeded in extending their tentacles over Yugoslavia through the regime of their Tito agents, in fact the powerful exposures of the Rajk and Kostov trials and the vigorous united consolidation and vigilance of the democratic forces of the Eastern European peoples and the international working class have dealt a blow to the would-be machinations of imperialism in Eastern Europe.

Above all, 1949 has been the year of completion of the victory of the Chinese People’s Republic, which has profoundly changed the balance of forces throughout the world, in favour of the democratic camp. This victory is having the most far reaching effects on the liberation struggle in South East Asia and throughout the Colonial world.

This perspective of 1950 points to a rapid acceleration of the advance of the liberation struggle in the South East Asian countries, in Vietnam, Indonesia. Malaya, Thailand, the strengthening of the popular struggle against the Imperialist satellites in India and the Middle East, and the further advance of the awakening of the African peoples. This increased awakening and development of conditions toward crisis of the Imperialist camp does not diminish but increases the danger of new adventurist war policies of Imperialism. The successive shipwreck of the plans and miscalculations of reaction, and the ever more visible shift of the historical balance on the side of the advance of popular liberation and Socialism, does not yet mean a diminution of the dangers arising from the last representatives of the old order. On the contrary, as their desperation increases, so their frenzy grows more furious to find a violent solution. Sober calculations are thrown to the winds and the danger of the reckless gambler's throw is ever present. This was significantly shown by the military measures during the closing months of 1949, the successive visits of American Military leaders to Europe, the fierce and open bellicose declarations of the Imperialist representatives in the United Nations Assembly, and the speeding up of the armaments programme. Hence the most serious attention needs to be given to the warning sounded in the Resolution of the Meeting of the Communist Information Bureau in November: –

"It would be mistaken and harmful for the cause of peace to under-estimate the danger of the new war that is being prepared by the Imperialist Powers, headed by the United States of America and Britain. The experience of history teaches that the more hopeless the cause of Imperialist reaction, the more it rages, the greater grows the danger of military adventures."

The world of Capitalism and Imperialism enters a year of sharpening contradictions in 1950, which are likely to give rise to still more reckless and dangerous manoeuvres and provocative policies on the part of the desperate leaders of reaction. Hence the prospect of 1950 calls for increased vigilance, activity and united organisation of the strength of the working class and the masses of the people in all countries to defeat the plans of the warmongers and carry forward the victories of working class advance and Socialism which made such signal progress during the past year.

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