Capitalism is coming to an end. But how?

(Corrected version 11-3-2021)

The dutch language blog ‘arbeidersstemmen’ previously covered C.Mcl.’s critique of the ICC’s theory of the decline of capitalism since 1914. (1) We also posted some of his work as On the Character and Function of Trade Unions since 1914. (2) Recently we received a request for clarification of our critique of C.Mcl. and of our own position that capitalism has no ‘decline’ or ‘obsolescence’.

Does China’s further integration into capitalism lead to its “obsolescence”?

This question is partly related to the interpretation of a quote on the development of China and India from Anton Pannekoek’s The Workers’ Councils, written during World War II. For the quote, see Reply by C.McL. The latter thinks that we are now experiencing this process described by Pannekoek, that capitalism is slowly entering its period of “obsolescence”; C.Mcl. prefers to use this term rather than that of the “decline” of capitalism. In an online comment I remarked on this:

  • that C.Mcl. ignores the fact that Pannekoek thought that capitalism would run aground if it could no longer draw on an industrial reserve army,
  • that C.Mcl. neither examined the evidence that the “surplus population”, the population dispossessed of its means of subsistence, is increasing in certain regions and possibly worldwide, rather than decreasing as Pannekoek predicted.

Did Pannekoek indeed mean that capitalism would come to an end with the integration of the many hundreds of millions, who populate the fertile river plains of East and South Asia, as wage laborers in capitalist production? In the aforementioned comment, I referred to other texts for a further explanation of my interpretation. In particular, it is about the following excerpt: “… there must also be a sufficient reservoir of humans so that, as the number of workers continues to increase, no shortage will occur. It also goes without saying that a capitalist society, which already includes all people, cannot expand any further.”(3)

It seems clear to me that Pannekoek presupposes for the survival of capitalism a continuous growth of job-seeking proletarians, for which Marx at the time used the notion of an “industrial reserve army” or “surplus population”. (4) This growth is today ensured by legal and especially illegal migration or by the expansion of capitalist production to India and China, within the latter countries by rural-to-urban migration and the relocation of production from China to Southeast Asia, Indonesia and Ethiopia. The key question – which C.Mcl. does not ask – is therefore whether this growth in unemployed population is assured. My answer to this question, contrary to what Pannekoek thought, is: ‘yes’, there is a growing “surplus population”. The demand for a proof of my thesis of a growing surplus population is now placed upon me. For this, after some searching on the Internet – I am not an economist or a statistician – I can only refer to some sources that explain how ‘difficult’ it is to measure unemployment, how unemployment figures are distorted on a global scale by extremely narrow definitions, and finally some statistical data. (5)

The phenomenon of surplus-population, precarity, and migratory-labor is part of the current “condition of the working class”, both regionally and globally, and deserves further examination from a historical-materialist perspective, from the science of the proletariat, in the service of – as I have noted – “the vast masses who have lost their means of subsistence without finding work in capitalism, from Iraq to Chile and from Pennsylvania to South Africa” and who “cannot be satisfied with an analysis centered around the old industrial centers of world capitalism. Nor will unemployed miners and steelworkers in the U.S. be satisfied with the proposition that there has been no net loss of jobs due to the relocation of their industries to Asia.” (6)

Obviously, the current situation of the working class cannot be examined with just a few quotes from Pannekoek in 1916 and 1946. For a critique of the theory of the decadence of capitalism, Pannekoek is important because he always opposed the view that capitalism would automatically and irreparably collapse. In “The Economic Necessity of Imperialism”, he summarizes his critique of Luxemburg’s underpinning of the saturation of markets at the hand of Marx’s reproduction schemes. We will not go into this further, but we do point out that the ICC theory of decadence relies on Luxemburg’s argument. Further, Pannekoek has taken down the tendency of the rate of profit to fall as a theoretical underpinning of Grossman’s and Mattick’s crises theory as well. Instead of an automatic and irreparable collapse of capitalism, Pannekoek argues that periodic crises arise from the imbalance of economic factors inherent in capitalism. Instead of an economic necessity of imperialism, he posits a social and political necessity that follows from the power of big business. Only at the periphery of his reflections does Pannekoek speak of an end to capitalism in a then – in 1916 and 1946 respectively – distant future: by the exhaustion of the “material” conditions for the expansion of production. In 1916 these are “unlimited quantities” of raw materials in nature, in 1946 he already speaks of “the raw adventurous methods of capital – which on all continents are in the process of destroying the fertility of the earth”(7) Not unimportant, and even highly topical in light of the current environmental and health crises. But here it is about the second material condition mentioned by Pannekoek that capitalism would no longer be able to fulfill, that of a labor force in sufficient quantities to expand production.

In the following contribution to the discussion of the decadence of capitalism, I will elaborate on the notion of the development of productive forces with Marx and Engels, with social democracy, with Bolshevism, and finally answer the question of what remains theoretically of the theory of the decadence of capitalism.

The development of productive forces with Marx and Engels

The question I have raised is whether it is true “that capitalism, like all productive orders historical modes of production before it, develops according to a curve with rise, summit, and downfall? As far as I know, Marx and Engels never said anything like that.” I would therefore like to see quotes from Marx and Engels that prove me wrong. What quotes from Marx and Engels are cited for this purpose relate to the further development of productive forces and their slowing down in periodic crisis. Indeed, statements can be found that capitalism would have outlived itself historically, statements … which they then have to come back to later. These mistakes of Marx and Engels, are only the counterpart of a constant in their activity, namely that from their beginnings, Marx and Engels encouraged the working class at every historical opening that presented itself (especially the revolutions of 1848, and the ‘premature’ Commune of 1871) to carry through their independent struggles as a class to the maximum, and thereby accelerate historical development, given that any ‘natural’ development of capitalism, causes untold human suffering. By further development of productive forces Marx and Engels understood the development from small to large business, further industrialization and the beneficial effects this would have on the workers’ struggle. This is quite different from assuming that capitalism as a whole, as a historical mode of production would enter into a period of irreversible decline after reaching a peak, as several theorists believed during and immediately after World War I.

As supposed evidence that Marx and Engels already spoke of a decadent period of capitalism, one often refers to Marx’s “Preface to A Contribution to the Critique of Political Economy” (8) and to quotes from Engels’ ‘Anti-Dühring’. On closer reading, these text fragments only articulate that the proletarian revolution, like previous revolutions, presupposes that existing class relations, instead of promoting the development of productive forces, become an obstacle to them, mind you … in periodic crises.

Marx explains in the Preface that after the revolutions of 1848 he had taken up his study of political economy again because of “the new stage of development which this [bourgeois] society seemed to have entered with the discovery of gold in California and Australia, induced me to start again from the very beginning and to work carefully through the new material.” Note that Marx is speaking here of an ascending conjuncture.

Furthermore, in saying, “We abandoned the manuscript to the gnawing criticism of the mice all the more willingly since we had achieved our main purpose – self-clarification”, Marx is unmistakably referring to “The German Ideology”. In it, in 1845-1846, Marx and Engels summarized their view – historical materialism – much more extensively, including, not by coincidence as the first point of their conclusions:

In the development of productive forces there comes a stage when productive forces and means of intercourse are brought into being, which, under the existing relationships, only cause mischief, and are no longer productive but destructive forces (machinery and money); and connected with this a class is called forth, which has to bear all the burdens of society without enjoying its advantages, which, ousted from society, is forced into the most decided antagonism to all other classes; a class which forms the majority of all members of society, and from which emanates the consciousness of the necessity of a fundamental revolution, the communist consciousness, which may, of course, arise among the other classes too through the contemplation of the situation of this class.” (9)

The ‘decadence’ of capitalism, or if one wishes its ‘obsolescence’, thus does not develop in the future, but from its inception, simultaneously with the emergence of the working class. While C.Mcl. and also Anibal situate the decadence of capitalism in the future, I hold – also for reasons which I will explain later – that it is clearer not to speak of a “period of decadence” of capitalism at all.

The development of productive forces according to social democracy

The theory of the decadence of capitalism understands the concept of “productive forces” only in a technical sense, i.e. as machines, installations, etc. If we examine, for example, the prefaces of Marx and Engels to various editions of the Communist Manifesto, we see that by “productive forces” they also mean the people who operate these technical means of production, the workers, and that they are particularly interested in the advantages that a further development of industry, the development from small business to large enterprise, had for the organization and consciousness of the working class. In “The Economic Necessity…” Pannekoek pointed out:

  • That this one-sidedly technical view of the development of productive forces and of a supposed slowing down thereof in a coming historical collapse of capitalism goes back to Kautsky and the Erfurt Program of the SPD.
  • That Kautsky bases this on the Depression that began 1875, even though it had been succeeded by a new blooming period since 1894. The latter was considered by revisionism – especially by Bernstein – to be perpetually crisis-free and thus a refutation of Marx’s crises theory. (10)
  • That the goal of the workers’ movement is not the development of productive forces through capitalist accumulation, the benefits of which accrue almost entirely to capital. Neither is it the concentration and awareness of the workers, because a class does not consciously impose on itself more inhuman relations in order to better cope with its future tasks.

Pannekoek’s latter statement from 1916 was directed mainly against the social-imperialist wing of the SPD that justified participation in World War I on the grounds that this … benefited the development of productive forces and thus prepared socialism.

The development of productive forces according to Bolshevism

It is ironic to realize that Bolshevism used the same one-sidedly technical conception of the development of productive forces to ideologically justify the party-led extreme exploitation and oppression of the Russian working class as a ‘step towards communism’. While the Russian revisionists and social-imperialists (Mensheviks) considered the development of the productive forces in Russia insufficient for a social revolution, and therefore left it to the liberal bourgeoisie, the Bolsheviks took the plunge. When the revolution in Russia became isolated, they decided to continue their governmental responsibility and to further pursue state capitalist development along the lines of … the German war economy. This, by the way, is in contrast to the views of Marx and Engels in the bourgeois revolution of 1848 in Germany, as Willy Huhn has shown. (11)

Bolshevism in all its varieties (Leninism, Trotskyism, Stalinism) confined the concept of capitalism to the stage of private or liberal capitalism. (12) This stage had been superseded around 1900 by the development of monopoly capitalism, the rise of Finanzkapital, by the intertwining of business with the imperialist state, in short by what was called state capitalism. (13) State capitalism – contrary to Engels’ warnings – was embraced by various currents of Bolshevism either as the economic basis of socialism (with the party dictatorship providing the political basis), as the first stage of socialism or simply as socialism. The “socialism” or the “bureaucratized workers states” of the Soviet Union, the countries of the Eastern Bloc, China, North Korea, (North) Vietnam, Cuba, in fact weak state capitalisms, were presented as superior to (private) “capitalism”. While “socialism” would allow for a progressive development of the technical forces of production, and thus bring full communism closer, Western (private) “capitalism” was considered in Bolshevik propaganda as an outdated system “in decline” that would exert an ever-increasing brake on the development of the forces of production.

Current groups such as the ICC, the IGCL, Emancipación, and various organizations that consider themselves direct successors of the Italian Communist Left reject the identification of state capitalism with socialism, and endorse that state capitalism is a tendency within the capitalist mode of production as a whole. (14) By contrast, all of the aforementioned organizations adhere unabatedly to a theory of the decadence of capitalism, as proclaimed by the Comintern.

  • Where they differ is in the economic explanation of this decadence, whereby they fall back on the various explanations Marx gave for the periodic or cyclical economic crises. Here for instance the CWO and the ICC compete with each other – and individuals within them – by explanations based on the tendency of the rate of profit to fall, respectively the problems of markets, which they both link in their own way to the First and Second World War, the Cold War and the proxy wars and regional wars that have been waged since then. I believe I have been clear on this point, agreeing that both explanations of the economic crisis phenomena in capitalism are one-factor explanations while Marx, in each of his analyses of various recessions, underlined a different factor as the main cause and that all factors are interrelated (see for more M.R., A Marxist Analysis of the Coming Crisis). Linked to this was the demonstration [by C.Mcl.] of the reality of productive orders of capitalism as determining the continued survival of capitalism. (15)

The background of these theories of decadence outlined above (the assumed historical superiority of state capitalism over private capitalism), in addition to holding on to the idea of bourgeois revolution, entails that interest in differences between proletarian and bourgeois revolution declined, respectively were left to Otto Rühle and his followers, such as Wagner, Brendel, and Simon.(16)

Differences between the proletarian and bourgeois revolutions

In my critique of C.Mcl. I defend a third view in addition to that of decadence since 1914, or that of a decadence in a near or distant future, namely the non-existence of a decadent period of capitalism. To this end, I point to the neglected subject of the differences between the proletarian and bourgeois revolutions.

The working class, as a non-possessing and non-exploiting class, cannot gradually develop its communist mode of production within the existing social relations. This is in contrast to the bourgeoisie which developed the commodity society and wage labor within feudal relations. A supposed “decline” of capitalism, therefore, cannot be accompanied by a “rise” of socialism. Looking back over the more than 100 years that have passed since 1914, we must conclude that the need for accumulation has forced capital to seek a way out of multiple economic crises in new resurgences. In a decadence since 1914, humanity would have perished long ago.

As the Paris Commune showed, the working class cannot take over the bourgeois state and use it for its own purposes the way the bourgeoisie in its bourgeois revolution conquered the feudal state, transformed it according to its needs and used it for its class purposes. The same applies to taking over the top personnel of the bourgeois state, the high officials, the generals, the top bankers and their financial and (war) economic institutions as the Bolsheviks did after the October Revolution.

The separation between economics and politics of the period of private capitalism, which in the period of monopoly capitalism only continues in appearance, as well as the separation between economic and political struggles of the working class, and between economic and political organizations, is obsolete. The proletarian revolution destroys the bourgeois state and replaces production and distribution for profit purposes under wage labor by the goal of satisfying social needs through the association of free and equal producers in workers’ councils. These councils exercise an economic-political dictatorship of the proletarian masses over what remains of the exploiting and oppressive classes and all which identifies with the restoration of capitalism. (17)

In the proletarian revolution, it is the struggling working masses who themselves determine their means of struggle and the ends of their struggle. This is in contrast to the bourgeois revolutions – or the class struggles modeled after them – in which a bourgeois minority manipulated the proletarian masses for their own ends. Bolshevism, following the example of German social democracy, assumed that without external leadership, the workers would only be capable of an ‘economic’ struggle of interests. This included the idea that social development would be the result of ‘natural’ economic laws [‘of necessity’] of capitalism, which would lead to both crises and imperialist war.

Pannekoek rejects both this mechanistic idea and that of the ‘ethical’ necessity of socialism propagated by the revisionists in favor of a view in which the revolutionary subjectivity of the proletariat is highlighted. In “The Economic Necessity…” he states “material distress, worry, misery, the uncertainty of life, that compels them to struggle. Capitalist development awakens in the proletariat the desire and the will for socialism, just as it awakens in the bourgeoisie the desire and the will to preserve the existing”. And: “socialism will not be imposed by the fantastic big final crisis, in which capitalist production gets hopelessly stuck forever; it is nevertheless prepared for and built up a bit at a time by the real temporary crises, in which this production gets stuck every time. Each crisis gives the workers a jolt, makes them feel the unsustainability more strongly, forces them into stronger resistance and arouses a stronger will to fight. These crises are no accidental disturbances, but are part of the very mechanism of capitalist production. If they grow into a long hopeless depression, a revolutionary era with fierce class struggle will begin, which will continue to have an effect on the political transformations of later years.”

In a similar way, Pannekoek argues that imperialist politics does not follow from economic necessity, but from the power that big capital of coal and steel, with its Finanzkapital, exercises over the bourgeoisie and society as a whole. On the basis of this analysis, he declares the social-pacifist policy of the party center around Kautsky to be outdated and incorrect. (18)

What remains of the decadence of capitalism?

The theory of decadence was developed in the context of World War I and the revolutions that followed. World War I was the first of several inter-imperialist wars that followed the colonialist conquest of the world market. The imperialist cycle ‘crisis–war–reconstruction–crisis’ has been linked to the cyclical crisis of capitalism in several theories. In addition, the notions of the replacement of private capitalism by the “monopoly capitalism” of Finanzkapital, of the tendency toward state capitalism, of the unification of all fractions of capital into a national capital, and into imperialist blocs, are all part of a theory of imperialism that I still consider of value to any serious Marxist analysis of economic development. The inter-imperialist war leads to important changes in the redistribution of the surplus labor that capital extorts from the international working class. War, along with the crisis and issues of environment and health, is an important part of the life of the proletariat around the world.

In his responses to various criticisms of his rejection of the decadence of capitalism since 1914, C.Mcl. states that he recognizes 1914 as an important turning point and that he understands the importance of the imperialist wars in the development of capitalism, but that he has not yet dealt with it. (19) This is unfortunately evident in a recent reflection in which he addresses Vietnam’s economic growth.(20) Vietnam’s economic growth of 5% per year since 1988 does indeed provide ammunition for combating the stupidities of the ICC. But how do we explain this growth? C.Mcl. emphasizes that this economic growth of Vietnam occurs after the devastation of the inter-imperialist war in this region only one or two generations ago. Therefor this happened in a reconstruction period, which from a quasi-zero point is generally accompanied by hefty growth rates and increases in consumption. This seems to me to confirm the imperialist cycle crisis-war-reconstruction-crisis. This cycle is also important because of Vietnam’s impending involvement in an open conflict between Chinese and U.S. imperialism. In his aforementioned reply to criticisms, C.Mcl. speaks of a new imperialist dichotomy between China and the United States, “which poses the danger of a third world war if the proletariat fails to stop the armed wing of the bourgeoisie.” This poses questions such as what is meant by “the armed wing of the bourgeoisie”?, is there also an unarmed wing?, can the working class form a front with this unarmed wing?, etc., arise. In Vietnam there are tensions within the bourgeoisie and the Stalinist Party over the growing Chinese influence, and at the same time strikes by Vietnamese workers in Chinese factories have taken on a partly nationalist-racist character. (21) Vagueness and ambiguity do not seem to me of any service to the workers and revolutionaries in Vietnam, and elsewhere. The question of the imperialist war needs to be clarified quickly.

For all the criticism, let me emphasize again that I believe that the theory of the ‘productive orders’ mentioned only briefly in this article and the multicausal explanation of the economic crises defended by C.Mcl. have proved themselves to be an important addition to previous achievements in the theoretical arsenal of the working class. But a theory of decadence, no longer has a place in it, because it is not only contrary to reality but, in my opinion, also to the theoretical foundations of Marxism.

Fredo Corvo, January 2021

Version: March 1, 2021

Proofreading & correction suggestions: H.C, March 7, 2021


1 In November 2020, two articles appeared under the title “Inter-imperialist War and the Supposed ‘Decadence of Capitalism'”: Contrib. FC 13-11-2021 and Reply by C.Mcl.

2 C.Mcl., Over het karakter en de functie van de vakbonden sinds 1914.

3 Ant. Pannekoek, The economic necessity of imperialism (1916), Part III.

4 Karl Marx, Capital, Ch. 25, section 3, Progressive Production of a Relative surplus population or Industrial Reserve Army.

5 Wikipedia, Reserve army of labour. In it, among other things, the statement “The ILO reports that the proportion of jobless has been steadily increasing since the beginning of the financial crisis of 2007–2008.”
For statistical information see in various contributions by Jehu (whose views I do not share), in particular Jeremy Roos’ failed critique of 20th century communism , Labor Theory for (Marxist) Dummies: Part 4Tracking the collapse of wage slavery in real time.

6 Contrib. FC 13-11-2021.

7 P. Aartsz (Anton Pannekoek), De arbeidersraden, Amsterdam 1946, p. 81. Translated by FC from dutch original.

8 The following quote is often seen as Marx’s synthesis of historical materialism: “No social order is ever destroyed before all the productive forces for which it is sufficient have been developed, and new superior relations of production never replace older ones before the material conditions for their existence have matured within the framework of the old society.
Mankind thus inevitably sets itself only such tasks as it is able to solve, since closer examination will always show that the problem itself arises only when the material conditions for its solution are already present or at least in the course of formation. In broad outline, the Asiatic, ancient, [A] feudal and modern bourgeois modes of production may be designated as epochs marking progress in the economic development of society. The bourgeois mode of production is the last antagonistic form of the social process of production – antagonistic not in the sense of individual antagonism but of an antagonism that emanates from the individuals’ social conditions of existence – but the productive forces developing within bourgeois society create also the material conditions for a solution of this antagonism. The prehistory of human society accordingly closes with this social formation.” Marx, Preface to Contribution to the Critique of Political Economy, (1859).

9 Marx/Engels, The German Ideology, Part I: Feuerbach. Opposition of the Materialist and Idealist Outlook. D. Proletarians and Communism, under the editorially added intertitle ‘The Necessity of the Communist Revolution’.

10 For an introduction to Rosa Luxemburg’s critique of Bernstein, see  Fasen in de ontwikkeling van het kapitalisme. In this 2016 text (Dutch only), I do not address Pannekoek’s rebuttal of Luxemburg and still hold to a decadence of capitalism.

11 In particular, see Huhn, On the doctrine of the revolutionary party, p. 17 ff.

12 Today’s Trotskyists, Stalinists and even the Putin regime maintain this practice to oppose “neo-liberalism,” see, e.g., Lavrov’s remarks in response to the Navalny case on 18-1-2021.

13 Huhn has analyzed this as far as Trotskyism is concerned in “Trotzki – der gescheiterte Stalin”, Kap. Zur Theorie des „Arbeiterstaates“ in Rußland, § III ff. For a french translation see Huhn, Trotsky, le Staline Manqué.

14 But we also sometimes see that in their ‘understanding’ of the politics of the Bolsheviks, after having shown state capitalism and/or the party dictatorship to the door, they are letting them back in through the window, like the IGCL; see “Back to a State Capitalist Program. How a non-discussion reveals Bordigist positions” in A Free Retriever’s Digest (2020, Vol.4 #4), p.21 ff.

15 Contrib. FC 13-11-2021.

16 The trouble with these theories that assumed at the time (1917-1923) and later the wholly or partially bourgeois character of the revolutions in Russia is that they did not include in their argument the fact that after the failure of the European revolutions Marx no longer spoke of bourgeois revolutions and that he considered Russia to be dominated by the Asian mode of production. In addition, the idea of a bourgeois revolution in Russia contradicted those explanations of imperialism that emphasize the completion of the world market and the idea of slowing down the development of the productive forces, respectively, the end of the rise and flowering of capitalism. Finally, this idea can only explain the Bolsheviks’ struggle against the imperialist war from a Machiavellianism attributed to them. See The Fatal Myth of the Bourgeois Revolution in Russia. A critique of Wagner’s ‘Theses on Bolshevism’.

17 This is not only the position of the G.I.C. in Fundamental Principles of Communist Production and Distribution, but also that of Marx in his Critique of the Gotha Program and in his First Draft of The Civil War in France. See The economy of free and associated labor.

18 For Pannekoek’s complete argument, I refer the reader to the first English translation: The Economic Necessity of Imperialism (De Nieuwe Tijd, 1916). The excerpts used here have been emphasized.

19 Reply by C.Mcl.

20 C.Mcl., III. La question nationale avant et après 1914. [English Translation is forthcoming]

21 Recente strijd in Vietnam. See also Ongoing Struggles in Vietnam.

2 Comments on “Capitalism is coming to an end. But how?

  1. Pingback: Der zwischenimperialistische Krieg in der Ukraine – Arbeiterstimmen

  2. Pingback: The inter-imperialist war in Ukraine | Left wing communism

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