Ted Grant

East-West trade—profits cut “iron curtain”

Source: Militant, no. 25 (April 1967)
Transcription: Francesco 2009
Proofread: Fred 2009
Markup: Niklas 2009

A new round of smooth talking “pacifist” utterances between the Western powers, including Japan and America, and the Soviet Union and her Eastern allies has taken place in recent months. This in between bellicose utterances on the Vietnam War and the bloodthirsty attempts of American imperialism to force a “peace” agreement in South-East Asia.

Nevertheless a definite “detente” between the Western and the Eastern powers is being attempted at the present time. The capitalist powers of the West are beginning to feel the pinch of the end of the post war economic upswing. The slowing down of the growth of the economies in most of the major capitalist countries of the world, leads them uneasily to look for new markets as the old ones are becoming saturated and economic capacity still continues to increase. This is reflected in nearly all the capitalist countries by the attempt to impose a fixed barrier against increases in wages, while prices, despite lip-service to the contrary, continue to rise. This is due to the increasing amount invested in machinery and buildings, in comparison with that invested in wages, which means a tendency in the rate of profit to fall. Hence the practically universal adoption of the prices and incomes policy by the capitalist powers.

For years the great powers have been engaged through the so-called “Kennedy round” of talks, in trying to reach agreements in tariff reductions in order to increase trade, which in turn would give a fillip to the economy; but still, after years of negotiations under prosperous conditions, they have failed to bring these negotiations to a successful conclusion.

Now with the falling away and break-up of the alliances of both the Warsaw Pact and the NATO alliances, or at least their loosening, as the immediate prospect of world war recedes, the capitalist powers have begun a scramble for the wide-open markets which exist in the East.

Mutual bond of fear

The western capitalists and the bureaucracies of the Soviet Union and her satellites or ex- or semi-satellites share a mutual bond: fear of socialist revolution in the West, with the consequences which a free, democratic and egalitarian movement of the masses would have on the totalitarian political systems of the Eastern countries too. Consequently, deals have now been concluded between giant monopolies in Italy, France and now Britain, after the £100 million agreement just signed by Plesseys with their Soviet counterparts.

The idea is to buoy up the capitalist economies of these countries by increasing the markets in the East (and it may be added China, which also has practical possibilities for the future. The so-called “cultural” revolution is correctly seen as an attempt to prepare the way to squeeze more out of the workers and peasants, as Stalin succeeded in doing in 1931, and thus create a bigger surplus for building up the heavy industry of the country thus creating the possibility of a much increased trade with the West).

No revolutionary threat

No longer are the countries of the so called “socialist” bloc regarded as a revolutionary threat, except in so-far as capitalism and landlordism have been destroyed there, and they loom as rivals for the long-term future. In the meantime the capitalists see no alternative but to make the best of a bad job and accept the status quo.

In his time, in rejecting the reactionary utopia of “socialism in a single country”, Trotsky advocated a vast increase of trade between the capitalist powers, crippled by the economic slump, and the Soviet Union. But he did so with revolutionary perspectives in mind, advocating the planned integration of the economies of Germany and Britain with that of the Soviet Union, involving the working classes, the trade unions and the technicians, thus demonstrating democratically the superiority of socialist planning over the capitalist anarchy of the market.

Such a plan would involve immense benefits in the division of labour between the different countries, and an immense leap forward in standards of living for the peoples, but it would be impossible under capitalism.

No socialism in one country

Meanwhile the utopia of socialism in one country, on the basis of a self-sufficient—“autarchic”—economy has had to be abandoned by the Soviet Union and the other countries of the East… As the economies have become more industrialised so their trade with the rest of the world has increased. But the “Balkanization” of Eastern Europe has not been abolished: it has actually been increased. Each of the bureaucratic Stalinist states, has endeavoured, for the benefit of the power, prestige, privileges and income of the ruling upper layers of the population, to render itself independent of even its “socialist” neighbours. Hence the quarrels between Russia and China, and Albania and her neighbours, the “independent” policy of Yugoslavia, and now the economic, diplomatic and other initiatives of the Romanian bureaucracy, re the establishing of economic and diplomatic relations with West Germany.

The reasons for this policy on the part of the ruling bureaucracies of the countries of the Warsaw bloc, lie in the impasse which bureaucratic control has driven the economies of these countries. They face a social and economic blind alley. At the cost of tremendous waste and needless sacrifices on the part of the people, by means of brute coercion but without the trammels of the vested interests of private ownership, they have industrialised the economies of these countries: not for the benefit of the people but for a small clique in control. They have been unable to transcend the narrow horizon of the national state. They have been incapable of even working out a joint economic plan for the countries of Eastern Europe, let alone that of China and the Soviet Union.


Like the capitalist powers they find themselves in a blind alley. They hope to escape the worst effects of the social crisis by increasing trade with the West. In an attempt to allay the rising tide of protest at overcrowding, food shortages, and other deprivations, the new Soviet leaders proclaimed ambitious targets of consumer production. They have promised a “Western standard of living” by 1970, producing 4 times as many cars as now, 3 times as many televisions and fridges. This will still only serve the millions of petty officials and managers, and not the mass of the workers, but even this target cannot be realised on a bureaucratic basis, the introduction of “incentives” to managers notwithstanding. Hence the need to jump a few squares by buying whole Western car factories, from Renault, Fiat, and now Leylands. Thus the dread of political revolution in the East, with the restoration of workers’ democracy, as in the Hungarian revolution of 1956, and the dread of social revolution in the West, as the world economic upswing draws to a close, brings the capitalist powers of the West and the Bonapartist states of the East closer together.

This will not save them, either East or West. The working class of the West is beginning to realise the immense power it has accumulated in the last two decades. The working class of the Soviet Union and Eastern Europe is more and more understanding the incubus of the parasitic monster bureaucracy which has outlived its function and instead of acting to increase production, acts as an enormous brake upon it. This is preparing the way for an upsurge of the working class East and West which will put an end to capitalism and Stalinism. It will then proceed to organise production upon an intercontinental basis, pouring out a flood of goods for the benefit of the peoples and making the maximum use of the computerised economy made possible by the “scientific revolution” and the labour of the working class over the past generations.