Parvus’s ‘Fourth of August’
Sections of the left also adopted a German-defencist position during 1914-18
On August 4 1914 the Reichstag Fraktion of the Social Democratic Party of Germany infamously voted for war credits for the kaiser’s government. Opponents of the decision within the Fraktion went along with the decision for reasons of party discipline. The dominant narrative on the far left is that this was a political collapse of the ‘centre’, whose most prominent figure was Karl Kautsky, with its roots in the SPD’s ‘passive’ policy before 1914; but that the party’s ‘left’, previously advocates of an ‘offensive’ policy - most prominently Rosa Luxemburg and Karl Liebknecht - redeemed the honour of German Marxism by anti-war agitation.
As Ben Lewis has explained in this paper, this story is incomplete.1 An important section of leaders of the SPD’s pre-war left also adopted a German-defencist policy in autumn 1914, and from 1915 organised round the journal Die Glocke, published by Alexander Parvus. Over the next few months we will be carrying a number of extracts from these authors’ writings. Not because we support them, but because their arguments and errors are recognisably present in many modern far-left arguments about imperialism, war and Marxist policy. Perhaps seeing how the same arguments led to German-defencism in 1914-18 will help some of today’s comrades overcome their own mistakes.
We begin with Parvus’s own August 4 1914: his interview with the Constantinople (Istanbul) daily Tasvir-i Efkâr on that day (also the day of the formal British declaration of war on Germany), translated by Esen Uslu.2 In the interview, Parvus argues in a partially ‘coded’ way for Turkey (at this time the Ottoman empire) to take the opportunity provided by the war to break the chains of control by its British and French imperialist creditors: that is, to side with Germany.
Parvus, aka Alexander Helphand or Gelfand (‘Elephant’), aka Izrail Lazarevitch (surname unknown) was born in 1867 in Berezino, Belarus, but brought up in Odessa, Ukraine.3 In his teens he was a supporter of Norodnaya Volya and in 1886 spent some time in Zurich, where he was in contact with Georgi Plekhanov and the early Russian Marxist group, Emancipation of Labour. In 1887 he went to Basle to study political economy, obtaining a doctorate in 1891. He then moved to Germany, where he supported himself by writing for SPD periodicals.
He was a prominent writer of the left in the party: an early advocate of the mass strike tactic, an early critic of Eduard Bernstein’s revisionism, whose sharp criticisms provoked a storm of protest and forced the party leadership to respond to Bernstein.4 He was also an early writer against imperialism in his 1898 pamphlet Marineforderungen, Kolonialpolitik und Arbeiterinteressen (Naval demands, colonialism and workers’ interests). His sharp renewal of the revisionism debate with Opportunism in practice (1901) led Kautsky to refuse further articles from Parvus in Neue Zeit, the SPD theoretical journal.
In 1901-06 Parvus was more involved in the Russian workers’ movement, taking the side of the Mensheviks (after initial neutrality) in 1904 and writing in that year in the Menshevik Iskra on the likelihood that the Russo-Japanese war would lead to revolution. At this period he influenced Leon Trotsky and his ‘permanent revolution’ theory, and in 1905 he collaborated with Trotsky in Petrograd, playing a leading role in the second Petrograd soviet in December-January 1905-06 before being arrested.
Back in Germany after escaping from exile in Siberia, Parvus encountered a renewed debate on imperialism in the SPD following the 1906 ‘Hottentot election’, where the right, centre and liberal parties formed a bloc against the SPD around the defence of the German state’s genocidal Herero war in what is now Namibia. The SPD had denounced the war and as a result of the bloc it lost Reichstag seats and saw its share of the vote reduced (though its total vote went up). The SPD right used this defeat to attack the SPD’s anti-imperialism. Parvus responded with a major book on the topic, Die Kolonialpolitik und der Zussamenbruch (Colonial policy and breakdown [of capitalism]).5 This combined savage attacks on German colonialism with a theoretical analysis of the roots of imperialism, influencing Rudolf Hilferding’s Finance capital (1910) and thus, indirectly, Lenin’s Imperialism, the highest stage of capitalism, which relied on Hilferding.
In 1910 Parvus moved to Constantinople, initially as a journalist. He rapidly became involved with the ‘Young Turk’ nationalist movement, which had obtained power in the revolution of 1908. He wrote around 50 articles in Young Turk-affiliated periodicals, especially the pan-Turkist Türk Yurdu, mainly on economic issues, and a book on the Ottoman debt problem.6 He seems in this work to have arrived at the conclusion that finance imperialism led to what has more recently been called ‘underdevelopment’; and, with the Anglo-French control of Ottoman finances, and the ‘capitulations’ (special privileges of Europeans in the Ottoman empire), he was brought face to face with the reality of British imperialism in a way which had not featured more than abstractly in his previous work.
This Turkish anti-imperialist nationalism, focused on British and French imperialism, seems to provide the context for Parvus’s own ‘Fourth of August’: his turn from pre-war leftist anti-imperialism to German-defencism in the world war. After the interview, translated below, he wrote two pamphlets in Osmanli Turkish: Umumî harb neticelerinden: Almanya galip gelirse (The outcome of the general war if Germany wins), and Umumî harb neticelerinden: İngiltere galip gelirse (The outcome of the general war if England wins).7 If Britain won, the Russians would take Constantinople and the Bosporus, while Britain would take control of the Ottoman empire. If Germany won, the Franco-British debts would be cancelled, the Turks could expect to recover territory from the Russians and in north Africa from the French, while German investment would promote Turkish industrial development.8
He went on to write further articles justifying German-defencism, some of which we will publish later in this series. But August 4 was for Parvus, as for the SPD leadership, the decisive moment l
Financial measures during the war years
From Tasvir-i Efkâr,
August 4 1914
The general war in Europe has caused a violent financial and economic crisis in our country, as it has done elsewhere. As this crisis could take other forms in the near future, we thought it would be useful to hear from an independent and expert voice on what line of action should be adopted by our government. So we approached a foreign economist renowned for his friendship with Turks, and asked for his ideas about the current and future state of our finances. As our interviewee is involved with financial affairs day to day and everybody who knows him attests to his expertise in his profession, we emphatically recommend that his ideas and observations, recorded below, should be taken into careful consideration. The interview went as follows:9
Sir, what is your general opinion on the financial and economic position of Turkey in the face of current crises?
First of all, the basis that should be accepted is that the extraordinary situation created by the European war requires Turkey to adopt extraordinary measures. Apart from that, I must say plainly that the problem of ‘now or never’ faces Turkey too. The hostilities in Europe have laid bare all manner of conflicts. Those nations that fail to win their demands will be the prey of others. The time for talk and reasoning has passed. Now action is needed! You should heed this well.
Today the most important problem to consider, I believe, is how to reduce the devastation of the financial crisis as far as possible. What should we do in this regard?
You are quite right ... As to the measures adopted:
First of all, exporting gold money out of the country should be prohibited. As you know, the Ottoman state sends Europe 15 million Ottoman liras annually in debt repayment alone. Up to now, since gold is also imported from Europe, a balance has more or less been maintained. However, at present the transfer of gold from Europe is interrupted. Therefore, unless the export of gold is banned, the reserves of your country will be greatly reduced.
Sufficient amounts of bank or state bonds should be issued as a medium of circulation. Tiny Bulgaria had 90 million francs in banknotes in circulation even before the Balkan war, while notes in circulation from the Ottoman Bank are about 30 million francs, despite the fact that the commercial transactions of Turkey are five times greater than Bulgaria. When the importing of gold from abroad is interrupted and there is a general loss of confidence, the need for means of payment and the supply of a greater quantity of banknotes into the present medium of circulation becomes an urgent requirement. During a war every country issues a substantial amount of banknotes. If only Turkey fails to do so, that would very badly affect its financial and commercial position.
While the issue of banknotes as a medium of circulation is required, due diligence in the manner of that issue is also required. There are many practical questions, such as the total value of notes to be issued, the ratio between smaller and larger denomination notes, and the impact of these types of notes on the wealth distribution between people, etc, which only experts who are fully aware of financial matters could resolve after a thorough and detailed study of banking and money markets.
What is your opinion about a moratorium [on debt payments]?
A one-month-long moratorium is not sufficient. The term of such a moratorium as of today should be three months. In one month even the banks will not have been able to make their payments. Therefore, extending the moratorium is necessary. However, if the world of trade knows that it faces a term of three months, it will undoubtedly be able to perform its transactions relatively free of pressure. Besides, it should be explained that the moratorium also has the effect of deferring debts such as house and other rents, as well as other obligations.
Sir, the status of foreigners in our country is also very well known to you. Would amending that status during this time of crisis have a positive effect on our financial affairs?
Undoubtedly ... Facing a conflict endangering its existence, every state will feel it needs every individual and every penny. Therefore, Turkey should not consent to the tax-free status of those who have lived here and leeched fortunes off its back. Taxes should also be imposed on foreigners.
What about capitulations, sir?
The era of capitulations has already passed. The relationship between contemporary states can only be based on agreements which take current commercial conditions, social life and world affairs into consideration. Medieval practices cannot be defended or maintained. If Turkey wishes to survive, it must open its own way into 20th century civilisation. Keep what I have said in mind …
Are there no other measures to be adopted?
Of course there are, sir ...
It would be very beneficial if you replaced current custom duties with a method of ‘tariff based on weight’, which has been agreed in principle by several states. Especially if you implemented such a tariff in accordance with the needs of war times, you would benefit substantially.
Then the government should take over the railways. In any case such a measure is a requirement born out of mobilisation, but, due to the necessity of transporting grain to Istanbul,10 the said measure has the utmost economic importance.
France has already banned the export of grain and other foodstuffs. Undoubtedly other states will immediately adopt the same measures. Because of the mobilisation, steamboat and railway transport has been halted. Under such circumstances, Turkey should adopt measures to reduce grain prices by bringing in grain from Anatolia and indeed maintaining customs duty on all foodstuffs. Therefore, the railways should be under government control. The government should at once come to an agreement with the railway directors on the required measures to be adopted.
Such steps must be taken at once. The necessary measures are not limited to these, but they will lay the basis of the actual work to be carried out in order to prevent dangerous outcomes for Turkey arising from the European war.
This war is so horrendous that there is a risk of spontaneously seeking consolation in imagining that it will be short. But this is a daydream. Those who find themselves defeated will be forced to say goodbye to their political influence for a long time, or even permanently. The present struggle is not about a specific problem - each of the great powers fights for its own pride and political position. Therefore, no state will surrender to its rivals except as a very last resort - unless a European revolution halts the European war.
The measures being prepared have enormous significance - we are living in historic times. Therefore, I repeat: action is needed.
You said that the measures adopted were not limited to those you have mentioned. To which further measures could recourse be had?
In my estimation, such measures are sufficient for a temporary period of time that cannot be determined. If required, you may consider looking at the 1881 decree of Muharrem regarding the Ottoman public debt administration.11 Read article 20 of the decree - then you will understand where your interests and the interests of your creditors lie.
1. ‘SPD left’s dirty secret’ Weekly Worker June 26 2014.
2. Comrade Uslu’s English version is itself derived from a translation from Osmanli Turkish into modern Turkish of ‘Required financial measures’ Tasvir-i Efkâr August 4 1914, p3. The original translation is contained in Z Toprak Türkiye’de Milli İktisat, 1908-1918 (National economy in Turkey, 1908-1918) Istanbul 2012, pp712-14, checked and where necessary corrected by historian Yaprak Zihnioğlu, whose work is gratefully acknowledged.
3. Information about Parvus’s life from ZAB Zeman and WB Scharlau The Merchant of revolution London 1965.
4. Partial translation in H and JM Tudor Marxism and social democracy Cambridge 1988, chapter 6.
5. Partial translation in RB Day and D Gaido Discovering imperialism Leiden 2012, chapters 21, 22. Ben Lewis has translated the rest of the book, but this translation as yet remains unpublished.
6. See P Dumont, ‘Un économiste social-démocrate au service de la jeune Turquie’ Mémorial Ömer Lûtfi Barkan Paris 1980, pp75-86, and M Asim Karaömerlioglu, ‘Helphand-Parvus and his impact on Turkish intellectual life’ Middle Eastern Studies No40 (2004) pp145-65.
7. Pdfs of the original texts are at http://isamveri.org/pdfrisaleosm/R167632.pdf; and http://isamveri.org/pdfrisaleosm/RE13538.pdf.
8. This summary from P Dumont, ‘Un économiste social-démocrate au service de la jeune Turquie’ Mémorial Ömer Lûtfi Barkan Paris 1980, p83.
9. This paragraph translated into modern Turkish by Yaprak Zihnioğlu.
10. In the original, the word “Dersaadet” (Gate of Happiness) was used as a synecdoche for Constantinople, referring to the gates of the Sultan’s palace.
11. Muharrem, or Muharram, was the first month of Hijri calendar. On the Ottoman debt administration see M Birdal The political economy of Ottoman public debt London 2010.