Leon Trotsky: How economic shifts affect mass moods

July 20, 1938

[The Transitional Program for Socialist Revolution, New York ³1977, p. 240-244]

question: What influence can "prosperity," an economic rise of American capitalism in the next period, have upon our activity as based on the transitional program?

Trotsky: It is very difficult to answer because it is an equation with many unknown elements, magnitudes. The first question is if a conjunctural improvement is probable in the near future. It is very difficult to answer, especially for a person who does not follow the charts from day to day. As I see from the New York Times, the specialists are very uncertain about the question. In last Sunday's issue of the New York Times, the business index showed a very confused tendency. During the last week there was a loss, two weeks before a rise, and so on.

If you consider the general picture, we see that a new crisis has begun, showing an almost vertical line of decline up until January of this year; then the line becomes hesitant – a zigzag line, but with general declining tendency. But the decline during this year is undoubtedly slower than the decline during the nine months of the preceding year.

If we consider the preceding period, beginning with the slump of 1929, we see that the crisis lasted almost 3½ years before the upturn began, with some smaller ups and downs, lasting 4½ years – it was Roosevelt "prosperity." In this way the last cycle was of 8 years, 3½ years of crisis and 4½ years of relative "prosperity," 8 years being considered as a normal time for a capitalist cycle.

Now the new crisis began in August 1937, and in nine months has reached the point which was reached in the preceding crisis in 2½ years. It is very difficult to make a prognosis now concerning the time, the point of a new rise. If we consider the new slump from the point of its deepness, I repeat, the work of 2½ years is completed by the crisis, yet it has not reached the lowest point of the preceding crisis. If we consider the new crisis from the point of view of time – nine years, or seven, eight years, it would be too early for a new upturn. That is why I repeat that prognosis is difficult. Is it necessary that the new crisis should reach the same point – the lowest point – as the preceding crisis? It is probable, but it is not absolutely sure. What is characteristic of the new cycle is that "prosperity" did not reach the high point of preceding prosperity, but from that we cannot make in an abstract manner a conclusion about the nadir. What characterizes the Roosevelt prosperity is the fact that it was a movement mainly of the light industries, not of the building trades, the heavy industries. This made this movement develop in a very limited fashion. That is precisely the reason why the breakdown came so catastrophically, because the new cycle did not have a solid basis of heavy industries, especially of the building-trades industries, which are characterized by new investments with a long-term perspective, and so on.

Now we can theoretically suppose that the new upturn will include more than building industries – the heavy industries in general – in view of the fact that despite consumption during the last period the machinery was not renewed sufficiently, and now the demand for it will be greater than during the last conjuncture. It is possible it can give a greater, a more solid upturn than the preceding one. It is absolutely not contradictory to our general analysis of a sick, declining capitalism causing greater and greater misery. This theoretical possibility is to a certain degree supported by the military investment in public relief works. It signifies from a large historical point of view that the nation becomes poorer in order to permit better conjunctures today and tomorrow. We can compare such a conjuncture with a tremendous expense to the general organism. It can be considered as possibly a new prewar conjuncture, but when will it begin? Will the downward movement continue? It is possible – probable. In that sense we will have in the next period not 13 or 14 million, but 15 million unemployed. In this sense all we said about the transitional program will be reinforced in every respect, but we are adopting a hypothesis of a new upturn in the next few months, in half a year or a year. Such a movement may be inevitable.

To the first question, if such an upturn can be more favorable to the general perspective before our party, I believe we can answer with a categorical yes, that it would be more favorable for us. There cannot be any reason to believe that American capitalism can of itself in the next period become a sound, healthy capitalism, that it can absorb the 13 million unemployed. But the question is – if we formulate it in a very simple and arithmetical form – if in the next year or two years the industries absorb 4 million workers from the 13 million unemployed, that will leave 9 million. Would that be favorable from the point of view of the revolutionary movement? I believe we can answer with a categorical yes.

We have a situation in a country – a very revolutionary situation in a very conservative country – with a subjective backwardness on the part of the mentality of the working class. In such a situation, economic pickups – sharp economic pickups, ups and downs – from a historical point of view have a secondary character, but in the immediate sense have a profound effect on the lives of millions of workers. Today they have a very great importance. Such shake-ups are of very great revolutionary importance. They shake off their conservativeness; they force them to seek an account of what is happening, what is the perspective. And every such shake-up pushes some stratum of the workers onto the revolutionary road.

More concretely, now the American workers are at an impasse – in a blind alley. The big movement, the CIO, has no immediate perspective, because it is not guided by a revolutionary party and the difficulties of the CIO arc very great. From the other side, the revolutionary elements are too weak to be able to give to the movement a sharp turn to the political road. Imagine that during the next period 4 million workers enter the industries. It will not soften the social antagonisms – on the contrary. It will sharpen them. If the industries were capable of absorbing the 13 million or 11 million unemployed, then it would signify for a long period a softening of the class struggle; but it can only absorb a part, and the majority will remain unemployed. Every unemployed person sees that the employed have work. He will look for work and, not finding any, will enter into the unemployed movement. I believe in this period our slogan of the sliding scale can receive very great popularity; that is, that we ask for work for everybody under decent conditions – in a popular form: "We must find work for all, under decent conditions with decent salaries." The first period of a rise – economic rise – would be very favorable, especially for this slogan. I believe also that the other very important slogan of defense, workers' militia, etc., would also find favorable soil, a base, because through such a limited and uncertain rise – the capitalists become very anxious to have immediate profits, and they look with great hostility on the unions which disturb the possibility of a new rise in profits. In such conditions I believe that Hague would be imitated on a large scale.

The question of the labor party before the trade unions: Of course the CIO through a new prosperity would have a new possibility of development. In that sense we can suppose that the improvement of the conjuncture would postpone the question of the labor party. Not that it will lose its whole propagandistic importance, but it will lose its acuteness. We can then prepare the progressive elements to accept this idea and be ready when the new crisis approaches, which will not be long in coming.

I believe that this question of Hagueism has a tremendous importance, and that a new prosperity, a new upturn, would give us greater possibilities. A new upturn will signify that the definite crisis, the definite conflicts, are postponed for some years, in spite of the sharp conflicts during the rise itself. And we have the greatest interest in winning more time, because we are weak and the workers are not prepared in the United States. But even a new upturn will give us a very short time – the disproportion between the mentality and the methods of American workers in the social crisis, this disproportion is terrific. However, I have the impression that we must give some concrete examples of success and not limit ourselves only to giving good theoretical advice. If you take the New Jersey situation, it is a tremendous blow not only to the Social Democracy but to the working class. Hague is just beginning. We also are just beginning, but Hague is a thousand times more powerful. …