International debate: Crisis and decadence of capitalism

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We have already, in IR 50, briefly presented the Grupo Proletario Internacionalista of Mexico, on the publication of the first issue of its review, Revolucion Mundial. We are reprinting here a text from Revolucion Mundial no 2: a critique of the "Theses of the Alptraum Communist Collective" (CCA), also from Mexico[1], which were published in IR no 40 in January 1985.

We will let the GPI present themselves to our readers:

"We came together as a political group, only a few months ago under the name GPI, and united around principles set out[2] in the first issue of our publication Revolucion Mundial. Just beforehand, we were essentially a "discussion group": a largely informal grouping from the organizational standpoint, (without a name, or rules of functioning etc.), and polit­ically concentrated and orientated in an effort of political discussion and clarification, mainly towards giving more precision to the "class frontiers", ie the principles we should defend.

"This rapid sketch of the GPI's formation would be incomplete were we not to mention an import­ant fact: the influence of the propaganda of the international communist milieu, and especial­ly the intervention carried out over the years in Mexico by the ICC.

"To sum up then, the CPI is a new group, formed, in general, as a break with bourgeois national­ist, and especially leftist, ideology, which has had such bad effects in Latin America. The GPI claims no continuity, either political or organizational, with any pre-existing group in this country - with the sole exception of the "Marxist Workers' Group"[3] one of the "Left Communist" fractions which existed in Mexico during the late ‘30s, and whose continuators the GPI aims to be. The GPI's formation is part of the process of communist minorities reappearan­ce throughout the world, in particular since the historic resurgence of the world working class struggle since 1968."

The existence of two communist groups - CCA and GPI - both sharing essentially the same positions may come as a surprise. And indeed, were this situation to last, it would express a weakness in the revolutionary forces in Mexico. For the moment, it is no more than the product of circumstance, of the emergence of revolutionary elements in a newly formed milieu. The formation of a political relationship of discussion and debate between the two groups, closely linked to the international revolutionary milieu, is the "sine qua non" for the vital political clarification of all revolutionary elements in the country. It is the first and foremost condition for the regroupment of both groups, and of isolated elements, for the creation of one united proletarian political presence in Mexico.

If for no other reason, we would welcome the GPI's text that we are publishing here: "Crisis and Capitalist Decadence (critique of the CCA)". This critique is absolutely in the fraternal spirit whose necessity we have just insisted on: it initiates a debate with the CCA to clarify the question of the explanation of capitalist economic crises, and of capitalism's present period of decadence.

Moreover, the choice of crisis and capitalist decadence as a subject for discussion by new comrades who have just adopted class positions is a sign of their intention to give the very foundation of revolutionary positions a serious grounding. When we greeted the first issue of Comunismo, the CCA's publication, we wrote:

"Don't think that this question only concerns pedantic historians, or that it is only a theoretical question in itself without pract­ical implications for revolutionaries. The recognition and comprehension of the end of the progressive, historical period of capitalism and its entry into decline was the basis of the formation of the 3rd International on the ruins of the 2nd International which died in 1914. It underpins the coherence of all the class positions which the comrades share with the ICC. And in particular the denunciation of the unions as organs of the capitalist state in the 20th century and the movements of national liberation as moments in today's inter-imperialist antagonisms." (IR no 44, p. 22).

Finally, we welcome the text's seriousness, its high quality, and above all the correct position that the comrades have adopted towards the CCA's "Theses". We have already criticized briefly the CCA's position[4] on the explanation of capitalist crises solely by the law of the "falling rate of profit", and above all the Alptraum Collective's inability to place capitalism's entry into decadence clearly at the turn of the century marked by the outbreak of the first world holocaust in 1914. Despite a few errors (which we will indicate by notes in the text), the comrades of the GPI defend the marxist explanation of crises, and the reality of capitalism's decadence since the turn of the century.

The GPI's text is part of the same endeavor as that expressed in the series of polemical articles (published in IRs nos 47-49) against the GCI on the same question of decadence; we also intend to continue this effort in a forthcoming issue. The participation in this debate of groups like the GPI and the CCA - which both recognize the existence of capitalist decadence -is a sign that despite the multitude of diffic­ulties they confront, the world's slender revolutionary forces are in a time of upsurge, development, political clarification and regroup­ment. Through their seriousness, their effort to reappropriate the lessons and debates of the past, their concern for clarification and their intent to discuss, the CCA and the GPI are an example to today's proletarian political currents, and hold up to ridicule the GCI's "anti-decandentist theories", the EFICC's learned "discoveries" on state capitalism, and such like modernist ramblings which turn their back on marxism.

ICC 25.10.87

 

Crisis and decadence of capitalism

This article aims, through a critique of the Colectivo Comunista Alptraum, to help clarify our group's positions on the crisis and cap­italist decadence.

We have chosen to put forward our viewpoint in the form of a polemic, since the attempts to do so in the form of Theses only produced pure generalities, conclusions without arguments, which would not at the moment be a help to our internal discussions.

We started with a critique of your positions since we had intended at the same time to enter into direct discussion with the CCA. Although this has not been able to develop, some demar­cation is nonetheless necessary, since the Colectivo group is in contact with the interna­tional milieu.

We will deal with the following questions:

1) the characteristics of the present crisis,

2) the crisis' causes,

3) the limits of the market,

4) the particularities of capitalism's decadent epoch.

Our critique will refer to your "Theses" and other articles dealing with points under discu­ssion. We will use nos. 1 and 2 of your review Comunismo.

 

The characteristics of the crisis

The CCA's Theses highlight two particularities of the present crisis:

-- "it is on a world scale", because capitalism exists worldwide, and dominates every branch of production. This kind of crisis goes in a spiral moving from the developed countries to the rest of the world capitalist system;

-- "it should be considered as a classic crisis of over-accumulation", which verifies the cycle of prosperity-crisis-stagnation.

The first particularity is extremely import­ant in understanding the course of the world situation. Capitalism has spread throughout the planet, and its inherent crisis has therefore also become worldwide. The interpenetration of every national economy, the creation of a world market, prevents anyone escaping from the blows of the crisis. We must therefore throw into relief the fact that the crisis has no national solution. No sooner than a country or a region shows signs of recovery, than it is once again caught up in the whirlpool of this world crisis. The way out can only be on a planetary scale, and as we will see later, two roads lead there: war or revolution.

But in that case, the second point -- the crisis' cyclical nature -- is meaningless; it invalidates the first one -- unless we think that since the late 60's capitalism has under­gone a real phase of prosperity. The idea that the crisis is at one and the same time "world­wide" and a verification of the prosperity-­crisis-stagnation cycle leads the Colectivo into a juggling act when it comes down to analyzing the concrete situation.

Sometimes, they do indeed seem to be talking about a world crisis which has developed and deepened since the end of the 60's. They mention "the crisis which has got worse in recent dec­ades", and that the "first signs of the present crisis are to be found in the mid-60's", and that since then the GDP has fallen and unem­ployment increased. But at the same time, they say that "in their ‘periodicity, the cyclical crises of over-production....tend to become more and more profound, above all since 1968". The Colectivo solves this contradiction by introducing two concepts: the "recession" and the "relative recovery". According to the CCA, we learn that:

"In 1973-74, the rise in oil prices hit capital­ism's central regions, for it accentuated the fall in their-rate of profit. 1974-75 was a phase of recession when the peripheral areas, fundamentally oil-producers, were less affected since, thanks to the rise in oil prices and the resulting transfer of capital, their capital was increased and they were able to maintain an accelerated rhythm of accumulation in the foll­owing phase of relative recovery. 1980-83 was another phase of recession, but where the reverse happened; oil prices fell, and this countered the fall in the rate of profit in the central areas, whereas the countries in the periphery remained submerged by the depression; a situa­tion aggravated by the transfer of surplus value to world finance capital. In a period of rela­tive recovery this transfer helped strengthen the central regions. Nevertheless, by the end of 1985 the central areas began once again to show signs of recession through the measures of reorganization set in motion; and moreover, this recession also hit the oil-producing countries". (Comunismo no. 2, Editorial)

What does the CCA mean? If there have been sev­eral cyclical crises since 1968, we can only suppose that these crises are what the Colectivo calls "recession", and that the phases of "rel­ative recovery" are equivalent to prosperity.

So there was a crisis from 1974-75, 1980-83, and in 1985, and prosperity in 1976-79, 1981-85, and presumably in the near future we can expect it again. In this case, we don't see the point of using such terminology, which is taken from the arsenal of bourgeois ideology, and whose meaning is ambiguous.

But the Colectivo knows very well that in reality, the situation is not like that. If they speak of "relative recovery", it is because they know that since 1968, there has been no "absolute recovery" of the world economy. If they speak of "recession", it is to differentiate "capital transfers" from the real, general, worldwide crisis.

If we were to take the Colectivo's reasoning to its logical conclusion, where the "transfer of capital" in a phase of "recession" opens the door to "recovery", it would lead us to conclude: firstly, that the crisis is merely regional (since in the "recession" some regions are "more affected" than others), and secondly that the crisis has a national solution. Thus, in the 1974 recessionary phase, the oil-producing coun­tries gained a great mass of capital which all­owed them to "maintain an accelerated rhythm of accumulation in the following phase of relative recovery". Of course, the Colectivo does not share the dream of the different fractions of the bourgeoisie: getting out of the crisis to the detriment of others. But this kind of idea is the result of identifying "recession" with a "cyclical crisis".

We must therefore recognize:

-- that since the mid-1960's, world capitalism has not been through any phase of prosperity without each time necessarily plunging still deeper into stagnation and paralysis; and that the "relative recovery" of certain regions is only momentary, and at the cost of an overall fall;

-- that the worldwide nature of capitalist pro­duction relations, and so of the crisis, makes any national way out of it impossible.

In other words, there began in the mid-60's a chronic crisis of capitalism as a world sys­tem, which is unavoidably deepening and becoming more general. The cycle of crisis-stagnation-­prosperity no longer exists.

Certainly, in theory this cycle describes the life of capital: the crisis appears as a temporary solution to the contradictions of capitalism itself, as the destruction of productive forces opening the way to a new phase of pros­perity. Theoretically, a "chronic" or "permanent" crisis could not exist, since it would mean the total destruction of the productive forces and capitalism's definitive collapse. This is prob­ably why the Colectivo upholds the idea of the "classic cycle".

In the form in which it has spread, and deep­ened during all these years compared to the per­iodic crises of the previous century, today's crisis does indeed, paradoxically, appear as a permanent crisis. Not only that. From the turn of the century onwards, we can see that crises lead to wars of destruction of the productive forces; that capital, in trying to preserve it­self, really does tend toward a definitive coll­apse, dragging all humanity down with it; that the "classical" industrial cycle has been turned into a barbaric cycle of crisis-war-reconstruc­tion[5].

The facts need to be explained, and in the final analysis, theory must be "adapted" to reality and not the other way round as the Col­ectivo sometimes seems to claim. This is why we must get to the root causes of the crisis.

The causes of the crisis

Capitalism's development is determined by its contradictions; these latter lead to the crisis. The crisis is the open expression of all capi­talism's contradictions, and at the same time their temporary solution. In the final analysis, the cause of the crisis is the fundamental con­tradiction of capitalism. This is why finding the cause of the crisis means defining capital­ism's contradictions, and especially its funda­mental contradiction.

Very generally and very briefly, these con­tradiction can be expressed as follows: in order to live, men must associate with each other in order to produce; they must contract determined relations of production, which are independent of their own will, and which correspond to a given degree of development of the instruments of production, and of the way in which labor is organized, ie of development of the produc­tive forces. At certain moments the productive forces tend to break out of the relations of production. The relations of production are transformed, from an adequate framework for the productive forces, they become a hindrance to their further development. They need to be transformed; they are transformed. So opens an epoch of social revolution, where the old rela­tions of production must be destroyed, and re­placed by new ones that correspond to the mat­erial conditions of production. In capitalism, the contradiction between the development of the productive forces and capitalist relations of production gives rise to the crisis.

The paralysis of factories and the mass of products that can find no outlet, like the army of unemployed, point to an excess of pro­ductive forces for the relations of production based on the accumulation of capital and profit-making. Each crisis calls capitalism's existence into question.

But at the same time, each crisis appears as a temporary solution to these contradictions. On the one hand, through the destruction of a part of the productive forces; on the other, through an extension of the framework of the relations of production, which does nothing other than prepare new, still deeper and more wide­spread crises.

In this sense, the Colectivo insists:

"The crisis we are now living through is the result of the clash between the enormous dev­elopment of the productive forces (existing wealth) and the capitalist relations of produc­tion impose' by private appropriation of production."

In the crises is expressed:

"...the historically limited character of its production relations which can only hold back the progressive development of social produc­tive forces. Moments of crisis occur when cap­italism is obliged to destroy a growing mass of productive forces, revealing the decadence of the system." ("Theses of the CCA" in International Review  no. 40)

However, such a general explanation of capital's contradictions does not explain their determin­ing causes. Nor does it tell us anything about the fundamental contradiction, or about the causes of the present crisis.

The Colectivo expands on its viewpoint in the "Theses" only when it deals with the ques­tion of decadence. But before discussing the relation between crisis and decadence, we have to get at the causes of the crisis; to do so, we will for the moment deal separately with what they say on this point. The Colectivo att­ributes the crisis to the law of the tendential fall in the rate of profit:

"...both the development and the decline of the system reside in two essential factors: one ex­pressing the form, in the general law of the tendency of the profit rate to decline..." (ibid).

They, they try to sum up this law in the following points:

-- the system's aim is the "increasing and uninterrupted formation of capital",

-- this implies the expansion of capital, the growth of labor productivity, and an acceler­ated development of the productive forces;

-- the above is expressed in the growth in the organic composition of capital: the volume of constant capital (means of production) grows more in relation to variable capital (labor power), which is the source of surplus value;

-- this leads to the fall in the rate of profit.

"At this point, capitalist crisis occurs when the accumulated capital is more than the profit rate which it can sustain or when the growing organic composition of capital does not corres­pond to an equivalent increase in value (...) the over-accumulation of capital in relation to its ability to exploit labor leads the capital­ist system to a crisis" (ibid).

If we follow the Colectivo's polemic with the ICC, where they expand their arguments, we see that their criticism of the ICC lies in that the latter considers the law of the falling rate of profit as an insufficient explanation of the crisis, since for the ICC "capitalism's fundamental contradiction lies in its inability indefinitely to create markets for its expansion."

The Colectivo replies that it "does not rej­ect the problem of realization" but that it is a mistake "to place the fundamental contradic­tion in the sphere of exchange" (Comunismo no. 2, p.34)

And the Colectivo adds:

"...when we referred (in the "Theses") to the level of essential determinations, we were referring simply to the level where surplus value, which according to Marx is the source of cap­italist wealth, is generated and produced..."

"...The fundamental contradiction in the cap­italist mode of production and exchange lies in the dominant pole of this totality, ie in the framework of production. Although in its sing­ularity, it may also be determined by exchange, distribution, and consumption". The contradic­tion of production is between "the process of valorisation of capital, and the labor process" (Comunismo no. 2, p.35)

The CCA places the fundamental contradiction in production, for this is where surplus value is generated, this is the "dominant pole" in rela­tion to exchange. However, since we also "remem­ber" Marx, we have to say that if surplus value is only generated in production, it is only realized in exchange.

"Although capital, through the production proc­ess, reproduces itself as value and as new value, at the same time it finds itself as non-value, as something which is not valorized until it enters into exchange...." (Marx, Grundrisse, our translation)

"The conditions of direct exploitation, and those of realizing it, are not identical. They diverge not only in place and time, but also logically. The first are only limited by the productive power of society, the latter by the proportional relation of the various production branches and the consumer power of society. But this last-named is not determined either by the absolute productive power, or the absolute consumer power, but by the consumer power based on antagonistic conditions of distribution, which reduces the consumption of the bulk of society to a minimum varying within more or less narrow limits." (Capital, Vol III, quoted in ‘Marxism and Crisis Theory', IR 13). In other words: there is a determining contra­diction between the conditions in which surplus value is produced, and those in which it is realized, ie between production and the market. What then is the fundamental contradiction? Bet­ween labour and valorization, or between produc­tion and the market?

We consider that these are not in fact two different contradictions, but different aspects of the same one: the first indicates the content  as an abstract category; the second is the concrete form in which it appears.

The internal contradiction between labor and valorization is repeated externally as between production and exchange (similarly, the commodity's internal contradiction between use value and exchange value is expressed in the concrete form of commodity and money).

In the abstract, the creation of value and surplus value appears as a barrier to the cre­ation of use value. Concretely, the market app­ears as a real and determined limit for prod­uction.

The law of increasing accumulation of capital accompanied by a falling rate of profit does not exist independently of the problem of the market. The fact that the rate of profit falls through the increase in constant capital relative to variable capital, because a greater amount of total invested capital appropriates a propor­tionately smaller amount of surplus value, will only appear tangibly on the market when the cap­italist can no longer find anyone to buy his commodities at the established price of produc­tion.

Nor are there two kinds of crisis: one of over-accumulation of capital, the other of over­production of commodities. They are one and the same crisis in its two determinations. In its content, it is the inability to use all the existing capital given a determined rate of profit, and hence the devalorisation of capi­tal. In its form, it is the lack of outlets for commodities, warehouses gorged with stock, and hence the paralysis and destruction of the means of production and consumption. The crisis orig­inates as the contradiction between labor and valorization, and is realized as the contra­diction between production and the market.

Those who explain the crisis solely by the law of the tendential fall in the rate of profit may say that they go to the "bottom" of the question, to the origin of surplus value. But this kind of explanation is inadequate when we return to the terrain of concrete reality. If we make an abstraction of the market, ie if we leave it to one side, then the limits of cap­italism, as the Colectivo poses them -- the absolute impossibility of increasing surplus value with any increase in capital -- will also appear as a pure abstraction, an inacc­essible and purely theoretical limit.

Moreover, those who give their attention to the problems of realization in the market get a better grasp on the real course of events, in its multiple aspects, and on the real limits of production; although if they, ignore the basis of the origins of surplus value, every crisis appears to them as an absolutely insur­mountable limit.

The CCA inclines toward the "dominant pole". It tries to explain the crisis solely through the law of the falling rate of profit. This is why it misses the real limits that capitalism is coming up against today. The crisis' obviously worldwide character has no special sig­nificance for the Colectivo: it is just one more in the "classic cycle". Its tendencies (towards war for example) are the same as in all the others. For the Colectivo, there is nothing new under the sun. There is only the confirmation of theory.

We need therefore to note not only each crisis' common traits, but also to study their part­icularities, their forms. Only thus will we understand the true course of events, by passing from the "origins of surplus value" to the limits imposed by the market.

The limits of the market

Let us now explain how the accumulation of capital with its falling rate of profit app­ears in the capitalists' inability to sell all their commodities at given production prices, ie in the limits of the market.

We have already seen that the capitalists' aim is profit and capital growth, which demands an increasing extraction of surplus value. The capitalists must not therefore consume all the surplus value they gain in luxury commodities: they must continue to invest a major part of it as capital, by increasing the scale of pro­duction. The accumulation of capital is the reinvestment of surplus value so that it functions as capital. But growth in production, and in the accumulation of capital, is not harmon­ious: it contains a contradiction, which is reflected in the fall in the rate of profit due to the changing organic composition of capital.

The organic composition of capital sums up the two aspects of capitalist production:

-- firstly, capital's technical composition, the relation that exists between means of prod­uction and workers employed. The development of the productive forces means that a given number of workers can set in motion ever more power­ful means of production, making it possible to create a greater number of products (use values) in less time;

-- secondly, capital's value composition: the proportional relation existing between value simply transferred into the commodity (constant capital employed as means of production), and the value which returns to reproduce itself and which allows the creation of surplus value (variable capital invested in labor power).

The development of the productive forces, seen as accumulation of capital is expressed as a proportionately greater growth of constant capital in relation to variable capital. Of course, variable capital also increases, and the quantity of surplus value appropriated therefore increases as well; but this increase takes place at the price of a proportionately greater increase in constant capital, which brings about a decrease in the rate of profit -- which is the relation between the surplus value gained and total capital: (constant plus variable) invested. The more capital accumu­lation increases, the less -- proportionately -- is the surplus value obtained, which contradicts the aim of the capitalists. At a given moment, there is over-accumulation, ie too much capital in relation to the demands of the exploitation of labor power, and production is paralyzed.

The fall in the rate of profit would make capitalism's existence impossible were there not at the same time factors that counteract it: lengthening of the working day, intensifi­cation of work rhythms and reduction of wages make it possible to extract more surplus value without increasing investment; the diminution of production costs, over-population, and foreign trade make it possible to create new branches of production with a low organic com­position of capital. The fall in the rate of profit thus appears solely as a tendency, which in spite of everything, still gets the upper hand in the crisis.

In this way, the law of the tendential fall in the rate of profit expresses the contradic­tion between the productive forces and the relation of production. As production develops, it "takes no notice" of the creation of surplus value. This is why, at a given moment, the creation of surplus value opposes the continued advance of the productive forces. But this con­tradiction is internal, invisible. It must show itself concretely as a limit to exchange, as a limit to the realization of surplus value. This is a double limit, and has two aspects:

1) As a disproportion between different indus­tries. Society's global capital is divided amongst a multitude of private capitalists, who compete among each other in search of the greatest profit. In this effort, each one in­troduces new production methods, better mach­ines, and so pushes forward the development of the productive forces to gain market share by introducing cheaper commodities.

This means both that social production is divided up into a multitude of individual ind­ustries, but which form a chain -- the social division of labor -- where the production of one enters that of others either as raw mater­ial, or as a means of production, right down to the product of personal consumption.

However, the growth of each industry is not proportional to the demands of others, but is determined by private interest. It goes where it can find the greatest profit. Changes in the organic composition of capital, ie the more rapid growth of constant capital in relation to variable, mean here a disproportionate growth in the sector producing the means of production, in relation to the sector producing the means of subsistence: of heavy in relation to light industry, and of industry generally in relation to agriculture. All this is expressed in an over-production of commodities, an excess of products in demand by other capitalists.

If a capitalist at a given moment, because of his industry's disproportionate growth, is no longer able to sell his commodities at a price equivalent to the realization of surplus value, then his factory's output will slow, provoking a chain reaction. Further up the chain, his suppliers will no longer be able to sell their products either, while further down his clients will no longer be able to buy the product they need; all this in turn slows down their production, and so on. This is why over­production only has to appear in a few key industries for the crisis to break out and spread. The crisis appears here as the result of anarchy in production, in opposition to the social division of labor.

Hence the illusion of bourgeois theories (as well as those of Hilferding and Bukharin) as to the possibility of avoiding new crises by means of a production regulatory mechanism such as private monopoly, or better still state capitalism, which would eliminate competition and disproportion. This kind of theory simply forgets that behind this disproportion lies the thirst for profit, that private monopolies and state capitalism also seek maximum profit, and that they can only reproduce the anarchy of production on a larger scale. The most striking proof is to be found not only in the competition between monopolies, but within them: eg, the price war within OPEC provoked by the disproportionate growth of each member; or again, the state capitalism of countries like the USSR, where anarchy of production and com­petition between companies within the same state reappear in spite of the "state plan."

The essential point in what we have said above, then, is that the appearance of modern monopolies, and of countries dominated by state capitalism does not mean a step forward, a "transition" from capitalism to socialism, nor does it lead to a "growing socialization" of production. All that this means, is that the material conditions for the existence of communist society have already been in exis­tence for a long time[6] and that capital engenders these monstrous parodies of "social production" in a desperate but vain attempt not to sink in its own contradictions. 2) The second limitation that the realization of surplus value comes up against, is the working masses capacity for consumption. We are not of course talking about an absolute ability to consume, the complete satisfaction of their needs, but of the capacity of consumption det­ermined by the antagonistic relations of dis­tribution, ie the ability to pay.

In this case, the greater growth of constant in relation to variable capital appears as a greater growth of commodities in relation to wages.

The worker reproduces value equivalent to his wage (variable capital) and also gives another sum of value to the capitalist, without receiving anything in exchange (surplus value). If the capitalist can exploit more labor power with the same variable capital, he will obtain more surplus value. Hence capital's tendency to increase the length and intensity of the working day, and to lower wages. The result is to create an industrial reserve army, which puts pressure on active workers to accept a lower wage. This in turn increasingly restricts the working class' buying power. Capital tries to increase the creation of surplus value. It succeeds, but only by reducing the possibility of realizing this same surplus value[7].

It should be noted that we are speaking in terms of value. But it can also happen that the consumption of use-values increases, while the realization of surplus value nonetheless diminishes. If consumer goods production methods improve, this means that more can be produced in less time, ie with less value: the capital­ists thus reduce the value of labour power, the variable capital invested, since it is possible to buy as much with less money, if not more; they thus obtain more surplus value for an equal time of labor power usage. But once again, this comes up against the possibility of realizing this surplus value. Moreover, and this is what is happening today, the capitalists try to cut wages absolutely, which tends to reduce them to a value below that of labor power, with malnutrition, disease, and even death by starvation among the working popula­tion as a result.

Here again, the crisis appears as an over­production of commodities, with a mass -- "paradoxically" -- of unemployed and starving. The bourgeois ideologues -- especially of the left -- ­come on stage once more to say that the crisis could be avoided if the workers' ability to con­sume were increased, ie if wages were to rise. But any increase in wages is transformed into a drop in surplus value, which contradicts the very purpose of capital. In reality, the left of cap­ital's election-time promises of "wage rises" are nothing but disgusting lies to attract workers' votes. This is demonstrated by the present crisis, where no government, whether "left" or "right" has done anything but cut wages.

"Since the aim of capital is not to minister to certain wants, but to produce profit, and since it accomplishes this purpose by methods which adapt the mass of production to the scale of production, not vice versa, a rift must continually ensue between the limited dimensions of consump­tion under capitalism and a production which forever tends to exceed this immanent barrier..." "On the other hand, too many means of labor and necessities of life are produced at times to permit of their serving as means for the exploi­tation of laborers at a certain rate of profit. Too many commodities are produced to permit of a realization and conversion into new capital of the value and surplus value contained in them under the conditions of distribution and consump­tion peculiar to capitalist production, ie too many to permit of the consummation of this pro­cess without constantly recurring explosions..." "The ultimate reason for all crises always remains the poverty and restricted consumption of the masses as opposed to the drive of capital­ist production to develop the productive forces as though only the absolute consuming power of society constituted their limit." (Marx, Capital Vol III, Lawrence and Wishart, pp 256,258,484)

"And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and destructive crises, and by diminishing the means by which crises are prevented." (Communist Manifesto, Moscow, p50)

With the devalorisation of capital through the paralysis and the closure of factories and even the destruction of producer and consumer goods which takes place during the crisis, the cap­italists look for a solution to over-production by seeking out new markets. Hence the tendency to create the world market.

In an initial period, each national capital attempts to impose its exchange relations on the independent producers and on countries where pre-capitalist relations of production still domin­ate. But these markets are also limited because in pre-capitalist production all that is exchanged is that which exceeds the satisfaction of indiv­idual needs. Capital thus needs to create its own market, "to create a world in its own image."

Thus, by allying itself with or struggling against the land-owners and princelings, the bourgeoisie carried out the dispossession of the small producers. Wealth was concentrated in the hands of the few and could be oriented towards the production of commodities required by the capitalists; at the same time, this created an army of proletarians who could now only sell their labor power in order to be able to buy the things they needed to live. In this way, the capitalists could export their commodities, realize their surplus value and acquire other commodities. Moreover, the industries created in the more backward countries operated at a higher rate of profit because there was a lower organic composi­tion of capital: older machines, raw materials, a very low price for labor power and longer hours of work. But all this only led to the repro­duction, on a much wider scale, of the same contradictions of the capitalist system.

The oldest capitalist nations, in their search for outlets for their products, obtained them by turning the most backward countries into new com­petitors, thus laying the bases for new, wider, and more profound crises.

Thus at the beginning of the century, we see the "end of the division of the world among the great powers," the end of capitalist expansion in the inhabited parts of the world. Since then, this solution to the crisis no longer exists. All that remains is the destruction of the productive forces, which has to reach such a scale that it can only be achieved by war.

In this period, the fundamental object of inter-bourgeois wars is not the conquest or pill­age of territories or nations but the pure des­truction of the productive forces, of factories, of cultivated lands, ports, hospitals, industrial zones and entire towns[8]. This is the only way that capitalism can open up a new period of "prosperity", which lasts as long as he recon­struction lasts; at that point capital once again encounters its inherent limits and plunges society into a new world crisis. The industrial cycle in which crises led to a new phase of growth and expansion is transformed into the cycle of crisis-war-reconstruction.

The completion of its creative work, of the world market, and the beginning of wars to des­troy the productive forces, marks the end of the progressive historical mission of capitalism and the opening up of its phase of decadence. From now on, its existence is not only an obsta­cle to social progress but, with its growing barbarism, it puts the very existence of human society in danger. For the revolutionaries at the beginning of the century, the changes taking place in capitalism represented its "disintegra­tion", its "definitive collapse". With these changes, the era of the world communist revolu­tion had begun.

The Colectivo Comunista Alptraum also considers that we are living in the epoch of capitalist decadence. We will thus continue the critique of its positions which we began in section II in order to try to define more clearly the charac­teristics of this epoch.

The decadence of capitalism

"We consider" says the Colectivo in its Thesis no 6, "that capitalism is in its decadence..." "The decadence of the system implies the accen­tuation...and the deepening of all contradic­tions..." "The law that explains the development of the capitalist system of production is also an adequate basis for understanding its decadent nature. From our point of view, both the develop­ment and the decline of the system reside in two essential factors: one expressing the form, in the general law of the tendency of the rate of profit to decline; the other , expressing its content, in the formal and real domination of capital over the process of labor". (International Review no. 40, p30)

Thus decadence, like ascendancy, has a form in which it expresses itself, and a content.

The form is the law of the falling rate of profit. We've already seen that the crisis arises from this law. There is thus a relation­ship between the crisis and decadence. According to the Colectivo:

"Moments of crisis occur when capitalism is obliged to destroy a growing mass of productive forces revealing the decadence of the system". (ibid, p28)

But the fall in the rate of profit and the crisis have existed throughout capitalism. To say that these things express the decadent nature of capitalism could make it appear that decadence has existed since crises first arose (and the "classical" cycle of crises began in 1825) or that capitalism goes through cycles of ascendance and decadence; in short, that decadence simply means capitalism in general. Obviously, this is not what the CCA thinks. If it insists on the "decadent nature" of capitalism, its not because it sees decadence as the eternal nature of cap­italism, but simply because the germ of decadence has indeed been there since the origins of the system. Fine. But now, apart from recognizing that decadence is a "natural" phase in the life of capitalism, we haven't advanced one inch in characterizing it. In what way is this phase of decadence distinguished from the previous, ascendant phase? Perhaps we will find the solution in the "content" of decadence, in the formal and real domination of capital over labor.

Formal domination is the period in which cap­italism exploits wage labour in the form in which it appeared in previous modes of production. The worker carries out the same processes as he did when he was an artisan, but a cooperative char­acter is already imprinted on this process and, fundamentally, the instruments and the products of labor already no longer belong to the worker but to the capitalist, under whose orders he works. The industrial revolution laid the bases for real domination, for the transformation of the labor process itself, for the development of labor in its specifically capitalist form with its high degree of cooperation, division, and simplicity. This is the emergence of the modern proletariat, deprived not only of its means of production but also of its spiritual power. Historically, the passage from formal domination to real dominations is no more than the passage from manufacture to big industry. The subsequent expansion of capital appears as a reproduction of these phases in a rapid and violent manner: firstly capital appropriates production in the pre-capitalist form in which it is encountered, and immediately imprints its capitalist character on it. If the epoch of decadence corresponded to the passage from formal domination to real domination, we would have to situate it at the end of the 18th century and the beginning of the 19th. Once again, we are faced with a tendency to dilute the specific epoch of decadence into the general development of capitalism.

At one point, it seems that the Colectivo situated decadence at the beginning of the century. Having mentioned the decadent nature of capitalism, they carry on as follows:                                              

"In this logic, capitalism is periodically led to destroy a growing mass of the social productive forces....From this internal tendency emerges the need for wars to prolong its existence as a whole. Historically, we have seen that after each war there is a period of reconstruction". (ibid).                                                                     

But wars of this type were only a reality at the beginning of the present century, and we suppose ­that the Colectivo is referring to these wars and not to another kind of war from the previous century. In its response to the IBRP, the CCA adds:            

"If we observe how the capitalist system has become more and more barbaric from the first world war until today, it is possible to understand why the more capitalism develops, the more it sinks into barbarism (or decadence)..." (Comunismo no. 1, p22).

Thus decadence is situated at the beginning of the 20th century, which coincides with the position that we have adopted. However, in a note to the above paragraph, the Colectivo "clarifies" as follows:

"In strict historical terms, we can say that this progressive ‘barbarization' of the capitalist system begins in the middle of the 19th century, the date at which the bourgeoisie loses its progressive role in the history of Europe and at which the proletariat appears at the historic level of the class struggle as its antagonistic po1e....We can situate the beginning of the global decadency of the capitalist system in 1858. This is situated precisely in the course of its progressive alienated expansion on a planetary scale." (ibid).

So finally the Colectivo places decadence in the middle of last century, the period of the maturation of capitalism in Germany and of the revolutions of 1848. This dooms any attempt to characterize this period to remain at the level of generalities about capitalism. From this standpoint there are no substantial differences between capitalism today and capitalism last century because everything was there already: the cyclical crisis, he world market, the tendency towards war, the possibility of revolution. This is where you are led by the claim that you can explain everything with reference to the "dominant pole" of production, while leaving aside the changes that have taken place in the sphere of exchange.

But this is an error. The Colectivo doesn't seem to notice that it's a conceptual nonsense to place the epoch of decadence, of the decline of capitalism, "precisely in the course of its progressive alienated expansion," and that adding adjective "alienated" doesn't solve anything.

In this same note, the Colectivo twice quotes Marx to support its position. The first is a false and lamentable misinterpretation. Marx said that bourgeois economy is in decadence. He was obviously referring to bourgeois economic science, but the CCA, far from clarifying this, implies that Marx is referring to the mode of production. However, it would be worthwhile reproducing the  second quote:

"We cannot deny that bourgeois society has experienced its 16th century a second time -- a 16th century which will, I hope, sound the death-knell of bourgeois society just as the first one thrust it into existence. The specific task of bourgeois society is the establishment of a world market, at least in outline, and of production based upon this world market. As the world is round, this seems to have been completed by the colonization of California and Australia and the opening up of China and Japan. The difficult question for us is this: on the Continent the revolution is imminent and will immediately assume a socialist character. Is it not bound to be crushed in this little corner, considering that in a far greater territory the movement of bourgeois society is still in the ascendant?" (Marx to Engels, 8 October 1858)

It would be difficult to conclude from this passage that, in Marx's day, capitalism as a world system had already reached its phase of decadence while in a much wider territory it was still "in the ascendant."

Marx understood that the revolution wasn't possible at any moment but that it required certain material and social conditions. For him: "No social order ever disappears before all the productive forces for which there is room in it have been developed; and new, higher relations of production never appear before the material conditions of their existence have matured in the womb of the old society." (Marx, Contribution to the Critique of Political Economy)

Fine. What can we draw from the passage cited by the Colectivo? That Marx considered that the conditions for the revolution were already ripe? In Europe, yes. For the rest of the world, no.

The preoccupation of revolutionaries in this  period was that there was a perspective for revolution in Europe whereas in the rest of the world the struggle of the proletariat was improbable or non-existent. Perhaps communism could have been extended to the backward areas; in Russia, for example, it might have been possible to go from the patriarchal community to modern communism. But perhaps also the European revolution would have been crushed by the weight of the still ascendant movement of capitalist society in the rest of the world.

Marx, like revolutionaries and the working class in general, was limited by historical conditions. The European revolution seemed to equal the end of bourgeois society because at this stage bourgeois society was virtually limited to Europe. At that time, nobody could guess whether the revolution in this "little corner" would be enough to install communism in a world that was still under-developed.

Today we earl say that this was not possible. That at that time, capitalism still had something in reserve, that its tendencies towards an ascendant development were stronger than its tendencies towards decline and than the forces of revolution; that the opening up of the East opened Marx up an immense field for expansion; that the limits of the world market were still a long way from expressing themselves in an open manner. In short, that the exacerbation of the contradictions of capitalism had not arrived at the point which really opened up the epoch of its decadence and of the world revolution.

Marx posed the general bases for a theory of               decadence but was unable to develop them; this could only be done by revolutionaries at the beginning of the 20th century; when decadence became a reality. This was announced by the chronic depression at the end of the 19th century, the inter-bourgeois wars at the beginning of this century and the Russian revolution of 1905; and it was expressed with a blinding clarity by the the transformation of the crisis of 1913 into the generalized imperialist war of 1914-18 and by the revolutionary explosion of the international proletariat in 1917-23.       

The conception of the decadence of capitalism defines the epoch in which capitalism has already definitively accomplished its "historic mission" and in which its contradictions are no longer simply expressed in a, "high degree of development"; rather, the development of capitalism in this period is such that it is turned into barbarism, because the exploitation of wage labor no longer has as its counterpart the progressive mission of bringing "civilization" to the "barbaric" countries. Now, civilization appears as the generalization of barbarism.

The decadence of capitalism opens up the epoch of the world communist revolution, not only because, through the creation of the world market, capitalism has already created the material conditions for the new society, but also because the disintegration of capitalism, the advance of barbarism, has its counterpart in the advance of the forces of the revolution.

The crisis, as destruction of the productive forces, doesn't only mean the destruction of the means of production, but above all the destruction of human productive forces. It means more unemployment, more exploitation, more accidents, misery, and death. The antagonism between capital and wage labor is expressed in the most brutal and open manner. These are the conditions for the maturation of consciousness and of the revolutionary movement of the proletariat.

"A revolution is only possible as the consequence of a crisis...but the latter is just as certain as the former... " (Marx)

The present crisis with its worldwide character and its long duration doesn't only tend towards a new world war. It also opens up the perspective of a definitive assault by the proletariat on the enemy's fortress. It creates, as never before, the conditions for the world revolution of the proletariat.

These conditions must be the object of all our attention.

Grupo Proletario Internacionalista

The GPI comrades do not as yet have a box number for correspondence, but will be getting one soon.



[1]  See the presentation of the CCA in International Review no. 50

[2]  We lack the space to reproduce these here. The GPI shares the main political positions which are published on the back page of all the ICC's territorial press, and of the International Review.

[3]  See International Review nos. 10, 19, 20.

[4]  International Review no. 40

[5]  A remark seems necessary to us here: in the present period of decadence, the economic cycles do not stop with the "reconstruction". Contrary to the ascendant period, when the cycles appeared in the form "Production-Crisis-Enlarge Production", today's cycles are characterized by the formula "Crisis-War-Reconstruction-Deeper Crisis" (ed. Note)

[6] We think that the comrades make a mistake here. It is wrong to say that "material conditions for communist society are already given." In fact, material conditions make the continued existence of the capitalist system more and more impossible, whence decadence and the permanent crisis. And in this way, there appear the possibility and the necessity of taking the path of the sole solution: socialism. It is only in the period of transition that the material conditions allowing the installation of communism will be complete: "from each according to his abilities, to each according to his needs." (ed. note).

[7] It is wrong to say that the fall in wages reduces the realization of surplus value. By definition, wages never buy surplus value. A fall in wages is always an increase in production of surplus value, both absolutely and relatively (ed. note).

[8] The generalized destruction of the productive forces is not a "goal" sought by capital, but a "blind" consequence of its contradictions. This idea of war as a "search" for destruction is false. at most, it might be valid when applied to one capitalist bloc when it is out to destroy or seize hold of the industrial apparatus of its rival. Such a view glosses over a decisive element the exacerbation of inter-imperialist tensions as the direct cause of generalized war in our period (ed. note).