The post-war boom did not reverse the decline of capitalism

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The last few articles in this series have demonstrated the high level of agreement among Marxists (and even some anarchists) regarding the historical stage capitalism had reached by the middle of the 20th century. The devastating imperialist war of 1914-18, the international revolutionary wave that came in its wake, and the unprecedented world economic depression which marked the 1930s were all seen as irrefutable evidence that the bourgeois mode of production had entered its epoch of decline, the epoch of the world proletarian revolution. The experience of the second imperialist bloodbath did not call this diagnosis into question; on the contrary, it was seen as providing even more decisive proof that the system had outlived itself. Victor Serge had already described the 1930s as “midnight in the century”, a decade which had seen the victory of the counter-revolution on all fronts at the very moment that the objective conditions for the overthrow of the system had never been more plainly developed. But the events of 1939-45 showed that the night could grow darker still. 

As we wrote in the first article in this series: “Picasso's painting of Guernica is rightly celebrated as a ground-breaking depiction of the horrors of modern war. The indiscriminate bombing of the civilian population of this Spanish town by German planes supporting Franco's armies still had the power to shock because it was a relatively new phenomenon. Aerial bombing of civilian targets during the First World War had been minimal and largely ineffective. The vast majority of those killed during that war were soldiers on the battlefronts. The second world war showed that capitalism in decline was increasing in its capacity for barbarism because this time the majority of those killed were civilians: ‘The total estimated human loss of life caused by World War II, irrespective of political alignment, was roughly 72 million people. The civilian toll was around 47 million, including about 20 million due to war related famine and disease. The military toll was about 25 million, including about 5 million prisoners of war.’ ( The most terrifying and concentrated expression of this horror was the industrialised murder of millions of Jews and other minorities by the Nazi regime, shot in batch after batch in the ghettos and forests of eastern Europe, starved and worked to death as slave labourers, gassed in hundreds of thousands at Auschwitz, Belsen or Treblinka. But the civilian death tolls from the bombing of the cities by both sides were proof that this Holocaust, this systematic murder of the innocent, was a generalised feature of this war. Indeed at this level the democracies certainly outdid the fascist powers, as the ‘carpet bombing’ and ‘firebombing’ of German and Japanese cities made the German Blitz seem amateurish in comparison. The symbolic culminating point in this new method of mass slaughter was the atomic bombing of Hiroshima and Nagasaki, but in terms of civilian deaths, the ‘conventional’ bombing of cities like Tokyo, Hamburg and Dresden were even more deadly.”[1]  

In contrast to the First World War, which had to a large extent been ended by the outbreak of revolutionary struggles in Russia and Germany, the proletariat did not throw off the shackles of defeat at the end of the second. Not only had it been crushed physically, in particular by the steam-hammer of Stalinism and fascism; it had also been mobilised ideologically behind the banners of the bourgeoisie, above all through the fraud of anti-fascism and the defence of democracy. There were outbreaks of class struggle and revolt at the end of the war, particularly with the strikes in northern Italy which had a clearly internationalist spirit. But the ruling class had been well-prepared for such outbreaks and dealt with them with utter ruthlessness, above all in Italy where the allied forces master-minded by Churchill allowed the Nazi forces to put down the workers’ revolt while still bombing the strike-hit northern cities; meanwhile the Stalinists did their best to recruit militant workers into the patriotic resistance. The terror bombing of German cities eliminated any possibility that the military defeat of Germany would see a repeat of the revolutionary struggles of 1918.[2]  

In short, the hope that had animated those small revolutionary groups which had survived the shipwreck of the 20s and 30s – that a new war would give rise to a new upsurge in the revolution – was quickly dashed.

The state of the proletarian political movement after World War Two

In these conditions, the small revolutionary movement that had maintained internationalist positions during the war, despite a short period of revival following the collapse of the fascist regimes in Europe, faced the most difficult conditions as it set about the task of analysing the new phase of capitalism’s life in the aftermath of six years of carnage and destruction. The majority of Trotskyists had signed their death warrant as a proletarian current during the war by supporting the allied camp in defence of “democracy” against fascism; this betrayal was confirmed by the open support for Russian imperialism and its annexation of eastern Europe after the war. There were still a number of groups that had broken from Trotskyism and maintained an internationalist stance against the war, such as the Austrian RKD, the group around Munis and the Union Communiste Internationaliste in Greece, animated by Aghis Stinas and Cornelius Castoriadis/Paul Cardan, who went on to form the Socialisme ou Barbarie group. The subsequent evolution of these tendencies reflects the extreme difficulties of the period. The RKD, in its readiness to go to the root of Trotskyism’s demise, began by rejecting Bolshevism and ended up abandoning marxism altogether; Munis evolved towards left communist positions and remained all his life convinced that capitalist civilisation was profoundly decadent, applying this with particular clarity to key issues such as the trade union and the national question. But he was seemingly unable to grasp how this decadence was connected to the economic impasse of the system: in the 1970s his organisation, the Ferment Ouvrière Révolutionnaire, walked out of the conferences of the communist left on the grounds that the other participating groups all agreed that there was an open economic crisis of the system, a position he rejected. As we shall see later on in this article, Socialisme ou Barbarie was seduced by the boom that opened up in the 1950s and also began to question the foundations of marxist theory. Consequently none of the former Trotskyist groups seem to have made any lasting contribution to a marxist comprehension of the historic conditions now facing world capitalism.        

The evolution of the Dutch communist left after the war was also indicative of the general trajectory of the movement. There was a brief political and organisational revival with the formation of the Spartacusbond in Holland. As we show in our book The Dutch and German Communist Left, this group momentarily returned to the clarity of the old KAPD, not only in recognising the decline of the system but also in abandoning the “councilist” fear of the party. This development was facilitated by an open attitude to other revolutionary currents, in particular the Gauche Communiste de France. This was a short-lived development however. The majority of the Dutch left, especially the group around Cajo Brendel, soon drifted back towards anarchist conceptions of organisation and towards a workerist approach which saw little need to locate workers’ struggles in their general historical context

Debates in the Italian communist left

The revolutionary current which had been clearest about the trajectory capitalism was following in the 1930s – the Italian Communist Left – was by no means spared the turmoil affecting the revolutionary movement at the end of the war. The outbreak of a significant proletarian revolt in Northern Italy in 1943 was initially seen by most of its adherents as signifying a change in the historic course – the stirrings of the expected communist revolution. The comrades of the French Fraction of the International Communist Left, which had been formed during the war in Vichy France, initially shared this outlook, but quickly recognised that the bourgeoisie, profiting from the whole experience of 1917, was well-prepared for such outbreaks and had used all the weapons in its armoury to crush them mercilessly. By contrast, the majority of the comrades who had remained in Italy, joined by members of the Italian Fraction who had returned to Italy from exile, had already proclaimed the Internationalist Communist Party (henceforward PCInt, to distinguish it from subsequent “International Communist Parties”). The new organisation was clearly internationalist in its opposition to both imperialist camps, but it had been hurriedly cobbled together from a number of different, and in many ways politically disparate, elements; and this was to give rise to numerous difficulties in the next few years. The majority of the comrades of the French Fraction opposed the dissolution of the Italian Fraction and the entry of its members into the new party, and were soon warning it against adopting positions which marked a clear regression from the views of the Italian Fraction in exile. On central issues such as the party’s relationship with unions, its willingness to stand in elections, and its internal organisational practice, the French Fraction saw clear evidence of a slide towards opportunism.[3] The result of these criticisms was that the French Fraction was expelled from the International Communist Left and constituted itself as the Gauche Communiste de France.

One of the component parts of the PCInt was the “Fraction of Socialists and Communists” in Naples around Amadeo Bordiga; and a central element in the decision to proclaim the party was the prospect of forming the party with Bordiga, who had played an outstanding role in the formation of the CP of Italy in the early 1920s and in the subsequent fight against the degeneration of the Communist International. Bordiga was the last to openly criticise Stalin in the sessions of the CI, denouncing him to his face as the gravedigger of the revolution. But from the beginning of the 1930s and the first years of the war Bordiga had retired from political life, despite many pleas by his comrades to resume activity. Consequently the political gains made by the Italian Fraction in exile – on the fraction/party relationship, the lessons of the Russian revolution, the course of capitalism’s decline and its impact on questions such as the union and national questions – largely passed him by, and he tended to remain stuck on the positions of the 1920s. Indeed, in his determination to oppose all forms of opportunism and revisionism, encapsulated in the constant “new turns” of the official Communist Parties, Bordiga began to develop the theory of the “historical invariance of marxism”: in this view, the communist programme was distinguished by its essentially unchanging nature, implying that the dramatic changes which came about in the positions of CI or the communist left in their break from social democracy were no more than a “restoration” of the original programme incarnated in the Manifesto of 1848.[4] This approach logically implied that there had not been any epochal change in capitalism in the 20th century, and Bordiga’s main argument against the notion of capitalist decadence is contained in his polemic against what he called “the theory of the descending curve”:

 “The theory of the descending curve compares historical development to a sinusoid: every regime, the bourgeois regime for example, begins with a rising phase, reaches a maximum, begins to decline towards a minimum; after this another regime begins its ascent. This is the vision of gradualist reformism: no convulsions, no leap, no jump. The marxist vision can (in the interests of clarity and conciseness) be represented as a number of branches of curves, all ascending until they reach the top (in geometry: the singular point or cusp), after which there comes a sudden and violent fall and, at the bottom, a new social regime arises; we have another historic ascending branch... The current affirmation that capitalism is in its descending branch can only lead to two errors: one fatalist the other gradualist.[5]

Elsewhere Bordiga wrote:  “For Marx, capitalism grows without stopping, beyond all limits.[6] Capitalism was a series of cycles in which each moment of crisis, following a period of “unlimited” expansion, was deeper than the previous one and posed the necessity for a sudden and complete rupture with the old system.

We have responded to these arguments ourselves in International Review n°s 48 and 55,[7] rejecting Bordiga’s charge that the notion of capitalist decline leads to a gradualist and fatalist vision, and explaining why new societies don’t spring into existence overnight without human beings going through a long experience of the old system’s incompatibility with their needs. But there was already opposition to Bordiga’s theory within the PCInt. Not all the work of the Fraction had been lost within the forces that had formed the PCInt. Faced with the reality of the post war period – marked mainly by increasing isolation of revolutionaries from the class, inevitably transforming an organisation that could initially mistake itself for a party into a small communist group – two main tendencies emerged, preparing the ground for the split of 1952. The current around Onorato Damen, ancestor of the present-day Internationalist Communist Tendency, retained the notion of capitalist decadence – it was they who were principally targeted in Bordiga’s “descending curve” polemic – and this enabled them to maintain the clarity of the Fraction on key questions such as the definition of Russia as a form of state capitalism, agreement with Rosa Luxemburg on the national question, and a grasp of the capitalist nature of the trade unions (the latter position being defended with particular clarity by Stefanini who had been one of the first in the Fraction in exile to understand the integration of the unions into the state).

The summer 2011 issue of Revolutionary Perspectives, the journal of the Communist Workers’ Organisation (the ICT’s affiliate in the UK), republishes Damen’s introduction to correspondence between himself and Bordiga around the time of the split. Damen, referring to Lenin’s conception of capitalism as moribund, and Rosa Luxemburg’s view of imperialism as a process hastening the collapse of capitalism, rejects Bordiga’s polemic against the theory of the descending curve: “It is true that imperialism hugely increases and provides the means for prolonging the life of capital but at the same time it constitutes the surest means for cutting it short. This schema of the ever-ascending curve not only does not show this but in a certain sense denies it.

Furthermore, as Damen points out, the vision of a capitalism which is in some sense perpetually ascendant permits Bordiga to indulge in ambiguities on the nature and role of the USSR:

Faced with the alternative of remaining what we have always been, or bending to an attitude of platonic and intellectualist aversion to American capitalism, and benevolent neutrality towards Russian capitalism merely because it is not yet capitalistically mature, we don’t hesitate to restate the classical position which internationalist communists take on all the protagonists in the second imperialist conflict, which is not to hope for a victory of one or other of the adversaries, but to seek a revolutionary solution to the capitalist crisis.”

We might add that this idea that the less developed parts of the world economy could contain a “youthful” and thus progressive form of capitalism led the Bordigist current into an even more explicit dilution of internationalist principles, with its support for the movement of the “coloured peoples” in the former colonies.    

It is a mark of the post-war retreat of the Italian left back to the confines of Italy that much of the debate between the two tendencies in the PCInt long remained inaccessible to the non-Italian speaking world. But it seems to us that while Damen’s current was in general far clearer on the fundamental class positions, neither side had a monopoly on clarity. Bordiga, Maffi and others were correct in their intuition that the period opening up, still characterised by the triumph of the counter-revolution, inevitably meant that theoretical tasks would take priority over wide-scale agitational work. The Damen tendency, by contrast, was even less able to recognise that a real class party, able to develop an effective presence within the working class, was simply not on the agenda in that period. In this sense, the Damen tendency completely lost sight of the crucial insights of the Italian Fraction on the precise question of the fraction as a bridge between the old degenerating party and the new party made possible by the revival of the class struggle. In fact, without any real elaboration, Damen makes an unjustified link between Bordiga’s schema of the ever-ascending curve – which was certainly false – and the latter’s “theory of the uselessness of creating a party in a counter-revolutionary period”, which in our opinion was essentially valid. Against this, Damen offers us the idea that “the birth of the party does not depend, and on this we agree, ‘on the genius or value of a leader or a vanguard’, but it is the historic existence of the proletariat as a class which poses, not merely episodically in time and space, the need for the existence of its party.” We might equally argue that the proletariat has a permanent “need” for the communist revolution: it is certainly true at one level, but it does not get us anywhere near understanding whether the balance of class forces makes the revolution something tangible, something within reach, or a perspective for a much more distant future. Furthermore, if we connect this general problem to the specificities of the epoch of capitalist decline, Damen’s logic appears even more suspect: the actual conditions of the working class in the decadent period, in particular the swallowing of its permanent mass organisations in the maws of state capitalism, have quite clearly made it more, not less difficult, for the class party to maintain itself outside of phases of intense proletarian upsurge.

The contribution of the Gauche Communiste de France

The GCF, though formally excluded from the Italian branch of the communist left, was much more faithful to the old Italian Fraction’s conception of the role of the revolutionary minority in a period of defeat and counter-revolution. It was also the group which made the most important advances in understanding the characteristics of the period of decadence. They were not content merely to repeat what had been understood in the 1930s but aimed to arrive at a deeper synthesis: their debates with the Dutch left enabled them to overcome some of the Italian left’s errors on the role of the party in the revolution and sharpened their understanding of the capitalist nature of the trade unions. And their reflections on the organisation of capitalism in the period of decadence enabled them to develop a clearer insight into the profound changes in the role of war and in the organisation of economic and social life that marked the period. These advances were summarised with particular clarity in two key texts: the report on the international situation from the July 1945 conference of the GCF, and “The evolution of capitalism and the new perspective” published in Internationalisme no. 46 in 1952[8].

The 1945 report focused on the way in which the function of capitalist war had changed from the ascendant to the decadent period. Imperialist war was the most concentrated expression of the system’s decline:

 “Under capitalism, there is no fundamental opposition between war and peace, but there is a difference between the ascendant and decadent phases of capitalist society and, consequently, a difference in the function of war (and in the relationship between war and peace) in the two respective phases. While in the first phase war had the function of enlarging the market with a view towards a greater production of consumer goods, in the second phase production is focused essent­ially on the production of the means of destruction, i.e. with a view towards war. The decadence of capitalist society is strikingly ex­pressed in the fact that whereas in the ascendant period wars led to economic development, in the decadent period economic activity is geared essentially towards war.

This doesn’t mean war has become the goal of capitalist production, which remains the prod­uction of surplus value, but it does mean that war, taking on a permanent character, has become decadent capitalism’s way of life...

In response to those who argued that the destructiveness of war was merely a continuation of the classic cycle of capitalist accumulation, and thus an entirely “rational” phenomenon, the GCF stressed the profoundly irrational character of imperialist war – not only from the point of view of humanity, but even of capital itself:  

The object of war production is not the solution of an economic problem. Its origins are the re­sult of the state's need, on the one hand, to defend itself against the dispossessed classes and maintain their exploitation by force, and on the other to maintain its economic position and better it at the expense of other imperialist states, again by force. The permanent crisis makes the solution of inter-imperialist differ­ences by armed struggle inevitable. War and the threat of war are latent or overt aspects of the situation of permanent war in society. Modern war is essentially a war of materials. With a view to war, a monstrous mobilization of a country's entire economic and technical re­sources is necessary. War production becomes at the same time the axis of industrial production and society's main economic arena.

But does the mass of products represent an increase in social wealth? To this we must reply categorically, no. All the values created by war production are doomed to disappear from the productive process to be destroyed without reappearing in the next cycle. After each cycle of production, society chalks up, not a growth in its social heritage, but a decline, an impov­erishment of the totality.

Thus the GCF saw imperialist war as an expression of a senile capitalism’s tendency to destroy itself. The same could be said for the mode of organisation that becomes dominant in the new era: state capitalism.

In “The evolution of capitalism and the new perspective”, the GCF analysed the role of the state in the survival of the system in the period of decadence; here again capitalism’s agonising collapse is indicated by the continuous flouting or deformation of its own laws:

Unable to open up new markets, each country closes itself off and tries to live on its own. The universalisation of the capitalist economy, which had been achieved through the world market, is breaking down. Instead we have autarky. Each country tries to go it alone: it creates unprofit­able sectors of production to compensate for the break-up of the market. This palliative further aggravates the dislocation of the world market.

Before 1914, profitability, via the mediation of the market, was the standard, the measure, the stimulant of capitalist production. In the present period this law of profitability is being violated. The law is no longer applied at the level of the enterprise, but at the global level of the state. The distribution of value is carried out according to a plan of accounts at national level, no longer through the direct pressure of the world market. Either the state subsidizes the deficit part of the economy or the state itself takes over the entire economy.

This does not mean a ‘negation' of the law of value. What we are seeing here is that a given unit of production seems to be detached from the law of value, that this production takes place without any apparent concern for profitability.

Monopoly super-profits are realised through ‘artif­icial' prices, but on the global level of produc­tion this is still connected to the law of value. The sum of prices for production as a whole still expresses the global value of these products. Only the distribution of value among the various capitalist groups is transformed: the monopolies arrogate for themselves a super-profit at the expense of the less well-armed capitalists. In the same way we can say that the law of value continues to operate at the level of national production. The law of value no longer acts on a product taken individually, but on the entirety of products. This is a restriction in the law of value's field of application. The total mass of profit tends to diminish, because of the burden exerted by deficit branches of the economy on the other branches.”

We have said that there was no monopoly on clarity in the debates within PCInt and the same can be said for the GCF. Faced with the gloomy state of the workers’ movement after the war, they edged towards the conclusion that not only were the old institutions of the workers’ movement, parties and unions, irreversibly integrated into the capitalist state leviathan, but that the defensive struggle itself had lost its class character:

 “The economic struggles of the workers can only end in failure -- at best in main­taining living conditions which have already been degraded. They tie the proletariat to its exploit­ers by leading it to feel a solidarity with the system in exchange for an extra bowl of soup (which, in the last analysis, is only obtained through increasing ‘productivity'.[9]

It was certainly true that economic struggles could win no lasting gains in the new epoch, but it was not true that they served merely to tie the proletariat to its exploiters: on the contrary, they remain an indispensable precondition for breaking this “solidarity with the system”. 

The GCF also saw no possibility of capitalism achieving any kind of recovery after the war. On the one hand, they considered that there was an absolute dearth of extra-capitalist markets to permit a real cycle of expanded reproduction. In their legitimate polemic against the Trotskyist idea that bourgeois nationalist movements in the colonies or former colonies could undermine the world imperialist system, they argued that:

 “The colonies have ceased to represent an extra-capitalist market for the metropoles; they have become new capitalist countries. They have thus lost their character as outlets, which make the old imperialisms less res­istant to the demands of the colonial bourgeoisie. To which it must be added that these imperialisms' own problems have favoured -- in the course of two world wars -- the economic expansion of the colonies. Constant capital destroyed itself in Europe, while the productive capacity of the colonies or semi-colonies grew, leading to an explosion of indigen­ous nationalism (South Africa, Argentina, India, etc). It is noteworthy that these new capitalist countries, right from their creation as independent nations, pass to the stage of state capitalism, showing the same aspects of an economy geared to war as has been discerned elsewhere.

The theory of Lenin and Trotsky has fallen apart. The colonies have integrated themselves into the capitalist world, and have even propped it up. There is no longer a ‘weakest link': the domination of capital is equally distributed throughout the surface of the planet.”[10]

It was certainly true that the war enabled certain colonies, outside the main field of conflict, to develop along capitalist lines, and that globally speaking the extra-capitalist markets had become increasingly inadequate as an outlet for capitalist production. But it was premature to announce their complete disappearance. In particular, the ousting of the old powers like France and Britain from their former colonies, with their largely parasitic relationship towards their empires, enabled the great victor of the war – the USA – to find lucrative new fields of expansion, particularly in the far east.[11]  At the same time, there were extra-capitalist markets yet to be exhausted within certain European countries (notably in France), largely made up of those sections of the small peasantry that had not been totally integrated into the capitalist economy.  

The survival of certain solvent markets outside of the capitalist economy was one of the factors which made it possible for capitalism to re-animate itself for an unexpectedly long period after the war. But it was very much linked to the more general political and economic reorganisation of the capitalist system. In its 1945 report, the GCF had acknowledged that, while the overall balance sheet of the war was catastrophic, certain imperialist powers could indeed become stronger as a result of their victory in war. In fact, the USA had emerged in a position of unprecedented strength which enabled it to finance the reconstruction of the war-torn powers of Europe and Japan, evidently for its own imperialist and economic needs. And the mechanisms used to revive and expand production in this phase were precisely those which the GCF had itself identified: state capitalism, particularly in its Keynesian form, permitting a certain forced “harmonisation” between production and consumption, not only at national but even international level through the formation of huge imperialist blocs; and, along with this, a real deformation of the law of value, in the form of massive loans and even outright “gifts” from the triumphant USA to the defeated and ruined powers, which permitted production to resume and grow, but not without beginning the irreversible growth of a debt which would never be paid back, in contrast to the classic development of ascendant capitalism.

Thus through remoulding itself on a global scale, capitalism did experience, for the first time since the “Belle Epoque” at the beginning of the 20th century, a period of boom. This was not yet apparent in 1952, which was still dominated by post-war austerity. And rightly seeing that there had been no revival of the proletariat in the wake of the war, the GCF wrongly concluded that a third world war was on the short-term agenda. This mistake helped to accelerate the demise of the group which disbanded in 1952 – the same year as the split in the PCInt. Both these events were a confirmation that the workers’ movement was still living in the shadow of the profound reaction that followed the defeat of the 1917-23 revolutionary wave. 

 “The Great Keynesian Boom”

By the mid 50s, as the phase of outright austerity came to an end in the central capitalist countries, it was becoming clear that capitalism was entering into an unprecedented boom. In France this was the period known as the “30 Glorious Years”; others refer to it as “The Great Keynesian Boom”. The former term is a rather obvious misnomer. It’s certainly questionable that it lasted for 30 years,[12] and it was less than glorious for a very considerable part of the global population. Nevertheless it saw very rapid growth rates in the western countries; and even in the much more sluggish and economically backward east there was a spurt of technological development which generated talk of Russia being able to “catch up” with the west, as alarmingly suggested by the USSR’s initial successes in the space race. The USSR’s “development” continued to be based on the war economy, as it had in the 1930s. But although the arms sector also exerted a heavy weight in the west, workers’ real wages in the main industrial countries increased considerably (particularly in relation to the very hard conditions that had prevailed during the period in which the economy was being reconstructed) and mass “consumerism” became a fact of working class life, combined with extensive welfare programmes (health, holidays, sick pay,) and very low rates of unemployment. This was what permitted the British Tory Prime Minister Harold Macmillan to patronisingly proclaim that “most of our people have never had it so good."[13]

 An academic economist gives a brief summary of economic developments during this period:

Even a casual glance at numbers and growth rates reveals that growth and recovery after World War II was astonishingly rapid. Considering the three largest Western European economies - Britain, France, and Germany - the Second World War inflicted much more damage and destruction on a much wider area than the First. And (except for France) manpower losses were greater in World War II as well. The war ended with 24 percent of Germans born in 1924 dead or missing, and 31 percent disabled; post-war Germany contained 26 percent more women than men. In 1946, the year after the end of World War II, GNP per capita in the three largest Western European economies had fallen by a quarter relative to its pre-war, 1938 level. This was half again as much as production per capita in 1919 had fallen below its pre-war, 1913 level.

Yet the pace of post-World War II recovery soon surpassed that seen after World War I. By 1949 average GNP per capita in the three large countries had recovered to within a hair of its pre-war level, and in comparative terms recovery was two years ahead of its post-World War I pace. By 1951, six years after the war, GNP per capita was more than ten percent above its pre-war level, a degree of recovery that post-World War I Europe did not reach in the eleven post-World War I years before the Great Depression began. What post-World War II Europe accomplished in six years had taken post-World War I Europe sixteen.

The restoration of financial stability and the free play of market forces launched the European economy onto a two-decade long path of unprecedented rapid growth. European economic growth between 1953 and 1973 was twice as fast as for any comparable period before or since. The growth rate of GDP was 2 percent per annum between 1870 and 1913 and 2.5 percent per annum between 1922 and 1937. In contrast, growth accelerated to an astonishing 4.8 percent per year between 1953 and 1973, before slowing to half that rate from 1973 to 1979.[14]

Socialisme ou Barbarie: theorising the boom

Under the enormous weight of this avalanche of facts, the marxist view of capitalism as a crisis-prone system which had been in its epoch of decline for nearly half a century came under challenge on all fronts. And given the absence of generalised class movements (with some notable exceptions, such as the mass struggles in the eastern bloc in 1953 and 1956), official sociology began to talk about the “embourgeoisiement” of the working class, the recuperation of the proletariat by a consumer society which seemed to have solved the problems of managing the economy. This questioning of the fundamentals of marxism inevitably affected those who considered themselves to be revolutionaries. Marcuse agreed that the working class in the advanced countries had been more or less integrated into the system, and saw the revolutionary subject displaced towards oppressed ethnic minorities, rebellious students of the advanced countries and the peasants of the “third world”. But the most coherent challenge to the “traditional” marxist categories came from the Socialisme ou Barbarie group in France, a group whose rupture with official Trotskyism after the war had been welcomed by the left communists of the GCF.

In Modern Capitalism and Revolution,[15] written by the group’s main theoretician, Paul Cardan/Castoriadis analyses the main capitalist countries of the mid-1960s and concludes that “bureaucratic”, “modern” capitalism has succeeded in eliminating economic crises and can henceforward go on expanding indefinitely.

Capitalism has succeeded since the second world war in controlling the level of economic activity to a very considerable degree. Fluctuations of supply and demand are maintained within narrow limits. There have been profound modifications in the economy itself and in its relations with the state. The result is that depressions of the pre-war type are now virtually excluded...

Capitalist states have now been obliged publicly to assume responsibility for providing relatively full employment, and for eliminating major depressions. This they have more or less succeeded in doing, even if they cannot avoid phases of recession and inflation in the economy, let alone assuring its optimum, rational development. The situation of 1933 – which would correspond today to 20 million unemployed in the USA alone – is henceforth inconceivable. It would provoke an immediate explosion of the system. Neither workers nor capitalists would tolerate it.[16]

 Thus, Marx’s vision of capitalism as a crisis-prone system applies only to the 19th century and is no longer the case. There are no “objective” economic contradictions and economic crises, if they do occur, will from now on be essentially accidents (there is a 1974 introduction to the work which describes the recession of that period precisely as a result of the “accident” of the oil price rises). The tendency towards collapse as a result of inbuilt economic contradictions – in other words, a decline of the system – is no longer the basis for the socialist revolution, whose foundations must be sought elsewhere. Cardan argues that while economic convulsions and material poverty can indeed be overcome, what bureaucratic capitalism can never get rid of is the growth of alienation at work and leisure, the increasing privatisation of daily life,[17] and in particular the contradiction between the system’s need to treat the workers as dumb objects capable only of following orders, and the need of an increasingly sophisticated technological apparatus to count on the initiative and intelligence of the masses to enable it to function at all.

This approach recognised that the bureaucratic system had essentially annexed the old workers’ parties and unions,[18] increasing the masses’ lack of interest in traditional politics. It fiercely criticised the hollowness of the understanding of socialism propagated by the “traditional left”, whose advocacy of a fully nationalised economy (plus a bit of workers’ control, if you were selling the Trotskyist version) would merely offer the masses more of the same. Against these ossified institutions, and against the debilitating bureaucratisation which affected all the habits and organisations of capitalist society, SouB advocated the need for workers’ self-activity both in the day to day struggle and as the only means for reaching socialism. Since it was posed around the essential question of who really controls production in society, this was a far sounder basis for creating a socialist society than the “objectivist” view of the traditional marxists, who were waiting for the next big slump to step in to lead the workers to the promised land, not on the basis of a real increase in consciousness but simply on the back of a kind of biological reaction to impoverishment. This schema of revolution, in short, could never lead to a real transformation in human relations:

 And what about the origin of the 'contradictions' of capitalism, of its periodic crises, and of its profound historical crisis? According to the classical conception, the roots of all these lie in private appropriation, in other words in private property and the market. These, it is claimed, constitute an obstacle to the development of the productive forces, which is seen as the sole, true and eternal objective of social life. This type of criticism of capitalism consists, in the last analysis, in saying that what is wrong with capitalism is that it is not capitalist enough, that it is not doing its job well enough. To achieve 'a more rapid development of the productive forces' it is only necessary, according to the classical theory, that private property and the market be eliminated. Nationalization of the means of production and planning would then solve the crisis of contemporary society.

The workers don't know all this and can't know it. Their position in society forces them to suffer the consequences of the 'contradictions' of capitalism; it does not lead them to discover its causes. This knowledge cannot come to them from their experience in production. It can only come from a 'theoretical' knowledge of the 'laws' of capitalist economy. This knowledge is certainly accessible to individual, 'politically conscious' workers. But it is not available to the working class as a class. Driven forward by their revolt against poverty, but incapable of leading themselves (since their limited experience cannot give them a privileged viewpoint of social reality as a whole), the workers can only constitute an infantry at the disposal of a general staff of revolutionary generals. These specialists know (from knowledge to which the workers as such do not have access) what it is precisely that does not work in modern society. They know what must be done to modify it. It is easy to see why the traditional concepts of economics and the revolutionary perspectives which flow from them can only lead to – and historically have only led to – bureaucratic politics.

To be sure, Marx himself did not draw these conclusions from his economic theories. His political positions were usually, in fact, the very opposite. But what we have outlined are the consequences which objectively flow from these ideas. And these are the practices that have become more and more clearly affirmed in the historical development of the working class movement. These are the ideas that have finally culminated in Stalinism and which - shared by Trotskyism - have made it impossible for Trotskyism clearly to differentiate itself as a political tendency. For objectivist views of economics and history can only be a source of bureaucratic politics, that is, of politics which in the last analysis attempt only to improve the workings of the capitalist system, whilst preserving its essence.”[19]

It’s noticeable throughout this text that Cardan makes no attempt to distinguish the “traditional left” – ie the left wing of capital – from the authentic marxist currents which did survive the recuperation by capitalism of the old parties, and who strenuously advocated the self-activity of the working class despite an adherence to Marx’s critique of political economy. The latter (despite the post-war discussions between SouB and the GCF) are almost never mentioned; but more to the point, despite the lingering attachment to Marx contained in this passage, Cardan makes no attempt to explain why Marx did not draw “bureaucratic” conclusions from his “objectivist” economics, or to highlight the immense gulf between Marx’s conception of socialism and that of the Stalinists and Trotskyists. In fact, elsewhere in the same text, Marx’s own method is accused of objectivism, of erecting implacable economic laws which human beings can do nothing about, of falling into the same reification of labour power which he himself criticised. And despite some nods in the direction of the Economic and Philosophical Manuscripts of 1844, Cardan never accepts that the critique of alienation informs the whole of Marx’s work, which is nothing if not a protest against the reduction of man’s creative power to a commodity, but one which at the same time recognises this generalisation of commodity relations as the “objective” basis for the ultimate decline of the system. Similarly, despite some recognition that Marx did see a “subjective” side to the determination of the value of labour power, this doesn’t prevent Cardan from reaching his conclusion that “Marx, who discovered and ceaselessly propagated the idea of the crucial role of the class struggle in history, wrote a monumental work (Capital) from which the class struggle is virtually absent.[20]

Moreover, the economic contradictions which Cardan dismisses are presented in a very superficial manner. Cardan lines up with the neo-harmonist school (Otto Bauer, Tugan-Baranovski, etc) who tried to apply Marx’s schemas in Vol. 2 to prove that capitalism could indeed accumulate without crises: for Cardan, the regulated capitalism of the post-war period had finally brought about the necessary balance between production and consumption, eliminating forever the “market” problem. This is really just rehashed Keynesianism and the inherent limitations of trying to achieve a “balance” between production and the market would only too soon reveal themselves. The falling rate of profit is given equally short shrift in an appendix. The most telling aspect of this section is where he writes:

The whole argument is moreover irrelevant: it is a red herring. We have discussed it only because it has become an obsession in the minds of many honest revolutionaries, who cannot disentangle themselves from the fetters of traditional theory. What difference does it make to capitalism as a whole that profits today average, say, 12% whereas they averaged 15% a century ago? Would this, as sometimes implied in these discussions, slow down accumulation, and thereby the expansion of capitalist production? And even supposing it did: SO WHAT? When and by how much? And what is the relevance of this idea in a world where, not for a year, not for two years, but over the last quarter of a century production has expanded at rates undreamt of even in the heydays of capitalism? And even if this ‘law’ were true, why would it cease to be true under socialism?

The only 'basis' of the 'law' in Marx is something which has nothing to do with capitalism itself; it is the technical fact of more and more machines and fewer and fewer men. Under socialism, things would be even 'worse'. Technical progress would be accelerated -and what, in Marx's reasoning is a check against the falling rate of profit under capitalism, namely the rising rate of exploitation, would not have an equivalent under socialism. Would a socialist economy therefore come to a standstill because of a scarcity of funds for accumulation.”[21]

So for Cardan, a fundamental contradiction rooted in the very production of value is irrelevant because capitalism is going through a phase of accelerated accumulation. Worse: there will still be value production under socialism; and why not, since the production of commodities in itself does not inherently lead to crisis and collapse? Indeed, using basic capitalist categories like value and money could even prove to be a rational way of distributing the social product, as Cardan explains in his booklet Workers Councils and the Economics of a Self-managed Society (published by Solidarity in 1972, but originally titled 'Sur Ie Contenu du Socialisme' in the summer of 1957 in Socialisme ou Barbarie n° 22).

This superficiality made it impossible for Cardan to grasp the contingent and temporary nature of the post-war boom. 1973 was not an accident and it wasn’t primarily a result of the rise in oil prices – it was the explicit resurfacing of the basic economic contradictions that the bourgeoisie was trying so hard to deny and has spent the last 40 years trying to conjure away, with less and less effect. Today more than ever his prediction than a new depression is unthinkable seems ridiculously out of date. It is not surprising that the SouB and its successor in Britain, Solidarity, disappeared between the late 60s and the 80s, when the reality of the economic crisis was revealing itself with increasing severity to the working class and its political minorities. However, many of Cardan’s ideas – such as his castigation of “classical marxism” for being “objectivist”, for denying the subjective dimension of the revolutionary struggle – have proved remarkably persistent, as we shall see in another article.  

Gerrard, October 2011.



[1]. “Decadence of capitalism: Revolution has been both necessary and possible for a century”, International Review n° 132:

[2] See “Class struggle against imperialist war: Workers struggles in Italy, 1943”, International Review n° 75:

[3]. See our book The Italian Communist Left for an account of the manner in which the PCInt was formed. For the GCF’s criticisms of the party’s platform, see “The second congress of the PCInt in Italy”, in Internationalisme no 36, July 1948, reprinted in International Review n° 36:

[4]. Bordigist “invariance”, as we have often pointed out, is actually extremely variable. Thus, while insisting on the integral nature of the communist programme since 1848, and hence the possibility of communism from that moment on, Bordigism was also obliged by its loyalty to the founding congresses of the CI to accept that the war marked the opening of a general, historic crisis of the system. As Bordiga himself wrote in “Characteristic Theses of the Party” in 1951:  “The world imperialistic wars show that the crisis of disaggregation of capitalism is inevitable as it has entered the phase when its expansion, instead of signifying a continual increment of the productive forces, is conditioned by repeated and ever-growing destructions”. We have written more about the ambiguity of the Bordigists on the problem of capitalism’s decline in International Review n° 77

[6]. Dialogue with the Dead, 1956. "Dialogue avec les morts", 1956,

[9]. Ibid.

[10]. Ibid.

[11]. In his articles “Crises and cycles in the economy of capitalism in agony”, originally published in Bilan n°s 10 and 11 and republished in International Reviews n°s 102 and 103, which we examined in the previous article in this series, Mitchell had asserted that the markets of Asia would be one of the stakes in the coming war. He did not go beyond assertion, but it would be worth delving more deeply into this question, given that in the 1930s, this (and the far east in particular) was an area of the globe that contained the remnants of considerable pre-capitalist civilisations, and given the considerable importance of the capitalisation of the area to the development of capitalism in the last few decades.

[12].  The late forties was a period of austerity and hardship in most European countries. It was not until the middle fifties that the “prosperity” began to be felt by sections of the working class, and the first signs of a new phase of economic crisis appeared around 1967, becoming globally evident by the early 70s.  

[13]. Speech in Bedford, July 1957.

[14]. Slouching Towards Utopia? The Economic History of the Twentieth Century -XX. The Great Keynesian Boom: "Thirty Glorious Years", J. Bradford DeLong University of California at Berkeley and NBER, February 1997.


[15]. Paul Cardan, Modern Capitalism and Revolution:

[16]. Cardan, op.cit. From the chapter “Some important features of modern capitalism”.

[17]. The Situationists, whose view of “economics” was strongly influenced by Cardan, went much further in the criticism of the sterility of modern capitalist culture and daily life.

[18]. The critique of the unions had its limitations however: the group had considerable illusions in the British shop stewards’ system, which had in reality long made its peace with the official union structure

[19]. Cardan, op. cit. From the chapter “Political implications of the “classical” theory”.

[20]. Ibid.

[21]. Cardan, op. cit. Appendix: “The falling rate of profit”.

Historic events: 


General and theoretical questions: 


Decadence of Capitalism