The ABC’s of Communism Bolshevism 2011

Jason W. Smith, Ph.D.

 

Chapter 25:  The United States in the Imperialist Phase of The Capitalist Stage

The capitalist media uses the term imperialism to mean some kind of overbearing hegemonic attitude on the part of some nation against other nations. The capitalists do this because their entire educational system for the masses is a system of propaganda consisting of lies of omission and outright lies (about facts.) As far as the masses of North Americans are concerned the capitalist control of their thinking is established in their textbooks (with which I have years of personal experience as an author being forced to write according to formula and reactionary oversight).The capitalist publishers always educate to obfuscate. It’s no wonder so few students enjoy history courses. How could you enjoy something which is barren of truth at every turn and purposely made therefore extraordinarily boring and usually these books are just plain silly in the end. At least this is true as far as the mass educational system is concerned.

In ruling class preparatory schools like Phillips Academy (Andover, Mass.) or in their elite colleges and universities such as Harvard, Yale, and Stanford, you will find that students are often told the truth, or the truth is at least made available to them. That is because the ruling capitalist families understand that a few very safe and select students have to know what is really going on. Thus, you will find Marxist professors in these bastions of the capitalist oligarchy. On the other hand we Bolsheviks can see to it that this knowledge is passed on in proper form to the mass of working people which is one reason for this handbook.

The scientific definition of imperialism is the one given it by V. I. Lenin based on understanding the role of exported capital. In other words, when we Marxists use the word imperialism we are always referring to the export of constant capital (machinery and/or entire factories), from the advanced industrial capitalist countries to cheap labor centers in other parts of the world. These latter parts of the world were initially the “colonies” of the advanced capitalist countries of Europe and Japan, in Africa and Asia. In the case of the United States, it was the semi-colonial countries of Latin America, and then the Philippines and China. In other words, the advanced industrialized capitalist countries were initially the USA, England, Germany, France, Italy, Japan and (barely) Russia. By the end of the 1800’s the entire less developed world had been turned into colonies of one or the other of these great capitalist powers.

In short, our use of the term imperialism is highly specific, scientific and not susceptible to idiosyncratic redefinition by imperialist ideologues. It always means the export of constant capital backed up when necessary by military force of the state apparatuses of the capitalist countries. These capitalist countries are always class dictatorships of their respective capitalist classes no matter if they happen to be dressed up in parliamentary democratic forms from time to time.

A man named Hobsbaum wrote the first book on imperialism and Lenin took that data, along with a great deal more, and wrote the book Imperialism, the Highest Developed Stage of Capitalism, which was published in 1917. In the pantheon of Leninist theoretical texts this book immediately took its place with The Development of Capitalism in Russia, Materialism and Empirio-Criticism and State and Revolution.

We have seen in Europe and the Americas, capitalism began with a phase of primitive capital accumulation and proceeded to a phase of massive capital accumulation. The final imperialist stage of capitalist development overlapped with massive capital accumulation beginning by 1850. Imperialism reached its zenith with the division of the entire world by 1900.

Scientific Note: Stage and Phase Overlap in Sociocultural Evolution

By the way, in the nature and course of stage and phase evolution in sociocultural evolution overlapping is commonplace and the rule not the exception. Why? Because society and culture belong to people and people live all over the globe. The overall pattern of sociocultural evolution - which is to say the “general pattern”- is clear cut and looks in our charts as if one stage always gives way to the next, neatly and cleanly. One phase always giving way to the next, within each Stage, neatly and cleanly. But, in reality once we get beyond the general level and look at the highly specific geographic contexts in which people live we see differences in rate of both Stage and Phase evolution from people to people, geographic zone to geographic zone, and so forth.

We have Old World feudalism fully extant when slavery is the highest level of development in the New World and I have explained why in specific terms several times in this text. We saw in this case that massive accumulation of capital occurred a few decades earlier in the UK and adjacent Western Europe while northern US was in primitive capitalist accumulation and southern US was in slavery! This in no way changes the general global pattern of sociocultural evolution from Slavery to Capitalism via the intermediary transitional Stage of Feudalism. The epoch transformation from chattel slavery to wage slavery. It simply deepens our understanding of the mechanics of the process.

Back to our Story

Of course, exporting constant capital to cheap labor centers did not lessen the struggle of working people for a decent wage, and for an honest system of working hours and livable working conditions. Thus, the exporting capitalists had to use their governments and their state apparatuses (Army, Navy, police) to keep these workers and these countries in line. They also had to use their state apparatuses to fight one another for control of these cheap labor colonies which were both sources of raw materials and cheap labor and markets.

US Imperialism

For the North American nation the struggle to control foreign cheap labor and foreign markets had begun immediately after the US Civil War with the intervention of a variety of US firms in Latin America. For Gringo imperialism the countries of Latin America were considered its own. They were de facto colonies for the most part by the end of the 1800’s even if they operated as supposedly independent countries in many cases. Those that did not accept de facto colonialism were nevertheless bound up as de facto semi-colonial nations.

It is ironic that the so-called Monroe Doctrine had been issued by a weak but brave New Republic when it could hardly enforce it but was anyway willing to try, in order to support the national liberation struggles of Latin America which began in Mexico and climaxed with the South American wars of national liberation from Spain led by Simon Bolivar. Ironic because as the US changed from being the Brave New World Republic of working people in alliance with small capitalist farmers and industrialists, it transformed into a nation ruled by a ruthless super-rich oligarchy.

Thus, after the end of the US Civil War this tiny ruling oligarchy began to use its federal government to achieve their capitalist imperialist objectives world wide. Their interpretation of the Monroe Doctrine was quite a new and different thing. Namely a license to their exclusive right to exploit America south of the Rio Grande.

Initially it was US banks and railroads which invaded Mexico, and lands further south (see the movie Bandidas for a real flavor of the evil these men did in Mexico).Yet, it was what we call the Spanish-American War of 1898 that propelled the US officially and finally into the era of Imperialism.

The Spanish-American-Cuban War of 1898

Why did the US go to War with Spain in 1898? It did so because the biggest US capitalists wanted a share of the colonial world beyond that which, as we have just seen, they had already acquired by imposing gringo hegemony over Latin America. Spain was the weakest of the old colonial powers. The opportunity was at hand to attack Spain in the name of furthering democracy. Thereby seizing the Spanish empire and its Philipino road to China!

Where?

In Cuba. The Cubans had been fighting Spain in a guerilla war for decades and the struggle was coming to a head. In 1898, the Spanish were on the verge of defeat by Jose Marti and the Cuban patriotic national army. If the US wanted to get in on the act they had to do so before Cuba became independent on its own merits. This might not have mattered much in Washington if it had not been for the fact the gringo imperialist bosses in Wall Street, the  capitalist (“cap”) press, and in their government in Washington, knew that once Spain was defeated they could seize Spain’s entire empire not just Cuba. Most importantly globally were the Spanish Philippines.

The Philippines had been Western Europe’s road into China for four hundred years and so it was in 1898. – And, China was well into the process of being dismembered precisely by these same countries that were now the most important competitors for the US ruling families of centi-millionaires and billionaires led by the Rockefellers.

In reality beating Spain meant getting a piece of China. That was the prize the US ruling oligarchy had its eyes on.

 

The US Enters the Imperialist Struggle for World Oil

If the US was a late-comer in dividing up Africa and Asia it was certainly not a late-comer in the world-wide struggle for oil and oil markets. In fact, since the US had initiated the modern oil age in every sense it was perfectly positioned to take advantage of its new global position resulting from its victory in the Spanish American Cuban War.

Gasoline Comes of Age with the Invention of Thermal Cracking

In 1909 an American scientist, working for Standard, named William Burton; acting on his own, without authorization, knowledge, or support, from Rockefeller and his henchmen, conducted a series of experiments which put oil under high temperatures and pressures! Burton found that his “fancy still”, cooking crude oil to 650 degrees Fahrenheit in pressure-cooker conditions, would produce a gasoline fraction running to 45% of the total. This “thermal cracking” of the long carbon chained molecules of crude oil into short gasoline length molecules made gasoline available to use in all of the new internal combustion engines that demanded it, in sufficient quantities, for the first time.

Dividing Up the World

Oil was a big part of the world wide competition between capitalists as we have seen but it was certainly not the only part – nor, even the biggest part. For example, since the mid-1800’s the struggle for cotton, and the cheap labor workers to weave and dye it, had been a critical part of the world wide struggle between capitalists. No part of the world was more important in this regard than the Indian subcontinent (principally, what is today, Pakistan, India and Bangladesh.) Also capitalists were searching the world for iron ores and the cheap labor to extract them. Then it would be rubber, rice, etc. ad infinitum. However, in this handbook we will focus on petroleum. Accordingly, we shall review the unfolding struggle among the giant oil monopolies to get the backing of their respective governments to secure contracts and the use of their troops to back up their foreign claims.

Anglo-Persian  (British Petroleum)

Iran

During the course of the First World War (1914-1918) Anglo-Persian moved towards becoming a fully integrated oil monopoly along the lines of what Rockefeller had done with Standard and the Nobel’s had done in Russia. Anglo-Persian’s boss Charles Greenway took aim at a British government seized, German owned, distribution company in England, when the war started. It was called British Petroleum. Anglo-Persian purchased BP from the always friendly British regime and in so doing also acquired a far better name. – And, a distribution arm. Anglo-Persian did not immediately adopt the name British Petroleum to replace Anglo-Persian, but for our purposes we shall henceforth refer to Anglo-Persian as British Petroleum. At the same time BP moved to acquire a tanker fleet so that by wars end it was a fully integrated oil giant.

This was no small thing because by 1918 the number of internal combustion engine driven vehicles in the British Army in Europe had jumped from its initial 1914 number of less than 1,000 to 56,000 trucks, 23,000 automobiles, 34,000 motor cycles and the Americans had brought 50,000 more gasoline driven vehicles with them when they entered the War in April 1917. (At the same time Lenin arrived in Petrograd [St. Petersburg renamed during the War, as Petrograd, by the Czar for patriotic reasons] and Lenin gave his famous April Thesis to the Petrograd City Council. The Czarist replacement Capitalist Provisional Government had six months to live. Once it was gone so would the foreign oil monopolies be gone – but, of course, they didn’t yet know that.)

Also, during the War, the UK produced 55,000 airplanes, France 68,000, Italy 20,000 and the Americans 15,000. All, of course, gasoline driven. The Iranian oil fields and the Iraqi refinery jumped from 1600 barrels of oil produced per day (bpd) to 18,000! As you can see the War took BP and its stockholders from obscurity into national prominence.

Along the way BP had some luck in Arabia because while it was entirely susceptible to armed intervention the Arabs never really tried to shut it down nor did the Turks (allied to Germany) with one exception. Excepting this one time when the pipeline from the producing Iranian fields was bombed, and several months taken to rebuild it, the oil flow to Abadan and Basra was uninterrupted. This was fortunate for England, because the few British troops stationed in Iraq would not have been able to withstand a strong Turkish push had it been made.

Shell as Allied Oil Quartermaster

If BP emerged from the War as new fully integrated oil monopoly Shell had begun the War that way. Shell, had along with Standard (especially Standard Oil of New Jersey), the ability to organize oil production and distribution for the war effort. Furthermore just to get a firm foundation for completion of its initial work, and then its war time expansion, BP had had to get the British Government to take a 51% equity stake in its stock. Shell on the other hand needed nothing more than a British Government market and the War made that a certain thing.

Marcus Samuel (Shell) and his organizational boss Deterding were staunch British patriots (despite the bad mouth from BP about the Dutch aspect of Shell [the Netherlands were neutral in the War and many said pro-German]) and had proven producing oil reserves extending from Baku to Borneo and Sumatra. BP had only its Iran oilfield and it was highly vulnerable should the German-Turk forces ever figure that out.

Furthermore, Shell had discovered how to produce the key ingredient for TNT (toluol) from oil rather than coal as had the Germans. Samuel however was willing to go all the way and he secretly smuggled the Dutch toluol refinery out of Rotterdam and reinstalled it at Somerset England giving Britain what it absolutely had to have to make artillery shells.

Eventually, Royal Dutch Shell and Standard combined in what was called the Inter-Allied Petroleum Conference to plan for the supply on an organized basis of the US, Britain, France and Italy both domestically and militarily. Accordingly the Anglo-American side never had a serious petroleum shortage. Germany was not so lucky.

At any rate Germany’s submarine attacks on shipping to Europe, especially to Britain and France, led to severe shortages both militarily and domestically (not to mention bringing the US into the War) during 1917 and 1918 but in every case the Petroleum Conference was able to resolve the shortages and bottlenecks. In large part this was because of Standard’s ability to produce so much oil so regularly. US production jumped from 266 million barrels of oil in 1914 to 335 million in 1918.

To the Victors Go the Spoils

Iraq

The Bolsheviks knew the war had been fought for two greedy reasons. The imperialists seizing each others markets and resources was one. Both imperialist sides had succeeded in their second war aim which was the killing of as many million supernumerary male workers in Europe as possible. They were the enemies within created by capitalism. They were no longer needed and, the massive armies of unemployed they formed, were a dagger pointed at the heart of the capitalist system of production relations as the Bolsheviks had proven in the Russian Empire, Hungary, Germany, etc.

The division of the spoils of war was now the prime task of the Allied powers. British PM David Lloyd George and French Premier Georges Clemenceau had divided up “Mesopotamia” (Iraq) among themselves three weeks after war’s end on the latter’s visit to his colleague in London.

However, the struggle between the world’s biggest oil monopolies was over oil as yet undiscovered. The governments of Britain and France were, of course, just the instrumentalities of the rule of a few capitalist oligarchic families and they were used in the struggle to get the hands of the respective greedy evil families of Europe on the oil of the nation eventually to be known as Iraq.

At the time Iraq was still called Mesopotamia, and considered somewhat apart from the rest of Arabia. For four hundred years Mesopotamia had been part of the Turkish Ottoman Empire. However, Turkey had joined the war on the German side, and lost. So, it lost its empire too.

Part of the deal between Lloyd George and Clemenceau was giving the French oil monopoly 25% of the oil from Mosul and France taking all of Syria. Yet, no one really knew if there was any oil in Iraq although one world class expert (Gulbenkian) had written a paper claiming that a major strike would be had in Iraq. It was not until 1925 that the first exploratory team arrived in Iraq; not until April 1927, that a bit entered the ground in Iraq and not until October 1927 that oil was actually struck immediately outside the Kurdish city of Kirkuk.

It flowed at 95,000 bpd! But, it was also heavily loaded with deadly poisonous gas. Kirkuk had to be evacuated and the free flowing oil contained in man made dikes and the well capped. All of this took up the last days of October. No one had expected to hit so much oil, let alone on the first try.

Then it took nine months to hammer out the details about which imperialist company would receive what. The initial exploration had been undertaken by a joint British, Royal Dutch, and American team. An agreement was signed in July 1928. British Petroleum (Anglo-Persian), Royal Dutch Shell, the French Government and the Americans (organized as the Near East Development Company) each got 23.75% for a total of 95% of the total and 5% went to one individual – Calouste Gulbenkian – who had had his hand in this entire operation for 35 years (and who had created the Turkish Petroleum Company as his holding entity). Gulbenkian had written the initial report outlining the potential for Iraqi oil. As you can see the shape of the modern Arabian-Persian oil world was beginning to take shape and was purely an imperialist operation.

Part of the settlement among the explorer monopolies was the so- of called Red Line Agreement. This was just a line drawn in red pen around the old Ottoman Empire Turkey. It would include all of today’s Arabian oil fields except for that of Kuwait and Bahrain. Iran was also excluded from this agreement as it had not been part of the Turkish Empire.

From World War (1914-1918) To the Greatest Capitalist Depression (1929)

Part II: US Labor 1919-1923 - Finding Our Way in a Raging Class War

You should focus on trying to understand the milieu, on the one hand, of (1) Left confusion and (2) two contradictory labor approaches (trade unionism vs. revolutionary political unionism), meaning a long-term labor strategy to either moderate wage slavery or adopting a strategy of altogether liberating North American labor from wage slavery. (Note: It would be the task of the soon to be formed CPUSA to find some effective way of doing both.) -And (3) the ongoing physical capitalist attack on those workers (by the capitalist state apparatus – i.e. the federal and state police, US Army, mercenaries and vigilantes) who had been organized by militant Marxists, on the other hand. (That is, the pre-Lenin, pre-1917 militant Marxists.) These are two separate categories of class struggle. Yet, both of these categories of class struggle are intimately interrelated. We may think of these class struggle categories as the struggle for scientific comprehension and the struggle for physical survival of the working class vanguard organization(s).

Comprehension

In the last chapter we reviewed how the Left in the US was all over the place in its attitude to the inevitable imperialist war in the years preceding that event. – And, we have seen how that confusion and contradiction continued throughout the war years. From January 1919 to mid-1923, this confusion crystallized into two major tendencies and eventually ended for the parties in contention with the dissolution of the old Socialist Party. Two de facto new parties emerged. One was the new Socialist Party and the creation of a new Communist Party USA (unified by 1923). The former Right and the latter Left. With that development we scientific socialists (Marxist-Leninists) had gone a long ways toward achieving clarity, but we still had a long way to go.

Simultaneously the labor movement was crystallizing around the two tendencies which had become so manifest during the war. (1) One was, the Right tendency toward trade union issues only (as opposed to what Gompers called “political” commitments meaning he wanted the AFL to have no Labor Party platform to fight for) punishing and rewarding the capitalist parties according to their performance on labor issues. The second tendency (2) was the Left AFL movement which now wanted a Labor Party such as the Brits had developed, and was sympathetic to the emerging Marxists of the CP persuasion emerging around William Z. Foster and the TUEL movement. (3) During these four years the capitalists pretty much succeeded in destroying what little was left of the IWW.

Survival

Before the World War the capitalists had launched all out attacks against workers in some parts of the country, and an overall general attack against the Left Wing of the Socialist Party and its ideological allies (IWW, etc.) During the World War capitalists used said war to demand patriotic attacks on workers. Their demands were simply an excuse to exploit their workers even more intensively and this led to a raging armed class struggle. The violent state attacks on workers and their leaders were stepped-up immediately after the war.

In this latter period, beginning by the time the war ended in November 1918, the class struggle moved to a new level of intensity as the Gringo rulers unleashed a generalized government and state attack on all the non-Gompers elements in the US Labor movement.

Selected Highlights

 Attacks against Labor Prior to the War in August 1914

New England

In 1913 the capitalists in Lawrence, Massachusetts, managed to defeat the IWW leadership in its failed program for continuing the strike to gain ultimate objectives. Something these leaders should never have embarked upon. Especially after scoring such a great working class basic victory (hour’s wages and working conditions) the previous year.

Attacks against Labor 1914 – 1917

Northern California

During the first six, months or so of 1916 San Francisco had become radicalized over the issue of the obviously coming war. The Gompers forces in the AFL unions were busy building support for the coming war. During one of the right wing demonstrations, a labor boycotted “preparedness parade”; capitalist provocateurs had set off a bomb in the Embarcadero district. It happened during the busiest time of day with a parade and business going on, at 1:30 in the afternoon of July 22. The bomb killed 22 people and injured many more.

The real reason for the attack was to establish a legal pretext for massive raids and physical attacks on the organized Left in and out of the union movement. Murder charges were brought against two working class leaders Tom Mooney and Warren Billings (and three others were arrested.) These two were charged with planting and detonating the bomb and convicted. Billings was framed-up on totally false testimony and sentenced to life in prison. Mooney likewise was framed-up, but he was sentenced to death!

The Origin of May Day

It was obviously the greatest frame-up of union leaders since the capitalists had attacked labor in Chicago on May 1, 1886 (the original Haymarket Massacre.) Unions internationally reacted. Now, international outrage over the frame-up eventually forced a commutation to life imprisonment. It was this Haymarket Massacre on May 1, 1886, which made May Day the international holiday of the workers of the world.

The Intermountain Northwest

In the years preceding the Great Strike of 1917 in the forests and mills and shipyards of the Northwest the instigator of this struggle, the IWW, had undergone some radical internal changes. It lost most of its broader base in the SP, WFL and SLP by 1907, reverting to ultra-left leaders in Chicago and Detroit. Its eastern membership steadily dwindled in competition with the AFL and even the success in Lawrence, Massachusetts, in 1912 had ended in de facto defeat in 1913.

Then the IWW went from near financial collapse in 1914 to financial prosperity in 1916 due to its success in the oilfields, mining camps, agricultural labor camps in the mid-west and far west and last but certainly not least in the forests of the Northwestern states. Phillip Foner discusses the Agricultural Workers Organization and the Lumber Workers Industrial Union Number 500 in Volumes 4: 474-485 and 7:247-263.

But when it was said and done the IWW talk was a lot stronger than the IWW walk. On the other hand, determined proto-fascist thuggery on the part of the “Boise Gang” and allies in Washington State and Montana succeeded in lynching, otherwise killing, imprisoning, and deporting, IWW organizers.

But, the reactionaries did not win easily and not without exposing their utter contempt for democratic procedures of the capitalist variety. The dummies that composed this so-called ruling class in the intermountain northwest could not see far enough to collaborate effectively with the AFL which had done everything in its power to sabotage the IWW efforts to organize by fielding its own union (the Shingle Weavers and Timber Workers Union).

At any rate the IWW organizers were well trained as guerilla fighters in what they openly called a class war. (– And the reactionaries answered in kind.) Organizers arrived in the Lumber workers camps with their membership books and dues stamps and signed workers up right and left. When snitched off the expelled organizers left behind men ready to respond to the incoming IWW organizers already on their way through the recruitment offices of the Lumber companies and the employment companies elsewhere.

Local 500 of the Lumber Workers Union called a strike in June and in July the capitalists answered. The “Boise Gang” of local would-be Rockefeller equivalents (although they were as far from that financially as they were socially) launched a series of official State of Idaho attacks on the IWW, its offices and organizers. The Idaho Legislature passed several anti-sabotage laws enabling the arrest and prosecution of IWW organizers and officers and indeed regular members. The Idaho Criminal Syndicalist Law put the finishing legal structures on capitalist state power in that State and an Idaho Defense Council was creating amalgamating official and quasi-governmental vigilante organizations. On August 1, 1917, IWW organizer Frank Little was lynched in Butte, Montana. The cap press in Boise and the rest of the Northwest was jubilant urging similar treatment locally for IWW organizers. A week later the miners of Bisbee, Arizona, were deported en masse. On August 12, 1917, Governor Moses Alexander (Idaho) at Washington Governor Lister’s request sent Idaho National Guard troops to occupy Spokane, Washington, where they declared marshal law!

Against the roughly 50,000 men on strike in the lumber industry (from forests to mills and shipyards) local hoodlums and state power were far insufficient so on September 1, 1917, the federal government stepped in with the US Army sent to occupy the forests, mills, and shipyards. The strike was broken. But it was not an event, rather a drawn-out happening which resulted in the soldiers becoming disaffected and their commanders in Washington DC urging their rapid withdrawal. But by that time the IWW had been dismembered and coming in to pick up the scraps, often, only the AFL.

Selected Attacks after the US Enters the War in 1917

The US Congress voted for war as Wilson had asked on the 6^th of April 1917. Afterwards the gringo state apparatus was freed from any restrictions it might have felt prior to that date. The assault against the Left Wing of  Labor was intensified and continued until abut 1923 when workers finally fought and won enough battles against the Government, forcing them steadily back, to gain legal status for their new vanguard – the Communist Party USA.

The IWW had switched its emphasis from the Eastern industrial centers to the mid-west and far west agricultural, mining and lumber camps. These workers were seething with demands for social justice and many for a new society. The brought a huge and desperately needed new base to the IWW, albeit demographically unstable and temporary, and as importantly a huge new source of revenue, from the membership dues and initiation fees the IWW collected in its highly successful organizing drives. Needless to say the capitalist war was not popular among these workers and the IWW found them an increasingly fertile recruiting ground for the most militant section of their movement.

The Big Strike of 1917 initiated the capitalist-worker struggle in the far west, in the lumber states of Idaho, Montana, and Washington. Before it was over the US Army had 50,000 troops fighting against workers in these states.

In the end the Army broke the strike but not until after the lumber millionaires had been forced to accede to the eight hour day! Although the AFL debated the Company Union for credit with regard to the eight hour day, everyone involved knew this gain had been made by the IWW.

1919 the year of massive strikes.

The Greatest Rising of US and Canadian Labor to this Point

Philip Foner, a fellow communist, and the premier leading labor historian in the USA devoted an entire volume (8) of his History of the Labor Movement in the United States to 1919 and its massive strike movement. Serious students will want to pursue this in depth in his work. For our purposes I want to mention the general strikes in Seattle and Winnipeg.

Seattle

In January of 1919 the First World War had been over about six weeks (the armistice signed; the peace treaty would take several years to work out) and workers in Seattle as well as across North America were looking forward to higher wages and a higher standard of living. They were about to be brutally surprised everywhere. But, in Seattle the capitalist struck back with vigor when the Metal Trades Unions put forward their long (patriotically) suppressed demand for a fair wage scale.

Seattle, in 1919, had been one of the most pro-union cities in North America. It was a closed shop city and virtually all workers were AFL members and many of them were also in the IWW (the first for a job the second on principle.) Yet these AFL unions stood for everything Gompers and his gang were against.

Coming out of this struggle were two newly converted Bolsheviks, Arne Swabeck and Anna Louise Strong. I met Arnie in 1965 in Los Angeles some 46 years after the defeat of the Seattle General Strike of February 6, 1919. Arnie told me he believed the reason for the worker’s defeat was their failure to launch and maintain a strong information offensive to keep all the rest of the potentially sympathetic population informed as to what was going on in reality. In other words, in addition to the internal problems of strike committee organization the primary reason for the worker’s defeat were the effectively unchallenged out-right lies of the capitalists and their press and radio (i.e., about what the strikers wanted).

At any rate the Unions took over the city and apparently had sufficient confidence in their daily newspaper (the only Union owned newspaper in the US with a paid circulation well over 100,000) to keep the public informed that they went their merry way. A woman comrade, Anna Louise Strong, emerges about this time as a Bolshevik. She wrote the General Strike call to action printed in the Union daily and explained how public services would be run during the strike. (She later was recruited by Red Army G2 in China where she worked for us for many years, including a stint of duty with Richard Sorge when he was building his networks in China.)

The capitalists negotiated with one hand and then took back everything they conceded with the other. The first hand was their negotiating committee. The second was the US Governments Emergency Fleet Corporation’s, Labor Board. When the caps gave in with the one hand the next day they took it back with their Government controlling agency.

Within six days the General Strike was defeated, the radicals isolated, the unions demoralized and the caps launched an open shop city campaign that was largely successful.

Winnipeg

Seattle had been outright pro-Bolshevik as much of the union movement had been swept up in the enthusiastic US working class response to the Russian Revolution. But Western Canada was even more radical!

The general strike in Winnipeg began much as it had in Seattle when workers pent-up demands for fair increases in wages were denied at war’s end. The iron workers and carpenters led the way and the central labor council for Winnipeg backed their ploy with a call to a general strike. The strikers had three demands: (1) the right to organize (2) the eight hour day and (3) a living wage.

Before this was over the city police would join the strikers and the RCMP would be called in to shoot down the strikers. The strike was broken also much as it had been in Seattle. In the aftermath however the strike leaders found their cause continuable in the Provincial legislatures and in Ottawa.

The strike had gone on from May 16 to June 26^th as far as the workers were concerned but in effect it was broken with the mass murder of unionists by police, army men and thugs on June 21.

Analysis

These strikes were defeated along three avenues of bourgeois attack. The first was the road of information control. This was critical because a proletarian action in what is a very petty bourgeois setting (farmers of middle and lower  strata as well as the regular urban petty bourgeoisie) have to reach out and build bridges to these other strata. It takes time for the old classes to whither away and be replaced by the new proletarian classes. For example, it would take a century to go from -0 per cent farmer to 10 percent farmer in terms of both Canada and the USA.

The second boulevard along which the bourgeois forces attacked was that of armed physical murder of the strikers and the confinement and maiming of as many others as possible.

The third path to defeating the proletarians lay in the raising of the specter of communism (soviets) by the bourgeoisie before the workers had gone beyond vocal bullshitting in support of the Soviet Republic.

Attacks after the War ends

The Red Scare!

The Bolshevik Revolution put a real scare into gringo capitalists for the first time. Simultaneously they saw the opportunity to create a panic within the country simply by telling a mountain of totally concocted lies on a continuing basis about the dangers of the Red Menace. With this new anti-communism as its prime ammunition US capitalists could and did attack all of labor’s gains in hours, wages and working conditions.

We have seen how US capitalists often used patriotic camouflage for their selfish greedy acquisitiveness versus any regard to fairness in exchange for a worker’s labor-power. The capitalist’s only idea was to maximize his theft of the individual worker’s only sellable commodity - i.e., his labor-power.

A steady build-up of propaganda in the cap press led to the announcement by the US Attorney, General A. Mitchell Palmer, in early 1919 that US Communists planned on overthrowing the Government on May 1^st. All of this was a lie cooked up to justify the massive arrest and deportation of many thousands of persons accused of being foreign saboteurs and Bolshevik plotters.

At the same time as US capitalists unleashed Palmer they also sent a US Army Force to Siberia to engage the Bolsheviks, support the Whites and act as a counterforce to the some 70,000 Japanese troops already occupying the Siberian area around Vladivostok.

The Red Scare had served its purpose by the summer of 1920 and with the Left largely destroyed, in prison or deported, US capitalists began to relax their total police state grip and return to normalcy.

US Labor: Creating the Communist Party USA, 1919 -1923

In 1919, the right wing of the Socialist Party decided there was no possible common future for it alongside the left wing. The rightists proceeded to stage a coup.        

The Left Wing of the SP had won the national Party elections overwhelmingly literally everywhere. The Right should have been on the way out. In the event, the coupists expelled 70 percent of the Party membership and invalidated the election so that when the SP National Convention met in Chicago on the 30^th of August, 1919, it was headed for a final split. The Chicago police were used to clear this workers convention hall of all of the Left Wing delegates giving de facto control of the Party to the rightists who had brought in the police.

The expelled majority forms two Communist Parties

Emerging from the Left majority of SP members, now expelled, were two groups, each expecting to get Comintern recognition as the US Communist Party. Although both groups were formed too late to participate in the March 1919 founding meeting of the Comintern in Moscow earlier in the year they did meet their international comrades at the 2^nd annual convention of the Comintern the following year.

(1) One of these groups was the Left Wing majority of the old SP. They became the Communist Labor Party USA, holding their founding convention also in Chicago on September 3, 1919, just a couple of blocks from the SP convention where they had been denied their rights. The CLP was largely composed of US born English-speaking workers and may have numbered about 10,000 members. Elected as head of this Party, was First Secretary Alfred Wagenknecht.

Among CLP’s best known protagonists was the now famous John Reed (the Oregonian Socialist whose 1918 book Ten Days That Shook the World had made him world famous, and at that moment in 1919, Lenin’s favorite American.) Reed had gotten over 17,000 votes to lead the SP in its next presentation to the Second International of Traitors and Renegades trying to regroup in Switzerland after the end of the war. His nearest right wing competition Morris Hilquit got somewhere around 4000 votes. This is roughly the same percentage of Left to Right power that existed in the SP nationally. It was this realization; they could never prevail over three quarters of their members, which had lead the Rightists to go for broke with their successful coup.

(2) The other of these expelled groups was the Left Wing minority of the SP (that had early-on given up on the idea of recapturing the SP national convention to which their voting victory entitled them) and simultaneously was forming the Communist Party of America. This Party was largely composed of foreign born communists in what were called the Foreign Language Federations. The CPA (thereafter usually simply referred to as the Communist Party or CP) total membership was probably about 58,000. Elected as head of this Party was First Secretary Charles E. Ruthenberg.

The Capitalist Attack Drives Our Party Underground

We have seen the capitalist attack on labor as it developed in the pre war and war years. Now in 1919 communists were being forced underground by a massive All-States campaign of the federal regime against us. Even so both Parties continued a legal publication of their main organs as did the Foreign Language Federations. But what leadership was still out of prison had to hide. These leaders began work to create certain Mass Organizations which could take an open legal role.

One of these Mass Organizations was the American Labor Alliance (July, 1921). Another was the Worker’s Council.

In the meantime the two communist parties struggled to unite. The first attempt occurred in May of 1920 and was only partially successful. Then in May of 1921 at a second conference, another attempt at establishing unity finally got these two together creating the unified new Communist Party of America, (CPA.) In December of 1921 an organizing convention of the mass organizations and the underground now unified Party was held in New York City. Ruthenberg again emerged as the leader of The Workers Party with a seventeen man central committee and The Worker as its main organ. This was to be the legal above ground organization of the still underground Communist Party (unified CPA and CLP)

During August of 1922 the new Party struggled to get a strategy together for emerging from illegal status and despite renewed and ongoing capitalist state attacks the two were able to hold a unifying convention in April of 1923 where everyone was finally subsumed under one title in one legal above ground Party. - The Workers Party of America. This is the seed from which the then still underground Communist Party USA emerged as a legal entity of some 20,000 members in 1923. A long ways from the many times larger membership the Left had enjoyed in the old SP. But the federal and state capitalist attacks had taken their toll.

Analysis

What you have just witnessed historically is the most important single contrast within the capitalist world in the post-World War I period. Namely, the different ways the ruling classes of Europe and America developed to use against Bolshevism. In the USA something rather new had emerged and that was a capitalist appreciation for the work of the all out pro-capitalist pro-imperialist labor leaders of the AFL under Gompers. Elsewhere as in virtually all of continental Europe ruling classes were resorting to the elevation of outright (legal) police tyranny over workers as the preferred form of domesticating the working classes (i. e., fascism).

In short, one could say that fascism emerging in Europe and Gomperism in the USA were structural equivalents as far as their principal role in subordinating labor to capital was concerned, but there were important differences. When properly exploited this difference would allow Russian Leninists and the Soviet state, to ally with the North American capitalist state, to defeat fascism in the coming Second World War.

Jane Edgar Hoover

Chief Red Hunter for Attorney General Palmer and eventually for the entire US Government was a young attorney newly employed at the Justice Department named J. Edgar Hoover. On August 1, 1919, Palmer announced Hoover’s appointment to investigate the reported communist plot to overthrow the US Government by armed violent action. Thus, the man who would eventually be known in the intelligence community as Jane Edgar Hoover had begun his career as chief of the then just created General Intelligence Division within the Justice Department’s Bureau of Investigation, where the systematic intelligence gathering against the Left was now being conducted.

Hoover was a homosexual of the feminine variety but deep within the closet as far as the public was concerned. Within a few years he had found a 2^nd in command for the now named internal security service, the FBI. Number two in the FBI was the masculine homosexual for Hoover (who never lived with a woman other than his mother.) Hoover took on the role of “wife” to “husband” Clyde Tolson. Tolson who had been in the FBI for all of two years prior to elevation to this coveted number two seat. All of this might have been irrelevant to us if it had not been for Hoover’s whoring for cock.

The Three Musketeers

Lansky, Costello and Hoover

Hoover’s homosexuality was turned to the advantage of Meyer Lansky and his -chairmanship of organized crime’s national crime commission when Meyer played cupid to Hoover with the handsome Frank Costello. Costello was the mob’s top internal organizer and closest associate of Lansky, Benjamin Siegel and Charles Luciano. This relationship between the FBI boss (who one might have thought would be building a case against these men) and Costello, helped change that law enforcement mission dramatically. In fact, what happened was Costello’s quid pro quo for giving it to Jane up-the-ass every weekend (Saturday get together’s between Hoover and Costello occurred in Five Star Hotel rooms across the country for years) turned out to be Hoover’s assertion that there was “…no such thing as organized crime in this country.” Part and parcel of this quid pro quo was the “giving-up” of John Dillinger et. al. by the Lansky organization. This gave Hoover the breathing space he needed (of seeming success in his crime fighting) while he built his one man monopoly of federal criminal and political intelligence. See the movie Public Enemies for a visual account.

William Z. Foster

On July 8, 1924, The Workers Party (above-ground name for the Communist Party) nominated William Z. Foster and Benjamin Gitlow for President and Vice President of the United States. This was the first national ticket for the underground CPUSA and it featured one of its emerging principal leaders at its head.

Foster had a strong labor union orientation having begun his militant Marxist life in the IWW. He left the IWW and in 1915 wrote a serious theoretical pamphlet entitled Syndicalism. Eventually Foster began to grasp the significance of Karl Marx’s work in the analysis of society’s evolution in terms of what it means for the day to day conduct of a generalized class war. In other words as he grasped the fundamentals of historical materialism he left syndicalism behind and had graduated to being a scientific socialist.          

That had specific immediate ramifications. Namely organizing on every level possible (not just within normal trade union bounds) to win a broad spectrum of social victories including higher wages, better hours and working conditions. The long-term perspective being to create a socialist transitional order in the USA on the road to communism; specifically a social order that would look a great deal like Soviet Russia.

The Trade Union Educational League

What Is Syndicalism?

You have seen how Anarchism missed the boat altogether in failing to understand Karl Marx’s discovery that the “state” is simply an instrument of class suppression (army and police). Whatever class exercises its dictatorship over the class society in question uses that state to control the mass of slaves, serfs or workers (slavery, feudalism, capitalism, respectively, as the three stages of class-state society comprising the Servitude Epoch between Primitive Communism and Modern Communism. Preceded and succeeded by transitional stages.) This scientific discovery has certain undeniable consequences. Marxists and now the Leninists also considered the defeat of the ruling classes and their state as a necessary precondition to the establishment of socialism.

The anarchists wanted only local seemingly spontaneous bodies to go about governing with no enforcement mechanism other than the armed mass of the people as a whole. There were many unionists who saw a broader front had to be created to organize for working class state power than what the anarchists could assemble from their illiterate farmer base and the resulting anarchist industrial proletariat. These men and women believed workers could seize society by first seizing the shops and factories in which they worked and would then proceed to create the new society.

Syndicalists were very similar to the anarchists in many ways but most importantly in this inability to understand the nature of the state and class rule in any class society. In Europe (especially in England and France) during the first decade of the 20^th century, these syndicalists had what they considered to be considerable success in building their base for eventual working class takeover of society. That takeover was to be accomplished by building control over shops and factories and taking direct ownership after which the class war would see a rather automatic taking of social power – that is, without doing what the Marxists said was essential and that was first fighting and destroying the capitalist state apparatus (and its concomitant the establishment of a proletarian state – something anathema to both anarchists and syndicalists because of their failure to understand the nature of the state (any state) as the instrument of ruling class oppression and the proletarian state as the necessary enforcer and guardian of working class political priorities.

William Z. Foster traveled to Europe in 1910 while still an active member of the IWW and came back, after a year or so, convinced that American revolutionaries had to get inside (bore from within) the AFL and by winning over a militant minority, especially in certain specific unions, go about the reform and rehabilitation of that huge organization.

The IWW Fails Because of its Anti-Communism

In the fall of 1920 the underground Communist Party USA told the IWW leadership that the IWW’s membership in the First International and any working relationship in the USA between the two would require the IWW to stop teaching workers “…that the revolution can be achieved by industrial organization of the shops and factories and the direct seizure of industry, without first overwhelming the capitalist state (military and police – ed) and establishing the Proletarian Dictatorship of the Soviets.” (See Foner 8:234). To make a long story short the ultra left leadership ended up refusing any relationship with the Third International whatsoever. This marks the beginning of the end of the IWW.

After its anti-communist turn the IWW did occasionally have success in dramatic strike and free speech actions across the country now and then. But for practical purposes the IWW was dead and the continuity between it and the coming generation of revolutionaries would consist of the movement of persons such as William Z. Foster and Elizabeth Gurley Flynn (who I met in January of 1962 at her office in the National Office of the CPUSA in New York City.)

The Communists willingness to participate in the capitalist electoral system (along with joining the fight against the class enemy on every other front in the class war) was the most immediate and obvious given reason by the IWW ultra-left leaders. The real reason was their long commitment to the idea of industrial organization of workers to take ownership of those factories directly and without participation in the capitalist parliaments or without reliance on their own state apparatus (organized military units.) By 1920 it was clear to the ideologically narrow ultra left IWW leaders in Chicago and Detroit that the Russian Bolsheviks had turned their revolution into an anarchist’s bad dream and a syndicalist’s nightmare, in that the Bolshevik state apparatus was not only successful but an idealized version of a state apparatus commanded by Marxists. In other words to construct their socialism the Bolsheviks had adopted the capitalist mechanism of using state power.

There was certainly nothing new about the Marxist approach in this regard except for the Bolsheviks having made it practical. In other words, the way the Bolsheviks seized power and then fought a civil war to defend it was also precisely the Marxist way of applying proletarian police power to back up proletarian military power on the land and sea. The American syndicalists (and Anarchists like Emma Goldman) should not have expected anything else. After all this is what everyone had been arguing about since the days of the First International and the Marxist and Russian Bolshevik interpretation were well known to just about everyone on the Left

Syndicalist League of North America

When Foster returned from his self-directed sabbatical in Europe, in 1911, he was convinced that the ultra left IWW policy of “dual unionism” was self-defeating. Instead he proposed to do in the USA what the syndicalists in Great Britain and France had done. Namely get inside the conservative pie-card run trade unions and build a militant minority, which would then take over the entire union, working through extant union structures.  

The IWW leadership rejected Fosters ideas and he left that organization the following year (1912). Foster began his one man crusade as a full time employee in the railroad industry (12 hours a day 7 days a week) and a member of the Brotherhood of Railway Carmen’s union which had had a rather good militant history. His first step was to organize a syndicalist league within his union and to write to other persons he knew across the country to do the same thing in some union in their cities. By July (1912) Foster was able to get delegates from a dozen US cities and British Columbia to meet in Chicago to form the Syndicalist League of North America.

In September 1912 Foster was able to publish a de facto statement of principles in the form of a monograph entitled Syndicalism (along with Earl Ford) which acted as the organizations constitution and theoretical statement. Chicago was the seat of the new organizations main journal The Syndicalist, where Foster acted as Business Manager. There were regular syndicalist monthlies in Omaha (The Unionist), Kansas City (The Toiler, where future CPUSA boss Earl Browder was editor) and San Diego (The International.) A syndicalist weekly was being published in St. Louis (The Unionist).

The International Trade Union Educational League

Half-Way There

In January, 1915, Foster and associates from around the country put paid to their first effort with the SLNA and convened a second try. They believed the “boring from within” policy not only correct but one which needed to be pursued with increasing vigor. However, when it was all said and done, the ITUEL had gone only partway toward Marxism by adopting an alternative to IWW ultra-leftism on the question of elections. The term in those days for participating in capitalist elections was “political action.” The new ITUEL position was that there was a difference in participating in elections and the resulting parliamentary struggles between right wing socialist and trade unionist selling out (participating in the cap government rather than plotting its ultimate destruction) and taking advantage of legislative opportunities arising as a result of “direct industrial action.” ITUEL said the latter was alright but the IWW leaders took the former position.          

Foster was half-way to the correct Marxist position and by the time he made his final transformation into a communist he was able to bring his concept of boring from within (“education”) to the AFL militant minorities to the fore as the Communist Party’s main strategy. Thus, Foster arrived at his concept of a CP led Trade Union Educational League (TUEL.) By mid-November of 1920 Foster opened the National Office of the TUEL in the building owned by the Chicago Federation of Labor.

Foster said it best himself in a letter to Upton Sinclair:

“…it seems to me it is time that the left wing of the great labor movement develops an industrial program. It had one fifteen years ago, but that led to the IWW and all the years of impotency. The time is ripe for another and the new one, if it is to fare better than the last, must call for this inevitable industrial unionism through the old unions.” (Foster 9:105)

More on the IWW collapse Because of its Anti-Communism

In the fall of 1920 the underground Communist Party USA told the IWW leadership that its membership in the First International and any working relationship in the USA between the two would require the IWW to stop teaching workers “…that the revolution can be achieved by industrial organization of the shops and factories and the direct seizure of industry, without first overwhelming the capitalist state (military and police – ed) and establishing the Proletarian Dictatorship in the Soviets.” (See Foner 8:234). To make a long story short the ultra left leadership ended up refusing any relationship with the Third International whatsoever. This marks the beginning of the end of the IWW.

After its anti-communist turn the IWW did occasionally have success in dramatic strike and free speech actions across the country now and then. But for practical purposes the IWW was dead and the continuity between it and the coming generation of revolutionaries would consist of the movement of persons such as William Z. Foster and Elizabeth Gurley Flynn (who I managed to meet in January of 1962 at her office in the National Office of the CPUSA in New York City.)

The Communists willingness to participate in the capitalist electoral system (along with joining the fight against the class enemy on every other front in the class war) was the most immediate and obvious given reason by the IWW ultra-left leaders. The real reason was their long commitment to the idea of industrial organization of workers to take ownership of those factories directly and without participation in the capitalist parliaments or without reliance on their own state apparatus. By 1920 it was clear to the ideologically narrow ultra left IWW leaders in Chicago and Detroit that the Russian Bolsheviks had turned their revolution into an anarchist’s bad dream and a syndicalist’s nightmare, in that the Bolshevik state apparatus was not only successful but an idealized version of a state apparatus commanded by Marxists. In other words to construct their socialism the Bolsheviks had adopted the capitalist mechanism of using state power.

There was certainly nothing new about the Marxist approach in this regard except for the Bolsheviks having made it practical in the way in which they applied proletarian police power to back up proletarian military power on the land and sea. The American syndicalists (and Anarchists like Emma Goldman) should not have expected anything else. After all this is what everyone had been arguing about since the days of the First International and the Marxist and Russian Bolshevik interpretation were well know to just about everyone.

Foster had been one of those super-charged by the success of Lenin and the Bolsheviks in Russia. A few highlights from his career will give you an idea of how strongly.

The Great Packinghouse Strike

On July 11, 1917, as an unaffiliated one-time syndicalist working in Chicago young William Z. Foster got the idea of organizing the altogether crazily thrown together Packinghouse District workers. The meat packing industry had gone from one farmer slaughter of cows to a one-man slaughter per cow in the Chicago stockyards. Now, the entire process was broken up into a series of jobs until about half the jobs were in the hands of one immigrant population or another from Eastern Europe. About 80% of the other half went to White workers and 20% to Black workers.

The AFL unions had virtually all been racist in Chicago and this was the number one weapon of the capitalists in keeping their workers divided and disunified. Racism combined with nationalist bigotry did the job until Foster came along and changed the course of mass organizing in racist divided capitalist workforces.

Foster belonged to a rather small AFL union made up of railroad Carmen. He got them and the AFL Butcher Workmen’s union to approach the Chicago Federation of Labor to kick off an organizing drive in the packinghouses and stockyards. Only five days later the fight was on! 

The most amazing struggle unfolded and is certainly worth your effort in study. A good place to start is Volume 7 of Foner’s History of US Labor series. Suffice it to say for now that by Easter of 1918 the Packinghouses and Stockyards had been organized and the combined power of the capitalists and their state apparatus and quasi-governmental goon squads had been decisively defeated. Workers had won, temporarily anyway, the eight hour day, time and a quarter for overtime and a 20 minute paid lunch break. Workers walked away with a flat ten percent across the board wage increase. The Union won on key points such as worker seniority and changing, cleaning and toilet facilities, dining rooms, and anti-discrimination clauses in worker contracts.

Actually the AFL unions were a bulwark of the capitalist racial structure designed as the post-Civil War method for keeping US workers divided (from Slavery to Segregated racial serf). To the degree that the Packinghouse labor movement failed it was because of the racism. Foster recognized this and began his lifelong anti-racism campaign aimed at educating White workers.

The Mines

The Great 1919 Steel Strike

In April 1918, on the heels of the victory in the Packinghouse-Stockyards Organizing campaign Foster again approached the Chicago Federation of Labor and with nominal support from the AFL union which should have taken the point long before (the Amalgamated Iron and Steel Workers) Foster won support for his next organizing target: the US steel industry.

The Depression of 1920 – 1923

The collapse of working class buying power (rise in prices) began at War’s end (November 1918.) Then from August of 1920 to August 1923 the US economy sunk into another of the continuing nearly innumerable depressions of the US capitalist system and its history.

You will recall the first of these capitalist depressions in the USA began in 1819 and continued uninterruptedly every few years thereafter until the Civil War. After the Civil War these capitalist depressions continued. During the Spanish-American-Cuban War of 1896 and again during the First World War (1917-1918 for the US) there had been temporary spurts of employment and increased wages, which is to say as long as the war contracting continued.

Now in 1920 the old pattern of attacking working class gains across the board was the policy of the ruling capitalist classes across the gringo nation. Even gringo capitalist academics decried the fact that workers wages were largely below their calculated minimum working class family need at an annual 1617.00 US dollars. Scott Nearing (an early communist writer) calculated that in fact a minimal standard required $2285.00 for a US working class family of five and that only AFL labor aristocrats made that much, let alone more.

Worse yet was that gringo (cap) economists believed the problem was market saturation! That is, in all the cap press of the year 1920 we saw this idea being put forward that there were too many goods and too few buyers thus too many workers and many would have to be released to find other kinds of livelihood. Again Nearing pointed out in response that the problem was that workers didn’t have any money to buy the many things – almost everything – they desperately needed time and time again! By contrast capitalist profit had increased several hundred percent by the most conservative estimates. You didn’t have to be a rocket scientist to see what was going on. The eventual capitalist solution to this dichotomy would come after the next great depression began in 1929 and would continue unabated until the 1932 election of FDR, as by 1933 the US cap system was definitely tottering and the most important pusher coming would be the Communist Party USA.

The New York Times anticipated this by warning in 1922 that Canadian Bolsheviks had begun to lead the unemployed movement up there and that had to be prevented at any cost in Gringolandia. They kicked off another red-baiting campaign of their own against US Communists (all still underground) they claimed were running the unemployed demonstrations in US cities.

In the meantime unions fought back by providing assistance to their members and to members of their international unions. Civilian sympathizers with workers in unionized industries sometimes created food banks and produce distribution centers in the factory districts of Philadelphia and Buffalo. Workers never really win in these situations but sometimes they can weather them.

Capitalists Have Their Solution to the Depression

In his outgoing State of the Union Address Woodrow Wilson had called, in one sentence, for the Government to launch public employment programs of some kind to take up the slack expected by the returning waves of conscripted soldiers. However, the incoming Republican administration of Warren G. Harding decided on a different course after convening a Conference on Unemployment. Perhaps the best way to describe the attitude of US capitalists to the rising tide of unemployment and higher prices for everything (food to housing) is to recall how they reacted to labor’s demands for health and dental care.

There’s Your Dental Plan

Cut Wages by 2/3rds

During the New England textile strike of 1922 several Pinkerton’s had grabbed an IWW speaker so that the local fat-cat magnate could kick him in the head. Having removed most of his dentition with one kick the local offended capitalist pronounced “there’s your fucking dental plan!”

Harding’s Conference on Unemployment institutionalized this proto-fascism when it pronounced that US wages in the textile industry should be cut by two thirds in order for US capitalist owners to be better able to compete with German industry. In fact, the Conference recommended that all US worker wages be cut back to the German level for the same specious reason. Quite an outcome to the imperialist war fought by American workers against German workers. They won but then they lost everything they had gained over the previous years and decades!

Of course, workers didn’t lose everything they had gained but they came close to it. – And, although the President’s recommendation to cut US wages across the board by 67% was not enacted in general it certainly was the policy being enacted across the nation as individual blood-sucking capitalist scum took advantage of every opportunity presented by the capitalist governments in Washington and Statehouses everywhere, it was clearly the policy of capital in North America to enslave labor to the degree possible.

Slave Auctions

Beginning in September 1921 one activist named Urban Ledoux, using the name Mr. Zero, sold 50 unemployed men at a slave auction in Boston. More and more of these were held in the buildup to the unemployment Conference and supported by a broad spectrum of liberal and progressive organizations including the ACLU and the NAACP. The idea being to prove the difference between Chattel Slavery and Wage Slavery was not all that great.

Right Wing AFL Leaders Throw Their Qualified Support

Gompers and Gang were challenged by their own unions for failing to effectively stand up the wage slashing proposals of the capitalists at the President’s Conference. But, by this time the outright sell out role of the pie card leaders of the AFL was so well established that in reality nothing else had ever been expected. Their program? The same as the capitalists. To urge family and friends to come to the aid of their unemployed family and community members.

Time for Leninism

More would have to be done to insure the social welfare all working people regardless of sex, religion, race or ethnicity, but this would require the “legalization” of the status of the Communist Party and a massive education of workers in unions about unity and how the capitalist conspiracy against them was based on exploiting prejudices about others due to their race or sex, religion or ethnicity. We have reviewed how US communists handled the Government-Hooligan attack. Now let us take a look at how US communists approached the trade union movement even before their legalization under the leadership of William Z. Foster and the Trade Union Educational League (TUEL).

The Trade Union Educational League

Meanwhile Capital Expands

The Science of Petroleum Geology and Engineering

Throughout the 1920’s a primary concern of bankers and long term thinkers and planners was whether continuing sources of crude could in fact be found. Many experts thought it was just a matter of time until crude oil ran out and then where would we be? Science, engineering and technology continued to advance by gestalt leaps and bounds and it was not surprising that something as potentially rewarding as oil science should have been a big part of this. Consequently, we saw the emergence of entirely new ways of searching for oil and these were:

The torsion balance

The magnetometer

The seismograph and refractive seismology

Aerial reconnaissance

Deep drilling technology

Conservation oriented oil field production engineering

Improved refining (better shortening of long chain oil molecules or cracking)

Electric logging

Expelled from Russia

In the meantime, the imperialist oil families had to face the reality of having lost their entire investment in Russia. At first they tried wishful thinking and asserted the Bolshevik regime could not survive even though by this time (1920) an objective observer could see that the Wrangel threat out of the Crimea and the Polish threat against the Soviet West were both doomed to final ultimate defeat. So, these super-rich families engaged in long and drawn-out negotiations among themselves over one or another aspect of Russian oil. It was all irrelevant.

In Chapter 13 we reviewed the rise of Baku-Batum oil and the organization of its labor movement by Vladimir Illych Lenin and his agents of change, Joseph Stalin, Michael Kalinin and Kliment Voroshilov. We saw how these men, and other Old Bolsheviks, organized the nationwide general strike of 1903 that led to the Czarist War against Japan in 1904 – its miserable defeat – and the subsequent Revolution of 1905. We need not go over it once more here.

Suffice it to say the Bolsheviks were successful in 1917 establishing the first working class government and state in the world. The Soviet Republic became the Soviet Union in 1924 and the old Czarist Empire had been restored in new proletarian form.       

Leonid Krassin who had started his career in the oil corridor of Baku-Batum organizing strikes and robbing banks now took over the business aspects of the Commissariat (Ministry) having to do with getting government owned business up and running. Lenin needed the cash flow from oil and instructed Krassin to make modernizing the Russian oilfield and producing and selling Russian oil, his number one concern. Money was pouring in to Russia for its oil and the Rockefellers, Nobel’s and the Rothschild’s were totally excluded. They had lost it all. It would be their greatest defeat until Mexico.

Mexico

Revolution broke out in Mexico in 1910 and the revolutionary struggle would continue for a quarter century. Most people around the world became familiar with leading figures such as Pancho Villa who controlled the revolutionary armies in the north and Emiliano Zapata who was in charge in the south. – And a huge number of New Class technocrats in Mexico City also joined in revolutionary activity. The federal army (state apparatus) of over-thrown President Porfirio Diaz vacillated from one Mexico City New Class technocrat to another and occasionally simply took the Presidency itself under one or another general.

All of this was fueled, (as if it needed any more fuel than centuries of oppression had already put into place,) by the discovery that year of oil in northwest Mexico in the State of Tamaulipas near the city of Tampico at a well called Potrero del Llano 4. Potrero flowed at 110,000 bpd making it the biggest oil well strike in world history. Over the next 24 years the Mexican oilfield did not miss a stroke despite the ongoing civil war. The success in the oilfield suddenly gave even more impetus to the participants in the civil war because whoever won would have access to the incredible wealth of Mexico’s petroleum reserves.

In 1917 the Mexican Congress, pushed hard by native would-be Bolsheviks, and an in-process of being Bolshevized labor movement, passed a new Constitution which had oil declared a property of the nation (Article 27 paragraph 4). The Imperialist Oil Companies of course refused to recognize the right of the Mexican nation to seize subsoil rights and the battle that would only end two decades later was on.

In the midst of all this was the fight between the imperialist oil monopolies for ownership of the Mexican oil. That fight would go on until the nationalization of said oil by Mexican President (former General) Lazaro Cardenas. Cardenas was the man who would go down in history as the second, and last, honest Mexican President (all the others yet to come were crooks of one kind or another.) In 1927, Charles Lindbergh’s father-in-law, as US Ambassador to Mexico, managed to avert a Third Mexican War with a series of compromises accepted by the newly elected PRI Government of Mexico under Plutarco Elias Calles and the Oil Companies. The Companies were primarily British investor controlled Royal Dutch Shell (65% of the total foreign investment) and the US companies Standard Oil of New Jersey, Sinclair, Cities Service and Gulf (30%). But 1927 was a close-run thing with President Calles ordering General Cardenas to prepare to set the Tampico oilfields ablaze, should the gringos invade. Cardenas was a hero of the revolutionary civil war and at that moment was the general in charge of the oil zone.

By that time Mexico had been the number one oil producer in the world and for a long time continued as number two. In 1921 Mexico produced 193 million barrels of oil and supplied over 20% of US demand. In the late 1920’s Mexican production began to decline and so did the PRI Government’s revenues.

The US government owned lock, stock and barrel by capitalists was frequently called upon to use its influence and/or its troops to see that the US and British oil monopolies got their way. The way was cleared for the final battle between Mexico and Imperialism by the election that put General Cardenas into the Presidency in 1935.

During the electoral campaign of 1934, Cardenas had been backed by a broad united front of workers, small farmers, the Army, and New Class technocrats, under the leadership of Mexican Communists (some of whom became my closest associates a quarter century later.) Sixteen odd oilfield unions were in the vanguard of that leadership. The hand-writing was on the wall. Nationalization was inevitable.

Two years later the Mexican oilfield unions went on strike in May, 1937. Mexican labor rallied behind the oilfield workers and began preparing a national general strike.  They were propelled to do so perhaps more quickly than they might otherwise have done by the successful nationalization of Standard in Bolivia.

President Cardenas could not afford to have a strike that would paralyze the nation for a variety of reasons and set up a commission to study the Companies books and prepare a recommendation. The Companies fought back. To make a long story short Cardenas seized the oilfield and nationalized the entire infrastructure on March 18, 1938.

This time war seemed inevitable. -And in fact, the US came extremely close to invading and occupying Mexico again (this would have been the Third Mexican War for the US had it happened). The years 1938-40 featured FDR seriously considering the possibility. An embargo was placed on Mexico by the UK and the USA. Mexico severed diplomatic relations with Britain and almost did the same with Washington. However, the ongoing capitalist depression had reduced the US demand for Mexican oil and suddenly Germany and Italy took all of Mexico’s oil and willingly paid a high premium price! Japanese oil geologists began oil exploration in Mexico and mapped a pipeline to take Tampico oil across the country to a Mexican Pacific Port.

But the embargo hurt the Mexican people in other ways. I have spoken with Mexicans who lived through it, who were from relatively wealthy families and for the first time felt the pangs of hunger and deprivation. In the end, FDR decided that the effect on Latin America of another US invasion of Mexico would be to turn the entire region south of the Rio Grande against the US precisely at a time when the Nazi’s, the Italians and the Japanese were making strong probes and serious attempts at winning over the comprador regimes of South America to their side in the coming Second World War. FDR opted for peace with Mexico and came to a quiet agreement with Mexico City that gave Gringo acquiescence to permanence for the Mexican nationalization. In exchange Cardenas gave believable assurances that the US would continue to get the Lion’s share of Mexican production – and all of it, if necessary – in the inevitable coming World War.

At the end of 1939 FDR reached an accommodation with outgoing Mexican President Lazaro Cardenas over the 1938 nationalization of Mexican oil, thereby setting a favorable political scene for gringo imperialism to prevail over fascist imperialism south of the US border. Roosevelt then countered Axis inroads into Latin America by sending US Army Intelligence agents to neutralize incoming German, Italian, Japanese and other fascist spies and saboteurs. They did this by assassination of these persons in their five star hotels and favorite whorehouses from Mexico City to Buenos Aires. These foreign agents were fairly easy to recognize, even in Argentina and Chile, and most vulnerable when not ensconced with their fellows in embassies and safe houses. By 1941 these pests had been exterminated for the most part. US hit teams were called “rat hunters” and the tactic “rat hunting.”

When I joined US Army Intelligence in 1959 these tactics were still routinely being taught. We learned how to do it

Finally, Mexico having gained ownership of its own oil was able to produce cheap fuel oil and gasoline to support Mexico’s own industrialization. It set up a government oil monopoly, Petroleos Mexicanos (PEMEX) – And, generations of Mexican’s would enjoy the luxury of cheap automotive gasoline. This lesson would be learned by colonial and semi-colonial countries all over the world, not just Latin America, for many decades to come and had, thus, a world-wide significance far in excess of its immediate national import.

Equally important with the passage of time would be the criminalization of the Mexican oil labor movement under La Quina the Mexican super boss of oilfield labor who eventually was sufficiently powerful to challenge the PRI President for control of the nation. Another story for another time but we will return to this subject once more below.

The Rape of Venezuela

In the 1920’s, the Rockefellers and other US producers had been looking for an alternative to Mexican crude. While they had not yet missed a barrel in production from their Mexican oilfields, they had to operate within an atmosphere featuring the constant threat of nationalization from Mexico’s Labor movement and its powerful Communist Party. The foreign capitalist oil families took Bolshevism seriously now, because they had lost everything in Russia once and were not looking to losing everything twice in the event of Communist Revolution or Leftist Labor led nationalization in Mexico.

The aftermath of the wars of national liberation led by the bourgeois and petty bourgeois classes of South America featured the descendants of Venezuelan leader Simon Bolivar settling into a kind of post-Roman Empire West series of fiefdoms, where each local feudal boss was a military dictator. In fact of the 184 members of the bourgeois 1890 Venezuelan parliament, 112 were generals. This was still the case in Latin America in the 1920’s. This was called the Caudillo system (Caudillo is a Spanish term used for military leader) meaning local strong man bosses were running the show. Top Caudillo in Caracas, Venezuela, at the time the Rockefellers went looking for an alternative to Mexico, was “General” Juan Vicente Gomez.

Gomez was paid and he delivered a Venezuelan oil lease, on a platter, to Royal Dutch Shell in 1913. Paid again and delivered again to Standard Oil of New Jersey in 1919. Washington paid again and was thus able to put order into the Venezuelan system by getting Gomez to announce the Petroleum Law in 1922 which brought to Venezuela then current concepts in Anglo-American law regarding the exploitation and regulation of subsoil rights to oil.

Small time production of Royal Dutch in 1913 was joined by the first major strike in December 1922, at what became the Standard La Rosa field on the northeast coast of Lake Maracaibo. La Rosa blew in at 100,000 bpd! Standard now had its Mexican alternative source identified. All the imperialist companies switched their focus away from unstable, revolutionary, pro-Bolshevik Mexico. – And the imperialist companies had the Washington imposed Petroleum Law in hand. A law they had written for an orderly way to share in the rape of Venezuela. The bought-off comprador regime of totally corrupt General Gomez would last until 1935.

FDR Saves the US Petroleum Industry

The oil monopolies were confronted with a nearly as serious coming catastrophe in the USA, which in many ways was far more severe than what they had lost in the Soviet Revolution. It was, at bottom, the General Crisis of Capitalism which we have defined in earlier chapters, which was responsible. But, the immediate form of US oil capitalism’s collapse lay in overproduction, and the chaotic destructive profit-seeking of greedy production.

If not for Rockefeller and Flagler the US petroleum industry might have continued floundering in internecine and senseless warfare among producers, refiners, railroads, pipeline companies and banks, many years earlier. But, even then, as we have seen, with Rockefeller and Flagler de facto in charge, it had been impossible to continuously impose clarity on men who could not see beyond the greed on the tips of their noses.

This situation has been exacerbated and brought to crisis by the discovery of one gigantic oil field after another in the States of Texas and Oklahoma. California oil men contributed their part to the chaotic state of the industry, but were too far away from the eastern and mid-western markets to affect them. Then the biggest strike of all came in 1931, in East Texas, when perennial promoter and octogenarian Columbus “Dad” Joiner hit it big in Rusk County (East) Texas on the farm of Daisy Bradford. In fact, the field turned out to be ten miles wide and 45 miles long. By the next summer wells were producing 500,000 bpd!

All of this was great news, at least initially, for Dad Joiner. But, for the industry already suffering from too much crude on the market it was a disaster. Others hit it big before the collapse in prices and made the fortunes with which they would fund their future notorious activities such as H. L. Hunt. Texas fascist-to-be (and Kennedy assassination co-conspirator) Hunt, swindled Dad Joiner and many others, coming out with a Lion’s share of the new East Texas bonanza. But this was the depth of the First Great Depression (we are in the second now) and no one could take any more hits than they had already taken and were now taking.

Franklin D. Roosevelt was elected in the November 1932 election and four months later took the Presidency when the USA was itself on the verge of Bolshevik Revolution. Among other things the progressive capitalists under FDR had to get the price and supply of oil under control and they proceeded to do so. FDR appointed Illinois Republican and former Progressive Party lawyer Harold Ickes to take command as Oil Administrator in the Public Works Administration (one of FDR’s “100 days” emergency pieces of legislation.) Ickes had already been appointed US Secretary of the Interior so the two tasks fit together like hand in glove. Oil had sunk to ten cents a barrel when Ickes warned Roosevelt that collapse of the entire industry was imminent! Indeed, for once, US oil capitalists were begging Washington to save them.

To make a long story short FDR issued an Executive Order with “100 days” authorization to control the price of oil. To do this he had to stop the bootleg oil (being stolen at every opportunity from reserve tanks, pipelines and refineries to the tune of 500,000 bpd!) He used the power of his executive branch to send special cops into Texas and Oklahoma to enforce the new Oil Code authorized by NRA but operated by Ickes through the Interior Department.

Next FDR had to get the producers under control. Ickes issued quota orders for Texas and Oklahoma and instructed the State Governors to enforce the quotas. Ickes toyed with the idea of price fixing but gave that up (and we would not have it until World War II). By the time the ultra-reactionary US Supreme Court outlawed the NRA and NIRA the industry was under control and willingly accepted the regulation they had first vehemently opposed and then begged for.

Finally FDR acted to impose a tax on all foreign oil coming into the country and that put an end to oversupply originating overseas. Foreign oil imports dropped to 5% of the total.

Demand had been stabilized and so had supply. The Depression was far from over, but the immediate danger of Bolshevik Revolution had been avoided, and the oilfield was once again an integral part of the newly emerging, reformed, US capitalist system.

On the Eve of World War II

The Good

We have used the oil industry as our example of imperialist expansion before and after World War I. We have seen that a handful of super rich families owning a handful of super rich corporate monsters with a monopoly on oil (and yes natural gas, but the expansion of natural gas to contemporary levels would not happen until after World War II) had their own ideas. In this book we reviewed the fact that the entire post-World War I period can be defined in just one way. The international capitalist class considered itself to be at war with the international working class’s first national “state” power holder: the Union of Soviet Socialist Republics. The entire post-World War I period is a time characterized first, foremost, and exclusively by anti-Bolshevism from the standpoint of the great capitalist countries.

Now, how did Stalin prepare the oil industry of the working class for the inevitable coming world war which would decide the fate of mankind?

Oil Will Be Produced in Record and Needed Quantities

No Bolshevik, with the possible exception of Leonid Krassin, knew more about oil and natural gas than Joseph Stalin. You have seen that Stalin began his career as a fourteen year old young man, studying with oilfield workers in the Baku-Batum oil corridor. You have also seen, shortly thereafter, Stalin organized the first successful permanent labor union in Russia and that was also in the Baku-Batum oil corridor. Finally, you have seen that Stalin returned again and again to this part of the Czarist Empire to organize secretly both these unions and the Bolshevik Party apparatus itself. Stalin had been educated in the technical details of petroleum engineering by Leonid Krassin.

Krassin was college educated, and self-educated petroleum engineer and geologist, (in those days there were as yet no independent fields of petroleum engineering and geology) and an experienced oilfield company man (meaning in the oilfield, the financier’s boss of the drilling site), not to mention being an individual capitalist entrepreneur. It was Krassin, Lenin had put in charge of the oil industry to begin with, and with Lenin’s passing it was only natural that the new Bolshevik Party boss, Joseph Stalin, Krassin’s leading pupil, who was undertaking the greatest industrialization of any nation in the history of the world, before or since, would personally oversee the energizing of the USSR via oil and natural gas, and would take command of this most important economic sector. As you know the primary area from which petroleum would come in the years preceding World War II, was precisely here in the Trans-Caucuses.

The First Five Year Plan (beginning August 1928) had such vast industrialization objectives that oil and gas were not just one part of it but petroleum was the essential underlying foundation for it.

Cracking the Whip: Five Year Plan Style

Accordingly Stalin told his oilfield managers in 1929 that failure to meet their quotas would result in mandatory death sentences. Stalin knew the oilfield and he knew all the tricks. Drilling dry holes to get investor money. Calling wells drilled “dry” when in fact they were not (so you could dump your investors and come back later and take it for yourself.) Corruption of this sort existed all through the Baku-Batum oil corridor as it did in every oil strike region of the world. There were many consequences to Stalin’s firm stance.

In this case I remember reading the biography of the Schlumberger’s by Anne Schlumberger and her saying to paraphrase: “I recall that the Soviet petroleum engineer who cased a non-productive well would have a visit from NKVD shooters within days if not hours and would be taken outside the drilling rig shack and shot then and there!”

One result of this heavy emphasis on oil and gas production, and this draconic incentive program, was the creation of the modern well logging industry. The Schlumberger brothers had invented surficial electrical prospecting in the 19 teens and 19 twenties, traveling all over the world to do so, with limited success. So what was it exactly that made the middle level managers beg Stalin to do in technical terms?

Just before this time, in 1927, in Pechelbronn, France, when Stalin was just beginning to crack the whip in the Soviet Union on the oilfield managers, the Schlumberger brothers tried something completely new. Up and until this time they had been running electrical cables across the surface of the Earth looking for electrical evidence of petroleum deposits. Then they began trying something never before done. Namely, running one end of a very long telephone cord wrapped in electrical tape (later this would become today’s armored electrical cable) downhole in a newly drilled well,` and placing the other end on the surface. Then they withdrew the telephone cord by winching it onto a drum at a given rate (I used to do this at about 13 feet per minute) and they measured the resistivity (conductivity) of the formations touched by the downhole end of the cable. In this way they were able to determine what kind of rock it was touching if it was sedimentary: (sandstone, shale, limestone) and even what that rock contained (water, oil or gas – or all three). In Baku and Batum they had great success in identifying producing zones downhole.

Middle level Soviet engineers approached Stalin and asked him to bring the Schlumberger brothers and their men and women, and their equipment, to the USSR and help them develop the Baku-Batum petroleum corridor in a scientific way. Stalin was told in no uncertain terms that he owed this to the engineers who were putting their lives on the line given the new incentive program. Stalin agreed. He did owe it to them under the circumstances – and oil and gas were absolutely essential to the success of the Five Year Plans - so he went even further. Stalin contracted with these French brothers to build, in the Soviet Union, factories that would produce the downhole logging, perforating and pipe recovery tools they had invented in their home country. He also contracted with them to train an entire generation of Soviet petroleum engineers.

Thanks to Stalin the Soviet Union moved into the world leadership in petroleum geology, engineering and technology. Soviet oil and gas production was always thereafter up to whatever demands the Five Year Plans placed upon it. Soviet petroleum production soon surpassed that of the entire capitalist world combined. For the moment, there was in the Soviet Union, from that time forward, always sufficient oil and gas to run the Red Army and Red Navy military machine. In those years the USSR had the most advanced military in the world.

Along the way the Schlumberger family became the wealthiest family in France.

The Bad

Now, in the capitalist world, the oil oligarchs had only one remaining interest in Russian oil and that was to destroy the Soviet oilfields as part of their drive to (1) monopolize the world’s oil supply and (2) achieve unity for a joint campaign of all major capitalist countries to destroy the Soviet Union and Bolshevism.

Arabian Dreams

All of this time the idea of petroleum under the vast deserts of Arabia was just that – an idea – actually in the minds of all those who were supposed to know about these things; dreams. Naturally, as had always been the case, there were a handful of men advocating exploration and doing so hard and often. Yet, as of 1932, the only petroleum activity in the Arab world proper had to do with BP’s refinery near Basra Iraq. Oil from non-Arab Iran had to be brought two hundred miles from non-Arab, southeast Iran, by pipeline.

Furthermore the division of the Ottoman Empire among World War I victors the USA, Britain and France, had placed all of Arabia in a kind of purgatory dependant upon the unanimous consent of these victors to the exploration of Arabia by whoever among them might petition to do so.

Several individuals deserve comment at this moment as leading lights of the vanguard of capitalist oil exploration in Arabia. Three of them deserve special attention. New Zealand mining engineer Frank Holmes, Saudi Arab Chieftain Ibn Saud, and the Britisher Harry St. John Bridger Philby.

Now, before you ask, let me answer. Yes, this is the same family from which came the famous Soviet Spy Harold Adrian “Kim” Philby. In fact St. John Philby was the father of Kim Philby. Now let’s see what Holmes, Philby Sr. and Ibn Saud did that changed the world of oil.

Frank Holmes had discovered gold at home and become wealthy. He embarked upon a career in prospecting for gold, tin and a few other metals. He served in the World War and shortly afterwards, in 1920, he set up a pharmacy in Aden (capital of today’s Yemen). But what he was really interested in were all of the rumors he had heard about in his travels in East Africa and Arabia about oil seeps along the coast of Arabia. Over the next six years he talked cash poor sheik, after cash poor sheik, along the Arabian coast into giving him what he hoped would be legally enforceable “concessions” (lease options) to explore for oil. To make a long and fascinating story too short, let me jump to his first success, which was on the Arabian Island of Bahrain. May 31^st, 1932, which marks the date when he hit oil on Bahrain Island, becoming the first person to prove that there was in fact oil in Arabia.

Along the way (in 1923) he had acquired a concession to drill for oil at al-Hasa which is in the eastern part of what is now Saudi Arabia. The problem at al-Hasa was that the imperialist oil monopolies had signed an agreement to honor the Red Line (division of the old Ottoman Empire they had conquered in the imperialist First World War.) Now, that there was real interest in Arabia for the first time, King Ibn Saud in Saudi Arabia wanted to drill for oil too. Yet the oil monopolies could not, unless they all agreed and shared in the take. There were two exceptions to this Red Line Agreement and they were the Mellon Family oil monopoly – Gulf Oil – and the Rockefeller Trust spin-off, Standard of California (Socal). Making the internal capitalist struggle between the British and US oil monopolies and their respective governments into a sideline story.        

Suffice it to say, oil was struck by California Standard at al-Hasa Saudi Arabia, in March of 1938! Just a few weeks before Gulf and BP would hit oil in Kuwait! The rush was on.

Philby Sr. and Ibn Saud

The King of what is now the Kingdom of Saudi Arabia had a long pedigreed history of his own which is beyond the scope of this outline. However, he had found his back to the wall with the great capitalist world-wide depression as his revenues collapsed. His cash flow was the main pillar of his regime as he had to pay all the subordinate sheiks and also to finance his modernization program. Enter the British iconoclast St. John Philby.

Philby had a history of working for the British establishment as had his ancestors for centuries. But in India he became disillusioned and eventually found his way to Arabia as a person essentially anti-British imperialist in every way. Accordingly it was not long before he found Ibn Saud struggling to create a modern nation in Arabia and joined whole heartedly with him. Philby even took on the Sunni Moslem religion of the Watabi sect and took a second wife, and with her had another son at the age of 65. (His son by his British wife, “Kim”, born in India, was now at Cambridge, and just beginning in the world of the Red Secret Service as I have mentioned elsewhere in this book. See my forthcoming book Red Sword, Red Shield for all the details.)

St. John Philby engineered for Ibn Saud the most important agreement to date between the Kingdom and one capitalist oil monopoly; one that had not signed the Red Line agreement. Philby brought to Ibn Saud and his Kingdom, Standard of California operating under the rubric California Arabian Standard Oil Company (Casoc).Naturally, the strike at al-Hasa solved all of Ibn Saud’s problems and, of course, the financial problems of St. John Philby too. Vast new petroleum reserves were now at the disposal of the world’s capitalist oil monopolies and this would be critical to the British effort in the World War yet to come. It also made the Americans the players replacing the British which was a source of great personal satisfaction to St. John who had become almost pathologically anti-British.

The Ugly

The most dangerous decade in the history of humanity unfolded with fascism at odds with Bolshevism in a way that could only be resolved by war.

The Most Dangerous Decade in the History of Humanity

History has two meanings. The invention of writing is the definition in archaeology for the beginning of the historic period. Before writing we speak of prehistory. What about those societies and cultures which exist without writing, for example Bands and Tribes, but after its invention. We sometimes use the term protohistoric for them.

History also refers to the entire process of sociocultural evolution. That is the process of the evolution of human society and culture from its inception to the present time. In this case we are using the first definition.

Why is the decade of the 1920’s sometimes considered to have been the most dangerous decade since the emergence of written history? Precisely because the entire world was involved and a fundamental decision had to be made about which direction global humanity was going to take. What were the choices?

Capitalism had given humanity a great industrial infrastructure but at an extremely high cost. It had caused World War I as you have seen in this book. Capitalism was finding its preferred political forms in North America, Latin America, Europe, China and Japan which were (1) fascism and/or (2) parliamentary democracy. (Today capitalism is proving how dangerous it really is to the health of all working people.)

Capitalism had also created its own gravedigger. In other words Capitalism had also provided the solution to its General Crisis (which we have defined extensively in this book) in the form of the international industrial working class. That class had found its leaders and its scientific ideology in the form of the Communist Parties and Marxism-Leninism (historical materialism.) These parties were grouped around the Communist Party of the Soviet Union. These parties had found that one could not jump into Communism but would have to build into it via a transitional phase called Socialism. The first political form of working class government and state power was evolving in the USSR and Mongolia. In addition there were Red Base areas in countries as vast as China and as small as Cuba.

Fascism often means in everyday language any kind of bullying reactionary behavior on the part of dictators and their police. But the scientific definition of fascism is the elevating of absolute ruling class police power over the working class. The rulers do anything they wish and the workers must accept it or die.

There were different forms of fascism in the world as 1930 dawned; a world in a state of complete capitalist global collapse. Its most virulent forms were seen in Nazi Germany, Fascist Italy and Fascist Japan, not to mention Fascist China (the territory of China occupied by Chiang Kai-shek). Smaller thug run countries of the fascist type existed everywhere in Europe, Asia, Africa and Latin America.

Parliamentary democracy had evolved in Western Europe and the Americas as we have reviewed. Its central feature was to allow the newly ascendant bourgeoisie (small capitalist farmers, small business owners, new class technocrats, and large capitalists of the financial and manufacturing types) to resolve their differences among themselves in a kind of national crime commission (as the Lansky operation in North America would later name itself) in country after country. This national consortium of bosses met in parliaments of one kind or another and followed a set of rules for debate and resolution of issues also of their own creation. An important lesson for all of us here is to recognize and always remember that all capitalist parliaments are just Lansky Crime Commissions at-bottom.

Between Matches

During the 1930’s the capitalists would have to rearrange themselves and the workers would have to prepare for an inevitable Second World War. The former far outnumbered the latter in terms of number of countries they controlled and therefore were certainly far superior in terms of industrial power. Fortunately for the workers the inherent greed of the capitalists tended to turn themselves against each other frequently.

Therefore the situation offered the opportunity for an intelligent working class foreign policy to keep them divided, unable to attack the heartland of Socialism and thus unable to prevent the global advance of working class power. Lenin had, as we have seen, taken advantage of this to split the capitalist encirclement in 1922 when his diplomats negotiated the Rapallo Treaty that made capitalist Germany into the de facto ally of socialist Russia. But, that division of capitalist powers could not last forever. Yet it had to last long enough for the workers to get organized, and armed, and ready for the final struggle.

The 1930’s were the period of jockeying for final position between these two great classes on the verge of determining the course of global history for centuries to come. That jockeying for position had obviously a military aspect. It also had an underlying economic aspect.

In our study of imperialism (remember this phase of exporting capital and the military muscle to back up its employment is the highest and final phase of the Capitalist Stage and had already been in existence for some 160 years) we have focused on oil and so we shall now continue to see how the struggle to find, develop and utilize petroleum reserves became the key to both sides long-term strategic planning for the inevitable coming Second World War.

German Fascism Prepares for War

As everyone knows German fascism had taken a particularly noxious form in the National Socialist German Workingmen’s Party (Nazi Party) of Adolph Hitler. Its racism and especially its anti-Semitism were designed to divide the working class before the final confrontation and its consequences were especially repulsive. On the other hand the Nazi’s had control of one of the two most powerful West European industrial establishments, and therefore whatever it did, had to be of primary concern to the international working class movement.

Joseph Stalin in command of the CPSU and the Comintern had been running its intelligence and covert operations branches since the beginning. He was well aware of what the Nazi’s, Italian fascists, Chinese fascists and Japanese fascists were up to. No part of our preparation for war (whichever imperialists, if not all, vs. the USSR) was more important than the economic intelligence department of the Red Secret Service (Cheka). Stalin was also well aware of what the equally anti-Communist Western Parliamentary capitalist regimes were up to.

With that background in mind let’s see how the world struggle for oil played out in this the most dangerous decade in the history of humanity.

Fascism Struggles to Secure Oil Reserves

The fascist powers had an Achilles Heel and that was that none of the three that initially signed the Anti-Comintern Pact (1936) Germany, Italy and Japan, (Spain joined in 1939) had internal oil supplies. All of them depended upon oil imports and these imports had to come from their most dangerous capitalist competitors or from the Soviet Union. – And, as the inevitable conflict unfolded it would be the fascist countries failure to secure adequate oil reserves that would doom each and every one of them to military defeat,

Germany had no internal oil reserves and depended upon Fascist Rumania to supply its needs and the world oil market. Germany lost the Lion’s share of Soviet Oil in 1936 when Stalin choked off most of it.

Italy could have been stopped at any time in its war on Africa if the parliamentary capitalist governments had placed an oil embargo upon Italian fascism. But they did not.   Japan was almost totally dependant upon the USA for its oil reserves and Japanese fascism had to roll the dice (war with the USA) in its drive to secure the reserves of Royal Dutch Shell in the Dutch colony of Sumatra once the American’s cut off their oil.

The German fascists tried to create a substitute industry by producing oil and gas from coal but this never worked out for them despite very heavy expenditures aimed at building the necessary industrial plant.

We have already reviewed the subsequent Second World War in Chapter 16. When that war was over US Labor found itself living in an entirely different chess game.

In the next chapter we shall see how Stalin handled the transition from hot war against fascism to cold war against US led global capitalist imperialism. – And, let us look at how US Labor matured.