Internal debate: the causes of the post-1945 economic boom

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In spring 2005, the ICC launched an internal debate focused on the underlying causes of the economic boom that followed World War II;[1] this period remains an outstanding exception within the history of capitalism's decadence, achieving spectacular and then historically unprecedented overall growth rates for the world economy.[2]      

Elements of this debate had already been posed within our organisation, in particular concerning the economic role played by the two world wars and by the war economy in general, centred essentially on the key question of whether the destruction caused by war was in some way responsible for the post-war booms after 1918 and 1945. Indeed, this had led to the appearance of certain contradictions between various ICC texts on the question. As the debate got under way, it quickly became clear that if - as some argued - the destruction caused by war could not be said to open new markets (since the reconstruction that followed the wars took place entirely within the sphere of the existing capitalist economy), then this in turn opened a much broader problem: what other coherent explanation could account for the post-war boom that followed 1945? Although the debate is still ongoing, and the different positions continue to represent, up to a point, "work in progress", we consider nonetheless that their outlines are sufficiently clear for us to present them to comrades outside the organisation with a view to encouraging debate among all those interested in the positions of the Communist Left.

One might imagine that events prior to and since the post-war boom had sufficiently demonstrated its exceptional nature, for a debate on the subject to be of purely academic interest. We consider it critical nonetheless, since these questions go to the core of the marxist understanding of the historically limited character of the capitalist mode of production, the system's entry into decadence and the insoluble nature of the present crisis. In other words, they concern one of the main objective foundations of the proletariat's revolutionary perspective.

The context of the debate: certain contradictions in our analyses

The debate on the economic implications of war in capitalism's decadence is not new to the ICC, and had indeed already been posed in the workers' movement, notably by the Communist Left. Our pamphlet on The Decadence of Capitalism[3] explicitly developed the idea that the destruction provoked by the wars in the phase of decadence, and in particular the world wars, could constitute an outlet for capitalist production, by creating a market based on post-war reconstruction:

"...the external outlets have contracted rapidly. Because of this, capitalism has had to resort to the palliatives of destruction and arms production to try to compensate for rapid losses in ‘living space'." (Section 5: "The turning-point of the 1914-18 war")

 "Through massive destruction with an eye to reconstruction, capitalism has discovered a way out, dangerous and temporary but effective, for its new problems of finding outlets.

During the first war, the amount of destruction was not ‘sufficient' (...) In 1929, world capitalism again ran into a crisis situation. As if the lesson had been well-learned the amount of destruction accomplished in World War II was far more intense and extensive (...) a war which for the first time had the conscious aim of systematically destroying the existing industrial potential. The ‘prosperity' of Europe and Japan after the war seemed already foreseen by the end of the war, (Marshall Plan, etc...)" (Section 6: "The cycle of war-reconstruction").

A similar idea is present in other texts of the organisation (notably in the International Review) as well as among our predecessors in the Italian Left: in an article published in 1934 by Bilan we read, for example, that "The slaughter that followed formed an enormous outlet for capitalist production, opening up a ‘magnificent' perspective (...) While war is the great outlet for capitalist production, in ‘peacetime' it is militarism (i.e. all the activities involved in the preparation for war that realises the surplus value of the fundamental areas of production controlled by finance capital" (Bilan n°11, 1934, ‘Crises and cycles in the economy of capitalism in agony' republished in International Review n°103).

Other ICC texts, written both before and after The Decadence of Capitalism was published, developed a very different analysis of the role of war in the period of decadence, harking back to the report on the international situation at the July 1945 conference of the Gauche Communiste de France, for whom war "was an indispensable means for capitalism, opening up the possibilities of ulterior dev­elopment, in the epoch when these possibilities existed and could only be opened up through violent methods. In the same way, the downfall of the capitalist world, which has historically exhausted all the possibilities for development, finds in modern war, imperialist war, the expression of this downfall which, without open­ing up any possibility for an ulterior develop­ment, can only hurl the productive forces into an abyss and pile ruins upon ruins at an ever-increasing pace".

The report on the course of history adopted at the ICC's 3rd Congress[4] refers explicitly to this passage from the GCF's text, as does the article ‘War, militarism and imperialist blocs in the decadence of capitalism', published in 1988,[5] which emphasises that "what characterises all these wars, like the two world wars, is that unlike those of the previous century, at no time have they permitted any progress in the development of the productive forces, having had no other result than massive destructions which have bled dry the countries in which they have taken place (not to mention the horrible massacres they have provoked)".

The framework of the debate

These questions are important because they give a theoretical foundation and coherence to the general political framework of a revolutionary organisation. They are nonetheless different from those class lines which separate the proletariat from the bourgeoisie and its hangers-on (internationalism, anti-working class nature of the trade unions, impossibility of taking part in parliamentary elections, etc.). The different analyses that have evolved during the debate are thus all entirely compatible with principles contained in the ICC's own platform.[6]

The critique of certain ideas contained in The Decadence of Capitalism has moreover been undertaken with the same method and general analytical framework that the ICC has used both when the pamphlet was written and since:[7]

  1. The ICC stands by the Communist International's recognition that World War I had opened a new "epoch of wars and revolutions", based on the fact that capitalism could no longer escape from the insurmountable contradictions assailing its system. The workers' movement had to understand the expressions and political consequences of this change in period.
  2. When we analyse the dynamic of the capitalist mode of production over a whole period, we must begin by studying, not the different sectors of capitalism (nations, enterprises, etc), but the world capitalist entity taken as a whole; it is the latter which provides the key to understanding each one of its parts. This was the method Marx used in studying the reproduction of capital, when he made it clear that "To rid the general analysis of purely incidental elements, it is necessary to treat the commercial world as a single nation" (Capital Volume One).
  3. "Contrary to what the idolaters of capital claim, capitalist production does not create automatically and at will the markets necessary for its growth. Capitalism developed in a non-capitalist world, and it was in this world that it found the outlets for its development. But by generalising its relations of production across the whole planet and by unifying the world market, capitalism reached a point where the outlets which allowed it to grow so powerfully in the nineteenth century became saturated. Moreover, the growing difficulty encountered by capital in finding a market for the realisation of surplus value accentuates the fall in the rate of profit, which results from the constant widening of the ratio between the value of the means of production and the value of the labour power which sets them in motion. From being a mere tendency, the fall in the rate of profit has become more and more concrete; this has become an added fetter on the process of capitalist accumulation and thus on the operation of the entire system" (ICC Platform).
  4. It fell to Rosa Luxemburg, on the basis of a critical appraisal of Marx's work, to develop the thesis that the enrichment of capitalism as a whole depended on the exchange of commodities with pre-capitalist economies ("foreign markets"), i.e. economies that practiced commodity exchange but had not yet adopted the capitalist mode of production: "In real life the actual conditions for the accumulation of the aggregate capital are quite different from those prevailing for individual capitals and for simple reproduction. The problem amounts to this: If an increasing part of the surplus value is not consumed by the capitalists but employed in the expansion of production, what, then, are the forms of social reproduction? What is left of the social product after deductions for the replacement of the constant capital cannot, ex hypothesi, be absorbed by the consumption of the workers and capitalists-this being the main aspect of the problem-nor can the workers and capitalists themselves realise the aggregate product. They can always only realise the variable capital, that part of the constant capital which will be used up, and the part of the surplus value which will be consumed, but in this way they merely ensure that production can be renewed on its previous scale. The workers and capitalists themselves cannot possibly realise that part of the surplus value-which is to be capitalised. Therefore, the realisation of the surplus value for the purposes of accumulation is an impossible task for a society which consists solely of workers and capitalists".Rosa Luxemburg, The Accumulation of Capital, ‘The Reproduction of Capital and its Social Setting'). The ICC has essentially adopted this position, which does not mean that there cannot exist within our organisation other positions which criticise Luxemburg's economic analysis, as we will see in particular with one of the positions in the present debate. Her analyses met with opposition in her own day, not only from the reformist currents which considered that capitalism was not doomed to provoke growing catastrophes, but also from revolutionary currents, in particular Lenin and Pannekoek, who considered that capitalism was a historically obsolete mode of production although their explanations were different from Luxemburg's.
  5. The phenomenon of imperialism derived precisely from the need for the developed countries to have access to pre-capitalist markets: "imperialism is the political expression of the accumulation of capital in its competitive struggle for what remains still open of the non-capitalist environment". (Accumulation of Capital: ‘Protective Tariffs and Accumulation')
  6. The historically limited nature of these extra-capitalist outlets constitutes the economic basis of the decadence of capitalism. The First World War was the expression of such a contradiction. Once the world had been divided up between the great powers, those who were left the worst off in terms of colonial possessions had no choice but to try to re-divide the world by military force. Capitalism's entry into its period of decline signified that the contradictions which beset the system were now insurmountable.
  7. State capitalism is the way the bourgeoisie, in the period of decadence, uses various palliatives to hold back the descent into the crisis, to attenuate its most brutal expressions, in order to avoid a repetition of what happened in 1929.
  8. In the period of decadence, credit constitutes an essential means through which the bourgeoisie tries to make up for the lack of extra-capitalist markets. The accumulation of an increasingly uncontrollable global debt, the growing insolvency of the different capitalist sectors and the threat of a profound destabilisation of the world economy are both a consequence and a demonstration of the limits on credit.
  9. A typical expression of the decadence of capitalism, at the economic level, is the development of unproductive expenditure. This expresses the fact that the development of the productive forces is increasingly held back by the insurmountable contradictions of the system: military expenditure (arms, military operations) to face up to the world wide exacerbation of imperialist tensions; the expenses poured into maintaining and equipping the forces of repression, whose role in the last instance is to deal with the class struggle; advertising, a weapon of the commercial struggle to sell on a glutted market, etc. From the economic point of view, such expenses express a pure loss for capital.

The positions emerging from the debate

Within the ICC, there exists a position which, though compatible with our political platform, is in disagreement with numerous aspects of Rosa Luxemburg's contribution on the economic foundations of the crisis of capitalism.[8] For this position, the foundations of the crisis are to be found in another contradiction highlighted by Marx: the tendency of the rate of profit to fall. While rejecting conceptions (held notably by the Bordigists and councilists) which imagine that capitalism can automatically and eternally generate the expansion of its own market as long as the rate of profit is sufficiently high, it emphasises that the basic contradiction of capitalism is not located in the limits of the market as such (i.e. the form in which the crisis manifest itself) but in the barriers to the expansion of production.

The essentials of the debate around this position have been substantially taken up in polemics with other organisations (even if there are differences in the positions involved) with regard to the saturation of the market and the falling rate of profit.[9]

The other positions expressed in this debate, and which are introduced below, are all based on the analyses of Rosa Luxemburg, and consider the lack of sufficient extra-capitalist markets to play a central role in the crisis and decadence of capitalism.

 The critique developed within the organisation of certain contradictions contained within the Decadence pamphlet (notably that post-war reconstruction could in itself make continued accumulation possible by in some way compensating for the lack of markets outside the capitalist system) did not therefore abandon the text's underlying analytical framework. Quite the contrary, it should be considered as a development in the continuity of that framework.

The first of the positions presented here (under the title ‘War economy and state capitalism') though critical of certain aspects of our pamphlet (arguing that it lacks rigour in certain areas and makes no reference to the Marshall Plan in explaining the reconstruction properly so called), still basically adheres to the idea that the prosperity of the 1950s and 60s is determined by the global context of imperialist relations and the establishment of a permanent war economy in the wake of the Second World War.

The two other positions presented here are much more critical of the Decadence pamphlet's analysis of the post-war boom. The first of these (under the title ‘Extra-capitalist markets and debt') re-evaluates and accords a greater significance to these two factors, which have already been analysed by the ICC previously.[10] These two factors are considered sufficient to explain the prosperity of the post-war boom.

The second (under the heading ‘Keynesian-Fordist state capitalism'), starts from the same premise as our pamphlet on decadence - the relative saturation of the markets in 1914 with regard to the needs of accumulation on a world scale - and develops the idea that the system responded to this after 1945 by installing a variant of state capitalism based on a three-fold (Keynesian) repartition of the enormous gains in productivity (Fordism) between profits, state revenues and real wages.   

The following sections of this article provide a brief overview of these three positions.[11] In future we will publish more developed expressions of the different positions, or of others that may appear in the debate.

War economy and state capitalism

The point of departure for this position was already made explicit by the Gauche Communiste de France in 1945. The GCF considered that by 1914 the extra-capitalist markets which had supplied capitalism with its necessary field of expansion during its ascendant period were no longer able to play this role: "This historic period is that of the decadence of the capitalist system. What does this mean? The bourgeoisie, which before the first imperialist war lived and could only live through a growing extension of its production, arrived at a point in its history where it could no longer realise this extension (...) Today apart from unusable remote countries, from the derisory ruins of the non-capitalist world, insufficient for absorbing world production, it finds itself master of the world; there are no longer any extra-capitalist markets in front of it, able to serve as new markets for its system. Thus its apogee was also the point at which its decadence began".[12]

Economic history since 1914 is the history of the efforts of the capitalist class, in different countries and at different moments, to overcome this fundamental problem: how to continue to accumulate the surplus value produced by the capitalist economy in a world that has already been divided up by the great imperialist powers and whose market is incapable of absorbing the whole of this surplus value? And since the imperialist powers can no longer expand except at the expense of their rivals, as soon as one war ends they have to prepare for the next one. The war economy has become the permanent way of life of capitalist society; "War production does not aim to solve an economic problem. At its origin is the necessity for the capitalist state to defend itself against the dispossessed classes and to maintain their exploitation by force, and by force to ensure its economic positions and enlarge them at the expense of other imperialist states (...) war production has thus become the crux of industrial production and the principal economic field of society".[13]

The period of post-war reconstruction is a particular moment in this history.

Three economic characteristics of the world in 1945 need to be underlined here:

  • firstly, there was the enormous economic and military preponderance of the USA, something more or less without precedent in the history of capitalism. The USA alone represented half of world production and held nearly 80% of world gold reserves. It was the only belligerent country whose productive apparatus came out of the war intact: its gross national product had doubled between 1940 and 1945. It had absorbed all the capital accumulated by the British Empire over years of colonial expansion, plus a good part of the French Empire's as well;
  • secondly, there was a keen awareness among the ruling classes of the Western world that it was vital to raise working class living standards if they were to avoid social upheavals that could be used by the Stalinists and thus by the rival Russian bloc. The war economy thus integrated a new aspect, which our predecessors in the GCF were not really aware of at the time: the various social allocations (health, unemployment  benefit, pensions, etc) which the bourgeoisie - and above all the bourgeoisie of the Western bloc - put in place at the beginning of the reconstruction period in the 1940s;
  • thirdly, state capitalism which, before the Second World War, had expressed a tendency towards autarchy on the part of the different national economies, was now locked into a structure of imperialist blocs which determined the economic relations between states (the Bretton Woods system for the American bloc, COMECON for the Russian bloc).

During the Reconstruction, state capitalism evolved in a qualitative manner: the part played by the state in the national economy became preponderant.[14] Even today, after 30 years of so-called ‘liberalism', state expenditure continues to represent between 30 and 60% of the GNP of the industrialised countries.

This new weight of the state represented a transformation of quantity into quality. The state was no longer just the ‘Executive Committee' of the ruling class; it was also the biggest employer and the biggest market. In the USA, for example, the Pentagon became the main employer in the country (between three and four million people, both civilian and military). As such, it plays a critical role in the economy and makes it possible to exploit existing markets to the hilt.

The setting up of the Bretton Woods framework also made it possible to establish credit systems that were more sophisticated and less fragile than in the past: consumer credit developed and the economic institutions set up by the American bloc (IMF, World Bank, GATT) made it possible to avoid financial and banking crises.

The enormous economic preponderance of the USA enabled the American bourgeoisie to spend without limit in order to ensure its military domination in the face of the Russian bloc: it sustained two bloody and costly wars (in Korea and Vietnam); Marshall-type plans and foreign investment financed the reconstruction of the ruined economies of Europe and Asia (notably in Korea and Japan). But this enormous effort - determined not by the ‘classic' functioning of capitalism but by the imperialist confrontation which characterises the decadence of the system - ended up by ruining the American economy. In 1958 the American balance of payments was already in deficit and in 1970 the USA only held 16% of world gold reserves. The Bretton Woods system was taking in water on all sides, and the world plunged into a crisis from which it has not emerged to this day.    

Extra-capitalist markets and debt

Far from developing the productive forces in a manner comparable to capitalism's ascendancy, the period of the post-war boom was characterised by an enormous waste of surplus value which was a sign that there are barriers to the development of the productive forces, expressing the decadence of the system.

The reconstruction that took place after the First World War opened a phase of prosperity which lasted only a few years, during which, as before the outbreak of the conflict, sales to extra-capitalist markets constituted the necessary outlet for capitalist accumulation. Even though the world had been divided up between the great industrial powers, it was still far from being dominated by capitalist relations of production. Nevertheless, the capacity of absorption of these extra-capitalist markets had become insufficient in relation to the mass of commodities produced by the industrialised countries, so that the recovery rapidly broke down on the reefs of overproduction with the crisis of 1929.

Very different was the period opened up by the reconstruction after the Second World War, surpassing the best economic indicators of the ascendant period. For more than two decades, a sustained growth was founded on the most important gains in productivity in the history of capitalism, due in particular to the perfecting of assembly lines (Fordism) and the automation of production, which were generalised as widely as possible.

But it is not enough to produce commodities; you also have to find outlets on the market for them. The sale of the commodities produced by capitalism serves to cover the renewing of worn-out means of production and of labour power (workers' wages). It thus ensures the simple reproduction of capital (i.e. without augmenting the means of production or consumption), but it must also finance unproductive expenses, which go from arms expenditure to the upkeep of the capitalists, and also include numerous other costs which we will come back to. Finally, if there is a positive balance, it can be devoted to the accumulation of capital.

Within the sales annually achieved by capitalism, the part which can be devoted to the accumulation of capital, and which thus participates in its real enrichment, is necessarily limited because it is the balance left over after all the obligatory expenses. Historically, it represents only a small percentage of the wealth produced annually[15] and corresponds essentially to the sales realised through trade with extra-capitalist markets (internal or external).[16] This is effectively the only way that allows capitalism to develop (apart from the pillage, whether legal or not, of the non-capitalist economies), i.e. not to find itself in a position where "capitalists are exchanging among themselves and consuming their own production", which, as Marx said "does not at all permit the valorisation of capital": "How could there otherwise be a shortage of demand for the very commodities which the mass of the people lack, and how would it be possible for this demand to be sought abroad, in foreign markets, to pay the labourers at home the average amount of necessities of life? This is possible only because in this specific capitalist interrelation the surplus-product assumes a form in which its owner cannot offer it for consumption, unless it first reconverts itself into capital for him. If it is finally said that the capitalists have only to exchange and consume their commodities among themselves, then the entire nature of the capitalist mode of production is lost sight of; and also forgotten is the fact that it is a matter of expanding the value of the capital, not consuming it."[17]

With capitalism's entry into decadence, the extra-capitalist markets tend to be more and more insufficient, but they did not simply disappear and their viability depended, as in ascendancy, on the progress of industry: the extra-capitalist markets are less and less able to absorb the growing quantities of commodities produced by capitalism. The result is overproduction, and along with it, the destruction of a part of production, unless capitalism is able to use credit as a palliative to this situation. But the more the extra-capitalist markets become rare, the less the palliative of credit can be repaid.

Thus the solvent outlet for growth in the post-war years was constituted by a combination of the exploitation of those extra-capitalist markets which still existed and the use of debt, given that the former were not able to absorb the whole of the supply. There is no other way (except once again the pillage of extra-capitalist wealth) for capitalism to expand, in this period as in any other. As a result, the post-war boom already made its own small contribution to the formation of the current mass of debt which will never be repaid and which constitute a real Sword of Damocles hanging over capitalism's head.

Another characteristic of the post-war years is the weight of unproductive expenses in the economy. They make up an important part of state expenses which, from the end of the 1940s on and in most of the industrialised countries, increased considerably. This was a consequence of the historical tendency towards state capitalism, notably the weight of militarism in the economy which stayed at a high level after the world war, and also of Keynesian policies aimed at artificially boosting demand. If a commodity or a service is unproductive, it means that its use value is no longer integrated into the process of production[18] by taking part in the simple or enlarged reproduction of capital. We also have to consider as unproductive those expenses that relate to demand within capitalism but not necessary for simple or enlarged reproduction. This was the case in particular with the wage increases at rates sometimes approaching those of the increases in productivity which some categories of workers ‘benefited' from in certain countries, through the application of the same Keynesian doctrines. The paying out of a wage that is more than what is strictly necessary for the reproduction of labour power is, just as with the miserable payments given to the unemployed or the state's unproductive expenses, essentially a waste of capital which cannot contribute to the valorisation of global capital. In other words, the capital involved in unproductive expenses, whatever they are, is sterilised.

The creation by Keynesianism of an internal market capable of providing an immediate solution to finding outlets for massive industrial production gave the illusion of a lasting return to the prosperity of the ascendant phase of capitalism. But since this market was totally disconnected from the needs for the valorisation of capital, its corollary was the sterilisation of a significant portion of capital. Maintaining it was achieved through a conjunction of highly exceptional factors which could not last: the sustained growth in the productivity of labour which, while financing unproductive expenditure, was sufficient to create a surplus for the continuation of accumulation; the existence of solvent markets - whether extra-capitalist or the result of debt - made it possible to realise this surplus.

A growth in the productivity of labour comparable to that of the Thirty Glorious Years has not been achieved since. However, even if that were to happen, the total exhaustion of extra-capitalist markets, the fact that we are reaching the limits of the possibility of re-launching the economy through new increases in world debt, which is already gigantic, show the impossibility of such a  period of prosperity repeating itself. 

Contrary to the analysis contained in The Decadence of Capitalism, the reconstruction market is not a factor that can explain post-war prosperity. At the end of the Second World War, the restoration of the productive apparatus did not constitute in itself an extra-capitalist market nor did it create new value. It was to a large extent the result of a transfer of wealth already accumulated in the USA towards the countries in need of reconstruction, since the financing of the operation was done through the Marshal Plan, made up essentially of gifts from the US Treasury. Nor can the reconstruction market be invoked to explain the short phase of prosperity that followed the First World War. This is why the schema ‘War-reconstruction/prosperity', although it corresponds empirically to the reality of capitalism in decadence, does not amount to an economic law in which there exists a reconstruction market capable of enriching capitalism.

Keynesian-Fordist state capitalism

The analysis we make of the driving forces behind the post-war boom originates in a series of objective observations, the principal ones being the following:

World production per inhabitant during the ascendant phase of capitalism[19] and industrial growth rates continued to increase, reaching their high point on the eve of the First World War. At this moment the markets which had supplied capitalism with its field of expansion reached saturation point relative to the needs of accumulation on an international scale. This was the beginning of the phase of decadence which has included two world wars, the greatest crisis of overproduction of all time (1929-33), and a massive brake on the growth of the productive forces (both industrial production and world production per inhabitant was almost halved between 1913 and 1945: declining respectively by 2.8% and 0.9% per year).

This in no way prevented capitalism from going through a formidable phase of growth following World War II: world production per inhabitant trebled, whereas industrial production more than doubled (respectively 2.9% and 5.2% a year). Not only were these rates much higher than they had been during the ascendant period, but real wages grew more than four times more rapidly (they multiplied by four whereas they had hardly doubled during a period twice as long, 1853 to 1913)!

How could such a ‘miracle' come about? 

  • neither through a residual extra-capitalist demand since it was already insufficient in1914 and had further diminished after that;[20]
  • nor through state debts or budget deficits since they fell very sharply during the post-war period;[21]
  • nor through credit which only grew significantly after the return of the crisis;[22]
  • nor through the war economy since it is unproductive: the most militarised countries perform the worst and vice versa;
  • nor through the Marshall Plan whose impact was limited in extent and in duration;[23]
  • nor through the destruction of war since the destruction that followed World War I had not engendered any prosperity;[24]
  • nor through the growing weight of the state in the economy, since although it more than doubled in the period between the wars it didn't have this effect:[25] in 1960 its level (19%) was lower than in 1937 (21%) and also it includes a large number of unproductive expenses.

The ‘miracle' and its explanation lie elsewhere, all the more so because: (a) the economies were exhausted at the end of the war (b) the buying power of all the economic actors was at its lowest (c) the latter were all heavily in debt (d) the enormous power acquired by the US was based on an unproductive world economy and there were major difficulties in reconverting it and (e) the miracle nevertheless took place despite the sterilisation of growing masses of surplus value in unproductive expenditure!

In reality, this mystery is not really one if we combine Marx's analyses of the implications of the gains in productivity[26] and the contribution of the communist left on the development of state capitalism in decadence. This period was characterised by:

a) Gains in productivity never seen in the whole history of capitalism, gains which were founded on the generalisation and maintenance of assembly line production (Fordism).

b) Very considerable rises in real wages, full employment and the setting up of an indirect wage made up of various social allocations. Furthermore it was the countries where these raises were the highest that performed the best, and vice versa.

c) The taking in charge of whole portions of the economy by the state and a very high degree of intervention by the latter in capital/labour relations.[27]

d) All these Keynesian policies were to a certain extent organised at the international level through the OECD, the GATT, the IMF, the World Bank, etc.

e) Finally, unlike other periods, the post-war boom was characterised by growth centred on the developed economies (i.e. with relatively little exchange between the countries of the OECD and the rest of the world) and without any significant relocation of production to low-wage economies despite the very high rises in real wages and full employment. In effect, globalisation and relocations are phenomena which only appear from the 1980s and above all the 90s.

Thus, by guaranteeing in a coercive and proportional manner the three part repartition of the gains in productivity between profits, taxes and wages, Keynesian-Fordist state capitalism was able to ensure the completion of the cycle of accumulation between a geared-down supply of goods and services at falling costs (Fordism) and a growing solvent demand, since it was indexed on these same gains in productivity (Keynesianism) The markets thus being guaranteed, the return of the crisis appeared in a new fall in the rate of profit which, following the exhaustion of the Fordist gains in productivity, fell by half between the end of the 1960s and 1982.[28] This drastic drop in the profitability of capital led to a dismantling of the post war policies in favour of a deregulated state capitalism at the beginning of the 1980s. While this turn-around allowed for a spectacular re-establishment of the rate of profit, as a result of the compression of wages, the resulting fall in solvent demand ensured that the rate of accumulation and of growth were at a low water mark.[29] From then on, in a hitherto structural weakness in productivity gains, capitalism has been forced to put pressure on wages and conditions of work in order to guarantee a rise in profits, but in so doing, it further reduced its solvent markets. These are at the root of:

a) endemic overcapacity and overproduction,

b) the increasingly frenetic use of debt to palliate the reduced demand,

c) relocations in the search for cheaper labour power,

d) globalisation to export to the maximum,

e) constant financial instability resulting from the speculative investment of capital which no longer has outlets for expansion.

Today the rate of growth has fallen to its level between the wars, and a re-make of the post-war years is now impossible. Capitalism is doomed to sink into growing barbarism.

Not being able to present them as such, the roots and implications of this analysis will be developed later, since they require a review of certain of our analyses in order to arrive at a wider and more coherent understanding of the functioning and limits of the capitalist mode of production.[30]

A debate open to the internationalist movement

Like our predecessors in Bilan or the Gauche Communiste de France, we do not claim to be the holders of "an absolute and eternal truth"[31] and are well aware that the debates that arise inside our organisation can only benefit from critical and constructive contributions from outside it. This is the reason that all contributions addressed to us are welcome and will be taken into account in our collective reflection.





[1] This period is often referred to in France as "Les Trente Glorieuses" (the "30 Glorious Years"); the expression was coined (and was the title of a book) by Jean Fourastié, an economist who worked under Jean Monnet on the French government's planning commission set up in 1945.

[2] Between 1950 and 1973, world GNP per inhabitant increased at an annual rate of around 3%, whereas between 1870 and 1913 the increase was 1.3% (Angus Maddison, L'économie mondiale, OECD, 201, p.284)

[3] Published in 1981 as a collection of articles from our press.

[4] Third Congress of the ICC, International Review n°18, 1979

[5] International Review n°52

[6] Despite the fact that its militants varied in their theoretical explanation of the situation which had led to the outbreak of World War I, the Communist International had no difficulty in recognising both that World War I had created an entirely new situation, and that this had profound political implications for the class struggle. See the article on ‘The theory of decadence' in International Review n°123.

[7] Notably through the publication in the International Review of the series ‘Understanding the decadence of capitalism' in particular the article in n°56, as well as the presentation to the resolution on the international situation from the 8th Congress of the ICC with regard to the weight of debt (published in International Review n°59, 1989).

[8] This minority position has existed for a long time inside our organisation - comrades who defend it now already did so when they joined the ICC - and it has not prevented those who hold it from participating in all our activity, both intervention and theoretical-political elaboration. This vindicates the ICC's decision not to make the analysis of the economic crisis (saturation of markets or the falling rate of profit) a condition for joining the organisation.

[9] See in particular the article ‘Reply to the CWO on war in the phase of capitalist decadence' published in International Review n°127 and 128. Nevertheless, as we will see later, in the present debate there exists a certain convergence between this position and the one termed ‘Keynesian-Fordist state capitalism' which is presented below. These two positions recognise the existence of the internal market within capitalist relations of production as a factor in the prosperity of the period of the ‘Thirty Glorious Years' and analyse the end of this period as being the product of the contradiction which engenders the fall in the rate of profit.

[10] The idea of a more thorough exploitation of extra-capitalist markets was already presented in The Decadence of Capitalism. It is taken up and underlined in the 6th article in the series ‘Understanding the decadence of capitalism' in International Review n°56, where the factor of debt is also put forward; the notion of a ‘reconstruction market' on the other hand is not considered in these articles.

[11] There have been different nuances within each of the three positions which we cannot present in this article for lack of space. As the debate evolves they may appear in future contributions.

[12] Internationalisme n°1, January 1945, ‘Theses on the international situation'.

[13] Internationalisme, ‘Report on the international situation', July 1945.

[14] For the US alone, the expenses of the Federal state, which represented only 3% of GNP in 1930, went up to about 20% of GNP during the 50s and 60s.

[15] As an example, during the period 1870-1913, sales to extra-capitalist markets represented an average annual percentage of 2.3% of world production (a figure calculated in relation to the evolution of global production between these two dates. Source: OECD). Given that this is an average figure, it is obviously less than the reality of the years which saw the strongest growth, as was the case before the First World War.

[16] On this point, it's not so important whether the final destination of the sales is productive or not, as in the case of arms.

[17] Capital Vol III, 15, ‘Exposition of the Internal Contradictions of the Law, Excess Capital and Excess Population'

[18] To illustrate this fact, it is enough to consider the difference in final use between, on the hand, a weapon, an advert, a course in trade union training and, on the other hand, a tool, food, school or university courses, medical care, etc.

[19] From 0.53% a year between 1820 and 1870 to 1.3% between 1870 and 1913 (Angus Maddison, L'économie mondiale, OECD 284).

Annual growth rate of world industrial production


2,5 %


2,9 %


3,3 %


3,3 %


4,7 %

W.W. Rostow, The World Economy p662



[20] Very important in the birth of capitalism, the internal buying power of these outlets in the developed countries only represented between 5 and 20% in 1914, and had become marginal by 1945: between 2% and 12% (Peter Flora, State, Economy and Society in Western Europe 1815-1975, A Data handbook, Vol II, Campus, 1987) As for access to the third world, it was amputated by two thirds by the withdrawal from the world market of China, the eastern bloc, India and various other underdeveloped countries. As for trade with the remaining third, it fell by half between 1952 and 1972 (P Bairoch, Le Tiers-Monde dans l'impasse; 391-392)!

[21] The figures are published in International Review n°114.

[22] The figures are published in International Review n°121.

[23] The Marshall Plan had a very weak impact on the American economy: "After the Second World War...the percentage of American exports in relation to the whole of production fell by a no means insignificant degree. The Marshall Plan in itself did not bring about any considerable changes" (Fritz Sternberg, Le conflit du siècle  p.577). The author concluded that it was the internal market that was decisive in the recovery.

[24] The facts and the argument are developed in our article in International Review n°128. We will return to this since, in conformity with Marx, the devalorisation and destruction of capital does make it possible to regenerate the cycle of accumulation and to open new markets. However, a detailed study has led us to conclude that this factor was relatively weak in impact, limited in time and to Europe and Japan.

[25] The total part played by public expenditure in the GNP of the OECD countries went from 9% to 21% between 1913 and 1937 (cf International Review n°114).

[26] In effect, productivity is simply another expression of the law of value - since it represents the inverse of labour time - and it is at the basis of the extraction of relative surplus value so characteristic of this period.

[27] The part played by public expenses in the countries of the OECD more than doubled between 1960 and 1980: from 19% to 45% (International Review n°114).

[28] Graphs in International Review n°115, 121 and 128

[29] Graphs and figures in International Review n°121 as well as in our analysis of the growth in East Asia.

[30] The reader can nonetheless find a number of factual elements, as well as certain theoretical developments in our various articles in International Review n°114, 115, 121, 127, 128, and in our analysis of the growth of east Asia, all available on the website.

[31] "No group is in exclusive possession of an absolute and eternal truth" as the GCF put it. See our article ‘Sixty years ago: a conference of internationalist revolutionaries' in International Review n°132.

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