* * *¶
Core Argument¶
This chapter argues that the First World War was followed not by a slump but by a boom, a pattern dictated by the laws of capitalist economy. The core narrative thrust is that the vast destruction of capital goods and the acute shortage of consumer goods during the war created the material conditions for a rapid post-war recovery, which was temporarily interrupted only by the short slump of 1921. The author presents production indices to substantiate this: overall European production (excluding the USSR) stood at 62 per cent of 1913 levels immediately after the war, rising steadily to 79 per cent by the end of 1920. Detailed tables for coal, lignite, and steel production in France, Germany, and Belgium from 1913 to 1920 illustrate the tempo of recovery in Western Europe, despite the political challenge posed by mass Communist parties and the revolutionary aspirations of the young Soviet Republic under Lenin and Trotsky.
The chapter then draws a direct parallel to the post-Second World War period, asserting that the same theoretical postulate applies. Given the even greater destruction of capital goods and the six years of depreciation of consumer goods, a post-war boom is inevitable. The author adds a crucial political dimension: the economic recovery is further enabled by the paralysis of the proletariat, a condition attributed to the betrayals of social democracy and Stalinism, and the relative weakness of the Fourth International. Evidence for the post-1945 recovery is drawn from The Economist, showing French industrial production rising from 33 per cent in August 1945 to 80 per cent by June 1946. Graphs comparing average monthly output of coal and pig iron in the two post-war periods are cited to demonstrate the relative tempo of industrial recovery, with all statistics sourced from official League of Nations figures unless otherwise noted.
The chapter’s polemical edge is directed against those who might have expected a post-war slump or who underestimate capitalism’s capacity for recovery under these specific conditions. More pointedly, it argues against the political forces—social democracy and Stalinism—that have demobilised the working class, thereby removing the only obstacle to capitalism’s automatic recuperation. The theoretical framework is a Marxist one, grounding the boom in the material realities of capital destruction and commodity scarcity, while the political analysis is Trotskyist, identifying the revolutionary potential that was squandered by the betrayals of the Stalinised Communist parties and social democratic reformism.