The year 2023 was dominated by Israel’s genocidal campaign in Gaza beginning in October. It was supposedly in response to the Operation Al-Aqsa Flood attack on Israel by Hamas [Islamic Resistance Organization] and other Palestinian resistance organizations on October 7, 2023. Many so-called liberals, progressives, socialists, and even some Marxists have attacked the alleged excesses Palestinian fighters committed, such as beheading Israeli babies, raping Israeli women, kidnapping children, etc. Many of these claims of excesses have since been discredited. These “progressives” claim they sympathize with the Palestine people in their struggle against Israeli apartheid. But they then lecture that the Palestinians must conduct their struggle without violence or harm to “innocent Israeli civilians.”
It’s now clear that many of the civilian deaths were the result of the Israeli army itself firing into areas that were allegedly occupied by Palestinian fighters and their Israeli captives. Our “liberal” friends insist there is still a residue of Palestinian excess. But how could it be otherwise, considering how Zionists have treated the Palestinian people for the last 75+ years? Before October 7, there was the day before. Yet the so-called friends of the Palestinians insist we in the West must equally condemn Palestinian excesses, real or alleged, and Israel’s crimes. They want to support only a “pure” national liberation struggle without any “excesses.” In other words, they do not support any national liberation struggles at all!
They argue that today’s Palestinian liberation movement is dominated not by secular democrats like the Palestinian Liberation Organization of the past that fought for a secular democratic state for all of Palestine’s residents. The PLO’s program included the separation of church and state with equal rights for Christians, Muslims, and Jews to practice their respective religions. This is what these “friends” support as an alternative to Zionist apartheid with Judaism as the state religion.
These “friends” complain that Hamas and other resistance organizations want to replace Zionist apartheid with an Islamic state where non-Muslim religions, monotheistic ones such as Christianity and Judaism, would be regulated and restricted while polytheist religions, and atheism, would be banned. In fighting what they call the Hamas “terrorists,” the Zionists and their imperialist backers use methods including the genocidal murder of more than 20,000 Palestinian men, women, children, and suckling babies. Over the last several weeks, they have aimed to drive out the Palestinian people from Gaza — and ultimately from all of Palestine. These so-called friends of Palestine now say Israel has gone too far in the “worthy struggle against Hamas.”
In answer to these “friends” of Palestine, I reproduce a quote by Lenin on the subject of the 1916 Irish Easter Rebellion. Like today, where the Muslim religion exercises great influence over the people of Palestine, Roman Catholic Christianity had influence in 1916 Ireland. From the viewpoint of the liberal and socialist friends of the Irish people, in modern times, the Irish people should have put these religious influences behind them. They argued that while British imperialism in Ireland should be opposed, we should equally condemn the backward Catholic nationalism of the Irish people in the name of democracy, socialism, and human progress in general. Under the “green” banner of Catholic-ridden Irish nationalism, these 1916 socialists agreed the Irish national movement was going nowhere. It had to be replaced by a movement led by workers of all nationalities who would fight for nothing but the replacement of capitalism in Ireland and everywhere else by socialism. Short of a pure socialist revolution, the Irish struggle against Britain, no matter how heroic, was doomed.
See how Lenin answered these criticisms of the 1916 Irish Rebellion:
“To imagine that social revolution is conceivable without revolts by small nations in the colonies and in Europe, without revolutionary outbursts by a section of the petty bourgeoisie with all its prejudices, without a movement of the politically non-conscious proletarian and semi-proletarian masses against oppression by the landowners, the church, and the monarchy, against national oppression, etc. — to imagine all this is to repudiate social revolution. So one army lines up in one place and says, ‘We are for socialism’, and another, somewhere else and says, ‘We are for imperialism’, and that will be a social revolution! Only those who hold such a ridiculously pedantic view could vilify the Irish rebellion by calling it a ‘putsch.’ Whoever expects a ‘pure’ social revolution will never live to see it. Such a person pays lip-service to revolution without understanding what revolution is.”
Lenin went on to explain what a real-world revolution is and must be. He gave the example of the revolution he knew best at the time, the 1905 Russian revolution. Lenin explained:
“The Russian Revolution of 1905 was a bourgeois-democratic revolution. It consisted of a series of battles in which all the discontented classes, groups and elements of the population participated. Among these there were masses imbued with the crudest prejudices, with the vaguest most fantastic aims of struggle; there were small groups which accepted Japanese money, there were speculators and adventurers, etc. But objectively, the mass movement was breaking the hack of tsarism and paving the way for democracy; for this reason the class-conscious workers led it.”
“The socialist revolution in Europe cannot be anything other than an outburst of mass struggle on the part of all and sundry oppressed and discontented elements. Inevitably, sections of the petty bourgeoisie and of the backward workers will participate in it — without such participation, mass struggle is impossible, without it no revolution is possible — and just as inevitably will they bring into the movement their prejudices, their reactionary fantasies, their weaknesses, and errors.”
“But objectively they will attack capital, and the class-conscious vanguard of the revolution, the advanced proletariat, expressing this objective truth of a variegated and discordant, motley and outwardly fragmented, mass struggle, will be able to unite and direct it, capture power, seize the banks, expropriate the trusts which all hate (though for different reasons!), and introduce other dictatorial measures which in their totality will amount to the overthrow of the bourgeoisie and the victory of socialism, which, however, will by no means immediately ‘purge’ itself of petty-bourgeois slag.”(This quote can also be found in Lenin’s writings for 1916)
Though these words were written more than a hundred years ago about Ireland, we can say the same thing about Palestine and particularly Gaza today. As I write these lines, the Palestinian people are putting up heroic resistance against what appears to be overwhelming odds. They have no regular army, no navy, and no air force. So far, as of December 30, 2023, the Palestinians have not been able to shoot down a single Israeli bomber. With complete control of the air, the apartheid air force has been dropping 2,000-ton bombs on Gaza.
This raises the question, can the Gazans win? From a purely military standpoint, it’s hard to see how they can possibly defeat the Israeli army and air force. Sure, they’re inflicting considerable casualties on the Israeli ground forces, and they can land the occasional rocket in Israeli urban areas. But, in the end, isn’t the current resistance heroic but hopeless?
Let’s flash back almost sixty years to Vietnam’s struggle against U.S. imperialism. That struggle looked hopeless as well. Vietnam’s main allies, the Soviet Union and the People’s Republic of China were engaged in a bitter struggle of their own as both maneuvered to establish friendly relations with the U.S. This played directly into the hands of U.S. imperialism, and the U.S. government did everything it could to take advantage of this situation. As I’ll explore later, the resistance of the Vietnamese people, the resistance to the war in the United States and the other imperialist countries, and the deep contradictions of the capitalist system (including the relations between prices, values, commodities, and money) aided and ultimately ensured Vietnam’s victory.
The world is a different place today. But the basic contradictions of capitalism remain the same in 2024 as they did in the 1960s. The Biden administration hoped to stabilize its control of the Middle East by having the Saudi Arabian oil monarchy recognize Israel. This way the Biden administration could concentrate on the Russo-Ukraine war that could spill over into a war between U.S.-NATO and Russia. Ukraine’s growing war weariness represents a potential danger to U.S. imperialism in that part of the world. Add to that what imperialists consider their biggest contemporary problem: economic competition represented by China’s rise. They’re determined to prevent Chinese industry from taking control of the world semiconductor markets as they’ve done with other markets. This situation still threatens a war with China in the western Pacific.
Financially and militarily, the U.S. empire is dangerously overextended as it finds itself slipping into a so far low-intensity war in West Asia with resistance forces in Syria, Iraq, and Yemen coming to the aid of the Palestinians. New technology, such as drones and cheap rockets that didn’t exist in the Vietnam era, are opening new possibilities for resistance groups.
All these factors work in favor of Palestinian forces in their struggle to the death with apartheid Israel and its imperialist masters in the United States. An example is the attacks on shipping in the Red Sea by the Yemenis in solidarity with Palestinian resistance. This is forcing ship owners to reroute around the Cape of Good Hope at the southern end of Africa. This is a serious problem for the capitalists as it raises shipping costs and increases the turnover period of capital, lowering the rate of profit. For capitalists, anything that lowers the profit rate is a serious problem.
As a result, Genocide Joe’s administration is under direct pressure to “do something about this situation.” Will the Biden administration get involved in a ground war in Yemen to try to crush them? The danger is all too real. There are dangers of an escalation of the already raging war in Europe and an escalation of the so far low-intensity war in West Asia. And the confrontation between China and the U.S. over the Chinese island of Taiwan could turn into a war in the West Pacific.
One similarity with the Vietnam War is that, like 1968, 2024 is an election year. But unlike 1968, this year, the capitalist ruling class has a problem — the putsch-prone Donald Trump and his America First Party is challenging the Party of Order. Even before October 7, the 81-year-old Biden, who even in his prime was a less capable politician than Lyndon B. Johnson, had become very unpopular. Polls showed that any of the major Republican candidates, including Donald Trump, would beat him in the 2024 election. Trump was ahead of any other Republican candidate, making the 77-year-old the odds-on favorite. But polls showed the majority of Americans want neither Biden nor Trump.
An obvious move by the Party of Order would be to replace Biden with a younger, more popular Democrat. But he’s determined to run again despite this. Trump’s racism is even more extreme now, and it turns off a large section of the electorate. He recently warned about the danger of the “poisoning of the American blood,” a phrase not used since the days of the Third Reich. Last time around, Trump confined himself to quoting Mussolini, not Hitler.
In response, Biden is preparing to run against — Adolf Hitler. This is somewhat akin to the Democrats’ old tactic, used as long as the Depression generation was still alive, of running against Mr. Depression himself, Herbert Hoover. Even Biden should be able to beat Hitler-Trump — or can he? Before October 7, polls indicated that Biden probably could not win despite the “great economy.” With so-called progressives trailing them, Democrats decided to rally around the incumbent. They said that reelecting Biden is the only way to prevent U.S. democracy from morphing into a 21st-century version of the Third Reich under a second Trump administration.
Since October 7, Biden has earned a new name — Genocide Joe. Arab and Muslim voters are determined not to vote for a president who made possible the mass murder of their fellow Arabs and/or co-religionists, potentially costing Biden votes — vital for his defeat of Trump in 2020 and that he can ill afford to lose in 2024. Muslim and Arab-American voters know that the genocide in Gaza could not proceed without the massive military and financial support Zionist Israel is getting from the U.S.
We mustn’t forget that apartheid Israel is a creation not of the struggle of the Jewish people against anti-Semitism but of imperialism — the chief author of anti-Semitism, including the Holocaust itself. Since World War II, U.S. imperialism has been both the chief creator of Israel and its chief backer in all its crimes. For us in the U.S., the main enemy is right here at home! That enemy is “our” own capitalist ruling class of which Genocide Joe has been a loyal servant throughout his more than half-century-long political career.
The younger generation, including people of color, as well as an increasing number of young Jews, sympathize with the Palestinian struggle. Large and continuing demonstrations reminiscent of the heyday of the anti-Vietnam War movement have occurred in the streets in the U.S., Europe, and around the world. As recent United Nations votes show, on a world scale, Israel has little support outside the imperialist ruling class. Even the U.S.’s imperialist satellites, including neighboring Canada, have voted for a ceasefire. Their internal political situations give these governments no other choice.
As a result of the increasingly hated genocide, Biden seems increasingly unlikely to defeat Trump if, indeed, Trump becomes the Republican nominee.
In an attempt to stop Trump, the Party of Order has turned to the courts and an obscure clause in the 14th Amendment to the Constitution. He also faces four criminal cases — two in state courts, New York and Georgia, and two in federal court, as well as a civil case in New York that could cost him and his family control of the family real estate business, forming the centerpiece of their financial empire. Yet, this has not caused Trump to withdraw from the race for office.
The 14th Amendment, adopted shortly after the conclusion of the slaveholders’ rebellion — the U.S. Civil War — bars from office people who have taken oaths to uphold the U.S. Constitution who then participate in an insurrection. The amendment’s authors had in mind the 1861-65 slaveholders rebellion-insurrection. The loosely worded clause prevents any person who participated in an insurrection against the United States from holding any office unless Congress specifically votes to allow them to do so. Lawyers can argue forever about how this antique clause in the Constitution should be interpreted.
Now, Trump’s opponents of both parties have sued in their states to keep him off the ballot. Two states, Colorado and Maine, decided he should be kept off the Republican primary ballot. Two others, California and Michigan, decided that he should remain. It seems headed for the reactionary Supreme Court — that recently took away the right of abortion as a constitutional right. Trump appointed three sitting Supreme Court Justices. Still, the High Court has shown itself to be more loyal to the Party of Order and the class it represents rather than Trump personally. Denying a major presidential candidate of one of the two ruling parties the right to run in the elections would be without legal precedent. The best guess is that the Supreme Court will order Trump to be put back on the ballot in states attempting to exclude him. The question is still up in the air. Depending on events, we will examine this question in a future post.
Last but not least, there are some economic parallels with the Vietnam War era of the 1960s. And since this blog deals with economics, these are of special interest.
Then, as today, the Federal Reserve System attempted to engineer a soft landing after years of overproduction and over-trading. Unemployment was low, but inflation was rising, and real wages were stagnant after rising for decades. There were premature claims that the Federal Reserve and the government had succeeded in cooling the economy while avoiding a major economic crisis. But ultimately, as regular readers of this blog know, they failed.
Today’s Wall Street economists claim the Federal Reserve has pulled off the soft landing, paving the way for continuing prosperity for the rest of the 2020s. The government bond market rallied late in the year after crashing, and the stock market closed the year at near-record levels. This would be more reassuring if the dollar price of gold had not closed out the year well above $2,000 an ounce. The risk of a run from the dollar and other paper currencies into gold remains real. If, despite the economists’ current optimism, a deep recession does occur this year (hardly the first time bullish economists have been proven wrong), the dangers of a run on the dollar would ebb — for now. But such a development would make the defeat of Trump, if legal maneuvers do not drive him out, all the more difficult.
If Democrats cannot find a way to replace Genocide Joe with a popular Democrat, and Republicans can’t find a way to nominate a candidate other than Trump, the Federal Reserve will be under extra pressure to cut interest rates prematurely later this year to stave off a full-scale recession before November. Here, the need to stabilize capitalism economically, which requires a recession in 2024 to decisively liquidate the overproduction and overtrading of the COVID aftermath boom, and the need to stabilize capitalism politically by keeping Trump out of the White House come January 2025 could come into sharp conflict. This could provide a crucial opening for the struggle of the Palestinian people. 2024 promises to be a crucial year, not only for the future of the Palestinian people but for the peoples of the world.
The Great Depression and the rise of the U.S. world empire
I want to examine the rise of the U.S. world empire from the Depression of the 1930s to 1968 — the turning point of the Vietnam War. Next month, I will examine how the U.S. empire survived the crisis brought on by its defeat in the Vietnam War.
During the 1930s, large amounts of currency dropped out of circulation and flowed into the commercial banking system. At the same time, the drop in commodity market prices increased both the absolute and relative profitability of gold mining. Obeying the economic laws regulating capitalism, capital flowed into the gold mining and refining industries — one the few profitable industries at that time. In the depths of the Depression during the super-crisis proper, 1931-33, repeated runs on the commercial banks caused some bank reserves to flow into private hoards — literally cash in mattresses.
But after 1933, as the crisis proper ended, cash withdrawn during the panics of 1931-33 returned to banks. In Europe, things were different. European capitalists were fearful that money-hungry Nazi Germany would seize their hoarded cash and gold. European capitalists sold gold to the U.S. Treasury at a rate of $35.00 per ounce — the new official dollar price of gold set by Roosevelt in 1934 — and deposited the checks in U.S. commercial banks. As a result, commercial banks’ dollar reserves increased both as the low prices and reduced commodity circulation cut the quantity of currency necessary to circulate commodities and the large amounts of gold flowing from Europe to the United States. In addition, rising amounts of gold were produced and sold to the Treasury. The checks on the Treasury were deposited in U.S. banks, further swelling the reserves of the commercial banking system.
By the middle and late 1930s, the banking system was swimming in idle money capital. The financial forces that had restrained the U.S. from building the world empire that Woodrow Wilson wante in the 1920s were reversed. The problem that Washington empire builders faced was how to sell the empire-building project to the people of the U.S. World War I had left a sour aftertaste as it became clear to many that it was a commercial war, not one about “making the world safe for democracy.” (1) However Hitler made Roosevelt’s task selling a new world empire building war a lot easier. Instead of claiming they were fighting against autocracy — as is again said today — the empire builders could say they were fighting fascism.
After Hitler’s rise to power, there were two policy options open to the U.S. ruling class. One was to form an alliance, tactical or official, with Nazi Germany against the Soviet Union. This appealed to U.S. capitalists. For example, Henry Ford, the era’s richest and most famous industrial capitalist, produced cheap automobiles for the low end of the market. In this market, he faced no economic competition from Nazi Germany; his only competition was from U.S. companies. The German automobile industry produced luxury cars. The Volkswagen (German for people’s car) was still a project of the Nazi Labor Front for a post-war future. (2)
Though Ford never faced a Volkswagen problem, he did face a United Auto Workers problem. The best fighters and organizers of the UAW were members of the Communist Party, which was still a section of the Third International at the time, the Communist International, popularly called the Comintern. (3)<(3)/span>
As both Hitler and Ford saw it, if the “Jewish-Bolshevik” was crushed, the U.S. Communist Party and the Communist International could be weakened or perhaps cease to exist altogether. Ford hoped this would solve his UAW problem. A possible Volkswagen problem was for another day. Ford believed it was better to work out a possible future division of the world auto market with the “Aryan gentlemen” in Nazi Germany, who he greatly admired as the Hitler government knew how to deal with communists and trade unions — than deal with the Jewish communists (as Ford saw it) dominating the UAW.
Henry Ford was a (mostly) industrial capitalist. (4) Wall Street’s finance capitalists wanted nothing less than global economic domination for U.S. imperialism. Global economic domination requires political and military domination. Such a project would cost a great deal of money. But bankers, after all, are in the business, among other things, of lending money to governments — at a profit, of course. To a far greater extent than in the 1920s, by the end of the 1930s, U.S. bankers had plenty of money to lend — so much so that it was burning holes in their collective pockets. From their point of view, an aggressive “internationalist” policy leading to war was just what the doctor ordered.
Attempts to build a global empire, however, ran right into the plans of Nazi Germany for its own European — and eventfully — global empire. Hitler first had to build a European empire run by and for German imperialism. To do so, he had to subjugate the entire European continent, including the Soviet Union. U.S. capitalists did not have this problem. They’d achieved domination of their continent by late the 19th century before the imperialist phase of capitalism had begun. Hitler’s long-term plan was to make Germany a second America, then battle it out with the United States for ultimate world domination.
While Wall Street bankers (finance capitalists) were no more enthusiastic about the Soviet Union than Henry Ford, they realized that if Germany achieved domination of all of Europe, it would create a barrier to the U.S. world empire they hoped to build. For U.S. world empire builders to succeed, Nazi Germany had to be crushed. The only practical way to win was to use the Soviet Union as a battering ram against Germany. They hoped to weaken the Soviet Union in the process so that it would be removed as a barrier to U.S. world domination. But aligning with the Soviet Union against Nazi Germany cut across class lines and was not without its dangers to the U.S. ruling class.
As Wilson’s political heir, Roosevelt was committed to a course toward world empire. But he had to overcome the isolationist sentiment in the U.S., as well as the pressure of the wing of the ruling class represented by Henry Ford. To make a long story short, Roosevelt used the USSR to crush Nazi Germany. The junior Japanese imperials trying to build their own regional empire in East Asia were also crushed with the help of the Chinese, the Vietnamese, and other Asian people. In reality, World War II was largely fought by the Soviet Union and the international communist movement in Europe and Asia. The big winner was U.S. imperialism, which emerged with its industry fully intact from the war.
Money and the age of global class war
After World War II, Britain was almost bankrupt and at the mercy of U.S. imperialism, as was France and other smaller imperialist powers of Europe. Defeated Germany and Japan were even more at the mercy of the former British white supremacist colony that had matured into the U.S. world empire that absorbed the British empire. Not only was U.S. real capital intact, but not a single bomb had fallen on the U.S. proper. Pearl Harbor was in Hawaii, then a colony, not a state of the U.S. Unlike after World War I, the capitalist world was awash in idle money capital, with most of it sitting in U.S. commercial banks. This made all the difference between the post-World I era, when Wilson’s dream of a U.S. world empire had been frustrated, and the post-World War II era.
The cause of the global money glut was the Depression itself. For the fifteen years preceding the end of World War II the process of the expanded reproduction of capital was suspended first by the Depression and then by the World War II war economy. For fifteen years, very little new industrial capital accumulated, but a large amount of new money capital in the form of newly mined and refined gold had. Since money capital, like nature, abhors a vacuum, U.S. money capital (finance capital) was ready to pour over the world in search of higher interest rates and super-profits.
The rate of the accumulation of money capital was slowed by the war as commodity prices in gold terms rose rapidly. As the inflationary war economy drove up market prices, gold production slowed. However, as far as the money material, gold, was concerned, a slower production of money material doesn’t imply a contraction, as this doesn’t occur under capitalism. It was merely a slower rate of accumulation of new money material.
The war economy also meant a negative rate of accumulation of real capital overall as factory machines were depreciated without regular replacement since factories that would usually have produced factory machinery were busy producing the means of destruction instead. In Europe and Japan, military operations, especially the bombing campaigns against Germany and Japan, destroyed a considerable portion of industrial capital. This did not happen in the United States itself. Nor did military operations destroy money material, especially that held for safekeeping in Fort Knox and similar U.S. depositories.
Higher market prices brought on by the war economy did reduce the purchasing power of money material — and currencies that had largely held their value (like the dollar) against money material. However, so great was the glut of money material that was the result of the fifteen-year suspension of normal capitalist reproduction that the U.S. money market hardly tightened despite massive wartime government borrowing. It would take several decades before this glut, whose size was further reinforced by a slowly rising level of gold production after World War II, would again create the conditions for a major crisis.
The glut of money capital meant the Treasury could borrow large quantities of money to finance the emerging U.S. world empire without crowding out the borrowing of corporations who could finance most of their post-war capital expenditures from their own resources. They had no difficulties borrowing the rest on the capital markets and there was plenty of money left over to finance an expansion of consumer credit as well. There was enough money capital left over to not only finance the reconstruction of Europe and Japan but also to bring their industrial production to levels exceeding the pre-war levels soon after the most destructive war in world history.
This later development had a downside (from the viewpoint of U.S. imperialism) of creating industries in Europe — especially but not only (West) Germany — and Japan that would emerge as major economic competitors for U.S. corporations. This slowed U.S. economic growth. However, unlike the 1930s, neither West Germany, Japan, nor any other imperialist power felt impelled to challenge the United States politically or militarily.
The U.S. had opened its markets to German and Japanese competition — something it resisted during the 1920s and 1930s when the world market was expanding very slowly. However, if West Germany or Japan had dared to challenge the U.S. — such as to resist the domination of the dollar, for example — the U.S. could have simply again closed off access to its home market and the international markets that were policed by the U.S. armed forces. This would have had disastrous consequences for their economies.
Also, these countries were still occupied by U.S. armed forces. It is not out of the question for the U.S. to use these occupation forces to remove any government that dared challenge it. But, neither government dared, and they had no real incentive to do so since their capitalists were making more profits than ever before. The same was true of Britain, France, and the lesser imperialist countries.
The U.S. paid a price, however. That was the relative decline of the domination of U.S. industry, which had to gradually yield market share to resurgent European and rising Japanese industries. But U.S. imperialism was willing to pay the price to wage a global class war, dubbed the “cold war.” Unlike before World War II, the main enemy of U.S. imperialism was the Soviet Union and its allies. The existence of this powerful industrialized socialist state gave oppressed countries that were now embarking on their own capitalist development room to maneuver against the U.S.-led unified block of imperialist countries.
In 1949, inspired in no small measure by the Russian Revolution, the great Chinese people’s revolution was victorious, ending China’s century of humiliation. In 1953, the Democratic Peoples Republic of Korea (North Korea), helped by Chinese volunteers, achieved a draw in its struggle to drive U.S. imperialism out of Korea, at the cost of many killed. (5) A similar draw was achieved in Vietnam in 1954, though this agreement left half of Vietnam under a U.S. imperialist-controlled puppet regime. This made inevitable what the Vietnamese call the American War and what is called in the West the Vietnam War.
The large quantity of idle money capital that had accumulated during the Depression was being drawn down as it entered active circulation almost entirely by the late 1960s. In 1948-49, the U.S. economy experienced what I call a reset recession, resetting the industrial cycle after the interruption of World War II. This recession was fundamentally similar to that of 1920-21. However, the deflation of 1948-49 was milder than that of the 1920-21 reset. The difference between the severity of the recessions of 1920-21 and 1948-49 reflects the different economic conditions on the eve of the two world wars. The pre-World War I economy had been overall a period of prosperity that led to overproduction and tight money — two sides of the same coin: too many commodities produced relative to little money material produced.
Opposite conditions marked the decade preceding World War II. There was too little production of (non-money) commodities (including production of new means of production) in reaction to the previous overproduction. The result was mass unemployment and easy money markets — ideal conditions for the major war that followed.
It took about twenty-five years before the mass of idle money was fully absorbed by the expanding economy. Because money was more abundant relative to commodities in 1948, market prices were lower relative to the prices of production of commodities than was the case in 1920. As a result, the production of money material was higher relative to commodities in 1948 than in 1920. In addition, the bulk of the accumulation of money left over from the 1930s hadn’t yet been fully drawn into circulation. For this reason, not only was the 1948 recession milder than that of 1920, but economic prospects were also different. The different economic and financial situations between the two post-war periods do much to explain their different political characters.
This situation confused people of that time, not least the Marxist movement. Since World War II was more devastating than World War I, it seemed intuitively obvious that the second world war of the 20th Century would have a more devastating aftermath than the first. But in terms of the relationship between values, prices of production, and market prices, the situation was far more favorable for U.S. imperialism — and capitalism in general — than after WWI.
With money abundant after the war and the world market expanding, the U.S. could now finance the cost of the world empire without threatening the smooth operations of world money markets. The government had no trouble maintaining high military expenditures — though not on the level of the war years that would have made continued expanding capitalist reproduction impossible.
Industrial cycles after World War I
After the 1948-49 reset recession, the industrial cycle was set to resume its normal course as it had after the 1920-21 recession. However, due to the abundance of idle money in the commercial banking system and the higher production of money material than after WWI, there was never much chance that the first industrial cycle after WWII would end in anything like a Great Depression. On the other hand, because many people who had lived through the Depression were still very much alive, a second Depression was greatly feared. The generations alive after WWI had never lived through anything like the Depression; indeed, no generation before them had either. The Depression came as a shock because it was so unexpected. (6)
These economic conditions were favorable for the forces of reaction within the imperialist world. Since expectations were low, it wasn’t hard to satisfy and even exceed them, creating the material base for the conservative political climate that prevailed after WWII. Shortly after the post-war reset recession ended in 1949, the Korean War came with its quasi-war economy. In 1953-54, the U.S. passed through a mild recession with many of the characteristics of a post-war “reconversion” crisis.
The first real crisis of overproduction hit in 1957. This recession was becoming apparent on October 4, 1957, as the Soviet Union launched Sputnik, the first earth satellite. The fact that the Soviet Union won the race to launch the first satellite into Earth’s orbit was a blow to U.S. propaganda and capitalist economists’ claims about the unworkability of a planned economy. A prolonged depression would have been a further blow even if it didn’t reach the dimensions of the 1930s. As a result, once the recession became obvious in the fourth quarter of 1957, the Federal Reserve began slashing interest rates (at a rate that turned out to be too fast) in an attempt to reverse the recession quickly.
Under today’s monetary system, such a move by the Federal Reserve would result in a significant rise in the dollar price of gold. If not reversed, this would accelerate inflation and then stagflation, followed by renewed recession. In those days, however, under the rules of the then-prevailing Bretton Woods Monetary System, the Treasury was required to redeem dollars held by foreign central banks or the Treasury for gold at a rate of $35 for every troy ounce of gold presented. Until then, western Europe’s central banks had been happy to hold dollars (actually interest-bearing short-term Treasury bills that could be converted into dollars).
Unlike today, the U.S. had a solid trade surplus as Europe and Japan imported large quantities of U.S. industry-produced commodities to rebuild their industry from wartime damage and then build up their industries well beyond the pre-war levels as capitalist expanded reproduction proceeded. U.S. capitalists eager to realize higher interest rates and profits poured capital into Europe. This offset the effects of the trade surpluses on the balance of payments. As a result, gold remained in the U.S., even as European countries accumulated IOUs payable in gold against the U.S. Treasury. That began to change in the wake of the 1957-58 recession.
When the U.S. moved to lower interest rates in reaction to the 1957-58 cyclical recession, the growing realization that the dollar would be devalued sooner or later caused some central banks to redeem their dollars for gold. For the first time since 1931, the U.S. experienced a gold drain.
In reaction, the Federal Reserve was forced to raise interest rates again. (7) This halted the gold drain at the price of throwing the economy back into recession in 1960-61. The result was that the period from 1957 into the early 1960s was one of stagnation and depression with high unemployment (though not anything like the Depression of the 1930s).
The gold pool, the U.S. balance of payments crisis, and the Vietnam War
On January 20, 1961, Democrat John F. Kennedy was sworn in as President of the United States, succeeding the Republican administration of Dwight D. Eisenhower. The new administration was eager to accelerate the rate of economic growth and lower the high rate of unemployment that then prevailed. This implied that the Federal Reserve would follow an expansionary monetary policy to keep interest rates low to accelerate economic growth and lower unemployment. But such a policy risked renewed pressure on the dollar and the gold reserve.
In an effort to discourage market speculation on a rising dollar price of gold (the devaluation of the dollar), the new administration declared that it was not considering devaluing the dollar — this is what is always said by the government of a country just before its currency is devalued.
As the European economy and even more so the economy of Japan boomed, the U.S. balance of trade surplus was eroding. In the early post-war years, U.S. military expenditures abroad combined with the flow of money capital out of the U.S. in search of higher interest rates was covered by substantial trade surpluses. This reflected the high labor productivity in U.S. industry and agriculture relative to other capitalist countries.
Since U.S. industry had not been damaged — except in the sense that renewal of machinery was postponed during the war economy — the demand for U.S. commodities from Europe and Japan was high as these countries first rebuilt their economies from wartime damages and lifted their industries’ new highs. To do this, they imported machines from the United States.
As Europe’s and Japan’s industries continued to expand, the productivity gap between industries in the United States and that of Europe and Japan began to shrink. The result was that European and Japanese industries began to take markets away from the U.S., including within the United States. This was symbolized by the growing number of Volkswagen “Beetles” and Japanese-built cars on U.S. roads.
Though political and military competition among the imperialist powers was suppressed by the lopsided U.S. victory in WWII and resultant U.S. world military and political empire, economic competition between imperialist powers was reviving.
The movement of money capital — finance capital — out of the U.S. in search of higher interest rates and profits combined with the heavy military expenditures necessary to defend the empire meant that the U.S. had a lower rate of economic growth than its Cold War allies. This was especially true of the defeated Axis powers of Germany and Japan. The law of the uneven development of capitalism that had favored U.S. capitalism for decades now began to turn against it.
The U.S. balance of payments crisis of the 1960s
The shrinking U.S. trade surpluses were unable to cover the outflow of money capital in search of higher interests, direct foreign investments in search of higher profits, and the high military expenses required by world empire. This was the balance of payments crisis of the 1960s.
This crisis — or rather threatening crisis — took the form of the increasing accumulation of dollars by U.S. imperialist allies. This could go on only as long as the allies did not move to convert their growing hoard of dollars into gold. Free market speculators periodically bid up the price of gold above the official $35 per ounce. If the free market dollar price of gold rose significantly above the official rate and stayed there, European central banks would be under increasing pressure to redeem some of their dollars for gold.
To resolve this, on November 1, 1961, the United States, West Germany, Britain, France, Italy, Belgium, Netherlands, and Switzerland announced the establishment of a gold pool headquartered in London, where most of the world’s gold was traded. The idea was to establish a fund of real money to stabilize the dollar’s value at $35 an ounce of gold. The U.S. contributed 120 tons, Germany 27 tons, Britain 22 tons, Italy 22 tons, Belgium 9 tons, and Switzerland 9 tons, for a total of 240 tons of gold. The purpose of this fund was to stabilize the amount of gold in the dollar on the open market. If gold’s free market dollar price rose above $35, the gold pool would sell gold on the open market to knock it back down. If the free market dollar price fell below $35, the fund would buy gold, increasing its reserve of money material. The hope was that the gold pool would stop speculation.
The gold pool seemed secure for the first few years (1962 to 1965). The recession-stagnation period that stretched from 1957 into the early 1960s hit the U.S. harder than it did Europe and Japan. European and Japanese industries were gaining market share at the expense of the U.S. However, the late 1950s and early 1960s recession stagnation again increased the U.S. trade surplus. This was because as the U.S. economy slowed, so did its rise in imports due to the depressed economic conditions in the country. Exports rose as U.S. industry and agriculture found markets in the faster-growing markets of Europe, Japan, and other countries.
But as economic growth began to pick up, the gold pool came under increasing pressure. Speculators, sensing that despite all claims to the contrary that a devaluation of the dollar was inevitable, began to buy gold at $35 in the belief that it would only be a matter of time before the dollar price rose above that level. To keep the open market price at $35, the gold pool found itself selling more and more gold. The new boom and resulting erosion of the trade surplus, however, was not the only reason for the gold pool emptying — there was the escalating war in Vietnam.
In 1954, Vietnam was divided in two. In the north, called the Democratic Republic of Vietnam, the people’s revolution was victorious under the beloved President Ho Chi Minh and the Vietnamese Workers Party, which was part of the international communist movement. In the south, an increasingly hated pro-U.S. puppet regime was established. Under the peace agreement that ended the French colonial war in Indochina, free elections were supposed to be held in 1956 to reunify the country. Realizing that the pro-imperialist government ruling the south could not win in any remotely free election, the Saigon puppet regime refused to hold them. This left patriotic forces in South Vietnam little choice but to launch an armed struggle at the end of the 1950s to win the reunification of the country.
Within a few years, it appeared that the liberation of the south was imminent. At that point, the new Kennedy administration decided to intervene. Kennedy sent tens of thousands of U.S. soldiers in the guise of advisers to South Vietnam to prop up the puppet government. At home, the administration claimed that U.S. armed forces were not involved in combat but only advising South Vietnam’s armed forces in its fight against communist aggression. (8)
Despite these and other claims, U.S. soldiers were fighting and dying. In the early 1960s the first anti-war demonstrations were held, organized by small left-wing groups such as the Progressive Labor Party, Workers World Party, and the Socialist Workers Party. These first demonstrations were tiny and were repressed by the police like the attempts to demonstrate against the Korean War had been.
This is the way things stood for several years. Despite the presence of tens of thousands of U.S. soldiers as advisers, the Vietnamese armed resistance to the U.S.-imposed puppet regime continued to gain steam. First, Kennedy, then after his assassination, Lyndon B. Johnson claimed North Vietnam was infiltrating South Vietnam — that is, Vietnam was infiltrating Vietnam! In addition, the government and media claimed that “Communist North Vietnam” was a puppet of “Red China.” None of this was remotely true beyond the fact that the government of the Democratic Republic of Vietnam was supporting the resistance in the south, which was both their right and duty.
Then, in August 1964, the U.S. government reported that its ships, part of the strongest Navy in the world, were attacked by the naval forces of North Vietnam, at that time consisting of a few small PT boats. (9) In retaliation to the naval attack that had never occurred — there is no doubt about this today — the U.S. Air Force staged bombing raids against North Vietnam. This time, there was no claim that the U.S. armed force9 were merely advisers, not engaged in combat, though the full-scale introduction of regular U.S. ground combat units did not occur until early 1965.
The year 1964 was a U.S. presidential election year. The Democrats were expected to nominate the incumbent, Lyndon B. Johnson (1908-1973), who had been vice president under Kennedy. His Republican opponent was the ultra-right Arizona Republican Senator Barry Goldwater (1909-1998). Instead of discussing whether or not it was a good idea to go ahead with the war against Vietnam, Goldwater accused the Democrats of being soft on communism and urged a tougher attitude toward the Soviet Union, “Red China,” and Vietnam. At home, Goldwater wanted to repeal the New Deal. Goldwater’s warmongering enabled LBJ, despite his moves to escalate the war, to run as a peace candidate.
In November, LBJ defeated Goldwater in a landslide, and the world breathed a sigh of relief. The danger that Goldwater would launch a major war, escalating U.S. military involvement, had passed. The danger that hadn’t passed was that the victorious Johnson would do the same thing. And so it happened.
In early 1965, shortly after the first regular U.S. ground troops arrived in South Vietnam, the college-based Students for a Democratic Society, SDS, called a demonstration for April 17, 1965, in Washington, D.C., to protest the war. Between 15,000 and 25,000 marched. This was a tiny turnout for a national demonstration held in the nation’s capital by the standards of later anti-Vietnam war demonstrations and the ongoing protests against the U.S.-Israeli genocide in Gaza today. But it was larger than the first protests of the early 1960s and, importantly, established the right to protest against an ongoing war of imperialist aggression.
It could no longer be denied that the U.S. was at war in Vietnam in the full sense of the word. But this was not a war of fronts — like today’s war in the Donbas between Russia and Ukraine, but rather a guerrilla or partisan war. The U.S. and its Vietnamese puppet forces controlled whatever territory they actually occupied, while the Vietnamese resistance, called “Vietcong” in the media, controlled everything else. Unlike a war of fronts where losing or winning can be determined by the movement of the front lines, there’s no easy way to determine who’s winning a guerrilla war. The government and media claimed the U.S. was winning. After every clash, the military issued grotesque body counts of all the “Vietcong” allegedly killed by U.S. or Vietnamese puppet forces and claimed that at the rate at which the resistance was being wiped out, the war would soon be over. But then came the year 1968.
The year 1968
Before his November 22, 1963, assassination, Kennedy had proposed a regressive tax cut, not unlike later Republican tax cuts. The difference was that while the Republicans used supply-side arguments to justify them, the Kennedy administration used Keynesian arguments.
The Republicans claim tax cuts stimulate the economy and reduce unemployment because taxes on business and the rich in general discourage business investment (in Marxist language, capitalist reproduction on an expanded scale) that drives economic growth under capitalism. The Democrats use Keynesian arguments that claim that Federal deficits increase monetary effective demand, stimulating economic growth and reducing unemployment by, in Marxist terms, enabling surplus value to be realized thereby permitting capitalist expanded reproduction to proceed. Whatever arguments are used to justify tax cuts, the effects are the same.
Kennedy could not get the tax cut through Congress because some in the Democratic Party thought cuts were financially reckless. But LBJ, who’d been the Democratic Majority leader in the Senate, was able to get them through Congress during the post-assassination honeymoon period. The tax cut bill was formally called the Revenue Act of 1964. (10)
The Office of Tax Analysis of the United States Department of the Treasury summarized the tax changes as follows:
- reduced top marginal rate (on income over $100,000, roughly $848,000 in 2021 dollars, for individuals; and over $180,000; roughly $1,527,000 in 2021 dollars, for heads of households) from 91% to 70%
- reduced the corporate tax rate from 52% to 48%
- phased-in acceleration of corporate estimated tax payments (through 1970)
- created the minimum standard deduction of $300 + $100/exemption (total $1,000 max)
Besides being regressive, the tax cut turned out to be financially reckless as well, as some Senate Democrats had feared. The government was about to embark on a major war against the people of Vietnam, Laos, and Cambodia. This occurred just as the economy was emerging from the stagnation of the late 1950s and the early 1960s recession-stagnation, entering a cyclical economic boom. A more prudent policy from the viewpoint of government finance and counter-cyclical policy would have been to raise taxes to cool the economy, to discourage overproduction and release both real and monetary resources to finance the war. However, Johnson, encouraged by Keynesian economic advisers, believed the U.S. economy to be so powerful that it was possible to cut taxes in the face of a developing economic boom and fight a major war on the ground and in the air on the Asian mainland on top of that. This was LBJ’s “guns and butter policy.” This turned out to be a major miscalculation as events were to show.
The weak link in the financial chain necessary to finance LBJ’s policy of guns (war) and butter (mostly in the form of tax cuts for the rich but also Medicare and Medicaid) was the gold pool. The Federal Reserve System was expected to finance the deficits by creating new dollars. The problem was that the world’s gold mines were not producing enough new gold to back the new dollars the Federal Reserve was creating to finance both the ongoing cyclical boom as well as the tax cuts and the war against the peoples of Vietnam and Indochina.
In 1968, things came to a head. Under the U.S. Constitution, LBJ was eligible for one more full term. A protege of Franklin D. Roosevelt and considered a master politician in his own right, Johnson was expected to be the Democratic standard bearer. He would run on the economic boom, the tax cut — a lot of butter for the rich — reforms like Medicare and Medicaid — just a little butter for the poor and seniors — and the Voting Rights Act of 1964 that finally gave African-Americans in the South the right to vote. The latter was passed over the opposition of southern Democrats — but with the support of the old Republican party. As a result, southern Democrats began to shift their support to the Republican Party, creating the modern “dog whistle” racist Republican Party.
As the U.S. sent regular ground troops into Vietnam in 1965, the teach-in movement broke out on college campuses so that students could make up their own minds on the war. The idea was to have defenders and opponents of the war debate each other. Johnson administration spokespeople went to the campuses to present the case for the war. Opponents of the war read up on Vietnam’s history and had no trouble exposing the pathetic attempts of the Johnson administration spokespeople to defend the indefensible. The administration soon gave up. It lost the battle on this important front.
A new division began to appear among those who realized the war was wrong. One group saw the war as a terrible mistake or the result of the evil nature of LBJ and his administration. But, some students dug deeper and began to see the war not as a mistake but as the inevitable result of U.S. imperialism flowing from the capitalist system itself. The war was not a horrible mistake but a horrible imperialist crime, one of many. For the first time since the Cold War witch hunt, Marxist ideas received a serious hearing among a section of young people in the U.S.
On the economic front, by 1966, the U.S. economic boom was clearly getting out of hand. The Federal Reserve and other central banks raised interest rates to try to cool down the capitalist economy and achieve a soft landing before they faced a full-blown crisis of overproduction. But as soon as the boom showed signs of ending in late 1966, the Federal Reserve got cold feet. They feared the political impact of a recession as the war raged, as the movement against the war grew more radical, and student youth showed an increasing interest in Marxism. As they did in 1958, the Federal Reserve eased too soon — from the viewpoint of long-term capitalist stability — but the consequences were more serious this time.
As 1967 approached its end, the Vietnamese considered their own tactics. The incumbent LBJ was clearly committed to continuing and even escalating the war. Though it did not yet reflect the majority’s views, opposition was growing, especially among the youth, primarily college students. This opposition to the war was spreading to the rest of the population, including working-class youth and, most importantly, among the soldiers themselves.
When the Vietnamese launched an offensive of their own, it provoked a discussion within the Democratic and Republican Parties — the Party of Order — of whether to continue to escalate or enter into peace negotiations on the terms of a U.S. withdrawal. Maybe the Vietnamese hoped a more reasonable U.S. president would be elected, or alternatively, Johnson himself would enter into negotiations in a bid to win reelection. The decision was made to launch a major offensive right after the Christmas-Tet holiday ceasefire expired at the beginning of 1968.
The administration and media had been claiming that the U.S. was on the verge of winning the war and that the resistance was on the verge of defeat. The Tet Offensive, as it is known, blew these claims away. The Tet Offensive was very costly in human terms to the Vietnamese side. The U.S. claimed it had won the battle. But the offensive showed that the Vietnamese were not near defeat but rather the opposite. U.S. forces suffered more causalities than they had in any other period of the war. For the first time, the majority of the U.S. population and the soldiers themselves began to turn against the war.
The Johnson administration reacted by sending even more ground troops to “win” once and for all. The military claimed that since it had inflicted so many casualties on the Vietnamese people, if several hundred thousand more troops were sent, the resistance would be crushed. LBJ decided to follow this course.
However, this policy would cost a lot of money, and an increased number of troops would increase the U.S. balance of payments deficits on current account. The Federal Reserve would have to create even more dollars not backed by gold to finance the increased war expenditures. At the same time, the increasingly inflationary economic boom, by raising prices not only in dollar but also in gold terms (the dollar had yet to be devalued), was lowering both relatively and absolutely the profit rate in the gold mining industry. The long, slow post-World War II rise in gold production was leveling out. There was no chance that rising gold production would back the increased dollars that would have to be created to continue LBJ’s guns and butter policies.
The run on the gold pool
Under these conditions, speculators realized the devaluation of the dollar against gold couldn’t be staved off much longer. The gold’s market price would soon rise above $35. The demand for gold soared in anticipation despite Washington’s insistence that the gold pool would never permit this. The leveling out of gold production in response to rising market prices in gold terms was making gold scarcer relative to non-money commodities whose production as well as prices were steadily rising. The gold pool was forced to sell more and more gold on the open market to keep its dollar price from rising.
By March 1968, as the decision of the Democratic Johnson administration to send hundreds of thousands more U.S. soldiers became known, the demand for gold exploded. The gold pool was facing a full-scale run. By the middle of the month, the pool was within three weeks of total collapse. The game was up. On the evening of March 14, the U.S. government requested that the London gold market be closed the following day. The gold pool was dead, and the world had changed.
What happened after the gold pool collapse will be examined next month.
(1) To this day, leaders justify their insistence on U.S. world domination on the grounds that these policies are necessary to defend democracy. During the Vietnam War, it was claimed that the U.S. had to fight “communist aggression” to defend “democracy” in South Vietnam. (back)
(2)When the National Socialist German Workers’ Party (Nazi Party) came to power, it moved to crush all labor unions, whether led by communists, social democrats, or even the Catholic church. Instead, all German workers were enrolled in the German Labor Front that the Nazis controlled. Its job was to prevent the re-emergence of any type of genuine labor organization. The Nazis had to do something to gain the support of German workers or at least neutralize them. One way was to promise that after the wars Hitler was planning, German workers would be able to afford cheap automobiles of their own. Through the German Labor Front, German workers made layaway payments for the cheap automobiles that would be produced after Germany won the war.
The Volkswagen “beetle” was designed but did not go into mass production until Nazi Germany was defeated. After the war, the Volkswagen project was picked up by what was originally a state-owned corporation, the Volkswagen Corporation in West Germany, from the now-defunct German Labor Front. It was later privatized when it proved to be very profitable in the post-WWII economy. Volkswagen beetles became widespread on the roadways of Germany and Western Europe as well as in the United States, but not before Adolf Hitler and Henry Ford were dead. (back)
(3) Unlike the First International (the International Workingmen’s Association) and the Second International, the Third International was not an international association of independent working-class parties but a single international party with national branches. Lenin and his supporters believed that just as a united, democratically centralized party with iron discipline had been needed to topple Czarism, semi-feudal landlordism, and capitalism within the Russian Empire; a united, international, democratically centralized party with iron discipline would be necessary to topple world imperialism.
For example, if a communist from the U.S. moved temporarily to Moscow to study at a Comintern school with every intention of returning to the United States and no intention of becoming a Soviet citizen, they could not, of course, vote in Soviet — state — elections. They would, however, join a primary party organization — a party branch — in Moscow while they were residents and participate in internal party debates and elections with the Soviet Communist Party. The national parties, including the ruling Communist Party of the Soviet Union, were subordinated to the International. This way, the Soviet state belonged not only to Soviet Communists but to the communists of the entire world.
Soviet Communists enjoyed overwhelming prestige because they had made the revolution, and no other communist party had. In the early years in the meetings of the International, members of the Soviet delegation voted according to their consciences on disputed questions (there were many) and were not under the discipline of the Soviet Communist Party. The International was the highest body, while the national communist parties including the ruling Soviet Communist party were subordinate to the International.
This gradually changed when the grouping around Stalin established bureaucratic control not only within the Soviet Communist Party but the entire Communist International. Bringing this trend to its logical conclusion, in 1943, the Communist International was formally dissolved and replaced by the International Communist Movement, which was again an association of independent communist parties that increasingly went their own way over time.
However, in the 1930s, when the United Automobile Workers Union came into being, a communist in the U.S. building the UAW belonged to the same party as a Soviet Communist carrying out the second Five-Year Plan. This is what Henry Ford and his fellow capitalists all over the world feared, hated, and were determined to destroy. Under the conditions of the 1930s, Ford saw Nazi Germany as the most promising instrument in the world to accomplish the destruction of the Communist International, the U.S. Communist Party, and the United Automobile Workers. (back)
(4) Before Marx, the term “capitalist” meant what Marx called a money capitalist. The use of the term in this sense survives today in the term “venture capitalists.” Marx explained that not only money capitalists but the owners of industrial enterprises, such as Henry Ford, were also capitalists. Industrial capitalists begin with a sum of money — M — and then purchase labor power, elements of fixed capital, and auxiliary and raw materials with the aim of extracting the surplus value — the performance of unpaid labor — from the sellers of labor power.
It was industrial capitalists that Marx was most interested in describing in “Capital.” Henry Ford was indeed an industrial capitalist. Like all industrial capitalists, Ford was also a money capitalist who earned interest — the income of the money capitalists — as well as the profit of enterprise (and monopoly profit above that), the income of the merchant and industrial capitalists. Ford was actually a money capitalist on a considerable scale and controlled his own banks. Ford’s role as an industrial capitalist overshadowed his role as a money capitalist. (back)
(5) Even in the absence of the Russian Revolution, China would eventually have found a road to its liberation. But the Chinese century of humiliation could have dragged into a second century of humiliation. (back)
(6) The collapse of the shaky economy of post-World War I Germany would have come as no great surprise to knowledgeable observers of the time. However, the collapse of the U.S. economy was completely unexpected not only by the general public but also for the Marxist movement of the time. (back)
(7) Actually, the gold physically remained in the United States. This was because the gold the U.S. used to redeem the dollars was held in a vault under the U.S. Federal Reserve Bank of New York in lower Manhattan near Wall Street. The gold remained there; it was “held in trust” for the central banks of the countries that were redeeming their dollars. The U.S. could have physically repossessed this gold at any time since, as the saying goes, possession is nine-tenths of the law. Any move to do so, however, would have upset relations between the dominant U.S. and the subordinate imperialist nations that held the U.S. empire together. So, while the gold was still physically in the United States, which was by no means irrelevant, it did not negate the fact that the U.S. dollar was coming under significant pressure for the first time since 1931. From 1958 onward, the devaluation of the dollar was no longer unthinkable. (back)>
(8) This was typical Cold War language. A nation might commit aggression against another nation, but how can the world communist movement, which is not a nation but a grouping of political parties, carry out aggression against a nation? The 1960s radicals learned to see through this type of language much as young people today are learning to see through expressions like “Israel has the right to defend itself” or the “fight against terrorism.” (back)
(9) It is now known that no such attack took place. What occurred was U.S. ships were landing South Vietnamese puppet troops in North Vietnam in the hope that they could start an insurgency against the government of North Vietnam that would match the ongoing armed resistance against the South Vietnam puppet government. These attempts failed completely. (back)
(10) Lyndon B Johnson, LBJ, had been a pro-segregation Democratic Senator from the Jim Crow state of Texas before he was tapped to be Kennedy’s running mate in the 1960 election. To maintain the increasingly strained unity between northern Democrats and the openly racist — not mere dog whistles — segregationist Southern Democrats who were the historical core of the Democratic party, Kennedy offered the vice presidential candidacy to southern pro-segregationist Lyndon Johnson. This is called “balancing the ticket.” The Kennedys were reportedly appalled when LBJ accepted the offer since they hadn’t expected him to do so. They had expected him to turn down the offer because the office of majority leader of the Senate is, under the Constitution, actually more powerful than the office of vice president. John’s younger brother Robert, who served as attorney general in the Kennedy administration — especially despised LBJ and later ran against him in the 1968 Democratic Presidential primaries. Robert Kennedy’s presidential campaign ended with his assassination on June 6, 1968, in Los Angeles, California. (back)
A Critique of Crisis Theory 