Capitalism is in decline

Chris Reynolds' article "New Forces and Passions" (WL63) suffers from a certain one-sidedness and a number of omissions.

Chris is too quick to dismiss Marxists like Hillel Ticktin who argue that capitalism is in decline. He summarises their argument as: capitalism is declining because it has "departed decisively and increasingly from its free market norm" and "assumed increasingly aberrant forms". He then criticises this view as replacing the analysis of actual reality by "comparison of capitalist development with an ideal". This is unfair for two reasons.

Firstly, Chris commits the same mistake he accuses his opponents of. He seems to define capitalist decay as only when the system "generally diminishes the basic raw materials for socialism (the working class, science and technology)". Yet this is also a (socialist) ideal outside of the nature of the system, a fault he finds in other conceptions. Secondly, the argument is not about whether the productive forces have developed, or about a rising standard of living, or of constantly improving technology since 1945, which are incontrovertible, but rather what has happened to the fundamental laws of motion of capitalist society. The decline of capitalism argument refers to the social relations of the system, and in particular the law of value which is its fundamental law of motion. An epoch of decline in this context means the worsening ability of the system to solve its own problems.

Over the past century, capitalist production has become more and more socialised and organised, which suggests that the scope of the law of value is contracting. Examples include the growth of monopoly firms; the growth of needs-based sectors such as health and education; the rise in unproductive labour; arms production and other areas of state intervention, whose tendencies persist despite privatisation. The growth of finance capital is another symptom. The decline of the law of value, and the development of non-market forms, seems to be a better criterion to measure capitalist development against, as it is internal to the nature of the mode of production itself.

Another argument, implicit in Chris's article, that the duration of capitalism since 1914 proves that decline is an inaccurate description, is also suspect. The Roman Empire declined for centuries, whilst the productive forces continued to develop and little was lost of the productive methods and levels of technique that had been achieved. Similarly, feudalism was in decline from the 14th century, experiencing convulsions such as the Black Death and numerous peasant revolts during this time, and yet feudal relations staggered on in some places into the 19th century. The endurance of capitalism should not be confused with its condition.

There is a sentiment in "New Forces and Passions" that capitalism will simply go on and on, unless the working class intervenes (or the system destroys the planet). Yet Marx was quite explicit in his preface to Capital that capitalism like other social organisms would grow, develop and decline. Chris's picture seems to be of a relatively healthy and vibrant system. Of course, it is possible that capitalism will create the conditions for a new epoch of capital accumulation. But to do so would involve the decisive defeat of the working class in a number of advanced countries. I don't think we are at that stage yet. Also I think this confuses a distinction which needs to be made, between a terminal crisis, in which the working class is genuinely contending for power and the productive forces stagnate (a period such as the inter-war years), and an overall epoch of decline.

Right now capitalism is plainly not in terminal crisis. There is not an absolute decline in population that characterised pre-capitalist periods of decay. Capitalism is clearly not at the stage of disintegration which the USSR faced a decade ago. Total world production continues to grow, productivity has vastly increased and the standard of living is rising in many places. However, these are not the fundamental drives of the system, indeed their rising importance as measures of economic activity in the last hundred years are better associated with the forced adaptation of capitalism than with its vitality.

The real question is not whether capitalism is in decline, but rather why the system has declined for so long, and why it recovered. The period after the Russian revolution I think looked like one in which capitalism really was in terminal crisis. However, as Trotsky argued, social democracy "saved" capitalism, and this opened up a whole transitional epoch. So it was after an era of Stalinism, fascism, depression and war that capitalism survived.

The primary explanation for the persistence of capitalism is the catastrophic defeat that Stalinism inflicted on the working class. That is why capitalism survived and developed, but in a modified form. There is a wider question raised implicitly by "New Forces and Passions", namely whether the existing capitalist relations of production are a fetter on the development of the productive forces. Moshé Machover in his contribution to WL59-60, The 20th century in retrospect, argues that capitalism has not yet developed to its full potential, and whilst I doubt whether Chris concurs with this, the differences need spelling out. The argument is that capitalism had developed the productive forces to such a point that socialism was not only possible, but also necessary. A further century of its evolution has only strengthened that case. Part of our indictment of capitalism must be that it has consistently underdeveloped the real potential of the productive forces, that it has misused the surplus product pumped out of the direct producers. This is the deeper meaning of capitalist decline, and I think it remains a valid part of our theoretical armoury.