Our comrades in Ireland were invited to be one of the speakers in a debate last night at the Literary and Historical Society of University College Dublin on the motion 'That This House Believes that the End of Capitalism is Nigh'. Unfortunately, we were unable to send a speaker as we had done for previous debates but the organisers agreed to accept a written contribution to be read out. Here it is.
I want to oppose the motion. It would be great if the end of capitalism really was nigh but unfortunately it isn't. Capitalism is not collapsing and will never collapse of its own accord. It will have to be brought to an end. It will only end when a majority of its victims, the majority class of those who work for a wage or a salary, consciously decide to replace it with socialism.
By “socialism” I don't mean government ownership or what existed in Russia (that was state capitalism). What I mean is a society in which the means of production will belong, not to the state, but to the community as a whole, so that they can be used, under democratic control, to produce what people need and not for profit. A society in which the principle "from each according to their ability, to each according to their needs" will apply.
Many people do want socialism but at the moment we are only a relatively small minority. Before the end of capitalism will be nigh, there will have to be a lot more of us. In fact, we'll have to be the majority. It is because this is not yet the case that I say that, unfortunately, the end of capitalism is not nigh.
Every time capitalism enters a big crisis – as it has done at present and did in the 1930s and before that in the 1880s – overoptimistic people have predicted its collapse. In 1931 the British MP, James Maxton, predicted the collapse of capitalism within six months. He was wrong of course, but views like his spurred on the Socialist Party of Great Britain to publish a pamphlet called Why Capitalism Will Not Collapse that same year. In it we argued that there was no built-in flaw in the mechanism of the capitalist economy that would cause it to collapse automatically, of its own accord, for purely economic reasons.
Production under capitalism, we said (and it's still true), goes in cycles. Periods of boom inevitably ending in a slump and a period of stagnation, as capitalist firms, driven by a desire to maximise profits and assuming the boom would never end, overproduce in relation to the market for their goods. Which, in fact, is what has happened this time with regard to housing construction in the US.
But, we went on, slump conditions likewise create the conditions for a revival of profitable production. Eventually, the piled-up stocks would be sold, inefficient firms would go to the wall, capital would be depreciated, and real wages would fall, all helping to restore the rate of profit.
As Karl Marx pointed out:
“The life of industry becomes a series of periods of moderate activity, prosperity, over-production, crisis and stagnation”.
Having said this, something has indeed collapsed, but it is not capitalism as such, it is only one form of capitalism – so-called "free market" capitalism. From the 1980s onwards we were continually told that if restrictions on short-term profit-making were removed, that's the best way for the economy to work. Let the "free market" rip, they said, and we'll all be better off. It didn't happen of course. The rich did get a lot richer and some of us did get a little more to spend, but look where it has now led. Events have proved Adam Smith wrong and Karl Marx right.
It would be appropriate indeed if people would turn to Marx’s analysis of capitalism. Some are. But others are turning back to Keynes as if his theories hadn't been proved wrong too. Thirty or so years ago when the post-war boom finally came to an end, there was a slump. In Britain the government did what Keynes said you should do in a slump: they increased government spending. But it didn't work. It didn't kick-start or pump-prime the economy. It only added inflation to the stagnation, introducing a new word into the vocabulary of economics: "stagflation”.
This, apparently, has now been forgotten and governments everywhere are trying once again to spend their way out of the depression that's already here. Once again, it won't work. Capitalism will only recover from the depression AFTER inefficient firms have gone out of business, capital values have depreciated, and real wages have fallen due to increased unemployment. Before capitalism will recover – and it eventually will, even if it takes two or three years – there's going to have to be massive job losses. And there's nothing any government can do to stop this. In fact, if they try they'll probably make things worse.
Socialists have to organize now to replace capitalism – not wait in either hope or
expectation that it will collapse. But this organization has to be based on an agreed knowledge of the task ahead. It has to be based on an understanding of, and a rejection of, the failures of the past. It has to be based on a rejection of the half measures and the so-called solutions like state capitalism, political putschism, dictatorships and so-called national revolutions as well as a rejection of leaders and careerists building their lucrative careers and reputations on the naivety and goodwill of millions of workers. Most importantly, we have to end the widespread misconception that Socialism is nothing more than capitalism run by the State.
Capitalism isn’t collapsing. Capitalism won’t collapse. But even if it did, in the absence of the kind of organization I have been alluding to, it wouldn’t be collapsing into Socialism – it would be collapsing to give way to barbarism. So, in opposing the motion that "This House believes the End of Capitalism is Nigh", I would say that, until a majority take political action based on a desire for socialism, capitalism will stagger on from crisis to crisis as it always has done.
6 comments:
The reference to James Maxton MP was interesting. Do you have a more specific reference to Maxton's claim that capitalism would collapse in 6 months ?(in 1931)
Well written argument. What was the result of the debate?
What Maxton said is given in the pamphlet "Why Capitalism Will Not Collapse". Here's what it says:
"Mr. James Maxton, M. P., putting the I. L. P. point of view, has been as confident as the communists. He made a speech at Cowcaddens on 21st August, 1931, reported as follows in the columns of the Daily Record, 22nd August, 1931 (Reprinted in Forward, 12th September):
“I am perfectly satisfied that the great capitalist system that has endured for 150 years in its modern form, is now at the stage of final collapse, and not all the devices of the statesmen, not all the three-party conferences, not all the collaboration between leaders, can prevent the system from coming down with one unholy crash”.
The Daily Record report goes on to describe Mr. Maxton's speech:
“‘They may postpone the collapse for a month, two months, three months, six months’, he cried, forefinger pointing at his audience, and body crouched, ‘but collapse is sure and certain’”.
thanks for that, I especially liked the "forefinger pointing at his audience" bit! I think I remember one or two SPGB speakers doing similar, although I am sure making a much more credible point at the time! (I remember listening to some brave SPGB open air speakers, a good many years ago, in Glasgow city centre.)
Didn't know that Maxton had made such a sweeping (and wrong) prediction.
This blog was re-posted on the SPGB MySpace profile, and attracted the following comment.
"I don't agree with this analysis for several reasons.
First of all, capitalism is principally an economic system. The social, political and legal superstructures which exist around the capitalist economic system are generally reflections of it, serving its needs. Whether or not you think capitalism is currently collapsing, I am sure you can't disagree that it's in an extremely serious crisis, perhaps great than any ever before. Various political interventions are being made to attenuate the crisis, such as the bailout of banks and the Detroit car-makers. But those are political interventions. They are not self-correcting mechanisms within the capitalist economic system. Thus political systems have evolved over time (to attempt) to limit the severity of capitalism's destructive effects (by introducing trade unions, and welfare) and the crises it inevitably generates (with bailouts, stimulus packages and lines of credit), in short to save it from itself. Without those political interventions, capitalism as an economic system may well collapse, albeit as a likely result of the more pronounced suffering, anger and rise of insurgent agency against it.
Even with political intervention though, many economists and scholars agree that the scale of the current crisis dwarfs previous ones by orders of magnitude. This is not a normal cyclical crisis of over production. The inflation of debt (which feeds our current debt driven global economy) has reached staggering proportions. So much so that no amount of government intervention is now likely to salvage the global economy, without an intermediary multi-year global depression. Deregulated financial corporations have lent credit at 38-40 times the size of their capital reserves, to the point that debt derivatives are currently estimated at about $0.5 - 1 quadrillion (or $500 - 1,000 trillion). The expansion of that debt bubble, which has enabled the consumerism and economic growth of industrialised nations for the last 30 years, has reached its limit. Consider that global GDP in 2006 was $62 trillion. And the size of the global economy was estimated at $150 trillion. The size of global bailouts and liquidity lines so far amounts to less than $10 trillion - a drop in the ocean compared to the size of the problem. This doesn't mean that capitalism is collapsing. But it does mean that it is bankrupt beyond its capacity to repair itself anytime in the near future.
Somewhere, I think in Das Kapital, Marx wrote words to effect that - epochs of social production revolutionise only when they have exhausted their ability to continuously expand. I know don't have this wording exactly right, but I can't find the exact piece of text right now.
Does the simple mathematics of the numbers involved in the implosion of the current debt bubble not suggest that capitalism is reaching that point, if it hasn't already?
Marx also explained that epochs of social production do not change of themselves. A revolutionary class must come forward as the agent of that change, as you have implied above, and as happened historically when slavery gave way to feudalism, and feudalism gave way to capitalism.
And in order for that revolutionary class to come forward, both the objective economic conditions (the economic relations of social production) and the subjective conditions of consciousness (awareness of the individual, solidarity and co-operation with others in the same condition, across industrial, ethnic, gender and national lines) must simultaneously lend themselves to the ascendancy of revolution.
A lot depends right now on the severity of global recession. Right now the objective global economic conditions are lending themselves to the collapse of capitalism. Though the full severity of the recession still be 2 years away or more. But are the subjective conditions optimal? Only 3 months have passed since Lehman Brothers collapse, and already the global backlash against capitalism is gaining significant momentum, from Iceland to Greece and France. Socialists do have to organise, because at this time the reaction to capitalism's biggest ever crisis could well generate the conscious decision by the majority class to replace it, in many countries, from Asia to Europe to Latin America.
The question is, what is the Socialist Party of Great Britain going to do to about it, and when are the radical left of Britain going to stand up as a united front with a clear message and a coherent vision, instead of being fractured into divisive splinters?"
(Gareth)
And from another respondent -
"Hi Comrades, would it be possible for the discussion and outcome of this debate to be published. Jim."
I read Gareth's piece with interest. Debts may be mind-numingly high, but surely debts can and do get written off. I think the "Workers Revolutionary Party" (yes, I think they still exist!) favour the view that capitalism is in its "death agony" but I am not sure about that.
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