A Contribution Towards a Critique of the Theory of Decadence

The theory of decline or the decline of theory?

A] Introduction

We are subjects faced with the objective reality of capitalism. Capitalism appears as a world out of control - the denial of control over our lives. But it is also a world in crisis. How do we relate to this crisis?

One understanding that has been dominant among critics of capitalism is that capitalist crisis, especially a prolonged and severe crisis such as we are presently in, is evidence that capitalism as an objective system is declining. The meaning of decline is either that it has created the basis of 'socialism' and/or that it is moving by its own contradictions towards a breakdown. Capitalism, it is said, is a world system that was mature in the Nineteenth Century, but has now entered its declining stage. In our view this theory of capitalist decline or of the decadence of capitalism hinders the project of abolishing that system.

It might seem a bad time to critique the theory of decadence. In the face of a widespread disillusion with the revolutionary project and with a lack of a working-class offensive there is an understandable temptation to seek refuge in the idea that capitalism as an objective system is after all past its prime, moribund, heading inexorably towards collapse. If the subjective movement for revolutionary change seems lacking, the severity of the present world crisis offers itself as evidence that the objective conditions will bring about a change in the prospects for revolution.

In the theory of decline a number of issues are intertwined - crisis, automatic breakdown, the periodising of capitalism into ascendant and decadent phases, the notion of transition and the ontological question of the relation of subject and object. At a general level we might say the theory of decline represents a way of looking at the crises of capitalism that sees them expressing an overall downward movement. A complication in looking at the theory is that it has numerous versions. Among those presenting themselves as revolutionaries the two principal variants of the theory are those of Trotskyism and left-communism which although similar in origin are substantially different in the way they effect their politics. For some left-communists politics is virtually reduced to propagandising the masses with the message of capital's decadence, while for many Trotskyists the theory is often more in the background informing their theory of crisis and organisation if not their agitational work.

Essentially the theory suggests that capitalism as a system emerged, grew to maturity and has now entered its decline. The crises of capitalism are seen as evidence of a more severe underlying condition - the sickness of the capitalist system. Capitalist development brings about steadily increasing socialisation of the productive forces and at a certain point the capitalist forces of production are said to have moved into conflict with the relations of production. The concept of the decline of capitalism is bound up with a theory of the primacy of the productive forces. The driving force of history is seen as the contradiction with the relations of production. It is 'quintessentially' a marxist theory taking its understanding of the basic marxist position from the Preface to the Contribution to a Critique of Political Economy.

For most versions of the theory the change from mature to declining capitalism is saidto have occurred at a time around the First World War. The present form of capitalism is then characterised by declining or decaying features. Features identified with this change are the shift from laissez faire to monopoly capitalism, the dominance of finance capital, the increase in state planning, war production and imperialism. Monopoly capitalism indicates the growth of monopolies, cartels and the concentration of capital which has now reached the point of giant multinationals disposing of more wealth than small countries. At the same time in the phenomenon of finance capital, large amounts of capital are seen to escape linkage to particular labour processes and to move about in search of short term profits. In the increase in state planning the state becomes interpenetrated with the monopolies in various ways such as nationalisation and defence spending - this is capital getting organised. This planning is the state trying to regulate the workings of capitalism in the interests of the big firms/monopolies. Statification is seen as evidence of decay because it shows the objective socialisation of the economy snarling at the bit of capitalist appropriation; it is seen as capitalism in the age of its decline desperately trying to maintain itself by socialistic methods. The state spending and intervention is seen as a doomed attempt to avert crises which constantly threaten the system. War production is a particularly destructive form of state spending, where large amounts of the economy are seen to be taken up by essentially unproductive expenditure. This is closely related to imperialism which is seen as the characteristic of capitalism in the age of its decline. The 'epoch' is in fact said to be initiated by the division of the world between the great powers who have since fought two world wars to redistribute the world market. Wars and the threat of war are seen as evidence that capitalism's only way of continuing to exist is by destruction, it is suggested that if it can not save itself by other methods capitalism will plunge us into a war.

At the present unrewarding time for revolutionary politics it might then seem desirable to seek support for a revolutionary position in a theory offering an analysis of the objective development of history that shows capitalism on the way out. On the other hand some of the developments that have put pressure on a revolutionary position so making a theory of decline attractive undermine some of the presuppositions of at least some versions of the theory. The crisis of social democracy and literal collapse of the Soviet Union has been presented as a triumph of capitalism and as the end of history. In the West and East it used to be possible to point to an inexorable advance of socialistic forms as apparently concrete evidence of the movement of history being a progress towards socialism or communism. The notion that socialism represented progress was underpinned by the idea that capitalism had entered a declining or decadent phase. It was said that the socialisation of the productive forces was in sharp contradiction with private appropriation. Now with a move towards privatisation of nationalised concerns in the west, and the privatisation of the ruling class itself in the East, the idea that there is an inevitable movement towards socialism - an idea which has been so dominant on the left for the last 100 years - now stands undermined and the notion that history is on our side no longer seems plausible. With the failure of what was seen as 'actually existing socialism' and the rollback of social democratic forms, the identification of socialism with progress and the evolution of human society is thrown into doubt. It would seem that what has suffered a breakdown is not capitalism but history.

Abandonment of the idea that the historical development of the productive forces is a progress towards socialism and communism has resulted in three main drifts in thought: 1) The abandonment of the project of abolishing capitalism and a turn to reformism of the existing system by the 'new realists', 'market socialists' etc. 2) The post-modern rejection of the notion of a developing totality, and denial of any meaning to history resulting in a celebration of what is, 3) The maintenance of an anti-capitalist perspective but identification of the problem as 'progress' or 'civilisation', this romanticism involves the decision that the idea of historical movement was all wrong and what we really want to do is go back. These directions are not exclusive of course; post-modernist practice, to the extent it exists, is reformist while the anti-progress faction has roots in the post-modern attack on history. In the face of the poverty of these apparent alternatives it is understandable that many revolutionaries would wish to reaffirm a theory of decadence or decline - it is asserted that communism or socialism is still the necessary next stage of human evolution, that evolutionary course might have suffered a setback but we can still see in the crisis that capitalism is breaking down. However in the face of unsatisfactory drifts in theory it is not the case that the only alternative is to reassert the fundamentals, rather we can and must critically re-examine them.

We can see the theory of decline represented by two main factions (of the left?) - Trotskyism and left-communism. With the hard left-communists the decadence theory is at the forefront of their analysis. Everything that happens is interpreted as evidence that decadence is increasing. This is exemplified in the approach of a group like the International Communist Current (ICC) for whom capitalist crisis has become chronic, 'all the great moments of proletarian struggle have been provoked by capitalist crises'. [pI] The crisis causes the proletariat to act and to become accessible to the 'intervention of revolutionaries'. The task of the revolutionaries is to spread the idea of capitalist decadence and the tasks it puts on the historic agenda. 'The intervention of revolutionaries within their class must first and foremost show how this collapse of the capitalist economy demonstrates more than ever the HISTORIC NECESSITY for the world communist revolution, while at the same time creating the possibility for realizing it.' [p III] The model is one of the objective reality of capitalist decadence, arising from its own dynamic, which makes world communist revolution necessary and possible, with the job of revolutionaries being to take this analysis to the class who will be objectively predisposed to receiving the message due to their experience of the crisis. So far no luck ! Still, for the theory's proponents the decadence can only get worse; our time will come.

For the Trots the theory is less up front but it still informs their analysis and practice. In comparison with the purist repetition of the eternal decadence line by the left-communist upholders of the theory, the Trots seem positively current in their following of political fashion, but behind this lies a similar position. Despite their willingness to recruit members by connecting to any struggle, Trotskyist parties have the same objectivist model of what capitalism is, and why it will break down. They gather members now and await the deluge when, due to capitalism's collapse, they will have the opportunity to grow and seize state power. The position of orthodox Trotskyism is expressed in the founding statement of the Fourth International in which Trotsky writes:

The economic prerequisite for the proletarian revolution has already in general achieved the highest point of fruition that can be reached under capitalism. Mankind's productive forces stagnate... [p8] The objective prerequisites for the proletarian revolution have not only 'ripened'; they have begun to get somewhat rotten. Without a socialist revolution, in the next historical period at that, a catastrophe threatens the whole of mankind. The turn is now to the proletariat, i.e., chiefly to its revolutionary vanguard. The historical crisis of mankind is reduced to the crisis of the revolutionary leadership. [p9]

A significant difference in the theories is that the Trotskyist version historically identified the former Soviet Union as a (politically degenerated) part of the economically progressive movement of history while for the left communists it has exemplified the decadence of the period. Thus the Trotskyist theory of decline, which tended to see the Soviet Union as progressive and proof of the transitional nature of the epoch, has been more bothered by the collapse than the left-communists for whom it was just state capitalism and for whom its fate was just grist to the mill of the notion of capitalism's permanent crisis. Despite their antipathy to other parts of the 'left wing of capital's' program, it is the general statements by Trotskyists about the decadence of capital that the left commies find themselves in agreement with. In fact the ICC even think that the inadequacies of the Trotskyist theory stem from it not having a proper conception of decadence. The underlying similarity in the theories can be identified in an account of their history. Both the Trots and the left-communists claim the mantle of the heritage of the worker's movements. Both trace their heritage through the Second International, and their argument is whether it is in Lenin and Trotsky or figures such as Pannekoek and Bordiga that the classic marxist tradition is continued after 1917 or some such date. If then we wish to understand and assess the theory of the decline of capitalism, we need to trace its history back to Second International Marxism.

B] The history of the concept and its political importance.

The theory of capitalist decadence first comes to prominence in the Second International. The Erfurt Programme supported by Engels established the theory of the decline and breakdown of capitalism as central to the party's programme:

private property in the means of production has changed... From a motive power of progress it has become a cause of social degradation and bankruptcy. Its downfall is certain. The only question to be answered is: shall the system of private ownership in the means of production be allowed to pull society with itself down into the abyss; or shall society shake off that burden and then, free and strong, resume the path of progress which the evolutionary path prescribes to it ?[p 87] The productive forces that have been generated in capitalist society have become irreconcilable with the very system of property on which it is built. The endeavour to uphold this system of property renders impossible all further social development, condemns society to stagnation and decay. [p 88] The capitalist social system has run its course; its dissolution is now only a question of time. Irresistible economic forces lead with the certainty of doom to the shipwreck of capitalist production. The erection of a new social order for the existing one is no longer something merely desirable; it has become something inevitable. [p 117] As things stand today capitalist civilisation cannot continue; we must either move forward into socialism or fall back into barbarism. [p 118] the history of mankind is determined not by ideas, but by an economic development which progresses irresistibly, obedient to certain underlying laws and not to anyone's wishes or whims. [p119]

As well as this insistence on the inevitable collapse of capitalism by its inner contradictions, the Erfurt Programme also contained eminently reformist goals and tactics and it was these that dominated the Second International whose practice became to build a set of socialist institutions and work through parliament. In this program we see the recurrent themes of the theory of capitalism's decadence: the identification of the revolutionary project with the evolutionary progress of society; the ascribement of primacy to the economic laws of development of capital; and the reduction of revolutionary political activity to a reaction to that inevitable movement. Though it is insisted there is a need for political activity, it is seen to be at the service of an objective development. Socialism is seen not as the free creation of the proletariat but as the natural result of economic developments which the proletariat becomes heir to. It is this conception shared by those who present themselves as heirs of the 'classical marxist tradition' and thus the Second International that we must shake off. The Erfurt Program was not just a compromise between the 'revolutionary' position that capitalism was coming to an end and the reformist remainder: this 'revolutionary' part had already converted the revolutionary conception of capitalism's downfall into a mechanistic, economistic and fatalistic one.

The Legacy of Marx

By adopting a theory of capitalist breakdown the Second International identified itself as the 'marxist' section of the workers movement. Indeed for most members of the Second International as for most members of Leninist parties today, Marx's Capital was the big unread work that proved the collapse of capitalism and the inevitability of socialism. The substance of the split in the First International is clouded by the personal acrimony between Marx and Bakunin. Following Debord, we can recognise that both Marx and Bakunin then, and the anarchist and the marxist positions since then, represent different strengths and weaknesses of the thought of the historical workers' movement. Organisationally while Marx failed to recognise the dangers of using the state, Bakunin's elitist conception of a hundred revolutionaries pulling the strings of a European revolution was also authoritarian. While 'marxists' have developed theory to understand the changes in capitalism but have often failed to ground that theory in revolutionary practice, the anarchists have maintained the truth of the need for revolutionary practice, but have not responded to the historical changes in capitalism to be able to find ways for this need to be realised. While the element of truth in the thought of anarchism must always be present in our critique, if we wish to develop theory we must address the marxist strand of that movement.

The question that arises then, is whether the Second International adopted the valuable point from Marx's side. As well as personal differences the split in the First International between Marx and Bakunin reflected a serious division on how to relate to capitalism. Marx's critique of political economy was a move away from a moral or utopian critique of capitalism. It marked a rejection of the simple view that capitalism is bad and we must overthrow it in favour of the need to understand the movement of capitalism to inform the practice of its overthrow. Marx and Bakunin's reactions to the Paris Commune show this. Bakunin applauded the action and tried to organise his hundred revolutionaries in the immanent revolution; Marx, while identifying the communards as having found the forms through which capitalism can be negated, thought the defeat showed the weakness of the proletariat at that time. What Marx's critique of political economy did was give a theory of capitalist development in which it is recognised that capitalism is a transitory system of class rule that has arisen from a previous class society but which is dynamic in a way beyond any previous system.

The Erfurt Program and the practice of the Second International represented a particular interpretation of the insights of Marx's critique. The theory of the decline of capitalism is an interpretation of the meaning of Marx's insight that capitalism is a transitory system, an interpretation that turns the notion of a particular dynamic of development into a mechanistic and determinist theory of inevitable collapse. If we think that there is a value in Marx's work, a value that most marxists have lost, then what is it ? Marx analysed how the system of class rule and class struggle operates through the commodity, wage labour etc. Capitalism is essentially the movement of alienated labour, of the value-form. But that means that the 'objectivity' of capitalism as the movement of alienated labour is always open to rupture or alteration from the subjective side. An irony in the split in the First International is that Bakunin considered that Marx's 'economics' were fine. He did not recognise that Marx's contribution was not an economics but a critique of economics and thus a critiqueof the separation of politics and economics as well. As we shall see, the Second International in their adoption of Marx's 'economics' made the same mistake of taking the critique of political economy offered to revolutionaries as an economics rather than as a critique of the social form of capitalist society.

Behind the breakdown theory is a notion of what socialism is: the solution to 'the capitalist anarchy of the market', the freeing of the forces of production from the fettering relations of private capitalist appropriation. Capitalism is seen as an irrational economy and socialism is seen as equivalent to a fully planned economy. The theorists of the movement were convinced that the movement was on their side, focusing on Marx's ideas that the joint stock system "is an abolition of capitalist private system on the basis of the capitalist system itself." They thought the further socialisation of production evidenced in the extension of credit and joint-stock companies into trusts and monopolies was the basis for socialism. At some unspecified date a revolution would occur and the capitalists would lose their tenuous hold on the socialised productive forces which would fall into the hands of the workers who could continue their historic development.

This is an optimistic reading of the lines of capitalist development which gives the agency for social transformation to capital's drives towards centralisation and co-ordination. To base one's theory on how capitalism transforms into socialism on passages such as that above is founded on the belief that Capitalvolumes I-III gives a complete systematic and scientific account of capitalism and its destiny. It is to see Capital as essentially complete when it is not. Engels prepared volumes II and III for publication, in which as in volume I, although there are intimations of capitalism's mortality, there is no finished theory of how capitalism declines and breaks down. Engels himself was tempted towards such a theory by the sustained depression of the 1870's and 80's, though he never finally settled on one. It was this crisis and Engel's speculative position on it that encouraged Kautsky to make capitalist collapse central to the Erfurt programme and it was the replacement of depression by a prolonged boom from the 1890's that then prompted the revisionist debate.

Revisionism and its False Opposition

The major proponent of revisionism was Bernstein, his opponent at first Kautsky but later and more interestingly Luxemburg. On one level Bernstein was arguing for the party to bring its theory into line with its tactics and to embrace reformism wholeheartedly. However the focus of his argument and the revisionist controversy was his insistence that the conception of economic decline and breakdown included in the Erfurt program had been proved wrong by the end of the long depression and that the changes in capitalism -e.g. the growth of cartels, of world trade and of the credit system - showed it was able to resolve its tendency towards crisis. Bernstein argued that the legacy of Marx was dualistic, on the one hand a 'pure science of Marxist socialism', on the other an 'applied aspect' which included its commitment to revolution. The notion of decline and breakdown and the revolutionary position it implied was, Bernstein argued, scientifically wrong and it, and the dialectical element in Marx that prompted it, should be eliminated. In the heated arguments Bernstein and Kautsky engaged in a battle of statistics on whether the breakdown theory was correct.

The important point about the revisionist debate was that both Kautsky and Bernstein were agreed on tactics - the furious dispute about theory hid a complicity about practice. What Kautsky defended and what Bernstein attacked was a caricature of revolutionary theory - theory become ideology due to its separation from practice. Moreover it was closer to Engel's Marxism than the ideas of Marx. Kautsky gained his credibility from his association with the two old men but his contact was almost exclusively with Engels. Kautsky continued the process started by Engels - in works such as the Dialectics of Nature - of losing the subject in a determinist evolutionary view of history.

When revolutionaries like Luxemburg intervened they were supporting a position that already contained the negation of a consistent revolutionary position. Luxemburg's criticism of Bernstein was at a deeper level than Kautsky's in that she recognised the extent to which his reading of Marx had lost its dialectical revolutionary aspect and had reduced it to the level of bourgeois economics. While Kautsky tried to argue that there was no problem of dualism in Marx's Capital, that the notion of the collapse of capitalism and the need for revolution was absolutely scientific, Luxemburg saw there was a dualism: 'the dualism of the socialist future and the capitalist present... the dualism of capital and labour, the dualism of the bourgeoisie and the proletariat. ... the dualism of the class antagonism writhing inside the social order of capitalism.' In this we can see an attempt to reclaim the revolutionary perspective from the scientism of the Second International. However as she came to develop her own position on the collapse of capitalism a different form of dualism came to the fore. Her position was irreconcilably split between on the one hand revolutionary commitment and on the other an objectivist theory of capitalist collapse. Her theory of collapse was founded on a rereading of Marx's schemas to show the eventual impossibility of the reproduction of capital when their purpose, although they indicate the precariousness of capitalist reproduction, is to show in what conditions it is possible. Surprisingly for someone who was committed to mass revolutionary action from below, her theory of capitalist crisis, decline and collapse was based entirely at the level of circulation and the market, and thus does not involve the proletariat at all. At the level of the schemas everyone is simply a buyer or a seller of commodities, and the workers can thus not be agents of struggle.

Luxemburg's theory of decline is premised on the postulation that capitalism needs external non-capitalist markets to absorb surplus profit and when these are exhausted its collapse is inevitable. This did not mean she was not committed to political combat; she did not suggest we should wait for the collapse, arguing that the proletariat would and had to make the revolution before that. But her position was nonetheless economistic, in that it postulated the collapse of capitalism from purely economic disequilibrium even though it was not economistic, in the sense of say the orthodox Second International theory which relied on those economic forces to bring about socialism. Luxemburg was a revolutionary and she participated in the revolution in Germany, but her conception of the capitalist process was wrong, based as it was on a misunderstanding of the role of Marx's schemas. However she thought that the scientific case had to be proven that capitalism could not expand indefinitely and it is in this imperative we find the key to the vehemence of the 'breakdown controversy'.

The left of the Second International saw those who denied the bankruptcy of capitalism moving towards reformism and they conceded that such a move was natural for "If the capitalist mode of production can ensure boundless expansion of the productive forces of economic progress it is invincible indeed. The most important objective argument in support of a social theory breaks down! Socialist political action and the ideological import of the proletarian class struggle cease to reflect economic events, and socialism no longer appears an historic necessity." For those who follow Luxemburg the reason to be revolutionary is because capitalism has an irresolvable crisis due to a purely economic tendency towards breakdown which becomes actualised when its foreign markets are exhausted. Capitalism's collapse and proletarian revolution are seen as essentially separate, and their connection lying only in the idea that the former makes the latter necessary.

While Luxemburg was absolutely committed to revolutionary action, and unlike Lenin was sure that such action had to be the self-action of the proletariat, she dualistically held that what made that action necessary was the fact that capitalism would otherwise collapse into barbarism. In that she was wrong; capitalism will only collapse through proletarian action. What needed to be argued with Bernstein was not that capitalism cannot resolve its problems by its own forms of planning (although it cannot ever permanently resolve its problems because they are rooted in the class struggle), for that only demands a socialist planned economy. What actually needed arguing was that the debate over whether the problems of capitalism could be resolved within capitalism or only by a socialist planned economy was missing the point. These problems are not our problems. Our problem is that of the alienation of not controlling our lives and activity. Even if capitalism could resolve its tendency towards crisis, which it cannot do because such a tendency is an expression of class antagonism, it would not answer our problem with it.

But here's the rub. The socialist economy as envisaged by Second International marxists was a solution to capitalism's problems, and as such was state capitalism. The better left social-democrats identified socialism with proletarian self-emancipation, but their underlying conflict with the state capitalist position of both the right and centre of the party became displaced on to a conflict with the revisionists over the question of economic collapse. This is not to say that the SDP and the Second International were simply a state capitalist party. They represented millions of workers real aspirations and it was often workers who had been members of Second International parties that took a lead in communist actions. But ideologically the Second International had state capitalist goals and those who went beyond these such as Luxemburg did so contradictorily. A part of that contradiction is represented in the maintenance of an objectivist theory of decline.

Bernstein attacked Kautsky and the Second International orthodoxy on the inevitability of breakdown and socialist revolution for fatalism and determinism, in favour of social reformism and the abandonment of revolutionary pretensions. But in point of fact the notion of deterministic economic evolution was the perfect counterpart of reformism. The breakdown theory of the Second International implied a fatalistic conception of the end of capitalism, and thus allowed reformism as an alternative to class struggle. The theory of decline/decadence put forward by the revolutionaries was different to that implicitly contained in the Erfurt Program, for in people such as Luxemburg and Lenin the notion of economic collapse gets identified with the end result of a final stage of capitalism - imperialism/monopoly capitalism. In recognising the changes in capitalism they were in a curious way closer to Bernstein than Kautsky; they marked their opposition to his reformist conclusions by emphasising their commitment to the inevitability of breakdown. It was precisely those changes which Bernstein thought showed capital's resolution of any tendency to collapse, which they saw as expressive of it entering the final stage before its collapse.

The political question of reform or revolution gets bound up with a falsely empirical question of decline. For the left Social-democrats it is seen as essential to insist capitalism is in decay - is approaching its collapse. The meaning of 'marxism' is being inscribed as accepting that capitalism is bankrupt and thus that revolutionary action is necessary. Thus they do engage in revolutionary action, but as we have seen, because the focus is on the objective contradictions of the system with revolutionary subjective action a reaction to it, they do not relate to the true necessary prerequisite of the end of capitalism - the concrete development of the revolutionary subject. It seemed to the more revolutionary members of the movement such as Lenin and Luxemburg that a revolutionary position was a position of belief in breakdown while the theory of breakdown had in fact worked to allow a reformist position at the start of the Second International. The point was that the theory of capitalist decline as a theory of capitalism's collapse from its own objective contradictions involves an essentially contemplative stance before the objectivity of capitalism, while the real requirement for revolution is the breaking of that contemplative attitude. The fundamental problem with the revisionist debate in the Second International is that both sides shared an impoverished conception of the economy as simply the production of things when it is also the production and reproduction of relations which naturally involves people's consciousness of those relations. This sort of economism (seeing an economy of things not social relations) tends towards the notion of the autonomous development of the productive forces of society and the neutrality of technology. With the economy seen in the former way, its development and collapse is a technical and quantitative matter. Because the Second International had this naturalistic idea of the meaning of the economic development of capitalism, they could maintain a belief in capitalism's collapse without any commitment to revolutionary practice. Because the left identify breakdown theory as revolutionary, Lenin could be surprised at how Kautsky, who wrote the Erfurt Program version of that theory, could betray the revolutionary cause. When the left fought against the mainstream's complicity with capital they brought the theory of breakdown with them. Thus the radical social democrats such as Lenin and Luxemburg combine revolutionary practice with a fatalistic theoretical position that has its origins in reformism.

To say that the Second International was guilty of economism, has become a common place. We have to think what it means in order to see whether the Trots and left-communists who might criticise the politics of the Second International have gone beyond its theory. It is our case that they have not, that they retain an impoverished Second Internationalist theory of the capitalist economy and its tendency towards crisis and collapse with political and social struggle promoted by this crisis at the economic level. This fails to grasp that the object we are faced with is the capital-wage labour relation i.e. the social relation of class exploitation that occurs right across capitalist society: the areas of reproduction, production, political, ideological are all intertwined moments of that relation and it is reproduced within the individual him or herself.

Radical Social Democracy

It was with the radical social democrats such as Luxemburg, Lenin and Bukharin that the full conception of a decadent epoch of capitalism is arrived at - the notion that at a certain stage - usually around 1914 - capitalism switched into its final declining stage. Luxemburg's The Accumulation of Capital is one source of the theory of decline but most revolutionaries then and now disagreed with her account. Other left social democrats such as Bukharin and Lenin founded their theory of imperialism and capitalism's decadent stage on Hilferding's Finance Capital. In this work Hilferding linked new features of the capitalist economy - the interpenetration of banks and joint-stock companies, the expansion of credit, restriction of competition through cartels and trusts - with expansionist foreign policy by the nation state. Hilferding, while seeing this stage as the decline of capitalism and transition to socialism, did not think capitalism would necessarily collapse or that its tendency towards war would necessarily be realised, and his politics tended towards reformism. The theories of Bukharin and Lenin produced after 1914 saw imperialism and war as the unavoidable policy of finance capital, they identified this form of capitalism as decisively the decline of the system because of the natural progression of finance capital and monopoly capital to imperialist expansion and war whose only further development had to be proletarian revolution.

Lenin's Imperialism, which has become for his followers the crucial text for the modern epoch, defines the imperialist phase of capitalism 'as capitalism in transition, or, more precisely, as moribund capitalism.' For Lenin, in the capitalist planning of the large companies it is 'evident that we have socialisation of production, and not mere "interlocking"; that private economic and private property relations constitute a shell which is no longer suitable for its contents, a shell which must inevitably decay if its removal is artificially delayed; a shell which may remain in a state of decay for a fairly long period, but which will inevitably be removed.' Lenin's text, like Bukharin's Imperialism and World Economy, which was a great influence on it, adopts Hilferding's analysis of the 'final stage of capitalism' - monopolies, finance capital, export of capital, formation of international cartels and trusts, territorial division of the world. But whereas Hilferding thought that these developments, particularly the state planning in this stage of 'organised capitalism', were progressive and would allow a peaceful advance to socialism, Lenin thought they showed that capitalism could not develop progressively any further. The continuity between the reformist theory of the Second International and the 'revolutionary' theory of the Bolsheviks in terms of the conception of socialism as capitalist socialisation of production under workers' control is one of the keys to the failings of the left in the Twentieth Century. Hilferding writes:

The tendency of finance capital is to establish social control of production, but it is an antagonistic form of socialization, since the control of social production remains vested in an oligarchy. The struggle to dispossess this oligarchy constitutes the ultimate phase of the class struggle between bourgeoisie and proletariat.

The socializing function of finance capital facilitates enormously the task of overcoming capitalism. Once finance capital has brought the most important branches of production under its control, it is enough for society, through its conscious executive organ - the state conquered by the working class - to seize finance capital in order to gain immediate control of these branches of production... taking possession of six large Berlin banks would mean taking posession of the most important spheres of large-scale industry, and would greatly facilitate the initial phases of socialist policy during the transition period, when capitalist accounting might still prove useful

Henryk Grossman, who as we shall see is one of the key theorists of decline, refers to this conception as 'the dream of a banker aspiring for power over industry through credit... the putchism of Auguste Blanqui translated into economics.' Yet compare this with Lenin to whom Grossman feels nearer:

Capitalism has created an accounting apparatus in the shape of the banks, syndicates, postal service, consumers' societies, and office employees' unions. Without big banks socialism would be impossible.

The big banks are the "state apparatus" which we need to bring about socialism, and which we take ready-made from capitalism; our task here is merely to lop-off what capitalistically mutilates this excellent apparatus, to make it even bigger, even more democratic, even more comprehensive. Quantity will be transformed into quality. A single State Bank, the biggest of the big.. will be... the skeleton of socialist society.'

Whilst Hilferding thinks this take over of finance capital can be done gradually, Lenin thinks it requires revolution but both identify socialism with the taking over of the forms of capitalist planning, organisation and work.

Imperialism as the stage of monopoly and finance capital was, for Lenin, capitalism's decadent stage. Luxemburg, though with a different analysis, had the similar conclusion that collapse was inevitable. In the internecine debates Leninists accused Luxemburg of a fatalism or spontaneism and of not believing in the class struggle. But although Luxemburg and Lenin differed in their analysis of imperialism their conception of capital's end was essentially the same - the development of capitalism heads towards the collapse of the system and it is up to revolutionaries to make it socialism and not barbarism. Neither of these thinkers were against class struggle; for both the idea is that the development of capitalism has reached a crisis point, thus now we need to act.

However, behind the similarity between Lenin and Luxemburg on the notion of capital entering its final stage there lay a considerable difference, in that while Luxemburg had to an extent criticised the statist model of socialist transformation held by Social Democracy, Lenin had not. In the arguments within social democracy following the Bolshevik revolution, Leninism was accused of voluntarism and defended as reasserting class struggle. What it was actually about was Lenin's maintaining of an objectivist position on what socialism is: the development of an objective dialectic within the economy combined with a voluntaristic view that it could be built. He rode the class struggle to get there - or more favourably responded to it and was carried forward by it - but when in power he started from above to develop the economy because that was what he identified socialism with. Lenin and the Bolsheviks made a political break from Second International marxism, specifically from the orthodox stages theory which implied for Russia that there had to be a bourgeois revolution before there could be a proletarian revolution. But this was not a fundamental break from the Second International's economistic theory of the productive forces. Trotsky's theory of the permanent revolution, which the Bolsheviks effectively adopted in 1917, was not premised on a critique of the reifed notion of the development of productive forces held by the Second International, but on an insistence on seeing such development at the level of the world market. The prerequisite for socialism was still seen as the development of the productive forces narrowly considered, it was simply seen that in its decadent highest stage capitalism would not provide that development for Russia.

The Bolsheviks accepted that Russia needed its productive forces developed and that such development was identical with capitalist modernisation; they voluntaristically chose to develop them socialistically. The nature of combined and uneven development under imperialism meant that because capitalism was failing to develop itself, the Bolsheviks would have to do so. Of course they expected support from a revolution in Western Europe but in the introduction of Taylorism, capitalist specialists etc. we see that the task which the Bolsheviks identified as socialist was in fact the development of the capitalist economy. These measures were not pushed on them by the pressure of events, they were part of their outlook from the beginning. In the same text from before the October revolution quoted earlier Lenin admits that "we need good organisers of banking and the amalgamation of enterprises" and that it will be necessary to "pay these specialists higher salaries during the transition period." but don't worry he states:

We shall place them, however under comprehensive workers' control and we shall achieve the complete and absolute operation of the rule 'he who does not work, neither shall he eat.' We shall not invent the organisational form of the work, but take it ready-made from capitalism - we shall take over the banks, syndicates, the best factories, experimental stations, academies, and so forth; all that we shall have to do is to borrow the best models furnished by the advanced countries.

While Hilferding had seen the role of state planning in the stage of 'organised capitalism' as the basis for a peaceful transition to socialism, Lenin was convinced of the need to take power. But he was in agreement that capitalist planning was the prototype for socialist planning. For us revolution is the return of the subject to herself, for Lenin it was development of an object . The defence of Lenin is that socialism was not possible in Russia so he waited for revolution in Germany. But his conception of socialism, like that of the Second International from which he never effectively broke, was state capitalism.

Within the Bolshevik and Second International conception the socialisation of the economy under capitalism was seen as neutral and unproblematically positive, with the anarchy of circulation being seen as the problem to be got rid of. But capitalist socialisation is not neutral; it is capitalist and thus in need of transformation. The Bolshevik measures are a direct product of their adherence to the Second International identification of socialism with planning. The notion of decline and decay is seen as evolving from the contradiction between the increasing socialisation of the productive forces - the increasing planning and rationality of production versus the anarchy and irrationality involved in capitalist appropriation through the market - the former is good, the latter bad. The solution implied by this way of conceiving the problem with capitalism is to extend planning to the circulation sphere as well, but both these sides are capitalist - the proletariat does not just take over capitalist control of the labour process and add control over consumption, it transforms all areas of life - the social regulation of the labour process is not the same as the capitalist regulation.

The economistic position of Second International marxism shared by the Bolsheviks dominated the worker's movement because it reflected a particular class composition - skilled technical and craft workers who identified with the productive process. The view that socialism is about the development of the productive forces where they are considered as economic is a product of the lack of development of the productive forces considered as social. One could say that at a certain level of development of the productive forces the tendency for a state capitalist/socialist program was dominant and a truly revolutionary communist position harder to develop. The communist project was adopted by many workers but they did not manage to realise it. There is a problem in looking at history with the question whether it was possible for any particular revolution to win. It did not win then. Communism is never possible in the past only from the present to the future. What we can do is look for reasons why the project of communism was not realised then to inform our efforts to realise it now. What happened was a battle of forces in which the forces of capital increasingly took the form of a state capitalist worker's party. In considering the productive forces as neutral when they are capitalist the Bolsheviks become a capitalist force. In Stalinism the ideology of the productive forces reached new heights of crassness but while it had differences it also had continuity with the ideas of Trotsky and Lenin. The crushing of workers by the German Social Democrats and by the Russian Bolsheviks both expressed the victory of capital through the ideology of state capitalism. This is not to deny that there would be communist development but such a development would be the conscious acts of the freely associated producers and not the 'development of the productive forces', which presumes their separation from the subject. It would not, as the Bolshevik modernisation program did, have the same technical-economic content as capitalist development. Communism is not built from above, it can only be the movement of proletarian self-emancipation.

The Heritage of October

The two main proponents of the theory of decadence/decline trace their lineage to this period of war and revolution. And of course there were objective factors supporting the theory - the war was catastrophic and it did appear that capitalism was clapped out. Yet the revolution failed.

The Trotskyist form of Leninism has never made a successful break from the Second International conceptions of what constitutes the crisis of capitalism and thus what socialism should be. While Lenin adopted the theory that capitalism had entered its period of decay, he also insisted that no crisis was necessarily final. Trotsky on the other hand does write of inevitable collapse. His politics after 1917 was dominated by the idea that capitalism was in or approaching a final crisis from which revolution was inevitable. Trotsky's marxism was founded on the theory of the primacy of the productive forces and his understanding of the productive forces was crude and technical, not so very different from Stalin's: "Marxism sets out from the development of technique as the fundamental spring of progress, and constructs the communist program on the dynamic of the productive forces." When still part of the Soviet bureaucracy, Trotsky's mechanistic notion of the productive forces led him to justify militarisation of labour and to accuse workers resisting Taylorism of 'Tolstoyian romanticism'. When in exile it led his criticism of the Soviet Union to focus not on the position of the workers, whom he'd always being willing to shoot, but on its lack of technical development. He states "The strength and stability of regimes are determined in the long run by the relative productivity of their labour. A socialist economy possessing a technique superior to that of capitalism would really be guaranteed in its socialist development for sure - so to speak automatically - a thing which unfortunately it is still impossible to say about the Soviet economy." On the other hand there was something that made Russia an advance on decadent capitalism: "The fundamental evil of the capitalist system is not the extravagance of the possessing classes, but the fact that in order to guarantee its right to extravagance the bourgeoisie maintains its private ownership of the means of production, thus condemning the economic system to anarchy and decay."

The Soviet Union for Trotsky was progressive because although it had a ruling strata living extravagantly, with planning it had gone beyond capitalist irrationality and decay. It was backward because it lacked technical development. The orthodox Trotskyist defence of the Soviet Union as a degenerated workers state was premised on the model of economic development which sees state control and planning as progress. Because of the change in the relations of production, or what for Trotsky amounted to the same thing the property relations, the regime was somehow positive. This position was the logical expression of the theory that capitalist socialisation is positive, private appropriation negative, thus that if one gets rid of private appropriation - private property - you have socialism, or at least the transition to socialism. One can call it socialism but it is state capitalism.

The Falling Rate Of Profit

Trotskyism as a tradition thus betrays its claim to represent what was positive in the revolutionary wave of 1917-21. The importance of the left and council communists is that in their genuine emphasis on proletarian self-emancipation we can identify an important truth of that period against the Leninist representation. However in the wake of the defeat of the proletariat and in their isolation from its struggle, the small groups of left communists began to increasingly base their position on the objective analysis that capitalism was decadent. However there was development. In particular Henryk Grossman offered a meticulously worked out theory of collapse as an alternative to Luxemburg's. Instead of basing the theory of collapse on the exhaustion of non-capitalist markets he founded the theory on the falling rate of profit. Since then, nearly all orthodox marxist theories of crisis have been based on the falling rate of profit. In his theory, which he argues is Marx's, the tendency for the rate of profit to fall leads to a fall in the relative mass of profit which is finally too small to continue accumulation. In Grossman's account capitalist collapse is a purely economic process, inevitable even if the working class remains a mere cog in capital's development. Grossman tries to preempt criticism:

Because I deliberately confine myself to describing only the economic presuppositions of the breakdown of capitalism in this study, let me dispel any suspicion of 'pure economism' from the start. It is unnecessary to waste paper over the connection between economics and politics; that there is a connection is obvious. However, while Marxists have written extensively on the political revolution, they have neglected to deal theoretically with the economic aspect of the question and have failed to appreciate the true content of Marx's theory of breakdown. My sole concern here is to fill in this gap in the marxist tradition.[p 33]

For the objectivist marxist the connection is obvious, the economic and the political are separate, previous writings on the political are adequate and just need backing up with an economic case. The position of the follower of Grossman is thus: 1/ We have an understanding of economics that shows capitalism is declining, heading inexorably towards breakdown. 2/This shows the necessity of a political revolution to introduce a new economic order. The theory of politics has an external relation to the economic understanding of capitalism. Orthodox theories of capitalist crisis accept the reduction of working class activity to an activity of capital. The only action against capital is a political attack on the system which is seen to happen only when the system breaks down. Grossman's theory represents one of the most comprehensive attempts to declare Marx's Capital a complete economics providing the blueprint of capitalist collapse. He insists that "economic Marxism, as it has been bequeathed to us, is neither a fragment nor a torso, but represents in the main a fully elaborated system, that is, one without flaws." This insistence on seeing Marx's Capital as being a complete work providing the proof of capitalism's decay and collapse is an essential feature of the worldview of the objectivist marxists. It means that the connection between politics and economics is obviously an external one. This is wrong; the connection is internal but to grasp this requires the recognition that Capital is incomplete and that the completion of its project requires an understanding of the political economy of the working class not just that of capital. But Grossman has categorically denied the possibility of this by his insistence that Capital is essentially a complete work.


While left-communists maintained the classical general identification of decadence with the imperialist stage of capitalism, Grossman's more abstract theory rooted in the falling rate of profit tendency in Capital was enthusiastically adopted by many council communists, most prominently Mattick. Against this trend Pannekoek made a an important critique. In The Theory of the Collapse of Capitalism Pannekoek, apart from showing how Grossman distorts Marx by selective quotation, develops some arguments that point beyond objectivist marxism. Although in his own way still a believer in the decline of capitalism, Pannekoek starts to make an essential attack on the separation of economics from politics and struggle: "Economics, as the totality of men working and striving to satisfy their subsistence needs, and politics (in its widest sense), as the action and struggle of these men as classes to satisfy their needs, form a single unified domain of law-governed development." Pannekoek thereby insists that the collapse of capitalism is inseparable from the action of the proletariat in a social and political revolution. The dualism involved in seeing the breakdown of capitalism as quite separate from the development of revolutionary subjectivity in the proletariat means that while the working class is seen as necessary to provide the force of the revolution, there is no guarantee that they will be able to create a new order afterwards. Thus "a revolutionary group a party with socialist aims, would have to appear as a new governing power in place of the old in order to introduce some kind of planned economy. The theory of economic catastrophe is thus ready made for intellectuals who recognise the untenable character of capitalism and who want a planned economy to be built by capable economists and leaders." Pannekoek also notes something that we see repeated today; the attraction of Grossman's theory or other such theories of breakdown at times in which there is a lack of revolutionary activity. There is a temptation for those who identify themselves as revolutionaries to:

wish on the stupefied masses a good economic catastrophe so that they finally come out of the slumber and enter into action. The theory according to which capitalism has today entered its final crisis also provides a decisive, and simple, refutation of reformism and all Party programs which give priority to parliamentary work and trade union action - a demonstration of the necessity of revolutionary tactics which is so convenient that it must be greeted sympathetically by revolutionary groups. But the struggle is never so simple or convenient, not even the theoretical struggle for reasons and proofs.[p 80]

But, as Pannekoek continues, opposition to reformist tactics should not be based on a theory of the nature of the epoch but on the practical effects of those tactics. It is not necessary to believe in a final crisis to justify a revolutionary position; capitalism goes from crisis to crisis and the proletariat learns through its struggles. "In this process the destruction of capitalism is achieved. The self-emancipation of the proletariat is the collapse of capitalism."[p 81, our emphasis] In this attempt to internally link the theory of capitalism's limits with the movement of the proletariat Pannekoek made an essential move. How to grasp this linkage requires further work.

Fourth International and Left-Communism: Flipsides of the Objectivist Coin

While the small bands of left and council communists mostly adopted a theory of decadence the other claimant to the mantle of continuer of the marxist tradition -Trotskyism - was also making it central to their position. At the foundation of the Fourth International they adopted Trotsky's transitional program The Death Agony of Capitalism and the Tasks of the 4th International. In this text the mechanistic conception of the capitalist economy and its decline which had previously justified the position of the bureaucracy, now meant that attempts by Stalinists "to hold back the wheel of history will demonstrate more clearly to the masses that the crisis in mankind's culture, can be resolved only by the Fourth International. [...] The problem of the sections of the Fourth International is to help the proletarian vanguard understand the general character and tempo of our epoch and to fructify in time the struggle of the masses with ever more resolute and militant organisational measures." It might seem churlish to accuse the Trots over something written 50 years ago at a time of depression and impending war when it seemed more reasonable. Moreover, while it is the case that the orthodox trots will hold to every word, in Britain at least, revisionism is the order of the Trotskyist day. However the revisionist SWP and more revisionist RCP still hold to the essential thesis of decline induced crisis and the need for leadership. Trotsky's writings are marked by a rigid dichotomy between the objective conditions that is the state of the economy and the subjective, namely the existence or non-existence of the party. Capitalist crisis is an objective process of the economy and the decadence of capitalism will make that crisis severe enough to create an audience for the party which supplies the working class with the needed subjective element of consciousness and leadership. This conception of the relation between objectivity and subjectivity has to be contested.

What we are saying is not that proponents of decadence or decline do not believe in revolution - they quite manifestly do. (The theory of decline is not a theory of automatic breakdown. Most of its proponents recognise that capital can generally gain temporary escape if the working class let it, but it is a theory which sees an inevitable tendency to breakdown coming from capital's own development and which sees the subjective problem as bringing consciousness into line with the facts). Our criticism is that their theory contemplates the development of capitalism, the practical consequences of which being the fact that the trots move after anything that moves in order to recruit for the final showdown while the left communists stand aloof waiting for the pure example of revolutionary action by the workers. Behind this apparent opposition in ways of relating to struggle, they share a conception of capitalism's collapse which means that they do not learn from the real movement. Although there is a tendency to slip into pronouncements that socialism is inevitable, in general for the decadence theorists it is that socialism will not come inevitably - we should not all go off to the pub - but capitalism will breakdown. This theory can then accompany the Leninist building of an organisation in the present or else, as with Mattick, it may await that moment of collapse when it becomes possible to create a proper revolutionary organisation. The theory of decay and the Crisis is upheld and understood by the party, the proletariat must put itself behind its banner. That is to say 'we understand History, follow our banner'. The theory of decline fits comfortably with the Leninist theory of consciousness, which of course took much from Kautsky who ended his commentary on the Erfurt Program with the prediction that the middle classes would stream "into the Socialist Party and hand in hand with the irresistibly advancing proletariat, follow its banner to victory and triumph."

After the Second World War both the Trotskyists and Left-communists emerged committed to the view that capitalism was decadent and on the edge of collapse. Looking at the period that had just passed the theory was did not appear too unrealistic - the 1929 crash had been followed by depression through most of the thirties and then by another catastrophic war. Capitalism if not dying had looked pretty ill. Apart from their similar theories of decline both currents claimed to represent the true revolutionary tradition against the Stalinist falsification. Now, while we might say the left and council communists upheld some important truths of the experience of 1917-21 against the Leninist version upheld by the Trots, the objectivist economics and mechanical theory of crisis and collapse which they shared with the Leninists made them incapable of responding to the new situation characterised as it was by the long boom. The revolutionaries of the next period would have to go beyond the positions of the last.

After the Second World war capitalism entered one of its most sustained periods of expansion with growth rates not only greater than the interwar period but even greater than those of the great boom of classical capitalism which had caused the breakdown controversy in the Second International. A crisis ensued within Trotskyism because their guru had categorically taken the onset of the war as confirmation that capitalism was in its death throws and had confidently predicted that the war would herald both the collapse of capitalism and proletarian revolution to set up workers states in the West and to sort out the bureaucratic deformations in the East. Trotsky had closely identified his version of marxism with the perception of capitalist bankruptcy and had written that if capitalism did recover sustained growth and if the Soviet union did not return to its true path then it would have to be said that "the socialist program , based on the internal contradictions of capitalist society ended as a Utopia." The tendency of orthodox Trotskyist groups from then on was to deny the facts and constantly preach that crisis was imminent.

The fragments of left-communism were not so limited by identification with one leader's analysis (moreover many of their theorists were still alive). However, they like the Trots tended to see the post war expansion of capital as a short lived reconstructive boom. Essentially all these representatives of the theory of the post-WW1 proletarian offensive could offer was the basic position that capitalism had not resolved its contradictions - it just appeared to have done so. The basic thesis was right of course - capitalism had not resolved its contradictions - but these contradictions were expressing themselves in ways not grasped by the mechanistic theory of decline and collapse because it did not fully grasp the contradictions. The problem of how to relate to these contradictions in the post-war boom with its pattern in the advanced countries of social democratic politics, Keynesian economics, 'Fordist' mass production and mass consumerism, was the problem facing revolutionaries of this period.

When struggles started breaking out the new generation of radicals were antagonistic to the rigid schematic account of capital's crisis held by the old left. While the left-communist sects accepted this stoically many of the Trot groupings opportunistically followed the concerns of the New Left but only to grab recruits into their organisations who could then be persuaded of the doctrine of economic collapse. There were a number of groups - Socialism or Barbarism, the Situationist International, the autonomists - who attempted to escape the rigidities of the old workers movement and to re-develop revolutionary theory. In the second part of the article we will now look at some of the most important of them as well as at attempts to reassert a revised version of the theory. Some of the questions asked and the answers to which are important for us were: What form was the struggle taking in these new conditions? What was the meaning of communism? How was revolution to be reinvented?

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