A Framework for The Concept Of Decadence of Capitalism

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A Framework for The Concept Of Decadence of Capitalism
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The following is a discussion document for the MDF Meeting on 24th Feb 2013. If you want further detail contacts: [email protected]

Along with recognition of society as divided into social and economic classes, the idea of periods of ascendance and decadence in each society is one of most important and most fundamental concepts of Marxism. Both are intrinsic to the approach taken by historical materialism and arises from a scientific approach to the analysis of social history.

So what does decadence mean and how does it affect us today?

“There have always been leaders and lead, rulers and ruled“!?!

We need to start by looking back in history and understanding the Marxist framework.  This framework establishes that the development of society has followed successive stages which are identified by the economic relationships between classes at each stage.  Each stage is a new and distinct form of class society.  The political and social environment in each society is defined by its particular form of economic relationships between classes.

Primitive Communism

A society of scarcity where all members of relatively small tribes cooperate to survive.  No private property.  Ended with the emergence of large scale agriculture (cattle and land) which promoted private property and slavery

Slave Society

Agriculture develops to support large populations.  Society of Slave owners and slaves.  The workers themselves, their tools and their produce are all owned by the rulling class.  Subsistence is provided to the workers.  A political state emerges as does democracy – for members of the ruling class

Ended as slave empires expanded so much they became too wealthy and yet too costly to maintain themselves  Roman empire broken up by wealthy robber barons who established manorial/aristocratic rights over specific regions and lead to feudalism

Feudal Society

Established a ruling class comprising of inherited aristocratic or theocratic rights and ownership over the land, produce and people in their domain.  All land, tools and produce owned by ruling class.  Workers are serfs who are tied to the land/landowner.  Their labour and its produce are owned by the ruling class who allow a portion to be retained by the serf for subsistence.

Feudal society came to an end as technology and skills developed to generate sufficient wealth for merchant class to grow and develop international trade and manufacturing systems


Established a commodity market economy based on wage labour and the accumulation of capital.  It is a production system which is far more dynamic than previous societies and expands rapidly.  Merchant class develops into an industrial class which owns means of large scale production and its produce.  Workers are free socially and sell their labour to earn subsistence

In the decline of Capitalism,  industry becomes so productive and expands rapidly to dominate the whole world.  The greed and squabbling of ruling class now hinders social progress

These different class societies are stepping stones in social progress.  Each one enables a certain social and economic development to take place but when that systems limits are reached, internal conflicts emerge as do new classes who represent the next phase of economic development.  So each of these society has a period when it is new, fresh and dynamic – a period of ascendance – followed by a period when it is in decline because it has reached its limits and its internal contradictions fester – a period of decadence or decline.

Its as simply as that – or as complex.

“There have always been markets and money “!?!

Capitalism establishes a market based on commodity production.  This is what enables capital accumulation to proceed independently of the need of the producers or the owners..  Perhaps not present in primitive communism, but in both slave society and feudal society there were markets selling surplus goods and money was used to represent values, to  facilitate exchange and for accounting purposes.  What is clear however is that both societies, the sale of surplus was a side issue as production was for self ie for individual members of the ruling class.

Marx’s concept of historical materialism establishes that the existing mode of production and the social relations of production in each society give rise to a the ideologies , class relationships culture and behaviour of people  that dominate in that society.  This means that leaders and the led exiting in each society as classes existed but they are different in each society and behaved and believed in different values.   In feudal society for example allegiance to your king, duke lord of the manor was absolute.  They set the law and had personal right to make decisions affecting those below.  Individuals were not allowed to question this right.  In capitalism this approach has disappeared and commodity manufacture and wage labour require and support a system of individuals’ rights and representative democracy.

Furthermore each successive society exhibits a more dynamic and progressive development of the productive forces above that achieved by the previous society.  Slave society , feudal society and capitalism all grew within the previous society when the latter  began to struggle to develop the production forces in a positive fashion and indeed started to became a barrier to further developments.  New classes emerged that brought forth new economic structure and approaches and who came to dominate society and established a new class structure, a development that would remain  positive for humanity for a period.   

“To the extent that the labour process is solely a process between man and nature, its simple elements remain common to all social forms of development.  But each specific historical form of this process further develops its material foundations and social forms.  Whenever a certain stage of maturity has been reached, the specific historical form is discarded and makes way for a higher one.  The moment of arrival of such a crisis is disclosed by the depth and breadth attained by the contradictions and antagonism between the distribution relations and thus the specific historical form of their corresponding production relations, on the one hand, and the productive forces, the production powers and the development of their agencies, on the other hand.  A conflict then ensues between the material development of production and its social form”

Capital Vol 3 Chapter LI

So Marx did not use the term decadence but he clearly outlined for each mode of production  a period of progressiveness followed by a period of  internal conflict and hence decline.  He also clearly indicated that capitalism could create no new class to develop the productive forces further.  The conflict remains between the bourgeoisie and the working class and the outlook remains barbarism or socialism.

So what is decadence under Capitalism?

Decadence is the period when the social relations of production come into conflict with the productive forces. 

The Social Relations of Production are the class structure and the political and economic relations within and between the classes; the economic and political structures of capitalism, wage labour  and the extraction of surplus value, capital accumulation, commodity production for the commodity market; hence all economic contradictions of the system


The Productive Forces are the working class itself, the bourgeoisie, the level of development of technology and manufacturing achieved the system, the physical scale of manufacture of the system

The conflict between the 2 does not prevent expansion and development taking place.  In many senses this conflict always exists and drives class society forward but at a certain point the social relations of society became a barrier and a hindrance to free development, they cause political conflicts and economic crisis because they do not work in harmony with the sheer physical size  and structure of society.  In capitalism the nation state and exploitation of the working class hold back social and economic development leading to wars and a great need to manage the production and distribution processes in capitalist society.

What causes decadence?

It is not a straightforward process to determine specific causes once the general framework of ascendance and decadence is accepted and each mode of production  has specific factors involved. Decadence is a political concept of growth and decline of a social system and it suggests that that mode of production has simply outgrown itself.  In the end the causes and onset of decadence are not convincingly identified by the crisis theories that have emerged. Its consequences are to be seen and understood in actual events.  It ameliorates or exacerbates the crises in the system.  However neither of the 2 main crisis theories that try to explain decadence appear to be able to do this with any certainty.  Capitalism is either too complex or too capable of ‘reinventing’ itself and it is still even now unclear just where decadence leads.

The tendency for the rate of profit to fall theory does not aim to present a specific value of the Rate of Profit which defines when the relations of production become an absolute hindrance to the productive forces.  Indeed the FROP cannot be measured quantitatively (effectively) and its level changes continuously anyway.  Its consequences and its counter tendencies are to be seen in society both before and during decadence however and its value appear to lie in its uses to make judgements about progress of crises.

Luxemburg’s theory of the need for extra capitalist markets to enable capital accumulation does raise the issue of  how capitalism grows during ascendancy and perhaps provides an understanding of the capacity to of the system to expand.  But the theory loses clarity when applied to decadence itself and fails to explain how the remnants of pre-capitalist markets enable capital accumulation to proceed in this period

There is general agreement however that the period of the high point of capitalism coincides with the completion of a world market and the exacerbation of imperialist conflict between nation states and perhaps this is simply how we should perceived the onset of decadence -   The achievement of a world dominated by capitalist relations and imperialist conflict between national bourgeoisies and perhaps then crisis theory should be using this a framework to explain events rather than trying to explain decadence itself.

To return to Marx’s framework for viewing an obsolete social system then, we have a framework that identifies that the national state, the world domination of capitalism, wage labour, commodity markets, the profit motive now work against ongoing free growth of manufacturing industry and the working class itself.  This is not to say that no growth has been possible, clearly it has, but that the capacity for growth provided by what exists ie technology, the size of the working class and the productive machinery across the globe, is relative and much greater than has been achieved within capitalism

An issue for ongoing clarification is the course of decadence.  With the onset of the imperialist phase, revolutionaries believed they had to argue for the short term collapse of capitalism to distinguish themselves from reformist to argued that capitalist could go on.  However capitalism has gone on for a century and to the surprise of the current generations, the crises of the 60s did not become the final crisis either.  The ICC’s current formulation of decomposition leading to the final crisis seems hollow and uncertain therefore.  Socialism or Barbarism and War or Revolution seem self evident or sensible interpretations of reality but rather long term views in the current context.  What has enabled capitalism to persevere rather than collapse during the last 50 years?   The CWOs use of the FROP analysis sees an ongoing crisis and does not try to identify the final phase of collapse whereas the ICC is keen to put exaggerated labels to periods and phases of capitalism.   Neither provide a clear model of capitalism development in this latter period.  Perhaps we should not expect crisis theory to explain the collapse of capitalism in decadence but use them to focus on the explanations of ongoing crises.  The causes of decadence appear to lie in the more general contractions in the system ie exchange value and use value, the economy vs social  need,  the need to accumulate and grow vs the consequences of  that growth

Why is the concept of decadence so important?

Nevertheless, Decadence is the main defining characteristic of the current period of capitalism. If the concept of decadence is correct, it is the framework for our understanding of all events and ideas that emerge in the period, even if aspects of the current situation are yet clear to us

When capitalism was progressive because it was able to expand itself and wrestle domination of society from feudal structures as well as grow and strengthen productive forces on a scale previously unknown.  The expansion of capital was a historically progressive development no matter how brutal or exploitative the system  actually was.  Reforms could and would benefit all in society (the ruling class, the working class and pre-capitalist classes) because the growth of productive forces improved the supply of all commodities eg food, clothes, housing to the whole of humanity over and above what it had been in previous societies. 

When capitalism moves into decadence this development of the productive forces is declining relative to the human social and economic needs of society.   The completion of the world market and the exacerbation of conflict between capitalist states vividly marks the change in period.  The leads to greater conflicts caused by the social relations of production and brings the working class revolution onto the agenda

“Resolution on the Tactics of the CI” at its 4th Congress

II. The period of the decline of capitalism. On the basis of its assessment of the world economic situation the Third Congress was able to declare with complete certainty that capitalism had fulfilled its mission of developing the productive forces and had reached a stage of irreconcilable contradiction with the requirements not only of modern historical development, but also of the most elementary conditions of human existence. This fundamental contradiction was reflected in the recent imperialist war, and further sharpened by the great damage the war inflicted on the conditions of production and distribution. Obsolete capitalism has reached the stage where the destruction that results from its unbridled power is crippling and ruining the economic achievements that have been built up by the proletariat, despite the fetters of capitalist slavery…What capitalism is passing through today is nothing other than its death throes”.

From the perspective of the bourgeoisie, the period leads to ever sharper conflict and disruptions because reforms are generally not able to improve the potential of capitalism, they are primarily there to retain control over the working class change and prevent the emergence of a new revolutionary class.  Capitalism cannot improve in a historical sense as the possibility of the creation of a new more productive society,  that possibility is politically and economically now in place.

From the perspective of the working class, it cannot achieve its full potential  if it does not recognise the failure of the bourgeoisie to make qualitative improvements in society.  Only within a political conflict with the ruling class can the working class  learn what it can achieve and take control of society.     Its long term objectives become its only objectives and all factions of the bourgeoisie must be seen as an enemy to its objectives.

So the concept of decadence is important to use because it demands a sharp demarcation between capitalist institutions and ideologies and those of the working class.  For capitalism it has led to state capitalism as the means to manage a conflicted society and the greater and greater mystification of capitalist ideologies to present itself as normal and natural despite what it actually does.  For the working class, reformism of the system is dead.  The period dictates only revolution will as an objective because the working class holds no wealth within capitalism, it can have no institutions to protect itself -  only a revolution itself can do that. The view of political minorities, workers councils and the rejection of reforms, nationalism, trade unionism are direct consequences of this viewpoint.


excellent starting point!

A very solid and stimulating basis for the discussion. I will try to come back on this so that the discussion can get udnerway prior to the meeting itself. 

Quote:However neither of the

However neither of the 2 main crisis theories that try to explain decadence appear to be able to do this with any certainty.  Capitalism is either too complex or too capable of ‘reinventing’ itself and it is still even now unclear just where decadence leads.

An argument that comes to mind is that capitalism is inertia, a process of social relationships, that requires "expansion" (which can be defined different ways for or in different periods or eras)- like a circle that grows larger in all directions, from the time of the first landless peasants being turned into the first waged laborers, alienated from the product of their labor, which had turned into commodity, to where we are today. Bukharin, in his 2 articles on Imperialism (from 1915 and 1917), documents the size of the capitaist state (the public sector) as relatively small and quite uniform among the advanced capitalist/central capitalist nations during ascendency- but in the last 20 years before 1900, the state sector of the economy of each of the central countries grew year by year, and the definitive date of 1914, the introduction of WWI and the first centralized total war economy, works as an epoch defining moment for state capitalism. But if we see the outward expansion of capital as its growing co-option of existing social relations and customs for the ends of capital accumulation, we see colonialism and the carving up of the Earth by the major, central capitalist nations- the Earth is finite, there is only so many resources, land mass, etc. and when it was nearly dominated by the capitalist relationship (in the form of the first capitalist nation-states), the expansion turned inward, the public sector began to bloat, culminating in imperialism where they turn on eachother.

Is that a fair assessment of how ascendence and decadence are periodized, without hanging on to specifically Leninist (labor aristocracy, super-profits, etc.) Imperialism, Luxemburg's economic theory, the various personalities or groups that tie in the transition from Formal to Real domination of capital (IP, Camatte, etc.), or Trotsky's catastrophist predictions- in other words, extrapolating a theory from what decadence theory means or implies?

One point--I am not sure the

One point--I am not sure the ICC's theory of decomposition presupposes a "final crisis." There is always a certain temptation to go that direction, but I don't think you need to believe in some kind of apocalytpic final crisis to accept that decomposition is real. In fact, one could read decomposition as precisely the exclusion of a final crisis. Its not clear what the outcome of decomposition might be (in the abscence of some kind of catastrophic event--which can't be ruled out). Is there a point where society breaks down to such an extent that it is no longer capitalist? Is barbarism a seperate mode of production? Etc. etc.

welcome this text.

This text should be welcomed, it's a good text. I had a brief look at it before but re-reading it, it's a strong defence of a working class position and a good analysis in depth of decadence with some interesting thoughts. It certainly makes decadence a fundamental issue and explains it well.

A few secondary issues: I'd stress the relative saturation of the market and say that pre-capitalism markets didn't die out overnight - in fact they persist in places now. I'd defend decomposition. I think that it's a valuable tool and a logical outcome of a dying body - it gradually decomposes. Ever bigger populations across the globe are now living nightmares. It could have added national liberation at the end but these are all secondary and my general agreement is with the text.

I tend to agree with what it says about crisis theories. They've been going on for several decades now, at great depth, detail and length, but there's been no real clarification - just going round in circles. Discussion on crisis theories in the ICC alone have clarified little and to me seem even more confused now that they were 20 odd years ago. The text says that crisis theory should look at "The achievment of a world dominated by capitalist relations and imperialist conflicts between national bourgeoisies and perhaps then crisis theory should be using this (as) a framework to explain events rather than trying to explain decadence itself". I agree with this (if I understand what it's saying).

I think that the global butchery of 1914 goes a long way towards a crisis theory and is expressive of capitalism's fundamental economic contradictions. The text above makes this clear especially in relation to the 3rd International where the analysis of decadence is fundamental, succinct and clear and there's not a crisis theory in sight. What caused the economic collapse of capitalism in 1929, fourteen years after the global holocaust and nearly a decade after the workers' movement had a crystal clear analysis of the decadence of capitalism, is obviously interesting. But much more important for capitalism's collapse (for me) is its turning in on itself in 1914 and the consequences this had for humanity.

world economy

I think that Bukharin, Lenin, Pannekoek, Mattick and Luxemburg all converge on the point that Link and Baboon point to: the 'globalisation' of the capitalist system,which,  though never complete, reaches its truly critical point at the onset of the 20th century. 

This is one of the reasons why I don't think the discussion on crisis theories can do no more than go round in circles.  

Alf post above I find

Alf post above I find problematic because it basically says that there  is not such thins as a scientific analysis of the crisis ridden nature of capitalism and that all discussion of the theoretical roots of the crisis are a waste of time because we are going to go around and around in circles. Thus there can be no marxist theory of the crisis!

The test of the development of the theoretical framework laid out in Kapital is whether that taking forwards of this framework can be used to explain and even predict the main features of the unfolding of the decay of capitalism over the last 100 years.

All of the above named theoreticians(to which I would add Grossmann), apart from Luxemburg, all sort to take forwards Marx's framework as laid out in Kapital and they all made important contributions to the marxist framework, though clearly there were weaknesses in their analysis, as there inevitably will be.

Luxemburg, decided that the only way to take forwards marx's framework was to make a radical critique of it and she found it wanting at the level of the analsyis of the totality of capital: hence her theory of 3rd buyers etc.

So in the end there are not a multitude of theories counter acting each other and dooming Marxism to the state of paralysed by-stander to the unfolding of the decay of capitalism but two fundamental approaches:

1. Marx's framework provided in Kapital (along with the subsequent wealth of new material pushed in the last 3 decades) does provide the main theoretical tools for a radical critque of capitalism and for developing an understanding of its probable future develops

2. Marx's framework was inadequate and that Luxemburg has overcome these weakness and provide the necessary theoretical tools for continuing Marx's radical critique.

It is pretty straight forwards really. We are not dogmatists if the unfolding of reality has proveen a theory wrong we need to able to see this.

To say we are doom to just go around and around in circles is a passive response to the real theoretical complexity of developing the marxist method for explaining the unfolding of capitalism. 

I agree with Ernie, if we do

I agree with Ernie, if we do not have a scientific explanation of captialism's crisis then what becomes of Marxism? It would seem to me like the grounding of proletarian revolution in a material necessity disappears and communism becomes merely a "nice idea." That said, Alf is of course right that the debate about crisis theory has gone around in circles for most of the last century. What then is the disconnect? In theory, either the FROP or overprodution should be empirically discoverable. So, why then have they has the observable evidence for both approaches proven so elusive?

not in circles

I must have expressed myself really badly because I was trying to answer Baboon who was saying that the discussion on crisis theory just goes round in circles. I was also relating to Link's point that capitalism's decline begins when it becomes a global system. I think this is a point of convergence between the different crisis theories.

There has been much ado the

There has been much ado the last few days about the Dow Jones hitting an historic high, gaining back all the ground lost since 2008. Supposedly, if you were smart and held your stocks, you are now ahead of where you were at the onset of the financial crisis. The Democrats were quick to seize on this to say that whatever the heck Obama is doing--its working, while the Republicans threw cold water on the party, arguing that this has only been made possible by the Fed's continuing easy money policies.

Instinctually, my first response is to think that a soaring Dow Jones is not always the best reflection of the economy's health. But thinking more about it, I wondered if I had to explain to someone why it isn't, could I actually do it convincingly? Do I really understand why it isn't? If I don't, why do I instinctually reject this "evidence" that the economy is improving?

My point is that I think we need a more robust explanation of captialist crisis than simply deducing from historic events like imperialist war that it is in decadence. How do we defeat claims that things like a soaring Dow Jones demonstrate that theories of captialist crisis are all wet? I think we need a theory that sorts through the economic weeds here and actually shows (god forbid--using math, statistics, econometrics and all the tools of professional economists) that it has become decadent. But this raises issues (broached on the crisis thread and continuing in the Science and Beliefs thread) of just who is qualified to undertake such an endeavor?

well the communist left is

Through its analyses the communist left is well qualified to provide a "more robust explanation of the capitalist crisis than simply deducing from historic events like imperialist war that it is in decadence". The opening post is a good example of it, providing a clear analyses exposing the decay of this system, going back through history, and thus tdoay laying the basis for revolution. I'd say that this analysis was scientific, but I wouldn't get stuck on the word.

The groups of the communist left generally provide excellent positions on the capitalist crisis both overall and in relation to "punctual" events, giving very detailed explanations and, like the ICC, they use the statistics, graphs, information and economic analysis of the bourgeoisie, all to be used with caution.

The ICC, particularly its Review, has a wealth of stuff on the economic crisis. For example, all the various economic models put forward as the "Dow Jones highs" of successfully restructured national capitals, which were supposed to show the overall health of capitalism - its ability not only to stay above crisis but to go forward: Argentina, the "Asian Tigers", Kenya at one stage, Ireland, Brazil, which is now in the frame for the second time in a couple of decades as an "economic miracle". The are deep answers within the communist left to all these capitalist lies and so-called miracles.

Within the economic analyses of these groups there's the overall theoretical strength which comes from the analysis of decadence and explanations of very specific events with the exploding of bourgeois myths. The USA is in severe economic crisis as is China, the ECB and everyone else. All this is covered in the greatest detail - there might be some misreadings here and there but that's not an issue.

The rise of the Dow Jones means nothing about the health of capitalism but is just one aspect of the disconnection of paper money from real wealth. It's part of, or a consequence of, the money creation strategy of the bourgeoisie which has brought them some time but which promises further trouble down the road as they use credit to solve the crisis of credit. The impasse faced by the bourgeoisie is enormous  and its economic crisis will turn into political crises. I don't think that you can separate the question of imperialism, within the framework of decadence certainly but particularly within the last decades, from the development of the economic crisis.

Ernie wrote:Alf post above I

Ernie wrote:
Alf post above I find problematic because it basically says that there  is not such thins as a scientific analysis of the crisis ridden nature of capitalism and that all discussion of the theoretical roots of the crisis are a waste of time because we are going to go around and around in circles. Thus there can be no marxist theory of the crisis!

There are three things mentioned in the above quote which may all be different or all be the same. These are (1) the SCIENTIFIC ANALYSIS of the crisis (2) the discussion of the THEORETICAL ROOTS of the crisis and (3) the MARXIST THEORY of the crisis.

I suppose (2) doesn't have to be the same as (3) though it could be. But why do either (2) or (3) have to be SCIENTIFIC, whatever that actually means, to be valid? Don't the bourgeois economists, and their Nobel prize winners, all think their analyses are scientific, though they're not
usually Marxist and not usually right? Why do we have to persist on insisting that Marxism be a science, rather than a theory of human history, in order for it to be acceptable? Do we not tend a little to fetishize the idea of SCIENCE. and even the very word itself? As Baboon suggested: is it not possible to get "stuck" on the word?

And then there's jk's frustration with which I sympathize.

jk wrote:
Instinctually, my first response is to think that a soaring Dow Jones is not always the best reflection of the economy's health. But thinking more about it, I wondered if I had to explain to someone why it isn't, could I actually do it convincingly? Do I really understand why it isn't? If I don't, why do I instinctually reject this "evidence" that the economy is improving?

So what's the answer jk? (lol)

Science doesnt give facts


There seems to be an assumption above that a scientific analysis means agreement or one answer but that’s what  science is.  I like the term scientific approach because it suggests some way of going forward, some uncertainly maybe.    I mentioned it in terms of Marx’s view of historical materialism and the existence of classes but I struggle with applying the term to liberally to an analysis of everyday events – perhaps because interpretations are too dominant then.

Science is not about facts but interpretations that’s one of the benefits of a Marxist view.  Science doesn’t establish facts it interprets on the basis of the existing society and science only sees ‘facts which accord to known science’.  That’s therefore an interpretation.  So I don’t think that there is a Marxist science as opposed to bourgeois science but a Marxist approach.

Therefore I don’t think we can automatically expect to agree (especially crisis theory?) because we are Marxist.  It seems to me one of the really important tasks for revolutionary organisations is the interpretation of current events - this involves understanding history and theories of understanding history.  But still left is the idea that what is being understood is ongoing and therefore unfinished.  An approach is all that is possible precisely because its open ended and unfinished.  Hindsight is a wonderful thing as they say.


Fred wrote:

So what's the answer jk? (lol)

Confirmation bias? Only accepting evidence that confirms a priori held beliefs and rejecting negative evidence as somehow faulty, contrived, a conspiracy, a trick, etc. In other words, the desire to believe something is so great it overides any evidence that would strip one of their illusions? (AKA the "Republican brain" phenomenon).

Quote:In theory, either the

In theory, either the FROP or overprodution should be empirically discoverable.

I'd argue that they are; specifically FROP. Andrew Kliman's book, 'The Failure of Capitalist Production' documents the tendency of the ROPF since 1945 to 2011, and discusses its relationship to crisis. But Engels noted that it is nearly impossible to be engaged in the heat of economic events, and that analysis of political phenomenon can give you hints at what is happening on the 'subterranean' terrain of economic forces- granted, information technology and communication has made this task much, much easier today. Hal Draper writes about how Trotsky spent most of his time when he was in the US (up to 1917) reading and writing in the NYC Public Library going over American financial and economic data. Today, the internet and numerous available publications publish and condense such information pretty fast.

My point is that I think we need a more robust explanation of captialist crisis than simply deducing from historic events like imperialist war that it is in decadence. How do we defeat claims that things like a soaring Dow Jones demonstrate that theories of captialist crisis are all wet?

I think the history of first 'Finance Capital' around the end of the 19th century (documented by Bukharin and later extrapolated into all kinds of theories by people like Hilferding, Kautsky and Mandel) to the 1960's then the 'financialization of capitalism' and growth of the FIRE sector (finance, insurance & real estate) since the return of crisis 1968-1973 and its growing autonomy from commercial/industrial capital (and growing importance) speak to phenomenon like a capitalism in crisis that produces 'record' or 'historic' gains on stock markets/bond markets/etc. Kliman touches on this briefly, but it deserves a lot more attention (Insurgent Notes has written about this, as have groups like Endnotes, TC, etc.). It would seem that the growing importance of financialized capital and its relative removal from being bound to commercial/industrial capital is due to the return of crisis and the need to find the place where capital can generate returns (larger and faster)- sort of like squeezing one end of a balloon and all the air goes to the other end- rising OCC in the central capitalist nations, overproduction and restructuring (turning East Asia into the worlds manufacturing workshop) leads to increased investment of capital into financialized products and speculation.  This means the environment is primed for asset-bubbles, which is what we have seen endlessly since the return of crisis to capitalism since the late '60s/early 70's: junk bonds, S&L, dot.com, mortgage backed derivatives/real estate, etc. There was also a historic high of the DOW during the Bush years until the new manifestation of the crisis in late 2007-early 2008; and I'm sure this is true of the periods preceding asset bubble bursts (or busts) going back to the late '60s.

That's my very rough and early estimation of why capitalism can be senile and in its decadent phase but still produce signs that are interpreted as 'good health'; same with the post-war boom era- a time when they said crisis had been solved, etc.