Marxism and finance capital

Source: Bottomore, Tom. “Finance Capital.” A Dictionary of Marxist Thought, Basil Blackwell, Oxford, 1985, pp. 172–177.

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Rudolf Hilferding

finance capital   The only form of capital that was not theorized by Marx but has become established as a valid category for twentieth-century Marxist theory. It is a form quite distinct from others such as financial, interest-bearing, or money capital. In the concept first promulgated by Hilferding (1910) it has two central characteristics: first, it is formed by the close integration of financial capital in the hands of banks, with industrial capital; and second, it arises only at a definite stage of capitalism. The existence of finance capital, thought Hilferding, has major implications for capitalism, being seen as integral to the development of monopolies (see CENTRAL­IZATION AND CONCENTRATION OF CAPITAL), to IMPERIALISM, and to the prospects for the overthrow of capitalism. It was these dynamic aspects which gave finance capital a significant place in the writings of Lenin and Bukharin, and have ensured that the debate over it has persisted to the present. Its signifi­cance for the application of Marxist theory to twentieth-century conditions was, indeed, im­plied by Kautsky and Bauer in their reception of Hilferding’s book, Finance Capital, as the completion of Marx’s preliminary ideas on the stage of capitalism that was only just emerging before his death. (See Bottomore 1981 and Coakley 1982 for the connections between Hilferding’s work and that of his contemporaries.)

The integration of financial and industrial capital, in a general sense, is not specific to finance capital. Throughout capitalism the existence of specialized financial capitalists holding, exchanging, borrowing, and lending money is possible only because of their articulation with the productive sectors; it is only by lending money to industrial capitalists that they can appropriate surplus value through interest, and only by operating the payments and foreign exchange systems for the transactions of the whole economy that they can appropriate surplus value through profit (see FINANCIAL CAPITAL AND IN­TEREST). However, it is the specific manner in which the two types of capital are integrated that distinguishes finance capital, and the essence of it is that the relationship ceases to be at arm’s length; as Hilferding wrote, finance capital arose from the forces that ‘bring bank and industrial capital into an ever more intimate relationship’ (emphasis added). Moreover, it is an intimacy in which the banks are the dominant partners, controlling industry and forcing change upon it.

Hilferding and Lenin, with different emphasis, identified three channels through which the banks’ control of industry is exerted. First, the rise of the JOINT-STOCK COMPANY enabled banks to take controlling shareholdings in industrial firms, and this facilitated not only control but a merging of identities so that ‘banks … become to a greater and greater extent industrial capitalists’. (Hilferding 1910, p. 225). Second, the ‘personal link-up’ (Lenin 1916, p. 221) achieved through the appointment of bank directors to the boards of industrial firms and vice versa, and the fact that the same persons who hold major shareholdings in banks hold them in industry too. Finally, the banks obtain detailed knowledge of ‘their’ industrial firms’ affairs by the fact that they handle their financial transactions; they know the state of their bank balance day by day and they handle the credit (bills of exchange) generated in the course of the firms’ everyday business. It is significant that the concept of finance capital was not developed with respect to financial capital in general dominating industrial capital; the channels of control were those by which a particular institutional form of the former, banks, interlocked with and dominated an institutional embodiment of the latter, joint-stock companies. Indeed, the framework was even more specific, for although they referred to other countries, Hilferding and Lenin did base their ideas primarily upon their observation of the system that dominated industrial Central Europe where the ‘universal bank’ was typical. Whereas commercial banks in the United Kingdom have historically concentrated on handling payments and giving short-term credits to industry, taking the view that industrialists know more about industry than bankers, the German universal bank has combined such functions with holding shares, floating share issues and holding directorships in industry.

The idea of an articulation between banks and industrial firms with the former dominating is, as such, static, but the essence of the idea of finance capital is that it is typical of a stage in the history of capitalism, and therefore both the product of historical forces and the generator of forces which would themselves transform the world. For Lenin (1916) finance capital was not itself a stage of capitalism but was, instead, an intrinsically prominent feature of the stage called monopoly capitalism or imperialism (see PERIODIZATION OF CAPITALISM). Monopoly capitalism was the stage in which competi­tion between many capitals came to take the form of domination of whole industries by a handful of giant enterprises, trusts or cartels, but finance capital was an essential characteristic of it. Finance capital was not the interlocking of any bank with any firm but ‘the bank capital of a few very big monopo­list banks, merged with the capital of the monopolist associations of industrialists’ (Lenin 1916, p. 266). The picture was one of giant trusts dominated by bankers and , wielding enormous power. In the hands \ of non-Marxists a similar picture informed populist and even fascist attacks on ‘the power of finance’ in the first half of this century, but Hilferding, Lenin and Bukharin saw their task as uncovering the laws that governed finance capital’s rise and its future. Finance capital was generated by the operation of two phenomena that Marx had identified. Concentration and centralization had created monopolistic firms in industry, while the rise of a modem credit system had concentrated into the hands of banks the savings of the whole community; the merging of the two was the outcome of monopolistic firms having nowhere else to go for the large blocks of finance needed to facilitate their accumulation, while the banks had no profitable alternative to investing their large inflows of funds in industry. Moreover, the merger in the form of finance capital was itself an impetus to the development of further monopolies as blocks of financial-industrial capital attempted to gain further control over the anarchy of their markets. In this process the promotion of new industrial enterprises by banks was an important strategy which generated a special form of profits, promoter’s profits, through the promotion itself.

The creation of monopolies, which both underlay and was given added impetus by finance capital, was seen by Lenin as inseparable from the internationalization of capital in imperialism. In his introduction to Bukharin’s Imperialism and the World Economy (1917) he explained the growth of finance capital by arguing that at

a certain stage in the development of exchange, at a certain stage in the growth of large-scale production, namely, at the stage that was reached approximately at the end of the nineteenth and the beginning of the twentieth centuries, commodity exchange had created such an inter­nationalisation of economic relations, and such an internationalisation of capital, accompanied by such a vast increase in large scale production, that free competi­tion began to be replaced by monopoly (p. 11).

Again, though, this was seen as a two-way relationship. Imperialism was a condition of the monopolies which were the condition for finance capital, but finance capital was itself the motive force for, and a defining characteristic of imperialism. Lenin’s Imperial­ism, the Highest Stage of Capitalism (1916), expresses it in this way:

The characteristic feature of imperialism is not industrial but finance capital. It is not an accident that in France it was precisely the extraordinarily rapid development of finance capital and the weakening of industrial capital, that from the eighties onwards, gave rise to the extreme intensification of annexationist (colonial) policy, (p. 268).

V.I. Lenin

The emphasis on finance capital, distinct from industrial or other forms of capital, as the characteristic of imperialism was the fulcrum for Lenin’s and Bukharin’s theoretical criticisms of other Marxist views. Lenin (1916) attacked Kautsky’s view that im­perialism was characterized by industrial capital seeking the subjugation of agrarian areas, while Bukharin, in ‘Imperialism and the Accumulation of Capital’, (in Luxemburg and Bukharin 1972), bases his general critique of Luxemburg’s theory of imperialism partly on the ground that she fails to distinguish the specific form of capital which underlies imperialism, finance capital, from capital in general.

Lenin and Bukharin argued that reality contradicted a view of imperialism as appropriation of agrarian areas or as, according to Luxemburg, the expansion of capital into non-capitalist areas in its search for markets; for imperialism at the turn of the century was characterized by expansion into areas where capitalist industry was already established. (Bukharin took the French occupation of the Ruhr in 1923 as his example, while Lenin mentioned German designs on Belgium, and French designs on Lorraine.) This imperialist struggle for industrial, as well as non-industrial, econ­omies, could only be explained by the dominance of finance capital. It was symptomatic of a struggle to re-divide the world rather than simply expand into virgin territory, and re-division was imperative because of finance capital’s domination and maturity. For in the years before the first world war finance capital had reached maturity by establishing a world system in which financial capital and productive capital were exported until the whole world was linked with one or another block of finance capital. In Lenin’s view: ‘finance capital, literally, one might say, spreads its net over all countries of the world… The capital- exporting countries have divided the world among themselves in the figurative sense of the term. But finance capital has led to the actual division of the world’ (1916, p. 245). Since the world was thus divided, further competitive development of the trusts necessarily involved a struggle for re-division.

That struggle was seen as a principal element in the genesis of imperialist war so that for Lenin and Bukharin war was seen as a necessary concomitant of finance capital’s domination. In this they diverged from Hilferding, for although his theory of imperialism, with finance capital at its centre, was the foundation for that of the better-known writers, he did not regard war as the inevitable outcome of imperialist rivalry. And whereas Bukharin and Lenin thought that the imperialism of finance capital only changed the conditions under which socialist revolution would overthrow capitalism and smash its state, Hilferding saw the state’s subordination to finance capital and the interventionism to which the trusts pushed it as laying the foundation for a system (which he later called ‘organized capitalism’) that could be readily taken over and, without transformation, used by the proletariat. It was this above all that marked the political divisions between Hilferding and Lenin.

Debates over the manner in which imperialist war and the regulation of capitalism by trusts and the state would affect the balance of power between classes and the prognosis for capitalism are, however, at one remove from the question of power that is at the core of finance capital: the enormous economic, social and political power that it appeared to concentrate in the hands of banks and of the handful of capitalists that control them. The validity of the concept of finance capital for later capitalist societies has hinged on the question whether this power, predicated on the dominance of banks over industrial corporations to which they are tied, does exist. The debate on this question, which Sweezy initiated in a 1941 article and subsequent book (1942), has concerned principally the empirical question of whether data on shareholdings and interlocking directorships confirm that the channels of control identified by Hilferding do exist, and it has concentrated on the United States. The theoretical problems in the concept of finance capital – the meaning of dominance, power and integration in the relationship between banks and firms—have hardly been discussed.

Sweezy argued that Hilferding and Lenin had witnessed the emergence of capitalism into a new stage, MONOPOLY CAPITALISM, and that the dominance of bankers had been only a transitional phenomenon in its gestation: ‘Bank capital, having had its day of glory, falls back again to a position subsidiary’ to industrial capital’ (1942, p. 268). A significant challenge to this thesis came from Fitch and Oppenheimer (1970) and Kotz (1978) who argued that major banks do control large firms in the United States (although whereas the theory’ of finance capital emphasized the strength this brings to the trusts, Fitch and Oppenheimer pointed to the debility induced in railways and power companies by banks’ policies). An import­ant mechanism of control (in addition to boardroom representation) was seen to be the management of corporate stock by US banks trust departments on behalf of pension funds and individuals, giving some banks effective control over strategic blocks of shares. In Kotz’s work the holdings of other financial institutions within banking groups were also examined, and in the case of Britain, the work of Minns (1980) has demonstrated that banks’ management of pension funds’ portfolios has given them control over substantial blocks of shares and at least the pritna facie possibility of using that to control industry’s development. Whether such power is, in fact, exercised in modern America and Britain remains an unanswered question. Their involvement in the merger waves through which capital was centralized in the two decades from the early 1960s, and in the restructuring of industry in the economic crises of the 1970s and 1980s, is beyond question, although difficult to document and quantify; but whether they dominated and gave impetus to these changes in a significant way, as implied by the concept of finance capital, is less clear.

The theoretical coherence of the concept of finance capital, as opposed to the empirical validity of the thesis of bank domination, has remained unquestioned, but in fact it is not unproblematic. The main difficulty is that two distinct entities, financial capital in the hands of banks and industrial capital organized in corporations, are conceived as merging but yet remaining distinct to the extent that one remains dominant over the other. That notion is sustainable as long as ‘merging’ is interpreted in a loose sense to mean that the elements while remaining distinct are articulated with each other through definite channels and are mutually transformed through their connection. But although some of the transformations have been enumerated in the concept (such as the increased degree of monopoly in industrial capital), Hilferding, Lenin and Bukharin reflected the problem by collapsing the characteristics of finance capital into those of one or other of its elements. Although Hilferding noted the ‘relative independence’ of finance capital, in places he slipped into arguing that bank capital simply became industrial capital: ‘the banks… become to a greater and greater extent industrial capitalists’ (1910, p. 225) whi|c Lenin, in his Introduction to Bukharin (1917) slipped into endowing finance capital with the same characteristic of universality as Marx attributed to financial capital (in the form of interest-bearing capital): ‘finance capital, apower that is peculiarly mobile and flexible peculiarly intertwined at home and inter­nationally, peculiarly devoid of individuality and divorced from the immediate processes of production…’

A different problem which is, nevertheless, related to that of the nature of the merger and transformation of the elements of finance capital is the identification of financial capital with banks and of industrial capital with firms whose activities are only industrial. It has meant that forms of articulation between financial and industrial capital which are not comprised in links between banks and firms are excluded from theoretical con­sideration (and from much empirical in­vestigation), although the concept of finance capital purports to be more general. As an example of the empirical weakness that results from this theoretical restriction, modern multinational corporations encompass indus­trial production, commercial activities, and the banking activities of money dealing and control of investment funds (in the form of retained earnings and reserves and in the form of borrowing on the same wholesale money markets as banks draw upon); they integrate financial and industrial (and merchant) capital, but since this occurs within themselves the concept of finance capital defined in terms of banks and firms cannot be strictly applied.

For Marxist political strategies the question of the modern validity of the concept ultimately turns on whether finance capital generates a political or economic power which has to be broken if capitalism is to be overthrown. Hilferding and Lenin pointed to the concentration of power that it generated; the latter argued that ‘literally several hundred billionaires and millionaires hold in their hands the fate of the whole world’, while the former thought that ‘taking possession of six large Berlin banks would mean taking posses­sion of the most important spheres of large- scale industry and would greatly facilitate the initial phases of socialist policy during the transition period’. In the 1980s it remains true that the construction of socialism would re­quire the overthrow of the independent power of the banks, but the reasons for this have more to do with their character as financial capital than with their dominant position within finance capital. With some exceptions (the Japanese economy being the most promi­nent) the power of banks within the capitalist system is not primarily the consequence of their direct involvement in and control of industry even though that involvement does exist. It arises from the structural power that their (and other) financial capital exerts in the foreign exchange and money markets, deter­mining interest and exchange rates that influ­ence the whole economy. It also arises from the discretionary power private banks have acquired to move credit on an international scale, but this credit is financial capital, not bank capital tied to industry; it was ex­emplified in the 1970s by the international banking system becoming the principal source of credit for some third world and socialist governments, a position that gives them great power but does not constitute finance capital.



Bottomore, Tom 1981: “Introduction to the Translation’. In Hilferding, Finance Capital. Bukharin, Nikolai 1917 (1972): Imperialism and the World Economy.
Coakley, Jerry 1982: ‘Finance Capital’.
Fitch, Robert and Oppenheimer, Mary 1970: ‘Who Rules the Corporation?’
Hilferding, Rudolf 1910 (1981): Finance Capital. Kotz, David 1978: Bank Control of Large Corporations in the United States.
Lenin, V. I. 1916 (1964): Imperialism, The Highest Stage of Capitalism.
Luxemburg, Rosa and Bukharin, Nikolai 1972: Imperialism and the Accumulation of Capital.
Minns, Richard 1980: Pension Funds and British Capitalism.
Sweezy, Paul 1942: The Theory of Capitalist Development.


[1] Laurence Harris, Open University

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Li Ta-chao, a Founder of the Chinese Communist Party

Author: Liu Nung-chao1
Source: People’s China, July 1957; No. 13, p.24-29.
Transcribed/HTML: Mike B. for, 2013
Public Domain: Marxists Internet Archive (2013). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.

LI TA-CHAO was China’s first propagandist for Marxism and one of the founders of the Chinese Communist Party. He was born into a peasant family in Taheito Village, Loting County, Hopei Province on October 29, 1889, six years after the death of Marx and nineteen years after the birth of Lenin. He was a posthumous child and became an orphan as soon as he was born (his mother having died in childbirth). The sole heir to the family fortunes was brought up by his grandparents.

The child grew up at a time when world capitalism was changing into imperialism and the old China was drifting more and more to the position of a semi-colonial and semi-feudal country At eleven, the boy personally saw the atrocities committed by the troops of the eight allied powers on Chinese soil and the heroic resistance put up by the Yi Ho Tuan (“Boxers”) against them. An indelible impression was thus left on his young mind. At sixteen, Li Ta-chao sold about an acre of land, the only property the family had, and with the money enrolled at the Yungping Middle School, Lulung County, Hopei. After a lapse of two years, he left the school and joined the Peiyang School of Law and Politics in Tientsin.

In the 1900s the revolutionary movement was showing signs of fresh power and growth. Between 1905 when it was founded and 1910, the Tung Meng Hui (Revolutionary League), whose leader was Sun Yat-sen, staged seven armed uprisings and grew rapidly. In 1910 spontaneous large-scale revolts broke out in Hunan, Shantung and Yunnan. In the same year, Japan annexed Korea; clearly the spearhead of aggression was now turned towards China.

A Staunch Revolutionary

In 1911 the tide of the democratic revolution swept through north China, and anti-imperialist and anti-feudal ideas began to take root in the mind of the young student. Li Ta-chao not only hated intensely the despotism which condemned the people to a miserable life but also firmly opposed the evils inherent in feudal monarchy which had inflicted untold sufferings on the people for thousands of years. He resolved to join the Tung Meng Hui (Revolutionary League) after the example of his teacher in the Peiyang College,Pai Ya-yu. The neighbourhood of his native county, Loting, was his sphere of activities. There he urged units of the New Army to take revolutionary action.2 On October 10 the Wuchang Uprising which toppled the 2,000 year-old autocratic monarchy erupted. In November the New Army units stationed at Luanchow staged a revolt which was planned by Pai Ya-yu and Li Ta-chao. The uprising was a failure but it nevertheless gave a lively impetus to the 1911 Revolution as it occurred in Chihli Province (the present- day Hopei) where the Manchu court was strongest.

Activities Against Yuan Shih-kai

In 1912, Yuan Shih-kai, boss of the Northern Warlords, took advantage of the revolutionary gains and engineered his election to the provisional presidency of the young republic. The Tung Meng Hui, now reorganized as the Kuomintang, became more and more demoralized with every passing day. Li Ta-chao was angered by the situation and commented on the outcome of the revolution in these words. “The democratic government as it is today is the dictatorship of a handful of violent and crafty scoundrels, it is not a government of the people. The people have been robbed of their rights by a group of these scoundrels and can claim nothing. All the benefit goes to these scoundrels, and the people have nothing at all.”

In 1913 Sung Chiao-jen, one of the leaders of the Kuomintang, was assassinated on the orders of Yuan Shih-kai who was trying his utmost to strengthen his dictatorship. The Yen Chih (Statesmanship), a monthly in Tientsin, carried articles by Li Ta-chao which attacked Yuan in a most outspoken manner. Towards the end of the same year, the situation compelled Li to take flight and seek refuge in Japan. The following year, he entered Waseda University in Tokyo where he studied politics and economics and at the same time continued his activities against the regime. In 1915, the dictator gave in to the Twenty- one Demands of the Japanese Government. These demands, if enforced, would have brought China under Japanese suzerainty. Li Ta-chao travelled all over Japan, calling upan the Chinee students there to rise and fight against the notorious demands. On the suggestion of his fellow students, he drafted “An Open Letter to Our Countrymen” which gained a wide circulation in China, evoking a response even among school children in rural areas. In 1916. Yuan went a step further in his treachery by declaring himself emperor of China. Li Ta-chao immediately returned to Shang-hai, established contacts with various groups and prepared the organization of armed forces for a punitive expedition against Yuan. The nationwide support for the march on Peking finally compelled Yuan to give up his kingship, and he died not long afterwards.

Li Ta-chao
[alternatively: Li Dazhou]

After this victory Li Ta-chao returned to Peking which became the base of his revolutionary activities in the ten years that followed. At this time Peking was the centre of the new cultural movement which made feudalism its enemy and was spreading throughout the country. The soul of the movement was the Hsin Citing Nien (New Youth) magazine. Li Ta-chao was a member of its editorial board and published his famous philosophical article “Youth” in the first number of Volume Two, which appeared on September 1, 1916. This was the first article to appear in modern China which interpreted the universe and human life on the basis of dialectical materialism. Li Ta-chao ended his article with this challenge: “What the Chinese youth should say most solemnly to the world is that it must stop arguing why the old China will not perish but that it should work untiringly for the rebirth of a young China.”

By this time, Li Ta-chao had become known as a prominent scholar who had earned the respect and love of the country’s youth. In 1917, at the age of 28, he was appointed to a professorship at Peking University and also as its librarian.

The October Revolution

In 1917 the October Revolution triumphed in Russia, and the imperialist powers launched a cruel war of intervention against the Soviet state. In May 1918 Japan took advantage of the opportunity to work secretly with Tuan Chi-jui, leader of the Anhwei faction of the Northern Warlord group, then in occupation of Peking, to conclude with him so-called military and naval agreements. In the same month more than 2,700 Chinese students in Japan suspended their studies and returned to China to join the fight against the secret agreements. Some of them met in Peking and staged a demonstration under Li’s personal guidance.

From the very first, Li Ta-chao expressed his fast friendship for the young soviet state and pledged all support for it. In an article on the October Revolution, written for the July 1 issue of the Yen Chih, he pointed out: “Civilization after the early days of the twentieth century will surely grow out of today’s Russian revolution…Let us hold our heads up and greet the dawn of the world’s new civilization, let us hearken to the news coming from the new Russia of freedom and humanity!”

Spreading Marxism

Meanwhile, Li Ta-chao invited some young men who were rather more aware of the issues facing the country to form the “Young China Society.” He was also the guide of the “Students’ National Salvation Society,” organized by students formerly in Japan for the continuation of their patriotic anti-Japanese activities. After October 1918 Li got together some able young men from various organizations and founded the “Society for the Study of Marxism” with its headquarters in Peking University Library. “When I worked as an assistant librarian in Peking University,” Mao Tse-tung has said of the period, “it did not take long before I took the road of Marxism under the leadership of Li Ta-chao.” Shortly afterwards, Peking University students founded the Hsin Glum Sheh (New Tide Society) also under Li’s inspiration.

On November 11, the First World War ended. At a mass rally held in the Tien An Men Square in Peking Li delivered a speech entitled “The Victory of the Common People” in which he pointed out that the defeat of Germany was the victory of the masses and the working people. He developed his views further in an article, “Bolshevism’s Victory,” which appeared almost at the same time in the Hsin Ching Niem magazine. “The victory over German militarism,” he wrote, “is the victory of Bolshevism and of the world’s working class; the great achievement is to the credit of Lenin and Marx.” His assessment of the influence of the October Revolution on world history was full of confidence: “It is really impossible for the capitalist governments to dam the onrushing tide…From now on we shall see the flags of victorious Bolshevism and hear its triumphant songs wherever we go. The bell of humanity has sounded! The dawn of freedom is now visible! The world of the future will be the world of the Red Flag!”

In December Li Ta-chao launched a new venture called the Meichou Pinglun (Weekly Review). In an article entitled “A New Epoch,” published in the New Year’s Day issue, 1919, he wrote: “Out of the bloodshed of the 1914 World War and the bloodshed of the Russian Revolution in 1917 has emerged a new epoch. Living in dark China and in deadly silent Peking, we see the first glimmerings of the dawn lighting up the road to a new life. We should seize the opportunity this light offers and march forward and work for the interests of humanity.”

The October Revolution was heartily welcomed by many sections of Chinese society, for their country had tasted to the full the bitterness of oppression by the imperialist powers. However, there were many, including some radical democrats, who were yet unable to appreciate immediately the significance of the October Revolution to the world and the Chinese revolution. But Li Ta-chao was sensitive enough to have observed that it had begun a new epoch for human history and that the Chinese revolution must follow its example. It was this keenness of perception that gave Li Ta-chao his place as the pioneer in modern Chinese history. The radical democrat became a communist.

May the Fourth Movement

On May 4, 1919 the May the Fourth Movement broke out. Li played a leading role in the campaign and dispatched some members of the Society for the Study of Marxism to popularize the movement in several of the larger cities. In the Weekly Review he proposed that the following three principles should guide the course of the movement: (1) Transformation of this robber world, (2) Non-recognition of secret treaties and (3) National self-determination. The movement was thus directed towards a struggle against imperialism and warlord rule. It was a demand for national liberation, democracy and freedom. Thanks to the ideological leadership of Li Ta-chao and other early communists, the events of May the Fourth developed into a great movement to throw out imperialism and feudalism; it began a new era in China.

Only two months after the May the Fourth Movement began, the rapid spread of socialist ideas caused the spokesmen of the comprador bourgeoisie in cultural spheres to come out openly with a call to “stop the tide of Bolshevism.” This led to a major conflict between the communists, with Li Ta-chao at their head, and the bourgeois right-wing represented by Hu Shih. The battle was centred on “Problems and Isms.” In an article “More Study of Problems and Less Talk About Isms,” Hu Shih revealed himself as an opponent of Marxism and a reformist. Hu Shih’s attack was treated to a withering counter- blast by Li Ta-chao. Although many young men had thrown themselves into the struggle against the antiquated culture and its influence, it never crossed their minds that such a fundamental divergence of views could exist among the advocates of the new culture. It was the great debate that opened their eyes to the fact that obsolete bourgeois ideas and nascent proletarian ideas were circulating in their own camp. Where was the new youth of the day heading? They had to make up their minds. The controversy between Hu Shih and Li Ta-chao had the effect of gradually increasing the numbers of those studying and propagating Marxism.

In May 1920 Li Ta-chao organized the first group of Marxists and laid the foundations for the future Communist Party From the earliest days the labour problem engaged the attention of Li Ta-chao. The Weekly Review in the spring of 1919 carried a short article by him about the coal miners’ life in Tangshan, Hopei. Li took a keen interest in the power of the peasants. Before and after the May the Fourth Movement he repeatedly called upon the young people to go to the countryside. After the founding of the Marxist group, propaganda and organizational work was immediately carried out among the workers and Marxism was rapidly linked up with the working-class movement.

After Founding the Party

On July 1, 1921 the Communist Party of China was founded.

Li Ta-chao was put in charge of Party work in north China where he was the guide of progressive students and organizer of the railway workers in their struggles under conditions of brutality and immense difficulties. In August 1922 he went to Shanghai and represented the Party in preliminary talks with Sun Yat-sen on the problem of forming a united front. These talks paved the way for Kuomintang-Communist co-operation, which the Kuomintang National Congress approved in Canton in January 1924. At this congress, Li Ta-chao was elected to the five-man presidium and also to the committee examining the Kuomintang statutes and its manifesto. Thanks to this co-operation with the Communists Sun Yat-sen made a fresh interpretation of his “Three People’s Principles”—Nationalism, Democracy and the People’s Welfare— and formulated the Three Policies of alliance with Soviet Russia, co-operation with the Communist Party and help to the workers and peasants. Li’s work contributed greatly towards the rapid progress of the revolution.

In September of the same year, after a visit to the Soviet Union, Li returned to Peking which was under the control of the Chihli group of the Peiyang Warlords. He established secret contacts with General Feng Yu-hsiang in Peking, whose troops had taken part in an armed uprising at Luanchow in 1911, and urged him to throw in his lot with the revolutionary forces. General Feng rewarded his efforts with a coup d’etat in October which expelled the Chihli regime.3 This coup d’etat helped push forward the revolution in the north. In 1925 Shanghai was shaken by the famous anti- imperialist and patriotic May the Thirtieth Movement which rapidly drew in the whole country. The imperialist powers collaborated with the various warlord groups to attack General Feng’s troops in Peking, Tientsin and Paoting. On March 12, 1926, gunboats of the Fengtien warlords with Japanese naval support raided the Taku Bar and clashed with the National Army. On the sixteenth, the Ministers of eight powers including Britain, the United States and Japan threatened the Peking government with a “protest” which demanded the withdrawal of the National Army Incensed by the demand, the citizens and students of Peking called a mass rally which was followed by a demonstration on March 18 in the Tien An Men Square under the leadership of the Communist Party. The demonstrators proceeded to Tuan Chi-jui’s office, where they demanded an immediate rejection of the eight-power ultimatum. The leader of the demonstrators was Li Ta-chao. Tuan Chi-jui replied to the petition with bullets, more than 200 people were either killed or wounded in the massacre in front of Tuan’s office. While organizing the retreat, Li Ta-chao was knocked down by the running crowd. Despite serious head wounds he managed to get up and did all he could to help the injured.

The incident is known as the tragedy of March eighteenth. The next day the Tuan government issued orders for Li’s arrest, but despite the danger, he continued to work underground in Peking dealing with the heavy work thrown up by the revolutionary movement in the north China provinces. Soon afterwards, the Northern Expedition campaign began and put a priority on revolutionary activities in north China. Li Ta-chao continued to remain at his post, although a white terror raged in the city, and rejected all advice to leave Peking.

A Martyr’s Death

On April 6, 1927 Li and many other revolutionaries were arrested by Chang Tso- lin, a Fengtien warlord, who had then seized Peking. Although he was horribly tortured in prison, he continued to spread the ideas of communism. His courage won over some of the prison guards who carried secret messages for him.

The arrest of Li Ta-chao aroused public indignation and there was talk of action for his release. Students, writers, teachers and others made strong demands for the immediate release of Li, whom they described as a “scholar of great moral courage.” The National Army which had then retreated to Shensi also served a warning by sending a telegram to the militarists in Peking. Railway workers in north China planned to storm the prison and liberate Li Ta-chao even at the cost of their lives. However, Li strongly opposed this rash action on the ground that the revolutionary forces must be preserved at all costs.

On April 28 Li Ta-chao and nineteen other revolutionaries were secretly taken to a remand prison in Hsi Chiao Mm Hsiang where preparations had been made to murder them. The weather was turning warm. Li Ta-chao, his hair uncombed and wearing a brown suit, walked to the execution ground, which was enclosed by trees. Raising his head, he saw the gallows and understood that the brutes were ready to kill him. Smiling, he walked on to the platform and addressed the soldiers and policemen who were to witness his death. It was a hero who spoke: “You are all like fish swimming in a saucepan, yet you are stupid enough to do a shameful deed. The great cause of communism will not die simply because you hang me today! We have trained a multitude of comrades and they are like the seeds of red flowers sown all over the country. We believe that the glorious victory of communism will come in China!” Li Ta-chao proudly finished his words, looked at the sky, smiled, then walked calmly to the gallows! He was 38 when he died.

Li Ta-chao’s whole life was one of an unending pursuit of truth. At first, he grew from a patriotic intellectual into a radical democrat. With the May the Fourth Movement he became a Marxist and together with other communists charted a new road for the Chinese revolution.

Li Ta-chao had many of the qualities indispensable to a revolutionary. In an article commemorating Li Ta-chao, Lu Hsun has written. “He made a very good impression on me: he was honest, modest, and reticent.” All his short life he was hard-working and frugal. When he was arrested, all he had was one yuan and a small gold ring.


1. The author is a professor at Tsinghua University, Peking. As of 1953. —MIA transcriber.

2. The New Army was an imperial armed force formed along modern lines in the closing stages of the Ching (Manchu) dynasty. The revolutionaries made it one of their main fields of activities.

3. The Northern Warlords were mainly divided into three groups: the Anhwei clique under Tuan Chi-jui, the Chihli clique under Tsao Kun and Wu Pei-fu, and the Fengtien clique with Chang Tso-lin as leader. Following Yuan Shih-kai’s death, civil wars were almost continuously waged between the various cliques which were jockeying for power. Feng Yu-hsiang’s troops were originally under Wu Pei-fu’s command. In the autumn of 1924, a great battle was fought between the Chihli and Fengtien groups in north China. When at the Jehol front Feng’s men rebelled and were moved back to Peking where they staged a coup d’etat, ousted “President'” Tsao Kun and joined the Fengtien forces in a pincer attack on the Chihli armies. Wu Pei-fu was defeated and withdrew to the middle Yangtse. Taking advantage of the chaos Tuan Chi-jui, the Anhwei boss, took over the reins of the Peking government and styled himself the “Provisional Chief Executive of the Republic of China.”

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Tales of the Cold War: Cosmos-954

Originally posted way back in 2006.

A while back, I was going through an old footlocker full of various magazines I have collected over the years. I had quite a bit of stuff in there, including a lot of sci-fi & horror magazines, many issues of Mad, Cracked and Crazy, music-related magazines, and the like. Included in the mix were about three issues of an old magazine called Future: The Magazine of Science Adventure. All of the issues were from the late 1970s and I figure I must have bought these magazines a Half Price Books or some other secondhand shop many years ago. As I inspected the issues for the first time in several years, the one issue that especially caught my eye was the May 1978 issue that had a small white and red wraparound ad that screamed: TOP SECRET: The Truth About ORBITING SOVIET BOMBS! See page 16.” It certainly looked like good reading, so I set the magazine aside and once I had thumbed through and organized the other magazines, I had a look at the “Top Secret” report.

The article was a very short story entitled “Cosmos-954: A Glimpse of Space Disaster” which chronicled the January 24, 1978 crash of a nuclear-powered Soviet satellite in Northwest Territories, Canada.  The article is a classic mixture of science fiction and Cold War hype:

The newspaper headlines were straight out of a fifties science-fiction film: KILLER SATELLITE CRASHES IN CANADA! Only this time the story was real. The crash-landing of the Soviet nuclear-powered satellite, Cosmos-954, north of the American border was a nightmare come true. The effects of the event were felt immediately. Politicians started talking in scientific jargon while many scientists issued distinctly political statements. An interest in space law was (belatedly) revitalized. People began looking to the heavens with increased anxiety. The spectre of a Russian- spawned war in space hovered over the globe. “Perhaps Chicken Little was right,” some joked in reference to the unexpected appearance of the stray spacecraft. But Cosmos-954’s appearance was no joke.


The killer satellite seems best suited for a sneak attack on U.S. command and control, and early-warning satellites in 24-hour orbits. The FOBS (Fractional Orbital Bombardment System) orbital H-bombs seem to be a useful way to approach the U.S. in low orbits, eluding radar detection until the last minute. The nuclear-power naval watchers would mainly be useful in plotting at- tacks on aircraft carriers and nuclear missile subs prior to the start of a war from space.

Cosmos-954 schematics

The real story of Cosmos-954 — the post-Cold War version, anyway, — is much less fantastic.  It is now known that Cosmos-954 was a Soviet Radar Ocean Reconnaissance Satellite (RORSAT) that was powered by a nuclear reactor. The former website UFO Phenomenon in the North previously offered a bit more information on the ultimate demise of the mission:

Previous Soviet missions using such technology would split the reactor from the parent body of the spacecraft and boost the radioactive material into a higher orbit where the reactor would remain for 300-1000 years once the short lifetime of the satellite was over (which was well beyond the life of the radioactive material). Cosmos 954 had a special problem, however – it went out of control and the technicians were unable to separate the reactor from the spacecraft’s parent body.

The Future article implicitly condemns the USSR for failing to notify anyone prior to the crash of Cosmos-954, but more recent accounts of the tale offer information that the USSR did send out a warning regarding the impending calamity, thus allowing NORAD to track the satellite until the crash. Moreover, some accounts note that the orbit of Cosmos-954 had become unstable as far back as September 18, 1977 and that its movements were monitored on a regular basis up until its demise.  A report from CBC Radio (dated Jan. 28, 1978 ) indicates that U.S. President Jimmy Carter contacted the Canadian Prime Minister by phone to advise him of the issue shortly before the satellite’s crash.  According to the CBC, in the wake of the crash, Canadian officials expressed disdain over the American delay in sharing information regarding the impending crash of Cosmos-954.

When Cosmos-954 finally did crash, it fell in the Great Slave Lake area of the Northwest Territories in Canada (near Yellowknife), spreading radioactive material across an area as large as 124,000 km² (some sources suggest the area was around 80,000 km²).  The total amount of radioactive material that reached the ground was around 25% of the estimated 68 pounds of Uranium-235 that was originally aboard Cosmos-954.  The remaining 75% of the U-235 burned up during re-entry.  No human deaths were reported as a result of the crash and it seems that information regarding the long-term environmental effects of contamination is rather few and far between.

Interestingly enough, the USSR eventually agreed to pay Canada a total of $15 million (US) for cleanup efforts, but they ultimately paid somewhere around half of the total bill.  By March 1978, most debris from the satellite had been collected through joint U.S.-Canadian recovery efforts.

In terms of nuclear accidents, Cosmos-954 was certainly an intriguing story back in 1978.  But in the grand scheme of things, it’s a drop in the bucket compared to some of the other nuclear accidents which have come to light in the past few decades.  For some particularly harrowing fare, check out Atomic Archive’s list of nuclear weapons incidents since 1950.

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Yes, It Really Happened: Steve Strong Vs. The Devil & Mel Sharples

Originally written in 2015  for another website.

Go ahead and file it in the “so bad, it’s good” category. After all, “Basher Malone,” a 1988 episode of the cult classic horror series Tales from the Darkside isn’t exactly without its charm. And hey, it’s built around the seedy world of territory-era pro wrestling, which is something that should strike a chord with nostalgia buffs far and wide.

Vic Tayback and friends, from the “Basher Malone” episode.

The story is built around a feud between “good guy” Basher Malone and a gym owner and promoter named Tippy Ryan. Tippy was played by Vic Tayback, who is best known for his role as Mel Sharples on the 1980s sitcom Alice. His arch-enemy, Basher Malone, was portrayed by Steve Strong. ‘88 was, of course, the heyday of Hulkamania, and a lot of Basher’s shtick seemed to be modeled after Hulk Hogan—although there was also a hint of an anti-Ric Flair persona mixed in for good measure.

“Kids need a righteous hero like myself to look up to. A square-dealing, straight-shooting, clean fighting man … And kids, don’t forget what the Basher yells you: Brush your teeth after every meal, do your homework, and listen to your mom…”

After Basher Malone vanquishes all of Tippy’s best men in the ring, Tippy gets a call from “Old Scratch” offering to send up one of his best bad guys from the netherworld down below to settle the score with Malone. Tippy challenges Basher to do battle with his sinister new grappler, telling Malone that he’ll close up shop forever if the babyface wins their no-holds-barred contest.

Malone brings his elderly mother to Tippy’s gym at midnight for the fight and Tippy summons his demonic wrestler Trog via a portal in a Pepsi machine. The stakes are high, as Basher puts his title, his career, and his status as a role model on the line against the Devil’s best wrestler.

The ending is easy enough to predict: Despite a few twists and turns, Basher Malone vanquishes Trog, who carries Vic Tayback back to hell through the Pepsi portal. And even though this all sounds kinda awful, it’s fun to watch, complete with cheesy sound effects and a weird soundtrack that’s comprised mostly of bass and synthesizer licks. It’s really a fun, mindless diversion for wrestling fans and horror aficionados alike and, truth be told, watching the video isn’t a bad way to spend 20 minutes of your life.

The story doesn’t end for Basher Malone and Trog with the closing credits of Tales from the Darkside. Trog, who went by the name of Magic Schwarz, wrestled from 1983 to 1990. His personal website details his experiences through a number of professions, including his work as a wrestler in AWA and NWA.

As for Steve Strong, he was featured in the cult wrestling film Grunt! Strong also attained notoriety as an artist under his actual name, Stephen Cepello. He has painted two portraits of his fellow wrestler Jesse “The Body” Ventura, including one that was displayed in the Minnesota State Capitol.

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