Dear Mr. Pearson:

There are several aspects of the Soviet attitude towards the United States as it appears in the press, which I find puzzling. As the Soviet calculation of United States policy may be the single most important fact determining whether or not there is to be a war, it seems important to come to the right conclusions. I need not bore you with a general description of Soviet comment concerning life in the United States and the policies of the United States Government. Suffice it to say that this comment has reached a pitch of hysteria which could scarcely be raised. It is no exaggeration to say that virtually every article in the Soviet daily press and in Soviet journals is either devoted to a full attack on the United States or given an anti-American twist. Every United States policy is described as unscrupulous, and every aspect of American life is described as decadent and depraved. Although the Americans are not yet "cannibals", the language used to describe them is now almost as strong as that used about the Germans in 1941. Whether the writers of these articles believe all they say or merely wish to delude Soviet citizens into believing that they live in the best of all possible worlds is a question which I do not propose to answer at the moment. For one reason or the other there is an obvious intention of persuading the Soviet citizen that he is in grave danger of aggressive attack from American imperialism.What puzzles me is the exception to this picture of American depravity provided by Henry Wallace and the Progressive Citizens of America. It is not surprising that the Soviet press has a certain fondness for Mr. Wallace, but I do not understand their reason for making such a tremendous fuss over him. From the day on which he announced his intention to establish a third party he has been front-page news in the Moscow press. The impression given is that the workers, the liberals, the downtrodden masses, the genuine American people, are devoted to Henry Wallace, but they are prevented from expressing their will by a small clique in Wall Street and Washington. This is familiar stuff. The question, however, is why does the Soviet Union wish its citizens to overestimate so grossly the "progressive" forces in the United States? If their present attitude to the Western powers is primarily intended, as is sometimes suggested, to spur the Soviet worker into greater activity, why let him think that there may be a revolution shortly in the United States and an end to the Truman doctrine?

Perhaps the explanation is simpler - the Soviet press merely wants to give a hand to a friend. If so, do they not realise that the applause of Pravda is for Henry Wallace the kiss of death? Is it possible that their intentions are still more devious? It was sometimes suggested that their purpose last November in France was to force a Right Wing Government on the country so that they might later exploit the reaction against it, Perhaps by the same process of reasoning they are pleased about Wallace's decision, because they think that it will result in the election of a Republican President, Rightist reaction and a capitalist explosion.

I find myself tempted to wonder if there is not more ignorance than calculation involved in Soviet policy towards the United States. The Swedish Ambassador, Mr. Sohlman, who is, I think, wise and well-informed, told me that when he was at the recent United Nations Assembly, he used, when he was listening to Vyshinski, to wonder whether Vyshinski really did want to prevent the Marshall Plan from being accepted by Congress, because he was so obviously going out of his way to make its adoption certain. However, both at Lake Success and after he returned to Moscow, Mr. Sohlman talked this matter over with some of his friends in the satellite countries and also a few Russians, and he was now convinced that the Russians simply do not realise the effect their speeches are having on American opinion. It seems to me not impossible that the leaders here, misled by their own doctrines and by their own misreporting of events in the United States, seriously thought at first that Wallace might have some success. At present they admit that Wallace wilt probably not be elected President, but their pessimism came after the defection of some of his former supporters. The only frank statement on the subject which I have seen was the remark made by a lecturer in the Institute of History of the Academy of Sciences several weeks ago. After lecturing on American expansionism, Mr. Zubok was asked what he thought were Wallace's chances at the forthcoming elections. His reply was as follows:

"A study of American history shows us no positive results for any third party even with a popular and progressive leader - take for example the case of La Follette in 1924. The appearance of a new party may influence the platforms of the other parties. The USA is fast becoming fascist. The greatest evil of all would be Eisenhower. I. personally, think a victory for Wallace very unlikely."

This answer is, of course, a personal opinion, but one need have no doubt that it reflects an authorised view. An open recognition that Wallace will not be elected is not to be found in the public press, but the reader is being prepared for his failure. The tone of current comment may be judged from the following quotation from an article in Pravda of 2nd February on the "Progressive Citizens of America":

"To judge from everything the Progressive Citizens of America soberly appraise the prospects of the unequal struggle at the forthcoming presidential elections. They are aware of the fact that the parties of Wall Street, commanding the apparatus of the state and possessing unlimited financial opportunities and a powerful propaganda machine, can still control a majority of votes. At the same time, however, progressive forces in the USA are boldly throwing down the challenge to their enemies in the knowledge that only in the harsh struggle with them will they acquire the necessary tempering and experience needed in the future."

I should like very tentatively to suggest consideration of the possibility that there is something of a crisis of confidence in their own theories among Soviet officials. Such a suggestion may be labelled ingenuous, but I think it is at least one possible explanation of some of the things which are happening here. The doctrine which is repeated endlessly is, of course, that imperialism is the final stage of capitalism on the eve of revolution. The United States, having reached this advanced stage of monopoly-capitalist imperialism, is certain to enter into a stage of acute depression. In the capitalist system booms are always followed by depressions. It has confidently been predicted for several years by Stalinists that the extraordinary war and immediate post-war boom in the United States would be followed by a devastating depression with greater unemployment than has ever been experienced before. Many intelligent observers have considered that Soviet policy during the past year has been based on the belief that they need be in no hurry to consolidate their gains in the form of final peace settlements, because in a very short time the depression will have set in in the United States, capitalist prestige will be lowered, American aid to Europe will cease, and the American people will again become isolationist. Whether the inscrutable ones in the Kremlin really believe this theory cannot, of course, be proved. Nevertheless, if the vast majority of Soviet citizens, including most of the "intelligentsia", do not believe this theory, they are much more sceptical of the propaganda fed to them than has usually been assumed. Unfortunately, however, for these theorists, the facts are not in accordance with what they predicted. The War has been over almost three years, and there is no sign of depression or serious unemployment in the United States. It is true that because of inflation the economy of the United States is not entirely healthy, but this is a different disease from what was expected. Even if the higher-ups are not surprised, the Soviet citizen must be getting a little impatient. What explanation is to be offered him if a depression does not come in the United States, and what is to be the alternative Soviet Policy in the light of unexpected circumstances?

At present the Soviet authorities seem to be grasping at any sign that the trend towards depression has set in. There has been a good sample of this wishful thinking in the past few days when the papers have featured exciting reports from New York about a drop in grain prices, which is said to have caused great alarm, about the inevitability of an economic crisis. The Washington authorities are said to be really worried about how to stop the fall, not the rise, of prices. We have not yet had an objective report of what has taken place in New York, but as I note that President Truman on February 5th emphasised the need of controls to halt the rise in prices, I take for granted that the Moscow interpretation is, to say the least, distorted. This anxiety to find signs of depression and unemployment has led also to an interest in Canadian developments. A good sample of the objectivity of the Soviet press is the fact that the same figures of unemployment emphasised in recent Canadian official statements because they are the lowest in history, have been tom from their context to prove to the Soviet reader that unemployment is, in fact, widespread in Canada.

There is a relevant argument going on in more learned circles at the moment. Some of the Soviet economists who have not completely abandoned scientific methods have been publishing examinations of recent economic developments in the United States and other countries. Although most of us would consider these Communist authors to he orthodox enough in their interpretations of capitalist developments, they have, in fact, been describing phenomena which were not foreseen by Marx or even Lenin. In particular, these economists have been describing the way in which in the United States the state planned and organised war production. They have been describing also the changes which have been taking place in the structure of capitalism, and emphasizing what has been called the "managerial revolution". They indicate a transformation of capitalism which contradicts the Stalinist-Leninist line because it indicates that the people, through the state, can control and plan their economy even in an admittedly capitalist country. They have shown, without venturing to underline the fact, that the power of Wall Street is by no means unlimited. For sowing these dangerous doubts in the minds of Soviet. citizens, the counter-attack of orthodoxy has been swift and ruthless. It is not a caricature of the criticism of these economists to say that they have been accused primarily of coming to conclusions on the basis of the evidence rather than on the basis of the predictions of Stalin mid Lenin twenty-five years ago. In the third paragraph of my letter to you of January 31st, † I quoted a sample of this kind of comment in criticism of the economist Varga. Varga has been the principal victim, possibly because he lias undoubtedly been the best Soviet economist. What has, in fact, happened to him, is clothed in secrecy, but he has almost certainly been removed from his position by the closing down of the Institute of World Economy and World Politics, of which he was the head.

A further sample of the intolerance of the authorities is to be found in a long article in the magazine Bolshevik of 15th December, entitled "A Vicious Book on the United States Industry." This article attacks a book by M. Bakshitski entitled Technical-Economic Changes in United States Industry during the Second World War. This book was published also by the heretical Institute of World Economy and World Politics. The author is accused of blindly following prejudiced American authors, accepting United States official statistics, eulogising the technical and organizational changes in the industry of the United States, and of failing to expose to a sufficient degree the aggressive policy of American capital and the mad aim of American imperialism to attain world domination. "Unfortunately", says the reviewer, "instead of a Marxist analysis of the reactionary rôle of the monopoly companies, instead of a scientific analysis of the general crisis of capitalism, some Soviet economists are following the path of bourgeois methodology providing antiscientific `studies' on `technical-economic changes' in capitalist industry. Such, for instance, is M. Bakshitski's book, which contradicts the chief propositions of Marxism-Leninism on imperialism. Instead of giving a serious analysis of the contradictions of American imperialism, Bakshitski describes the technical-economic `changes' in United States industry, uncritically quoting the lying inventions of bourgeois literature. His book is imbued with obsequiousness to bourgeois culture and technique.

"In defiance of the requirements of Marxism-Leninism, the author examines the economy in isolation from politics: this means that he slurs over the principal contradictions of American imperialism - first and foremost, the conflict of interests between labour and capital. The book fails circumstantially to disclose that economic `advances' in capitalist conditions result in the intensification of oppression on the part of the monopoly companies, it fails duly to expose the growth of anarchy of production and the aggravation of all the contradictions of imperialism. Bakshitski presents the capitalist economy of the United States in a rosy light.

"Proceeding from the erroneous view that the American wartime economy was imbued with a spirit of collaboration between the capitalists, Bakshitski describes the `collaboration' and `mutual aid' between the chief and subsidiary suppliers and associated producers, but says nothing of the main thing - the furious competition, the absorption and ruin of medium and small `suppliers' by the big monopoly companies.

"The book wrongly describes the development of specialisation and co-operation in American industry. Bakshitski presents matters as if American capitalism were able to set up and co-ordinate the uninterrupted and organised work of a wide network of specialised and co-operated enterprises throughout the country. The book represents the United States capitalist economy as an organised production organism working according to plan.

"A two-page table inserted in the book advertises the mobility of American industry, blindly citing hundreds of figures from the eulogistic report of the United States War Production Board. The author does not even make an attempt to analyse the data taken from bourgeois sources. He by-passes the most acute contradictions, major failures and other significant phenomena that have taken place in the course of the mobilisation of American industry.

"The author wrongly explains the reasons for the delay in war reconstruction of industry and the sabotage of war production on the part of American monopoly companies. When dealing with this question, the author, as in other instances, overlooks the main thing - namely the reactionary aims of the American monopoly companies in the war and their efforts to prolong it, not only in order to get rid of their rivals in the markets (Germany, Japan) and attain world domination, but also to weaken the USSR."

These quotations are, I think, sufficient evidence of the fury which is being loosed on those who suggest that the explosion of American capitalism will not take place as predicted. It may be said that all this is propaganda intended to remove dangerous thoughts from the minds of Soviet citizens, and that it does not. necessarily reflect in any way the views on world events of the directors of Soviet policy. If it is only propaganda, then one can only say that it may be as dangerous as the Nazi leaders' predictions that no bombs would fall on Berlin. The fact is that. Messrs. Varga and Bakshitski are a good deal closer to the truth than those who denounce them. The truth can be hidden from Soviet citizens pretty successfully, but it is going to be hard to invent a full-scale United States depression which does not take place. There is something frenzied about these assertions of faith in Mars, Lenin, and Stalin. They could be interpreted as the shrill cries of those who are afraid to believe that what they have always considered fundamental truth may be error. The Soviet revolution does seem to have reached the inquisition stage. No deviation whatsoever is to be permitted in thinking, in science, economics or art. Orthodoxy is so severe that the faithful are even denouncing each other. The present phase of the Soviet state is frequently compared with the Counter-Reformation, but it lacks the heroic quality of the latter movement. The intellectual level of discussion seems to me about the same as the arguments between proper Mennonites and Amish Mennonites as to whether God prescribed the wearing of buttons or hooks-and-eyes. My knowledge of Russian history is not thorough, but 1 should think the obscurantism of the new orthodoxy has much in common with that of the "Old Believers" who resisted the Greek reforms in the Church in the 17th century - and who still stubbornly and hostilely practise their rites in Moscow. Is it possible that Soviet education and terror has produced a race of intellectual pygmies so soon? It would be going far to say so, but it is depressing to compare the ignorant, irrational, at best sophomoric, discussions which now appear in the best economic journals with the scope and logic of Lenin. Before concluding this letter I should, of course, make one further reservation: perhaps the orthodox are right and there will be a devastating depression in the United States.

I am sending a copy of this letter to the High Commissioner in London.

Yours sincerely,
J.W. HOLMES