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The Decline of Capitalism?

Paul Hoggett

From New Interventions, Vol.5 No.2, 1994

Preliminary Remarks
I have been spurred into writing these notes having listened to Hillel Ticktin at a recent conference organised by the Bristol Marxist Forum. Ticktin’s thesis, outlined in his brief contribution in Critique 23, is that capitalism is in decline and has been in decline for over a century and, as far as I can make out, he believes that anyone who doesn’t believe this is not a Marxist.

Much of the counter-argument to this position is provided in Moshé Machover’s contribution to the same volume. Moshé outlines a number of reasons for believing that the thesis of decline has been refuted by reality. I would add two further factors which he doesn’t develop in any detail. To believe in the thesis of decline would surely lead one to believe that the development of the productive forces of capitalism had reached its limit at the beginning of this century. Reality suggests quite the contrary. The productive forces of capitalism have developed enormously throughout this century, albeit unevenly – both temporally and geographically. Today technological advance is more rapid than possibly at any time before, thus the concept of the Permanent Innovation Economy that Ken Tarbuck, following Morris Suzuki, has drawn our attention to. Secondly the notion of decline would surely lead us to believe that the extension of the market system and the commodification process had also reached a limit decades ago. The emergence of the Newly Industrialised Countries in the far East, the penetration of markets into leisure, communication, the public sphere (through privatisation etc), the private sphere (the development of insurance and pensions industries, personal services and indeed the commodification of the self itself) and now the possible market penetration of the former Stalinist regimes would all suggest that the frontiers of the commodification process are continuously being extended.

Moshé turns the Marxist method upon the communist movement itself to illustrate how Lenin and Trotsky were creatures of their times. This is not to say that they were wrong, rather it is to say that their view of the world, their feeling that capitalism has entered a dying phase, was based upon their experience of the times in which they lived – after a catastrophic world war, with stagnation if not recession rife throughout Europe, and workers mobilising on a scale never seen before. As I pointed out in my article on long Waves (in New Interventions, Vol.2 No.2, July 1991), even given this context Trotsky was able to entertain the possibility of a new wave of capitalist development as a theoretical possibility if the workers movement was crushed (which, writing in the early 1920’s, he regarded as inconceivable).

How Does Capitalism "Progress"?
With hindsight, and after the rise of fascism and another world war, we now know that another wave of capitalist development did occur and that this has been followed by another prolonged period of structural crisis which first became evident in the early 1970?s.

Moshé suggests that such developments force us to radically reconsider our periodisation of capitalism. That it is possible that the wars and revolutions of the early part of this century were an indication of the youthfulness of the system rather than its senility, a system which now perhaps is entering its mature phase (i.e. mature capitalism rather than late capitalism). But both Moshé Machover and Hillel Ticktin share what might be called a life-cycle view of capitalism – i.e. that as a system it passes through a number of stages such as youth, maturity and old age. It is only in old age, when the system, so as to speak, has exhausted all of its possibilities, that the possibility of transformation arrives.

It’s just a thought, but I wonder whether this life-cycle metaphor is helpful – was feudalism worn out when the first sparks of industrial capitalism ignited? This is a genuine question because I have read nothing on feudalism (indeed rm not even sure whether it is accurate to say that it was feudalism which preceded capitalism). The point I wish to make is that it may not be necessary for a system to be in a state of absolute decline in order for it to be replaced; it may be sufficient for it to be going through a period of relative decline (as arguably Britain has been enduring for two or three decades now) or going through one of the recurring structural crises which Long Wave theory illustrates.

The concept of recurrent structural crises links to the idea of restructuring as capitalism’s way out, i.e. as the way in which it revolutionises itself. I have always thought of this in terms of a change in the form of capitalism (and hence a change in the form of the mode of appropriation, the form of the mode of production and, following the Regulationist school, the form of the mode of regulation). Thus the form of the mode of appropriation has become increasingly collectivised – from private capital, to corporate capital, to what we have nowadays where some of the main sources of capital are in a perverted sort of way the workers’ own savings (i.e. the pension funds)!

But if capitalism assumes a number of distinct forms is there a limit to the number of forms it can assume (there must be a limit because all societies are in the process of coming into being and ceasing to be – even if this takes hundreds of years)? I don’t think there is an answer to this; all we can say is that there will be a limited number of forms – it may be 6, it may be 16. Looking backwards we can see how the last one has been described using a number of terms, depending upon which features analysts focus upon (hence Monopoly Capitalism, Fordism, and we can probably add Calloix’s framework). The previous form was that described by Lenin in his study of Imperialism, and I think the one before that was given a name by Maurice Dobb but I can’t remember what he called it. According to Kondratiev’s periodisation capitalism is currently struggling to obtain a fifth form (which would correspond to a fifth long wave of development). What I like about Long Wave theory is the sense of perspective it gives you! The point is, and I mentioned this back in my article on Long Waves in the old series of the Intervention journal in 1979, that what ultimately determines the way in which each successive structural crisis is resolved is political struggle. And there seem to be four possible outcomes.

1. The crisis is resolved decisively in favour of labour and a revolutionary transformation in the mode of production itself occurs leading to a qualitatively new mode of production.

2. The crisis is resolved in the terms of capital but the forces of labour are still strong enough to insert some of their requirements into the restructuring process. A new form of capitalism emerges but one which contains an uneasy tension between capital and labour. Such forms are not doomed to be unworkable (tension can provide dynamic as well as friction) as the post-war Scandinavian model illustrated. Some, such as Clegg, have argued that post-war Japan was built upon a similar compromise (hence jobs for life within the core firms).

3. The crisis is resolved decisively in favour of the interests of capital, labour is unable to insert few if any of its own requirements into the restructuring that takes place – e.g. post-war USA.

4. The structural crisis cannot be resolved either because the opposing classes reach a stand off and neutralise each other as forces for change or bemuse the hegemony of the ruling class is so great that it becomes complacent, corrupt, divided or decadent – the completeness of its victory is such that it no longer contains a motive for change. Trotsky argues that in such situations a gradual or rapid collapse into a kind of Dark Age may ensue (as after the decline of the Roman Empire). It is this scenario which is one of several underlying the idea of Socialism or Barbarism.

Progress and Barbarism
The concept of barbarism is often linked to the idea of a mode of production which has reached its absolute limits and is therefore dying. As should by now be clear I am sceptical of the notion of absolute limits – in the scenario above the decadence of a clan is itself the outcome of politics rather than the unfolding of some internal logic of birth, maturity and decay. To reiterate the point I made earlier, the concept of a dialectical movement through history (the process of coming and ceasing to be of all social phenomena) should be distinguished from the idea of a life-cycle, which seems rather Darwinist to me. I prefer to get away from thinking about rise and decline as distinct episodes and to think of them as simultaneous processes. From this perspective, progression is also regression. Specifically, whilst it cannot be denied that the productive capacity of capitalist society has increased massively, there is a sense in which society’s moral and aesthetic capacities have been progressively destroyed.

Thus the productive forces of capitalism (and Stalinism for that matter) are developed both via the destructive mastery of nature and the wrenching of the subject out of nature (both physically and psychologically – people are ejected from the land and from the natural ground of their own subjectivity). In place of interdependence (between people and between people and nature) there is the idea of independence, of a people without limits or responsibilities. Because technology promises to make anything possible (so don’t worry about the hole in the ozone layer) it distances us from concern about our own destructiveness.

What was new about the Holocaust was not that it was evil (genocide itself is not new – just look what happened to the indigenous populations of the Americas); what was new was the industrialisation and bureaucratisation of evil. The problem with the phrase "Socialism or Barbarism" is that it has sometimes been advanced in a way which suggests that if we don’t get socialism now we will collapse into barbarism (as if it were some horrible event around the corner).

The point surely is that barbarism surrounds us and saturates life already but in a largely latent form. What exists is a kind of civilised barbarism which occasionally finds expression in uncivilised ways.

So we progress in some ways and regress in others. Is this a distinctive characteristic of capitalism as opposed to previous modes of production?

Intellectual Pessimism
To return to the four paths out from a structural crisis that I mentioned earlier, I must say that at the moment the third or fourth outcomes seem more likely as a way out of our present structural crisis than either the first or second.

And this brings us to the issue of intellectual pessimism. Gramsci’s dictum – pessimism of the intellect, optimism of the will – points to a contradiction that a materialist but revolutionary movement has to handle. As materialists we must constantly strive to face reality as it is, no matter how painful its lessons. The alternative is to base our politics upon faith, which Gramsci describes in terms of the cloak that reason adopts when the will has been weakened or defeated. As Marxists we must stand on our own two feet and face the world without crutches. And yet we also know that when people engage in struggle reason is often a poorer guide than imagination. As Moshé notes, "it is virtually impossible to maintain an optimism of the will without an optimism of the intellect. We need our illusions. People mobilise on the basis of fictions not facts, but if successful today’s fictions may become tomorrow’s facts."

This surely is what Marx means in his second Thesis on Feuerbach. "The question whether objective truth can be attributed to human thinking is not a question of theory but is a practical question. Man must prove the truth, i.e. the reality and power, the this-sidedness of his thinking in practice. The dispute over the reality or non-reality of thinking that is isolated from practice is a purely scholastic question."

Reason in itself is without power; detached from political action it is purely academic in its consequences. But to be attached to politics reason must engage with unreason, or as Lenin put it, propaganda must be fused with agitation. True, people will organise, and have constantly organised simply on the basis of experienced injustice but they will only do so if they can sustain the illusion that together they can change a situation, otherwise injustice is simply endured. I was in Bulgaria recently, and what struck me about many of the intellectuals there was that even they had lost the capacity to imagine – there was simply fate on the one hand and delusion or myth on the other. Illusions are creative because they are grounded in the real but partake of the imaginary, this is what distinguishes illusions from delusions which are based upon a denial of reality. An illusion is neither real nor make-believe but both real and make-believe.

I tend to think about illusion in politics in terms of the need to generate "mobilising fictions". Following Frank Kermode we can distinguish "myths" from "fictions" – myths presuppose total and adequate explanation of things as they are and were, they are agents of stability, fictions are for finding things out, they are experimental, they have about them an "as if" quality, they are agents of change. For the neo-liberals over the last couple of decades the idea of the market has functioned as a myth not as a fiction – in many senses the notion of the market, specifically the free market, that they offer is quite naive (i.e. simple, innocent) and unreal. What they have offered is not a rational argument or concrete vision but the image of an alliance between "the people" and a magical force. It is an image that people connect to primarily in an infantile way (e.g. the market as a force of destiny – "you can’t buck the market"; the market as a dynamic power, a kind of societal libido – to be contrasted to the "dead hand" of bureaucracy; the market as an unpredictable, living organism, witness the constant references on the radio news during the day to its health and temperament – "how are the markets doing today Jim?"). To the extent that it has been successful in mobilising human sentiments and interests into a reactionary political force (which it can only do by drawing upon many layers of the working class itself) it is able to "prove the truth" and make myth reality.

Coming back to the left, I would like to offer the hypothesis that the thesis of "the decline of capitalism", a thesis which sought to operate as a mobilising fiction in the earlier decades of this century, has, since the second world war, assumed the status of a myth rather than a fiction. As I hope I have indicated, the concept of Socialism or Barbarism can be adhered to without any implication that capitalism is therefore in decline; the problem is that given the legacy of Stalinism (Socialism is Barbarism) the concept has lost its capacity to capture the imagination. We need a new fiction for our times, one which points to something which may or may not be "true" (just as "the decline of capitalism" did) but whose truthfulness is demonstrated through its capacity to transform the realm of the possible into the realm of the actual.