The rise and fall of capitalism

[Zederbaum]

This comment by Q on another thread got me thinking:


I see the decline of capitalism being translated in the decline of the left.1. Is capitalism in decline? What is the evidence that it is? What does it even mean to say that it is in decline?
2. Why should the left decline along with capitalism? Shouldn't the opposite happen, i.e. that as capitalism declines, the popularity of socialism as the natural successor system should increase.

My view is that if capitalism is in decline then the latter would be occurring. And if the left isn't gaining in traction, then capitalism isn't in decline :)

Hardly the most rigorous reasoning you're likely to ever come across! But I think there is something to it.

The capitalist mode of production as characterised by the extraction and private appropriation of surplus value via wage labour and production for the market is, when viewed at a global level, still on the increase. The rapid expansion in recent years of capitalism in China is the most striking example of its rude health, but the same process is proceeding in India and in its own way in South America too. In the developed world, the capitalist mode of production reigns ever more supreme. There isn't the slightest indication that any variant of a socialist mode of production is gaining any popular traction. Indeed, such is the domination of capitalism, even avowedly leftist organisations mostly propound what can fairly be called radical Keynesist solutions, sometimes with the addition of a backwards looking national tinge, e.g. to leave the euro and revert to a national currency.

Now clearly there is a ongoing crisis in capitalism and no doubt capitalists are having difficulty in locating investments which will return a profit. But to what extent is this a symptom of its own success, perhaps even an indication of a decline for particular capitalists. But is it an indication that capitalism as a system is in decline? If it is, then there should be no methods by which the capitalists can extract themselves from their current mess. Is that the case? Would a bad debt jubilee - essentially a purging of parts of capital itself - restore the capitalism's ability to grow substantially in the next three to four decades? I suspect it would and, along with the points raised above, am therefore of the view that capitalism is not yet in decline.

In fact, rather than living in a period of its decline, I think we are in an era of High-Capitalism, where both its mechanics and its ideology has never held so firm a grip on society. As well as the near total victorious march of the capitalist mode of production across the globe, we have seen in the last 30 years the decimation of even the idea that a socialist alternative is possible. It's true that the nearer we are to the peak, the closer we are to the descent. But there is still room for capitalism to expand, both geographically in India, South America, and Africa, and technologically in areas such bio-technology, AI, and robotics.

Lastly, pockets of capitalism managed to find toeholds in the world of feudalism and grew as the latter declined. What indications are there that a more advanced mode of production is doing the same to capitalism?

If there is any truth at all to the above thesis, it raises important questions about the reasons why the left and working class self-consciousness are in such bad health. Perhaps rather than the weak state of both being a symptom of capitalism's decline, it is a feature of capitalism's triumph. This isn't a very palatable thought, but the first step to changing the world is to interpret it :)

[Die Neue Zeit]

This comment by Q on another thread got me thinking:

1. Is capitalism in decline? What is the evidence that it is? What does it even mean to say that it is in decline?

If we consider things from even a more populist perspective, comrade, Michael Hudson wrote numerous articles about the "financial road to serfdom," about increased rentier power, etc. He contrasts, this, of course, with "industrial capitalism."


Now clearly there is a ongoing crisis in capitalism and no doubt capitalists are having difficulty in locating investments which will return a profit. But to what extent is this a symptom of its own success, perhaps even an indication of a decline for particular capitalists. But is it an indication that capitalism as a system is in decline? If it is, then there should be no methods by which the capitalists can extract themselves from their current mess. Is that the case? Would a bad debt jubilee - essentially a purging of parts of capital itself - restore the capitalism's ability to grow substantially in the next three to four decades? I suspect it would and, along with the points raised above, am therefore of the view that capitalism is not yet in decline.

There are lots of people who think it has been in decline since the end of the immediate post-war period, despite all the technological innovations.


In fact, rather than living in a period of its decline, I think we are in an era of High-Capitalism, where both its mechanics and its ideology has never held so firm a grip on society. As well as the near total victorious march of the capitalist mode of production across the globe, we have seen in the last 30 years the decimation of even the idea that a socialist alternative is possible. It's true that the nearer we are to the peak, the closer we are to the descent. But there is still room for capitalism to expand, both geographically in India, South America, and Africa, and technologically in areas such bio-technology, AI, and robotics.

Lastly, pockets of capitalism managed to find toeholds in the world of feudalism and grew as the latter declined. What indications are there that a more advanced mode of production is doing the same to capitalism?

If there is any truth at all to the above thesis, it raises important questions about the reasons why the left and working class self-consciousness are in such bad health. Perhaps rather than the weak state of both being a symptom of capitalism's decline, it is a feature of capitalism's triumph. This isn't a very palatable thought, but the first step to changing the world is to interpret it :)

I'm sure Arthur Bough of Boffy's Blog will agree with your Kondratiev Long Wave conclusion.

As for the feudalism comparison, IIRC there were no "pockets of feudalism" in slave relations.

Overall, there's one aspect you didn't consider: rising tides supposedly lifting all boats. Real wages should go up with increased productivity, and work time should go down. While I'm suggesting political programs independent of decline and crises fetishes, you're only considering things from the viewpoint of some capitalist.

[ernie2]

Zederbaum, the question of whether capitalism is in decline or not is not determined by whether it is in crisis or not. The question can only be posed historically and theoretically. To be in decline there had to be a period of ascent and one needs to define what marked that in order to analyse whether it has entered a period of decline: which means it has entered a process where the characteristics of the ascended period are weakened or over-turned.
For those who defend Left Communism, the ascendant period of capitalism was characterised by the formation of the world market and the international proletariat. In a remarkably short period of time, all of the main capitalist countries underwent a process of mass industrialization and at the same time dragging along the rest of the world. Old modes of production were swept aside, destroyed and dispoiled, millions sucked from the country side into the factories, millions more were born as the cities grow, whole transport systems arose where there had been none or very primitive ones before, the forces of production underwent perpetual transformation. This dynamic process was certainly not peaceful, as Rosa Luxemburg graphically pointed out: capitalism emerged oozing blood and gore from every pour. However, the end result of this process was the laying down of the material foundations of communism: massive abundance, whilst at the same time the revolutionary class armed itself politically as an international class: the First and Second Internationals, the formation of the mass socialist parties. Thus when the historically progressive phase of capitalism came to a terrible and bloody end, the final formation of the world market and subsequent world war the proletariat was able to launch a revolutionary counter-offensive against this barbarity and to offer hope to the whole of humanity. As the Communist International underlined time and time again if the proletariat proved unable to but an end to dying capitalism humanity would be thrown into ever deeper war, chaos and destruction because that was all that capitalism now had to offer.
This prediction was fully verified by subsequent history. The reign of unprecedented terror that was unleashed by the international bourgeoisie in order to first defeat the revolutionary wave and then to utterly physically and mental defeat the proletariat reached levels of barbarism not seen before then in Western Europe and beyond, apart from the war. The bloody crushing of the German revolution, and the other revolutions, followed by the terrible far right terror, whilst in Russia, Stalin and his capitalist reign of terror murdered tens of millions of workers, and peasants first to crush any remaining revolutionary spirit and then to carry out the mass milierization of the economy and society in preparation for the coming war with Germany. On the basis of this terrible barbarism Capitalism was able to let rip the horror of World War Two and its rabid destruction of every aspect of civilization and humanity that stood in its way: the massive slaughter of civilians was as much a war aim (of all those involved) as was that of the enemies armies. Not since the 30 years war had there been such a systematic destruction of society. Men women and children became nothing but targets to be annihilated as each national capital fought for survival or victory.
This barbarity did not stop with the end of the war, but simply became more localized: Korea, Vietnam, India-Pakistan, India-China, Angola, Mozambique, Israel/arab imperialisms, the Iraq-Iran war, the Gulf wars, Afghanistan, Iraq etc et. Even if the main power avoid being directly involved in wars on their home territories, their economies were dominated by the needs of the war economy. This did not just involve the arms industries (which have been so important to these countries) but the rest of the economy due to massive investment in R&D around the needs of the war economy. This has totally distorted the whole structure of research, not only directly involved in arms production but also all aspects of academia have been drawn into preparing the next war and the populations readiness for it. At a fundamental economic level the war economy has distorted the law of value: those industries involved in the war economy work of cost plus, ie they charge as much on top as the rest of the state will accept, and not based on the law of value.
Thus, in the socalled golden age of capitalism following WW2 the reality was barbaric wars, and the militarization of society and the threat of total annihilation.
The development of the open economic crisis since the end of the 60s has to be seen as an expression of this wider process. Never before in the history of capitalism has there been such a protracted period of open economic decline. And this is despite of the massive waves of industrialization that we saw first in the Asian tigres, then with China and other Far East Countries. This massive accumulation has only added yet more over-capacity onto an already over-produced international industrial structure. Also the rise of China etc has only been possible because of the increasing destruction of the economic structure of the West and the huge growth of debt, China's rise may have slowed down the rate of decline, but at the cost of yet even worse economic convulsions as the enormous over-accumulation that has taken place there becomes revealed. At the moment this debacle is being held back by the massive wave of liquidity that the US and other states are pouring into the economy, which is only worsening over-production. The implosion of China when it comes will be seismic. The growth rate is already slowing towards 6% which is simply what is need to absorb the increase in the working population, let alone fund further accumulation.
It is vital for marxists to refuse to accept the ruling class's constant and sophisticated efforts to present itself as basically being healthy, though having a dose of the flu at the moment. This involved not only blaming the bankers etc but also doing all they can to separate off the war economy from this economic and social crisis. The War on terror has cost trillions of $ and the war economy has become ever more vital to the systems ability to maintain its activity. The barbarism in Afghanistan, Iraq, Syria, Libyia, Sudan, Somalia, Pakistan etc are not some isolated event but the expression of the historical crisis of the capitalist system. A system that sows death and destruction inorder to simply drag itself from day today.
Sorry to ramble on a bit, but this is not an easy question to answer in a few sentences. I am also not able to post links at present. However, I would suggest having a look at our website, and that of the International Communist Tendency (which also defends that capitalism is decadent)for more detailed analysize of this question

[Die Neue Zeit]

Crisis theory (and by extension "decadence" stuff) is overrated:

http://revleft.com/vb/marxs-crisis-theory-t160755/index.html
http://www.cpgb.org.uk/worker/799/crisis.php
http://www.thenation.com/article/161267/reimagining-capitalism-bold-ideas-new-economy
http://www.revleft.com/vb/reform-possible-and-t166141/index.html
http://www.revleft.com/vb/begin-redefining-minimum-t133948/index.html

I'll (finally) post much more on this in the next day or two.