Following some positive discussion at the recent ICC online meeting which was followed up by Baboon’s attempt to dismiss any discussion about growth in capitalism, I think it appropriate to explain in more depth my arguments regarding the economic growth the capitalism has achieved and its relevance. My apologies if some of what I say is repetitive or obvious as its clear my conclusions are not - and not easily accepted by close supporters of the the ICC at least. I do not at all pretend to have all the answers, but it is however about time some in the communist left stopped turning a blind eye to reality.
Accumulation of capital is economic growth and it is an essential elements of capitalism. Why is it such a problem to convince people that accumulation takes place and that it is reflected in the GDP figures the bourgeois produces? This I do not understand!
Accumulation and growth are the inevitable products of waged labour and the generation of surplus value. However, growth and accumulation, whilst closely related, are not exactly the same thing. Accumulation is the growth of capital and is very specific, it is the generation of new constant capital that can be used in new production to create further surplus value. Accumulation is central to the creation of surplus value and hence the increased capital and an increased population. When we look at economic growth ie GDP growth this is something much broader than capital accumulation as it includes all that capitalism produces ie including all various types of waste production. Only some of that surplus product that is generated by the working class will be used in productive industry to create capital and hence new surplus value. The generation of surplus product comes however from the same process of waged labour and indicates the entire growth of capitalist society including unproductive industries. Hence GDP growth gives us a much clearer idea of the actual burden on the working class and gives us therefore a reasonably good indicator of how much capitalism achieves as total growth. To establish the extent of capital growth is problematic as it must be based on subtracting all waste production from GDP growth. A job for a professional economist?
In focusing on this full burden on the working class let us look at the actual figures for economic growth over the last 2 centuries. The purpose here is not and has never been to show 'capitalist growth is not only a rejection of decomposition but a calling into question of decadence and all the consequences that come from that', as Baboon says, but to establish a clearer view of the reality of decadence. This I have repeated several times too. If capital accumulation and growth did not exist, we would not be living in a capitalist society
% increase of World GDP per century
In $trillion 2011
Year GDP % increase in period
1600 0.57 33
1700 0.64 12
1800 1.2 86
1900 3.42 185
2000 63.1 1,745
2015 108.12 71
Baboon wants us to condemn these figures out of hand but are they not indicative of how capitalism has grown over the years? Of course a lot of these figures are obviously estimates (and very dependent on the method of calculation) but our interest in them is not in the precise figures but in the indication of trends. Here again is a link to the World Bank data.
On this link you can find the GDP growth form Yr 1 to 2000 presented by Our World in Data
What is evident from these various tables is that there was a low rate of growth in ascendancy and a higher rate in decadence. This is clearly not what the ICC and its supporters argue and is not to be expected from a Luxemburgist perspective where levels of accumulation are said to be dependent on the quantity of non-capitalist markets. From a low base in the level of production there was certainly a high rate of profit but the mass of profit was low and the growth of capital and the economy as a whole was low. Today we have a much high rate of growth based on a much larger level of production generating a higher mass of profit from a lower rate of profit. This is actually precisely what Marx forecast on his basis of the tendency of the rate of profit to fall (TROPF) and this, as I say, contradicts Luxemburg.
One interesting point of significance here is that even a small percentage in GDP growth per year for example 3% growth per year (which is not so far from the average over the past 2 decades) means that GDP doubles in about 23 years. This can be confirmed from the World Bank’s information above.
What we have to understand from this is that the 2 periods of ascendancy and decadence are ones of historic political change not economic growth and economic decline respectively. Ascendancy is a progressive period of development but that development is not primarily about economic growth but about social and political changes and the establishment of basic capitalist systems. The rate of profit was high but from a small level of production. Decadence should be seen as not solely or automatically about economic decline because capital must keep growing – what it represents is a period of political social and economic crises that are products of its historic limitations. It is a crisis of history. We should not see decadence as itself an economic crisis nor that permanent crisis of decadence as permanent economic crisis
World Population in billions
Year Population % growth in period
1600 0.55 19
1700 0.61 10
1800 0.99 62
1900 1.65 66
2000 6.12 270
2015 7.35 20
Why have I included population statistics here? Mainly because there has been little attempt to explain why population is increasing so much in the past half century and because it can only be a complement and a product of economic growth. Marx discussed how population was increased in the 19th century by the cycles of boom and crises every 10 years and Bukharin is one of the few to address the issue of population growth and how it is related to productive efficiency in society. He argues that populations cannot increase if society cannot afford it ie when it is an inefficient producer. This is the materialist method. It does not happen because people are having more sex or are more fertile, it must relate to the productive efficiency of society and capitalism is definitely an efficient produce and it appears I has been able to support a massive increase in population.
A more or less continuous increase in population is nothing more nor less than an extension and growth of the social system, which is possible only when the relation between society and nature has been altered in a favourable direction. It is not possible for a greater number of persons to live unless the bases of life are widened1
This is not to say that everybody is getting much better off. Certainly, The rich and capitalism itself get wealthier and wealthier but the inequalities expand ridiculously, the working class gets relatively and significantly worse off and significant sections of the world population experience extreme poverty and pauperisation.
The impact of this is that humanity experiences overpopulation in many parts of the world, poverty, destitution, famines and hunger and in other wealthier regions it is obesity, unemployment, insecure employment,
Why is the idea of economic growth such a problem to accept? For those with a background in Luxemburgist theory, it is hard precisely because her theory is based on the limitation of market expansion. From this point of view, capitalism cannot create new markets itself and that means population cannot be growing either. Quite simply the idea that markets can grow in decadence is not an understanding that can be derived from Luxemburgism. Luxemburgist theory suggests the opposite, that capitalism must decline during decadence because there are insufficient non-capitalist markets to enable accumulation to take place. The consequences are that followers believe there are insufficient markets to enable growth or that the stagnant markets places limits and barriers on growth. It is essential an economistic view of decadence based on an idea that accumulation is grinding to a halt.
Capital accumulation progresses and expands at the expense of non-capitalist strata and countries, squeezing them out at an ever faster rate. The general tendency and final result of this process is the exclusive world rule of capitalist production. Once this is reached, Marx’s model becomes valid: accumulation, i.e. further expansion of capital, becomes impossible. Capitalism comes to a dead end, it cannot function any more as the historical vehicle for the unfolding of the productive forces, it reaches its objective economic limit. 2
Luxemburg was however wrong about accumulation and reality has not followed her schema and from my point of view it is unfortunate that her influence on this topic continues. Marx on the other hand was quite clear that population growth is a product of accumulation and that continued accumulation meant further growth of productive forces, both physical and human (eg see Capital Volume 3 Chapter). His understanding of overproduction is not as an absolute limit to consumption but as a contradiction between the growth of productive capacity and the growing disparity between that and the consumptive forces ie capital and the subsistence of both the bourgeoisie and the working class. Hence that growth was an inevitable and permanent feature of capitalism.
Lenin was also clear about what imperialism entailed even in 1916:
I am not saying this to underestimate the importance of economic crises but to put the impact in context. The decadence of capitalism does not depend on a narrow view of economic collapse.
Concerning the issue of the growth of the Chinese economy I am not particularly objecting to the term cancerous growth but I don’t think this term should just be applied to China. Yes there are specific reasons for Chinese growth in the past decades but that is always the case for any nation. In any case China is not an exception as other countries in the Far East have seen rapid growth. Also South Korea, Singapore, Malaysia, Thailand Hong Kong Indonesia, India Philippines, Papua New Guinea, Vietnam and more recently Nepal have all seen higher growth rates that the world average over the past decades.5 What is evident here is a phenomenon of global capitalism.
Why are the implications of these growth figures?
Firstly I think it is more appropriate to call all growth by capitalism cancerous not just China’s. As Kamerling recently suggested growth today is more destructive than productive. What I don’t agree is that this should be downplayed as he suggested (and I think Alf echoed this idea in the online meeting?
It needs to be understood and explained and incorporated into an analysis of capitalism’s decadence and not as an exception.
What has been almost a tradition is to think that each crisis is worse than the last and that this is it!! Capitalism cannot recover from this crisis you know!! Trouble is that it always has so far hasn’t it? This problem of overestimating the impact of economic crisis is a problem of immediatism.
I think it is necessary for us to ask not just why there was a crisis or to restate that capitalism cannot solve its contradictions but also to ask why did capitalism recover - even temporarily? Why have we always been wrong to see collapse coming?
Recover it does and my suggested explanation is the feature that renewed accumulation and growth is an essential part of capitalism. I do not pretend this is some great theory, its a minor issue all things considered. But it will keep happening until it actually does collapse – but there again haven’t all revolutionaries in the past said that it is the working class that will bring about the end of capitalism before that happens? So, in making this point, I am not suggesting that the core contradictions of capitalism don’t continue to exist nor that capitalism can solve its economic crises nor that each crises doesn’t leave new problems that can only escalate. Of course these remain.
The final point I want to make is probably the most important in that the economic growth taking place should not be seen as somehow positive. The idea that because crisis are bad does not mean that growth is good. For example most of the waste production that capitalism has developed can be done away with. Growth may enable capitalism to maintain itself but it does not solve capitalism’s contradictions and in fact it just exacerbates the contradictions which is what we are seeing in society today and threatens major problems for the sustainability of industrial society
I think that the concept of ‘Growth as Decay’ that the ICC used in a title for an article is an important concept because it points to the negative impact of growth (although as I said, I do not think the ICC explained the issue at all well). In this stage of mature or late capitalism, we need to recognise growth itself as a fundamental contradiction of capitalism. It is the enormous growth it has achieved so far that is now a threat to humanity and to the natural world. Growth today is more destructive than productive precisely because we can see today the major impacts that this growth is having upon our environment and on humanity. Marx discussed the impact of capitalism on the air and the soil but nowadays we can see the devastating impact of over-industrialisation, pollution of the environment, over-fishing, over-reliance on meat, and over-population and so on is having have on the earth’s mineral resources, on the climate, the seas and on diversity in nature. We have recognised the danger that nuclear weapons hold for us but so has the bourgeoise and today we are already at a point where the environmental damage that capital is creating is in danger of becoming irreversible.
One task of communism will be to reduce and redirect industry to protect the earth and not to expand the productive forces as was thought in earlier phases of capitalism.
1Bukharin Historical Materialism
2Luxemburg 1916 Anti-Critique available at https://www.marxists.org/archive/luxemburg/1915/anti-critique/ch06.htm accessed 14.4.21
3 Marx Capital Vol. 3 Chapter 13
4Lenin, 1916 Imperialism, The Highest Stage of Capitalism, Chapter 10