In the shadow of default
U.S. & czarist Russia's common problem
There is no way of knowing how serious a debt problem is until a default
Published Jan 3, 2008 10:50 PM
Originally published on Nov. 23, 1995
The world position of the United States today is somewhat analogous to that of
the czarist empire in the 1890s.
About Sam Marcy
No one has contributed more revolutionary insight to this newspaper than
Sam Marcy, the founder of Workers World Party, who died 10 years ago on Feb. 1,
1998. We’ll be rerunning a selection from his past articles to
familiarize our readers with Marcy, his analyses, and what he had to teach
about applying the basics of Marxism and historical materialism to the
challenges facing the working class and oppressed today.
For more of his writings, see www.workers.org/books.
At that time the Russian empire was the most feared power in Europe and Asia.
It cast its shadow not only over the Balkans but other areas as well, from
Turkey to Kamchatka.
There was no question that the czarist regime was most hated among the small
and oppressed countries bordering its territory. Exiles from the region kept
pouring into the West.
But mighty though the empire seemed to be, and omnipotent in relation to its
neighbors, it had one significant flaw: It was unable to pay its debts on
Of course, no one could deny the czarist court when it asked for extensions on
its loans. Yet such matters as not being able to pay the bills due its
creditors began to assume greater and greater importance.
Yet who would dare refuse to extend credit to the czar? The idea seemed
Militarism and unpaid bills
Like the United States today, czarist Russia was a great military power. It
lorded it over all the surrounding neighbors. Its pre-eminence could not be
Yet the question was, could it pay its bills on time?
Was this not the Achilles heel of the czarist empire? The monarchy got a
continued stream of extensions. But did they help? Or did they in fact weaken
Whichever the answer, the debt problem flowed from more profound and general
causes. Capitalism came late to Russia. For it to develop, the bourgeoisie
needed considerable foreign support to maintain the ruling clique in the style
to which it was accustomed—maintaining a rich court, lavishly
entertaining foreign business owners and diplomats, and continually expending
its resources in wasteful ways.
Yet seen in another light, capitalist development was slowly but surely
producing a proletariat that was unique in the world at that time.
Instead of its attention being constantly riveted solely on its own situation
of being robbed and exploited by the newly created bourgeoisie, this
proletariat looked outward and sought by every means to assimilate the lessons
and experiences of its Western counterparts.
No small portion of the czar’s finances was spent in tracking down the
newly born, rebellious working class. But to no avail.
Russia’s historical situation at that time is not altogether analogous to
the present-day situation in the U.S. But certain similarities are undeniable.
The problem of paying debts on time is the most pressing of all.
Floating a new loan for the czar always seemed minor in comparison with the
vastness of the empire and the size of its population—as today in the
But finding an easy solution to the debt problem—one that would not
impinge substantially on either of the basic antagonistic classes in
contemporary society—is just as elusive for the Clinton administration
today as it was for the czar a century ago.
We know now what happened in Old Russia. We also remember the debt problem of
the French nobility just prior to the Revolution.
There’s no way of really knowing how significant a debt problem is until
there is a default. Under some circumstances, it is easy for a capitalist
government to achieve a so-called soft landing—to spread out its
indebtedness or reduce its principal or interest through negotiation.
But it’s also possible that, instead of an easy landing, there will be a
The U.S. debt crisis has to be seen in the light of the international
situation. The individual bourgeois states are all trying to cover up their own
weaknesses. Where possible, they are of course trying to transfer the burden of
the capitalist indebtedness onto the shoulders of the working class.
Nowhere is this easy for any of the capitalist states, not even the strongest.
The world economy was knit together by competitive forces in an earlier epoch
and has since been fortified by monopoly, whose tentacles stretch all over the
It is interesting to note that today, unlike in earlier years, a few of the
bourgeois economists are afraid to make predictions of an early and
In the meantime, the task for the workers’ movement in the United States
is to forge unity with each and every segment of the working class in order to
achieve a truly united front of all the working-class and progressive
organizations, the unions first of all.
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