Tendency of the rate of profit to decline

[DaringMehring]

...One of the fundamental points of Marxist analysis of capitalism.

Check out this essay on the subject as it applies to today: http://livingrevolution.co/2013/07/24/the-death-spiral-of-capitalism/

Are we entering a period of serious capitalist decay? According to theory and facts, it appears yes. Revolutionaries will have to harden themselves and become ready.

[Workers-Control-Over-Prod]

...One of the fundamental points of Marxist analysis of capitalism.

Check out this essay on the subject as it applies to today: http://livingrevolution.co/2013/07/24/the-death-spiral-of-capitalism/

Are we entering a period of serious capitalist decay? According to theory and facts, it appears yes. Revolutionaries will have to harden themselves and become ready.

As the author points out, and as I have pointed out many times myself, it is true that the capitalist crisis of profitability is making the frame creak and the first rivets fly already. But, while such an objective beneficial development for Revolution, a Crisis, means mass discontent and at a certain point rebellion, it says nothing about the subjective development towards workers' revolution. Revolutionaries do not have to "harden themselves and become ready"; Revolutionaries and Socialists today need go back and educate themselves on the fundamental developments made and conclusions reached by Marxism on how to take power and successfully build the new society of the workers.

While the ever more aggressive development of this Crisis of Capitalism naturally is increasing civil unrest and protest around the world, and this is objectively a good development towards social Revolution, the subjective part of the puzzle, the struggle for political hegemony and political power by the working class, is far behind the realities everywhere.

If the existing Left does not get its theory in order and learn from the rich source of knowledge which is Marxism, that which the First and Second Internationals emitted on this subjective aspect of the Social Revolution, then humanity is threatened by a total collapse of Civlization, as is already underway in Greece, Portugal, Spain etc. where the Marxists have failed to empower and organize the working class as a class.


Resolution of the International Workingmen's Association 1872:


Against the collective power of the propertied classes the working class cannot act, as a class, except by constituting itself into a political party, distinct from, and opposed to, all old parties formed by the propertied classes.

This constitution of the working class into a political party is indispensable in order to insure the triumph of the social revolution and its ultimate end -- the abolition of classes.

The combination of forces which the working class has already effected by its economical struggles ought at the same time to serve as a lever for its struggles against the political power of landlords and capitalists.

[Popular Front of Judea]

"Unfortunately, there's no reason why the Economic Calculation Argument and the Law of the the Falling Rate couldn't both be true. What if capitalism is unsustainable, and socialism is impossible?"
-- Ken Macleod


...One of the fundamental points of Marxist analysis of capitalism.

Check out this essay on the subject as it applies to today: http://livingrevolution.co/2013/07/24/the-death-spiral-of-capitalism/

Are we entering a period of serious capitalist decay? According to theory and facts, it appears yes. Revolutionaries will have to harden themselves and become ready.

[svenne]

the attempts of capitalists to mask it merely demonstrate that it is a reality they cannot alter.

Well, it does seem like you(?)'ve misunderstood the idea of the tendency a bit. While profit tends to fall over time, at least if constant capital grows over variable capital, there still exists several counter-tendencies. Kliman et al. puts it this way: there's a difference between will fall (if capital works like it usually does and no one is intervening) and must fall (as in it always falls). The capitalists are not masking the decline, they are attempting to stop it - and sometimes succeed. And it works for a while, until crisis strike; then, after the destruction of a lot of capital and commodities, they can restart effective capital accumulation with a higher profit rate. I do agree with some of your conclusions, though.

[RedMaterialist]

The economist and computer scientist Paul Cockshott (who posts here regularly) along with his graduate students have shown graphically that the tendential fall in the rate of profit is real. I don't have the postings, but it is clear that for the last 200 yrs there has been a slow decline in the rate. The rate goes up and down, but the undeniable tendency is downward. As production becomes more and more monopolized and automated capital needs fewer and fewer human beings to squeeze profit from. The capitalist does everything he can think of to reduce his reliance on labor, not realizing that the source of value and his profits is labor. Also the rate of profit is not the same as the aggregate amount of profit. Total capitalist profits have reached levels unthinkable a few yrs ago. The profit rate is so thin, however, that next serious disruption in the production and distribution of commodities may well destroy capitalism. The next Marxist crisis is in 2015-2018. If the people refuse to allow trillions of dollars of their wealth again to be transferred to the banks, then will this be the end for capitalism? Or will another Hitler rise up?

[RedMaterialist]

While the ever more aggressive development of this Crisis of Capitalism naturally is increasing civil unrest and protest around the world, and this is objectively a good development towards social Revolution, the subjective part of the puzzle, the struggle for political hegemony and political power by the working class, is far behind the realities everywhere.

If the existing Left does not get its theory in order and learn from the rich source of knowledge which is Marxism, that which the First and Second Internationals emitted on this subjective aspect of the Social Revolution, then humanity is threatened by a total collapse of Civlization, as is already underway in Greece, Portugal, Spain etc. where the Marxists have failed to empower and organize the working class as a class.

The subjective aspect of revolution can only arise from objective, real, conditions of social, political and economic reality. The consciousness of the working class will not fully develop until it finds itself in an actual war with the capitalists. The leaders of the working class, the communists, may very well understand the nature of the conflict, but that alone will not even fire the first shot. The working class has no clue that their intellectual leaders are communists. As Marx said, "...the weapons of criticism cannot replace the criticism of weapons..._ (Hegel's Critique of Right. (I think.)

This is why the Communist and Socialist parties in the U.S. have always been so weak. Only during the Great Depression did workers, as a class, become radicalized to support these parties. Roosevelt ameliorated some of the worst conditions of the working class, and WWII turned U.S. workers into a petit bourgeois middle class. I myself am a child of that class. Capital has done an excellent job at demonizing socialism in the eyes of the American working class.

No one is going to teach, explain, theorize, convince, the working class to become socialist. When they are ready for that transformation, the communists should be ready to explain what is happening. These socialists should be aware, however, that capitalists have at their disposal reactionary death armies eager to kill communists and socialists. This murder continues now in Columbia and Honduras, just to name two. The Paris communards were able to develop a socialist consciousness, but only temporarily, as they could not defeat the Franco-Prussian army. Capital understands very well that if you kill enough socialists you will kill socialist consciousness, but it doesn't understand that if not only cannot kill but it actually creates the the social and economic conditions from which socialism comes.

This is why I think a site like Revleft is important for teaching Marxism and socialism; however, I am always disappointed in how few people it actually attracts. Marx famously said in the Communist Manifest that it was high time for socialists to declare openly their political views. I doubt,in the U.S if a single communist has ever openly protested, with a sign, at any political campaign or that extremely few communists have ever run for office. Why? Well, fear.
I recall, during the Occupy demonstrations its leaders worked diligently to suppress any expression of socialism or communism. And it worked.

[Popular Front of Judea]

Would you care to document your assertions?


Only during the Great Depression did workers, as a class, become radicalized to support these parties.


I doubt,in the U.S if a single communist has ever openly protested, with a sign, at any political campaign or that extremely few communists have ever run for office.


I recall, during the Occupy demonstrations its leaders worked diligently to suppress any expression of socialism or communism. And it worked.

[RedMaterialist]

In the early 1930s the socialists and communists were very active as "Unemployed Councils." In New York the communists forced the city government to budget one million dollars for unemployment relief. There were large socialist demonstrations around the country in the 20s and 30s. In 1931, I believe, there was a communist party convention where about 1,500 delegates showed up. This all ended after WWII when the unions signed on to virulent anti-communism in exchange for good paying jobs. The deal has lasted for about 70 years now. There aren't any good jobs left in the U.S. I think socialism is about to make a comeback.

When is the last time you ever heard of a communist running for public office in the U.S.?

It is true that there were communist and socialist signs at Occupy, but practically none were shown in the media. Not that that was entirely the fault of Occupy leadership, if they did have a leadership.

[Popular Front of Judea]

Do you believe that the history of socialism in the United States started in 1929? Does the name Eugene Debs ring a bell at all?

What merits being a communist in your opinion? Revolutionary socialists of various "traditions" routinely run for political office. Some even have a notable turnout and goodwill. Here is an example in my city:

http://slog.thestranger.com/slog/archives/2013/07/24/why-i-am-voting-for-kshama-sawant

I will leave your third assertion to the various organizations that were present at the various Occupy events. I will note that revolutionary socialist organizations were both present and part of the process at the Occupy events here in Seattle. If you were to look at the banners present at the marches etc. you would see their banners.

I am not trying to ride your ass here. Just asking for confirmation for your assertions. Sadly the singular lack of success of the American revolutionary left cannot be all laid to repression. You still have to listen to working people and have something to offer them -- something the right has been much better at doing.



In the early 1930s the socialists and communists were very active as "Unemployed Councils." In New York the communists forced the city government to budget one million dollars for unemployment relief. There were large socialist demonstrations around the country in the 20s and 30s. In 1931, I believe, there was a communist party convention where about 1,500 delegates showed up. This all ended after WWII when the unions signed on to virulent anti-communism in exchange for good paying jobs. The deal has lasted for about 70 years now. There aren't any good jobs left in the U.S. I think socialism is about to make a comeback.

When is the last time you ever heard of a communist running for public office in the U.S.?

It is true that there were communist and socialist signs at Occupy, but practically none were shown in the media. Not that that was entirely the fault of Occupy leadership, if they did have a leadership.

[DaringMehring]

As the author points out, and as I have pointed out many times myself, it is true that the capitalist crisis of profitability is making the frame creak and the first rivets fly already. But, while such an objective beneficial development for Revolution, a Crisis, means mass discontent and at a certain point rebellion, it says nothing about the subjective development towards workers' revolution. Revolutionaries do not have to "harden themselves and become ready"; Revolutionaries and Socialists today need go back and educate themselves on the fundamental developments made and conclusions reached by Marxism on how to take power and successfully build the new society of the workers.

While the ever more aggressive development of this Crisis of Capitalism naturally is increasing civil unrest and protest around the world, and this is objectively a good development towards social Revolution, the subjective part of the puzzle, the struggle for political hegemony and political power by the working class, is far behind the realities everywhere.

If the existing Left does not get its theory in order and learn from the rich source of knowledge which is Marxism, that which the First and Second Internationals emitted on this subjective aspect of the Social Revolution, then humanity is threatened by a total collapse of Civlization, as is already underway in Greece, Portugal, Spain etc. where the Marxists have failed to empower and organize the working class as a class.

I largely agree with what you say.

However, the objective circumstances being revolutionary, means, we as leaders have to ourselves already be subjectively revolutionary, even though the masses may not be.

You can't use the excuse -- it's not a subjectively revolutionary situation, to argue against agitating for revolution. That's the way to create subjectively revolutionary conditions. On the other hand, saying that it is not subjectively revolutionary time, means, trying to escape and retreat from revolution.

And even if the conditions may not be ready in one country, world economy as a whole is objectively ready, so everyone should go ahead -- the Bolsheviks proved that.

[DaringMehring]

Well, it does seem like you(?)'ve misunderstood the idea of the tendency a bit. While profit tends to fall over time, at least if constant capital grows over variable capital, there still exists several counter-tendencies. Kliman et al. puts it this way: there's a difference between will fall (if capital works like it usually does and no one is intervening) and must fall (as in it always falls). The capitalists are not masking the decline, they are attempting to stop it - and sometimes succeed. And it works for a while, until crisis strike; then, after the destruction of a lot of capital and commodities, they can restart effective capital accumulation with a higher profit rate. I do agree with some of your conclusions, though.

The point is, every technique they use to mask it, only papers over the true decline, artificially keeping profits up, but making the system even weaker and more unstable. Thus after 20 years of masking, we are in a place that is none the less much more difficult for the capitalists, even though through various means outlined in the essay, they have kept their profit rates up.

[Workers-Control-Over-Prod]

I largely agree with what you say.

However, the objective circumstances being revolutionary, means, we as leaders have to ourselves already be subjectively revolutionary, even though the masses may not be.

You can't use the excuse -- it's not a subjectively revolutionary situation, to argue against agitating for revolution. That's the way to create subjectively revolutionary conditions. On the other hand, saying that it is not subjectively revolutionary time, means, trying to escape and retreat from revolution.

And even if the conditions may not be ready in one country, world economy as a whole is objectively ready, so everyone should go ahead -- the Bolsheviks proved that.

The way to "agitate for revolution" is through education, by showing fellow workers everyday how we are Slaves who need to free ourselves, through historical education on our class and facts about current class society.

To merely agitate for revolution is not enough. In order for the Proletariat to merely take political power (not to speak of holding it..), we need a Workers Party large and strong enough to first even get to get to the point of posing the question of taking power and governing a country.

"You have to be a KAUTSKYAN on the question of organizing in "Educate, Agitate, Organize!" as opposed to "Agitate, Agitate, Agitate!" to get to the point of having a mass workers' party which can possibly pose the question of power." (Mike Macnair)

[Popular Front of Judea]

What wealth was transferred to banks? As far as I understand it we are talking about an accounting exercise performed on a glorified spreadsheet. You do realize that unlike Marx's Britain we have a fiat currency, backed only by the reputation of the United States government? Money is now being created and removed from circulation with a keystroke. (I am angry because we briefly defacto nationalized the largest banks and have little to show for it.)

I worry far more about the increasing CO2 level in the atmosphere than the declining rate of profit. (However bad it may prove for humanity it may very well be good for capitalism. Think of all the asset destruction and reinvestment that will come with a rising sea level.)


The next Marxist crisis is in 2015-2018. If the people refuse to allow trillions of dollars of their wealth again to be transferred to the banks, then will this be the end for capitalism? Or will another Hitler rise up?

[TooManyQuestions]

It is likely that such a crisis will divide the working class rather than radicalize it. People who are dispossessed might be recruited into violent right wing groups. It should be our goal to present a better alternative, one that is both attractive and easily understood by those at the bottom of the capitalist food chain.