Will

there be

another crash?

eC

PNANcE Minister Walter Har-
nation. i announced that the
will ‘es production for 1955
ranitals the highest ever. The
Under a press is proclaiming
is gol old headlines that this
nace a to be “A Record Busi-
are } a Financial editors
with acking up) that forecast
Quick evidence of remarkably
and n Tecovery from the slump
ablisheq. high records being est-
ind in various branches of
Ustry and commerce.

Ee U.S. over-all economic

level Y is now at the highest

a ever, Canadian economy

aie is approaching a
ar new high peak.

ae are growing fears, re-
Warni in carefully veiled
time = to bankers and big
the } Imancial operators, that
But . is getting out of hand.
apolecs. public attitude of the
€smen for monopoly-capi-
Z of the government and of
‘un Capitalist press, is one of
-oUnded optimism.

ade dominant capitalist in-
are vy in Canada and the U.S.
that eee to convince people
statin Tesident Eisenhower was
lente a fact when he assured
that ets of the U.S, Congress
Unde sthe economic cycle is
tT reasonable control.”
Felt at Statement was not cor-
Cycle ; € capitalist economic
Systems not under control. But,
* sort eeue propaganda of that
ing ae the conditions prevail-
influe the moment, is-bound to
incly ae the thinking of people
Worki Ing members of the
Tesult © class movement. As a
of pe. & considerable number
Heer tend to believe that
1 aren’t going to be any
€conomic crises.”
Prisin long ago I had the sur-
that © XPerience of hearing
Worker non expressed by a
ed yj who had been unemploy-
Febnett from the middle of
Wary until the end of June.
More a I reminded him that
SUffere an 600,000 others had
Same $i unemployment at the
though Ime he answered, as
fact: « ay were an established
€conom; es, but that wasn’t an
Sion.» le crisis, it was a reces-
fate fact that a man with a
for fou Who was out of work
623.9 t months, considered that
emplo unplaced applicants for
loca) sent lined up at the
ooitices of the National
Con, eeenent Service across the
ands ng Several tens of thous-
for arenes unemployed who
a ee reasons are not list-
lion the NES, and half a mil-
Jobs acre who are still in
* Mot orking short time was
Nustrar 8 only a recession,
ta the powerful « in-
At Aa of capitalist propaganda.
the SS Same time, it illustrates
discus for a great deal more
Mover on in the working class

ment
T *

‘Si question as to whether
Shou} ae of the recent slump
or be described as a crisis
8 recession is important
it is related to the
or instability of capi-
Nomy in the U.S. and

because
stability
talist ¢ .

: for monopoly-
Mental phish includes govern-
ital;
TeEg ett press, use the word
Vince the They want to con-

~ Masses of the people

€aders and the entire

By TIM BUCK

that the slump was in fact
simply a voluntary halt “for
consolidation, change-over to
new products and new methods,
evening-out of stocks, and so
on
If that were true it would
indicate a substantial degree
of stability—-which is exactly
what the monopolists want the
masses of people to believe.
Marxists reject these capital-
ist claims and describe the
cause of the slump as a crisis.

”

Against the capitalist pretense.
that it was simply a voluntary.

halt we point out that it was
caused by the operation of
economic laws that the capitalist
class and its governments do
not control and cannot control.

When the crisis struck, the
capitalists were on the verge of
panic. They didn’t know how
far it would extend or how
deep it would go until it had
passed its lowest point. Only
after that, and their sighs of
relief, did the financial editors
of the capitalist press develop
their present fancy descriptions
One tus

The Marxist estimate, there-
fore, is opposite to the claims
represented by use of the word
recession.

Marxists describe the cause
of the slump as a crisis. We
base that primarily upon the
fact that it was brought about
by the operation of the inherent
laws which govern the operation
of capitalist economy; not upon
whether or not there was panic
on the stock market.

But, if its extent or the des-
truction that it wrought were
to be the sole yardstick, the
fact that it was a crisis still
stands out. ‘

For example, the Korea war
boom ended in 1953. With the
ending of the insatiable de-
mands set up by war, production
outstripped purchasing power.

By the beginning of 1954 the
unsold stocks of finished pro-
ducts in the U.S. and ‘Canada
reached the unprecedented level
of $85,000 million. Confronted
by that mountain of unsold
products, corporation manage-
ments cancelled plans for ex-
pansion and cut production in
existing plants.

By April 1954, the general
index of industrial production
in the U.S. had declined by 10
percent. Four million workers
had been fully unemployed,
several millions were working
short time. The number of
bankruptcies had doubled to
more than 11,000 during that
year. Measured by its immedi-
ate effects it was unquestion-
ably a crisis.

Because of the time lag that
intervenes between the economic
fluctuations in Canada and the
UrSetne marked decline of
industrial production” set in
here in the fall of 1954. Its
lowest point hadn’t been reached
until the spring of 1955. But
the fact that in March the NES
reported 623,000 unplaced_ ap-
plicants for work is by itself
conclusive evidence of crisis—
an acute crisis for many thous-
ands of families who were
forced to sacrifice the homes
into which they had put their
life savings with high hopes
only a short time before. .

*

The pretense that monopoly-
capital and its governments

have the economic cycle “under

reasonable control” is entirely .

false.
The capitalist economic cycle

‘ results from the operation of

laws which are _ inseparable
from the process by which ca-
pitalist profit is extracted from
the exploitation of the working
class. The contradictions which
cause the cyclical crises are
created by the process of ex-
tracting capitalist profits.

The capitalist system
operate only by ‘continually
evoking those contradictions. To
eliminate them and the capitalist
economic cycle requires that
the economic activity of the
country be organized and car-
ried on in conformity with the
law of the maximum satisfac-
tion of the growing material
and cultural needs: of the
whole of society instead of in
eonformity with the law of
maximum profits — as is the
case in Canada now.

In other words, it requires
that economic activity be main-
tained at the level which cor-
responds with the full produc-
tive capacity of the nation and
distribution of products be
organized on the basis of need.
Those requirements show that
capitalist governments cannot
prevent the operation of the
economic laws of capitalism. As
we pointed out in the pamphlet
Beat the Threat of Depression:

“Monopoly-capital will not

do those things or agree to

them. On the contrary, the
striving of the monopolists
for maximum profits re-
gardless of consequences
deepens the inherent contra-
dictions of the profit system
and, therefore, intensifies
both the causes of the peri-
odie crises and their severity.”

That is why the, capitalist
economic cycle: expansion,
boom, crisis, depression, con-

-tinues to dominate Canadian

economy. Each crisis becomes
the point of departure, as it
were, in the development of
another boom and every boom
the threshold of another crisis.

*

Not every cyclical crisis be-
comes a general crisis. For ex-
ample, the crisis of 1954 was
one of relative over-production
only. It didn’t spread to the
credit system. That explains
why once the low point of the
crisis was passed the capitalist
credit institutions were able
to speed up recovery so rapidly
that the period of depression
was barely noticeable to the
great majority of people.

The artifically stimulated re-
covery brought about heavy
capital expenditures immedi-
ately after the crisis had passed
its deepest point at the moment
when, ordinarily, its effects
would have been most evident.
That is the reason why a lot
of people tend to accept the
idea that there was no crisis.

The effectiveness of the al-
most reckless extension of
credit during the early months
of this year, combined with the
systematic recourse to inflation
by the governments of the US.
and Canada, illustrate a fact
that is sometimes used, wrongly,
to support. the pretense that the
economic cycle: is now under

control. I refer to the distortion

of the cycle.
With the merging of the credit
of the state with that of the

can ©

New York Stock Exchange (above) also experienced a heart’
attack, expressing the precarious health of the U.S. economy,
when it was reported that President Eisenhower had been stricken.

great banks, and the direct
amalgamation of the control of
the great monopoly-capitalist

“institutions, the state resources

of Canada and the U.S. (and
other imperialist countries) are
used increasingly by the capi-
talist: monopolists in efforts to
bolster up their crisis-stricken
system of exploitation.

Using all the resources of the

state they do distort the eco-

nomic cycle.

The use this year of a com-
bination of credit expansion
and inflation, with advance
warning to the capitalists that
inflation will be resorted to,
to whatever extent is neces-
sary, to force up the general

price level, illustrates the meth-.

od by which the interests of
the masses of the people, of the
nation as a whole, are sacrificed
to maintain the rate of profit
for big business.

They are maintaining their
profits by inflation “which
speeds up the concentration of
ownership in their hands and
which leads to the ruin of mil-
lions of people.

*

‘The report of the LPP na-
tional committee in December
1954 must be criticized, and
sharply, for its failure to deal
properly with some of the ques-
tions commented on above.
The data upon which it was

based was correct and its esti-~

mation was proven correct by
events. But, because of the
widespread tendency to assume
that a cyclical economie crisis
is bound to be a repetition of
the Wall Street crash of Oc-
tober 1929, the report should

’ have dealt much more adequate-

ly than it did with the fact that
not every economic crisis is a
general one. :
Crises of relative over-pro-
duction only, such as that of

1954, may be passed. through.
‘ without any widespread fear of

disaster. It would be of doubt-
ful validity to classify
crises aS minor, because they
certainly bring disaster upon
their victims. It must be ack-
nowledged that to the average
person the.significance of an
economic crisis is determined
very largely by the extent to

which it hurts, or threatens to:
hurt him. But the most cor-.
rect distinction is that between:

limited crises, crises of relative
over - production, of . foreign
trade,.and a general crisis.

‘ The report should have warn-

such

ed more sharply against the’

tendency to equate. cyclical

economic crisis. with, universal,

catastrophe including collapse
of the stock markets. .. Certain-
ly. it should have emphasized
more strongly that the. LPP.
does not base its policies upon
any such anticipation. ee

Well then,

the reader may *

ask, what is the point‘ of ‘study- »

ing the issue of “crisis or re- -

cession”?

The point is that the cyclical
crises since the war illustrate
a terrific increase in the insta-

bility of capitalist economy in ~
North America. Governmental,

action has not succeeded in pre-
venting the operation of the
economic. cycle. ,

The cyclical crises since the

war. have, singly, been limited.
But, none of the contradictions
that caused them have beer
solved even partially. Partly

because of the governmental .

efforts to distort the cycle, con- .

tradictions are. accuntulating
and extending to higher levels.

There will be more cyclical
crises and, at a certain con-
junction of - factors, general
crisis with its catastrophic ef-
fects, until the working class

takes over the leadership of the:

nation. :

PACIFIC TRIBUNE — OCTOBER 7, 1955 — PAGE $