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Capitalist States
Overcome Economic and Political Crisis

p A period of temporary partial stabilisation of capitalism had set in by 1924 and continued to 1929. During this period the capitalist countries overcame the post-war economic crisis and increased their overall production by 25-26 per cent. This stabilisation was only temporary, however, and lacking in stability. By no means all the industries of the West European countries were able to overcome the crisis and reach their pre-war production level. On the one hand, the United States, where the industrial upswing had begun as early as 1922, had surpassed in volume, by 1929, the combined production of Britain, France, Germany, Italy and Japan. On the other, the economies of some countries, such as Britain, for example, were practically at a standstill throughout the period in question. In Britain, industrial 129 production was barely back to the 1913 level by 1929, but her foreign trade never reached its pre-war level. In France the growth of industrial production proceeded at a very uneven rate. Some branches of her economy, such as the metallurgical, engineering and chemical industries, achieved a substantial increase of output, while her light industry (especially textile and leather) continued in a state of stagnation or decline.

p A notable feature of the 1924-29 stabilisation period was the failure of practically all the capitalist states to overcome even then the crisis in agriculture. And as far as the economically relatively backward capitalist countries of Eastern Europe were concerned, stabilisation in these was achieved either considerably later than 1924 or not at all.

There was also some improvement in the domestic political situation in the capitalist states between the years 1924 and 1929. The violence and bloodshed resorted to earlier by the bourgeoisie in dealing with the working people’s demonstrations were abandoned in most countries in favour of so-called normal bourgeoisdemocratic methods of maintaining their domination.

US Imperialism and Capitalist Europe.
  The Dawes Plan

p The economic and political stabilisation of capitalism in Europe was to a great extent facilitated by the position of the United States. In December 1923, President Coolidge, in his message to Congress, declared the American Government prepared to aid Western Europe economically and financially. The reasons that prompted the war-enriched American bourgeoisie to offer this so-called aid had nothing to do with philanthropy. In the first place, there was the European debt, amounting (with interest) to $7,200 million, which the United States was eager to collect. In the second place, American capital was seeking profitable opportunities for heavy investments elsewhere than in the Western hemisphere and eyeing Germany and other European countries with this in mind. Currency stability was essential for any such investments, and that could be found only in a country with a more or less stable economy. In the third place—and this was of the greatest importance to them—the United States ruling circles, in offering their financial and economic aid to European countries, were guided by considerations of class solidarity with the bourgeoisie of these countries, a desire to bolster its position, weakened as it had become during the years of revolutionary crises, and to help it cope with the workers’ movement.

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p Such were the considerations that motivated the United States when it offered, late in 1923, a scheme for settling one of the crucial international issues of the time, namely, that of reparations. This was the problem that had served to seriously aggravate the relations between Germany and the countries of the Entente and had caused France to send her troops into the Ruhr.

p Working under C. G. Dawes, an American financial expert, an international commission evolved a new reparation plan, which was duly approved at an allied conference held in London in July and August 1924. The Dawes Plan, as it came to be known, sought to provide tangible security for German reparation payments by reconstructing her economy. An international loan of 800 million marks was to be made available to Germany to that end. By far the greater part of the reparations was to be paid out of indirect taxes on consumer necessaries and revenues from industry and railways. The Dawes Plan offered all sorts of opportunities for an influx of foreign capital (chiefly American) into Germany as well as for American supervision over its employment. The head of the reparations agency and many of its staff were Americans.

Primarily, the Dawes Plan was aimed at bolstering capitalism in Germany, reconstructing, with the aid of American and British loans, the country’s war industry, and eventually using Germany as a striking force in the struggle waged by capitalism against the Soviet Union and the revolutionary movement in Europe. These aims served to reconcile, in a measure, the contradictions which existed between the American, British and French imperialists and the ruling circles of the Germany they had defeated. This reconciliation could not last, however, since the German imperialists wanted all further reparation claims cancelled, even though they stood to profit from the Dawes Plan. The decisions made in London in 1924 meant a victory for the American ruling circles and their foreign policies, and dealt a damaging blow to the French imperialists, who were forced to withdraw their troops from the Ruhr and refrain henceforward from any unilateral methods of regulating the reparations problem. While the Dawes Plan was being worked out Britain had supported the United States. Yet it was precisely the United States that she recognised as her principal rival in the struggle for supremacy in the capitalist world. Between Britain and France, however, as between France and Germany, France and Italy, and Germany and the smaller countries of Eastern Europe allied with France—contradictions were becoming more and more exacerbated.

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The Locarno Treaties

Bourgeois propaganda did its best to camouflage the true substance and anti-Soviet aims of the Dawes Plan, which it sought to present as a concrete achievement of the policy of peace and international co-operation and a first step towards general pacification in Europe. Much the same sort of publicity was given in the West to the Locarno treaties concluded in October 1925. These treaties, concluded at a conference of the heads of government and foreign ministers of a number of European capitalist countries at Locarno, Switzerland, comprised, among other things, a treaty of guarantee of Germany’s western frontiers and several arbitration conventions. The conference, in which the leading role belonged to Britain and France, guaranteed the inviolability of the German-French and German-Belgian frontiers; the issue of guarantees in respect of the Polish-German and GermanCzechoslovak frontiers was left open, however. The Western powers thereby left imperialist Germany freedom of action in Eastern Europe, in the hope that any aggression on its part would develop in that direction and lead to an armed clash with the Soviet Union. A flood of pacifist verbiage was loosed by the authors of the Locarno treaties (A. Chamberlain, A. Briand, G. Stresemann) in an effort to draw attention away from the antiSoviet substance thereof. No amount of bourgeois propaganda, however, could conceal the fact that the collusion achieved by the Western powers and imperialist Germany at Locarno was profoundly injurious to the interests of the European nations and threatened further international complications and conflicts.

Rationalisation of Production;
Class Battles of the Proletariat

p Between 1924 and 1929 the bourgeoisie initiated a campaign for the rationalisation of production, with a view to consolidating its dominance. This involved the introduction of new equipment, plant modernisation, etc., but it was achieved, in the main, by such methods as all-out intensification of labour, speed-up of assembly-line and mass production operations, sweating system of work, etc.

A direct result of this rationalisation campaign undertaken in the capitalist countries was a substantial increase in the output and hence higher living standards for certain categories of Workers. On the other hand, that same rationalisation meant physical exhaustion, death from accidents, and loss of their jobs for hundreds of thousands of workers in the capitalist countries.

132 This was in line with the imperialist monopolies’ policy of nullifying the social and economic gains that the workers had won in the preceding years. And the workers rose in vigorous defence of their interests.

p The fact is that throughout this period the working class never for a moment ceased to resist exploitation and to fight for better working conditions and higher living standards. A miners’ strike, brought on mainly by the anti-labour policy pursued by the Conservative government in Britain between 1924 and 1926, developed, in May 1926, into a general strike that involved something like 6,000,000 workers. This was the greatest organised workers’ action Britain had ever known. It lasted from May 4 to May 12, and its repercussions were felt all over the world. The miners continued their strike for another seven months after the general strike was over. Though the workers were defeated, chiefly through betrayal by the British trade union leaders, the events of 1926 showed that the British proletariat was stronger and more militant than before and fully determined to stand up for its rights and resist the monopolies and the Conservative government that backed them.

p In Austria, early in 1927, the workers began a struggle against the anti-labour policies of the reactionary Seipel government 133 whose aims included abolition ol the eight-hour working day and social insurance for the unemployed, raising taxes, and other similar measures. Armed clashes between police and workers occurred in Vienna during July, the workers putting up a valiant fight despite a shortage of arms.

p The Soviet Union
and the Capitalist World:
1924-1929

p This period, which was marked by partial and erratic stabilisation in the capitalist world, witnessed steady development of the entire economy of the Soviet Union. It was this growth of the country’s economic, political and military might that made the world bourgeoisie abandon their policy of boycotting the Soviet Union. By 1924 the leading statesmen of many European countries had come to realise the complete futility of that policy. Businessmen in capitalist countries were interested in economic contacts with the Soviet Union, in developing, more specifically, mutually profitable trade. And this trend helped tip the scale in favour of granting recognition to the Soviet state. The principle of peaceful co-existence, as between capitalism and socialism, which the Soviet Government had been propounding, was slowly but surely making headway and becoming the decisive factor in shaping the relations between the Soviet Union and the capitalist world.

p The recognition period, so to speak, was started by Great Britain, which established diplomatic relations with the Soviet Government on February 1, 1924. She was followed a week later by the Italian Government, which announced its recognition of the USSR and the conclusion of a trade agreement between the two countries. Austria, Greece, Sweden, Norway, Mexico, China, France, Japan and several other countries followed suit and established diplomatic relations with the USSR. The United States of America, alone among the great powers, refused to regulate its relations with the USSR. Indeed, its ruling circles made no small effort to restrain other capitalist countries from normalising their relations with the USSR, though this effort proved largely a failure.

p That did not mean that the bellicose imperialist reactionaries had discarded for good their lunatic scheme of sapping the strength of the Soviet Union and dealing it a death-blow. Far from it. The Locarno Conference, for example, had aimed primarily at uniting the leading imperialist powers in an antiSoviet bloc, with Germany as the main striking force. In May 134 1927 following a police raid on the Arcos,  [134•1  the Conservative Baldwin-Chamberlain government of Britain broke off diplomatic and trade relations with the USSR. This provocation was but one link in the chain of anti-Soviet acts committed by world reactionaries in 1926-27. Others were the British-inspired raids of Chinese militarists on the premises of Soviet representations in Peking, Shanghai and Canton; the murder of P. L. Voikov, Soviet ambassador to Poland; the initiation of an anti-Soviet campaign in France in 1927, etc.

The British Government had hoped that the disruption of diplomatic relations with the USSR would spark similar action on the part of other capitalist countries and add momentum to the building up of an anti-Soviet front. But none of these hopes and plans of the British reactionaries materialised: they fell through in the face of the Soviet Union’s consistent peace policy and refusal to be provoked into conflicts, and in the face of such factors as the growing contradictions among the capitalist countries and the active struggle of the masses everywhere in support of the world’s first socialist state. In the end the rulers of Britain themselves were compelled to admit defeat, and in October 1929, diplomatic relations between Britain and the Soviet Union were re-established.