New Interventions
Current Issue
Next Issue
Back Issues
Marxist Theory
Socialist History
Left Politics
Left Groups
Islamophobia Watch

Declining Capitalism?

Ken Tarbuck

From New Interventions, Vol.5 No.1, 1994

Is Capitalism Declining?
The journal Critique, and more particularly its editor Hillel Ticktin, have over the last decade propounded a theory of ‘declining capitalism’, which is said to be that condition of society which has subsisted for the last one hundred years. At first sight this seems to be a version of outright and absolute capitalist decay which was the hallmark of the Comintern, and which in turn had been garnered from Lenin’s theory of imperialism. But according to its author the theory of ‘declining capitalism’ is not a theory of absolute decline, but a theory which rests upon the organic nature of capitalism itself and Marx’s own interpretation thereof. I must admit that right from the start I have had my doubts about the validity of such a proposition, and it seems to me that this has been confirmed by events.

The Form and Content of the Theory
The clearest statement on the methodology that Ticktin uses comes, not in his earliest writing on the topic, but much later. Although he first advanced his ideas in Critique No.16 in 1983 it is in No.23 of 1991 that we find the following:

’I argue in what follows that capitalism is in decline and has been in decline for over a century. This is the classical Marxist position, of Marx, Lenin, Trotsky etc, as I understand it.... Indeed it is hard to stand on a Marxist position and not argue for decline. After all dialectical movement involves the coming into being of the entity, its maturing and its final decay. Dialectical movement inevitably leads to the decline of the entity. It is, of course, possible that Marxism is wrong and that capitalism is not in a stage of decline. It is also possible that Marx was wrong when he saw capitalism in decline and that although there is a stage of capitalist decay it has not reached it in spite of the views of the classical Marxists.’1

The first thing to note is that Ticktin adroitly wraps the mantle of orthodoxy around himself – ‘it is hard to stand on a Marxist position and not argue for decline’ – the implication being that if one does not argue for decline one is less than a full Marxist. I must say that this is a method of argument that leaves much to be desired. It rather takes us back to debates about holy writ, and who is the most devout. The argument here is, surely, whether the adoption of a theory, be it of decline or anything else, helps us to explain the world, and hence helps to change it. If Marx, or anyone else, got it wrong, so be it, we have to say so. It may well be, of course, that we have to use Marx’s own method to criticise Marx himself. Whatever the case, the reader or listener should not be intimidated by being made to feel somewhat lacking in understanding or education by the waving of ‘The Master’s’ words, or in the present case the threat of them.

Let us now come to the point of substance being made in the above quotation. This relates to an understanding or interpretation of dialectics (that dreaded word again!). Ticktin is obviously adopting an organicist view of society, which does indeed validate a view that any organism or entity has a period of formation, maturation and decline. I would not dissent from such a viewpoint as a starting point. But does it tell us the whole story? Dialectics not only deals in totalities, but also contradictions within such totalities. Contradictions which may be necessary and defining ones for such a totality. And it is in the concrete examination of the movement of such contradictions that disagreement may arise as to the precise nature and meaning of them.

Moreover, the three broad aspects of the development of the entities which Ticktin gives us do not present a complete picture. We may discuss the period of the rise of capitalism, but even that will not be a seamless whole; it too will have different aspects, periods, eras, and so on which have to be examined and related to that whole period which we give the broad definition of ‘the rise of capitalism’. Maturity? That too will have somewhat different characteristics depending upon the particular capitalism examined, the country, the period etc. No theoretical formula will provide us with an exact identikit of concrete reality. Decay and decline? That becomes even more difficult. The reason for the difficulty is that. whilst we have hisiorical examples of the decline of other societies and modes of production, we have, as yet not witnessed the decay cr dissolution of capitalism as a historical phenomenon. Hence we do not know that what we witness now is actually a symptom of decline or of a change within the mode of being.

Ticktin suggests that: ’The Roman Empire declined for centuries before being overthrown. A system could decline for a long time and undergo numerous crises from which it emerged intact in that period.’2 He is quite correct. However, in the case of the Roman Empire we have actual historical evidence – from the 3rd Century – of such a crisis, which was overcome, but nevertheless did indeed mark the onset of the decay of the empire. Moreover we have some precise indicators as to the nature of the crisis. The most basic and enduring indicator of this crisis was the failure of the slave population to reproduce itself sufficiently to maintain the labour force necessary for production. Furthermore, we also know that, apart from the circular mill and screw press, there were no significant technological advances made throughout the whole of classical Antiquity, i.e. the period of dominance of the slave mode of production.

In other words we can with a fair degree of accuracy pinpoint the rise of slave economy, its development and the bringing to full maturity by the Roman Empire, particularly in the west. We can also trace its crises, recoveries, decline, and decay to final dissolution. All along the way there are clear indicators of this process. But what is abundantly dear is that because of the adoption of slave labour: a) all other labour was devalued, which put a block on scientific or technical enquiry; b) there was no major advance in agricultural techniques. Slavery itself was merely a different way of using labour at the same technological level, but blocked the way to the adoption of productivity raising techniques. The rest, as they say, is history. It must also be added that both Greek and Roman slave owing societies, had quite big crises in their ascendant phases. Many of these crises appeared, at the time, to be near to bringing the destruction of the given societies. In other words, what may have appeared to be terminal crises to the participants, were actually crises of growth for the mode of production. Therefore until any particular crisis is resolved, in whatever manner, there is no certainty how the resolution will be achieved.

One final point here: it is not permissible to transfer directly the analyses of physiology to society; each is a different branch of study with its own particularities. We know, for instance, that if a person has a leg amputated they will not grow another. In India the British destroyed the indigenous cotton industry with their cheap exports, only to find that India later regenerated its cotton industry (on a capitalist basis) and in turn the British textile industry was decimated. India did therefore grew another cotton ’leg’, stronger than before. The physiological metaphor, in this case, does not hold.

Decline or Growth?
Ticktin suggests that some people: ’... have argued that capitalism is not in decline because all the material evidence shows the contrary. The standard of living has risen, technology is constantly improving and the market is extending itself. Above all, capitalism itself does not seem to be dying. If this was all there was to the problem then the case would be proven.’ 3 And further along he states: ’Capitalism is not in a terminal crisis at this point in history. It is clearly not about to be overthrown. We are not in a revolutionary or pre-revolutionary situation in the world. That does not mean, however, that capitalism is not in decline.’4

What is then being proposed by Ticktin? He claims that his theory of decline is based upon the Marxism of Marx, Lenin and Trotsky, but is not a version of the Cominternist catastrophism. But the theory of Lenin and Trotsky was precisely the catastrophist one of the Comintern. For example, Lenin wrote a foreword to the German edition of his book Imperialism in 1920, and said:

’As a result of the universal ruin wrought by the war a world-wide revolutionary crisis is arising which, no matter how protracted and difficult the stages through which it may pass, can end in no other way than in proletarian revolution and its victory.’5 And: ’Imperialism is the eve of the proletarian social revolution. This has been confirmed since 1917 on a world scale.’6 And coupled with this is: ’Monopoly is the transition from capitalism to a higher order.’7

And further on: ’... the tendency towards stagnation and decay, inherent in monopoly, continues to operate in individual branches of industry; in individual countries, for certain periods of time, it gains the upper hand.’8 Finally, from Lenin: ’From all that has seen said above on the economic essence of imperialism, it follows that it must be characterised as capitalism in transition, or more precisely, as dying capitalism.’9

Clearly then for Lenin, writing his book in 1916, the epoch of imperialism was of a decaying, dying order. And after the revolution in Russia this was more precisely characterised as the period of the overthrow of capitalism. If there is any doubt about how Lenin and Trotsky viewed the world it is worthwhile quoting from the letter of invitation sent out for the founding congress of the Comintern: ’The present period is that of the decomposition and collapse of the entire world capitalist system, and will be that of the collapse of European civilisation in general if capitalism, with its insurmountable contradictions, is not overthrown.’10

I will not burden the reader by extensively quoting from Trotsky; his own writings and the documents of the first four congresses of the Comintern are studded with references to the imminent collapse of capitalism. Let me just quote the following: ’The only thing excluded is the automatic restoration of capitalist equilibrium on a new foundation and a capitalist upswing in the next few years. This is absolutely impossible under conditions of modem economic stagnation.’11

This is taken from Trotsky’s report to the third congress in 1921. If one reads the document, one find that Trotsky gave a graphic and detailed account of the decline in production for all industries and agriculture in the whole of Europe, comparing the figures with the pre-war statistics. There can be no doubt that the whole thrust of Trotsky’s report and resolution was that capitalism had already passed its peak. And not merely was the system in decline, but it was actually unable to restore the pre-1914 levels of production. No one reading these documents today could be in any doubt that during the period of the first four congresses of the Comintern the whole of the leadership, including Lenin and Trotsky, considered that capitalism was in its death throes. Thus when examining the ideas of Lenin and Trotsky we are not dealing with a theory of relative decline but one of absolute decline.12

Now, of course, neither Lenin nor Trotsky were unwise enough to commit themselves to a prognosis of uninterrupted decay and decline. Always within their writings and in the resolutions of the Comintern there were inserted ‘escape’ clauses. But always these were such as to suggest that the possibility of capitalist recovery was extremely remote, and should not be taken into account in the strategy and tactics of the Comintern. And, again, Trotsky always allowed that even its its period of decay and decline capitalism would continue to exhibit its cyclical pattern, but these would be fluctuations of an overall downward movement.

How then can we reconcile Hillel Ticktin’s claim that whilst he eschews any catastrophist theory, his theory is in the same tradition as Lenin and Trotsky?

The Essence of Decline
Ticktin suggests that: ’We can have two interpretations of the events of this century. We can argue that capitalism took a blow in the pre-war period but has recovered by finding a new though essentially capitalist solution to its problems. We can also argue, however, that capitalism has not solved its problems at all but made huge concessions to the working class such that it has negated the very essence of capitalism.’13

The two parts of the argument are not symmetrical. Even if one accepts that capitalism did indeed recover after 1945, and did indeed find new solutions to its most pressing problems, this does not in any way commit one to accepting that capitalism found a ‘solution to its problems’. To say that capitalism has found a ‘solution to its problems’ implies that capitalism found a crisis-free equilibrium. But one can say that capitalism did find some solutions, which did indeed produce a prolonged period of growth. But that period of growth was not free of problems, nor were the solutions long-lasting. Ticktin wants to suggest that capitalism did not find any solutions after 1945, but merely survived by huge concessions to the working class. I would suggest that unless capitalism had not found some solutions it could not have made the concessions at all.

After all, what are we talking about when we speak of concessions? Full employment, rising standards of living, health care, social security, these were the real and visible signs of the concessions. Unless capitalism had been able to expand the forces of production on a massive scale, and increase production many times over, none of these concessions could have been made. But, I doubt if anyone noticed the capitalists being driven to penury because of these concessions. You would have been hard put to find any serious spokesperson for capitalism suggesting that the ‘essence’ of the system had been negated. But even during the ‘good times’ the cyclical pattern of capitalist development was not killed off, rather in the upswing of the long-wave after 1945 the cycles were dampened down. After 1974 we clearly entered a downturn, and with it the return of mass unemployment and all the other indicators of crisis.

How then is this decline expressed? Ticktin says: ’The theoretical question of the nature of the decline remains. If we start from the proposition that capitalism must be understood in terms of its laws of motion then it is the law of value which is in decline and hence the social relations underlying the law of value. Indeed it is necessarily the case that as capitalism develops the division of labour becomes increasingly integrated. In Marxist terminology, the socialisation of labour can only grow with the accumulation of capital. Such socialisation includes the growth of giant forms and so permanent monopolies, an increasing degree of government intervention, whether through nationalisation or through the use of monetary policy and other instruments, and the growth of bureaucracy both within firms and the government and the state apparatus. One can also argue that it lies at the origin of the expansion of the non-value sectors like health and education.’14

We seem to have finally arrived at the crux of Ticktin’s position. Capitalism as a system is in decline because the law of value is in decline. How is this decline expressed? By the monopolisation of the economy, government intervention and the growth of non-value sectors of the economy. Taking these arguments at their face value for a moment, we should note how far removed they are from Lenin and Trotsky’s theory of capitalist decay and imminent dissolution. It is not that Ticktin has modified this or that aspect of Lenin or Trolsky he has actually changed the whole basis for the theory of decline. In Hillel Ticktin’s projection we have a system that is still growing, and grew very fast for 25 years after 1945, but is progressively becoming less capitalist. This stands in sharp contrast to the Cominternist view of absolute decline, with minor fluctuations.

However, we only accepted the arguments for a moment, and that has now passed. The basis for Ticktin’s argument on monopoly is the ’... result is that monopoly becomes so much a part of pricing policy that all prices become monopoly prices and hence the law of value stands ever distant from prices. It is not that it has ceased to govern but today it is only at a distant level of totality.’15 However, no evidence is offered for the proposition that all pricing is monopoly pricing. Indeed I doubt if any evidence could be offered for such a proposition. No one doubts that capitalist monopolies today dominate the advanced economies which in turn dominate the world capitalist economy, but to accept that proposition should not snare us into conflating domination with total control. The idea that monopolies have such a total control is to fall into the trap of accepting that monopolisation is a permanent feature, and that once a firm reaches monopoly status it becomes a fixture. (Bukharin made just such a mistake in 1920 in his work The Economics of the Transition Period.) The evidence suggests otherwise. Competition will lead to monopoly, that is a truism of Marxism, but it also true that monopoly will also breed competition. Not only will monopolies (more accurately oligopolies) face competition from other giant firms, but the existence of such firms in turn breeds new firms at the fringes, which can grow to the point where they can challenge the existing giants.

Let me give two examples. After 1945 British and US car firms dominated the world market, and despite all the mergers and monopolisation in both countries today they face competition that has almost put many of them out of business. The Japanese and Germans in particular have mounted considerable competition. Now, it is true that in this case the competition came from oligopolistic firms in Japan and Germany, but the basic proposition holds. Secondly let us consider the case of information technology. A mere twenty years ago IBM of the US completely dominated the field of business machines. Apple and Microsoft today challenge IBM, and both started either in someone’s garage or back room. New technologies have the ability to break existing monopolies. Conversely, the same technology can promote the development of new ones. In personal computing and small business computers ten years ago there was a swarm of small firms all fighting for a share of the market; today most have disappeared because of the tough competition and it is now possible to see the outlines of a new coterie of oligopolies becoming dominant in the field.

Moreover, whilst it is true that oligopolies are ‘price fixers’ not ‘price takers’, this only holds for a limited period and within a certain price range. In very few fields are there any true monopolies – all of the oligopolies do actually face competition, so therefore their field of action as far as prices is concerned is always constrained by that competition. Even with a commodity that is a monopoly, the seller has to contend for a share of the existing market, i.e. the buyers will be constrained as to how much of their total income they are prepared to spend on any one particular item. If the price of any commodity goes too high substitutes will be sought.

How is monopolisation supposed to affect the law of value? Ticktin does not really spell this out. The basis for the law of value is, of course, the labour theory of value. How is the price/value of the commodity labour-power arrived at? Do monopolies purchase labour-power at above or below value? Or is it being suggested that the law of value no longer operates in the case of labour-power? If this is being implied, then, of course, we are indeed in considerable difficulty. The curious thing about Ticktin’s exposition of finance capital, which he says is the quintessential form of capital in decline, is that he does not advance any theory of money. This is what makes his exposition on the theory of value diffused.

The great problem which exercised many theorists, from Hilferding onwards, was how could a capitalist system operate with paper money? We should recall that it was only in 1972 that the US finally abandoned the gold exchange system for dollars. For the majority of the population, of course, paper money is something that they grew up with. But when one reads Trotsky’s speeches and writings to the first four congresses of the Comintern he was much exercised about the ‘debauching’ of the currency by the emission of paper money. At that time, paper money not backed by gold was still considered to be a novelty and an evil. Yet since the 1930s all currencies have eventually cut any connection with gold. It is true that it is since that time that inflation has become a permanent feature of the whole world economy, yet the capitalist economies appeared to thrive upon it. The fact is that any attempt to directly tie currencies to gold today would bring an almost catastrophic collapse in world trade, since the amount of gold in the world could not support more than a fraction of the trade.

Nevertheless, the basic question remains: how is it possible to operate capitalist economies with only state paper money? I do not intend to pursue that particular question in any detail here. But it does have a bearing upon the question of the operation of the law of value, therefore a few words are in order.

I will merely say that state paper money can exist, function, and still measure value because of the commodity labour-power. Labour-power is the single most important commodity that the capitalists buy, it is the source of surplus-value. Yet unlike any other commodity labour-power cannot be produced in a capitalist manner, it is produced outside of the formal framework of capitalist relationships. It is purchased like any other commodity, and its value is determined like any other commodity, i.e. by the socially necessary labour time required to produce it. But the measure of that socially necessary labour time is in the commodities which go to make up the ‘wage goods’ of the workers. These commodities are certainly produced in a capitalist manner, but are consumed by the workers within their own domestic economy. And it is in the consumption of these wage-goods that the workers produce labour-power. Labour-power is also the one universal commodity, it has to be used for the production of all other commodities, hence it has a universal recognition. It is this function of labour-power which, in the case of productive workers, establishes the ‘value’ of money or more simply the price level. Once one understands this theory of money, then one also understands that the monopolisation of the economy does not and cannot negate the law of value, the monopolists have to purchase labour-power like any other capitalist.

What Ticktin describes as the ‘non-value’ sectors of the economy (which are really non-market ones but only to a degree) are all subject to the same laws which regulate the productive sectors. It is not that the law of value is operating in some netherland, remote from the everyday world, it still regulates the sale and purchase of labour-power. The concessions which Ticktin, quite correctly, points to are part and parcel of the determination of the value of labour-power. The fact that a pan of the value of labour-power is not visible in the wage-packet should not blind us to its existence. The sectors that Ticktin mentions as being ‘non-value’, i.e. subsidised housing, education, health service and armaments, are all forms of unproductive consumption, and are either consuming surplus-value or are a part of the value of labour-power administered collectively. They cannot therefore be subsumed under the one heading of ‘non-value’ sectors.

The Socialisation of Labour and the Law of Value
The confusion within Ticktin is dearly expressed in the following: ‘Just as Marx adduced a law of early capitalism: the more developed merchant capital the less developed is capitalism; so we may state that the further developed is the process of socialisation of labour the more limited is the operation of the law of value.’16

There are two problems here. Firstly, merchant capital was seen as a precursor of the more developed form of capitalist production by Marx. It was a necessarily dominant form in the transitional period from feudalism, but it was a form of capital that reached back into antiquity and has continued into the full capitalist period. However, it is certainly true that as capitalist production became more fully developed merchant capital became a subordinate form. Merchant capital was, therefore, a ‘launching pad’ for the development of capitalist manufacture and should not be regarded as a barrier to that development. However, it needed special and particular circumstances for merchant capital to perform this task in Western Europe. Thus merchant capital was not historically antagonistic to the rise of manufacturing capitalism, it was an organic part of its development. This means that, the more developed merchant capital was, this indicated a maturing preparatory stage, and of course manufacturing capital arose out of that stage. In other words it is a symbiotic relationship not an antagonistic one.17

Secondly, there is no evidence for the supposed antagonism between capitalism and the socialisation of labour. On the contrary it is capitalism as a mode of production which has enormously enlarged the socialisation of labour, precisely upon the basis of the operation of the law of value, not in antagonism to it. The commodification of social life, which has been constantly growing, is an indicator of this socialisation of labour. It is precisely by this extension of commodification that capital socialises labour and bring more and more aspects of society under the sway of the law of value. What are we talking about when we speak of the socialisation of labour?

Firstly, in terms of concrete labour we are dealing with the co-operative nature of labour under capitalism, the replacement of skilled craftsmen or craftswomen by the introduction of the division of labour and the use of machinery. This division is the function of the desire for increasing relative surplus-value, and it is by treating labour-power as a commodity that this process was inaugurated and becomes evermore widespread. In other words the socialisation of labour is an indicator of the productivity of labour. The greater the socialisation of labour the greater the productivity of labour becomes. The second aspect of the socialisation of labour relates to the abstract nature of the labour incorporated within capitalist commodities. All commodities incorporate within them both abstract and concrete labour; the labour is both abstract and concrete at one and the same time. It is the abstract aspect of the labour which provides the commensurability of commodities when they are exchanged; X amount of socially necessary labour time is exchanged in an exchange of concrete commodities A and B. And capitalism has flourished on this process. Capitalism could not have grown to be the dominant form of production unless it had socialised labour on an historically unprecedented scale, but at the same time extended the sway of the law of value in the same proportion. Far from being antagonistic, the law of value and the socialisation of labour have had, and still do have, a symbiotic relationship. The antagonism arises within each and every commodity, i.e. the antagonism between value and use-value, but this has ever been so under capitalism, and is not an indicator of maturity or decline in and of itself.

How does Ticktin see the diminishing role of the law of value operating? ‘When workers are in the national health service or in education they are in a different relationship from workers in productive labour. But even workers in productive labour are not in the same relationship that they were 50 years ago. The welfare state and the commitment to full employment and growth changed the worker/capitalist relationship. Most important of all reduction or elimination of the reserve army of labour had been critical in the postwar period. The point is that the capital/labour relation remains but its form has changed.’18

We are not told in what manner the relationship of health service workers is different from those of productive workers. Do or do not the health service workers sell their labour-power? Or is Ticktin suggesting that there is no sale of labour-power here and therefore we have a quite different species of relationship? If it is not a sale of labour-power, what is it? Do such workers now constitute a different social category from that of proletarians? If they do it would be very difficult to determine just in what particular such workers are a different species. Have they any capital, with which to engage their trade in? It would appear not. Do they enter the labour market in any way differently from productive workers? We cannot find any difference, they still appear on the labour market offering their labour-power for sale, and the value of this labour-power is determined in exactly the same manner as that of productive workers. Are they bound by ties other than the sale of their labour-power to their employers? Hardly. Scratch around as we may, one cannot find anything that differentiates health service workers from any other workers. So what is it that gives them a different relationship that Ticktin claims for them? None as far as can be discerned from what he has said.

There is, however, one thing, one aspect, call it what you will, that does indeed differentiate such workers, i.e. they are counterposed by Ticktin himself to productive workers, and this means that such workers are unproductive, i.e. unproductive of surplus-value. Indeed such workers are not merely unproductive of surplus-value they are paid out of surplus-value. Is this the special relationship that Ticktin means? If it is, how does it differ from that of the unproductive workers that abounded in the ascendant phase or maturity of capitalism?

But what about the productive workers? We have been told that in this case the ‘capital/labour relation remains but its form has changed’. Are we dealing here with form or substance? Is the changed form merely one of appearance or is the changed form a reflection of a fundamental change in the substantive relationship? What is the substance of the capital/labour relationship? Surely it resides in the production of commodities by capital on the basis of the purchase of labour-power, which is regulated by the law of value. Capital in this case owns the means of production and the worker owns nothing but the ability to work. Has any of this changed, modified or been totally negated? Ticktin is unclear at this point. Is it that the form (appearance?) has changed? This may well be the case but does this mean that the fundamental substance of the relationship has changed? (If the fundamental capital/labour relationship has changed then the social formation is no longer capitalist.) Do the productive workers still produce surplus-value? And if they do, does capital still garner this surplus-value to itself? If the answer to these last two questions is yes, then we must say that the fundamental capital/labour relationship has not changed, and alterations to the form will have to be accounted for by an analysis of the particular epoch of capitalism that we are presently living through.

Ticktin does suggest some of the changes in form to account for the declining form of capital, he says: ‘... the old form of control through commodity fetishism, and so value, and the reserve army of labour no longer operates with momentous results. A whole new politics has followed, which has been rendered conservative because of the identification of socialism with bureaucracy. By being conservative the system remained stable.’19

But, again, we are offered no evidence that commodity fetishism has been displaced. This commodity fetishism is part of the alienation that both capitalist and labour suffer under the reign of capital, is Ticktin now suggesting that alienation has been overcome? If this is not what he his suggesting, just what does he mean? We have already seen that his assertion about the decline in the provenance of the law of value is unsupportable, and presumably he makes this direct link between value and commodity fetishism, which means that this claim too must be rejected.

He further says: ‘The decline of the law of value has been accompanied by the emergence of new transitional forms, which have apparently given capitalism a new lease of life. These new forms cannot be regarded as simply new additions to the law of value making it work more efficiently as some would see it. They have certainly permitted capitalism to continue to function, but at a price. It is this price which constitutes a source of disagreement.’20

We seem to be coming closer to an exposition of some fundamental issues here, since Ticktin continues: ‘The various forms whereby the law of value has been replaced or supplemented constitute, in my view, forms which also contradict the operation of the law of value. As argued above, they also and necessarily change the relations of production. Concretely nationalisation prevents capitalists taking part in a particular sector. Furthermore, individual capitalists normally object to such a nationalised sector, such as a local government construction firms, operating without control as they cannot compete with such firms. The point is that prices and profits are determined outside of value and the social relations become a combination of administrative or bureaucratic relations and capitalist/worker relations.’21

What can we say therefore constitutes the essence of this declining form of capitalism? 1. The declining role of the law of value (or its complete replacement). 2. This is expressed in monopolies and nationalisations. 3. The dominance of finance capital as a parasitic form of capital. 4. The elimination of the reserve army of labour (i.e. full employment). 5. The welfare state, health service, education, social security, etc. 6. An inability of capital to maintain its dominance other than by more and more concessions to the working class. Some of these points have already been dealt with, and need only be mentioned in passing.

1. Nothing in what Ticktin has written constitutes any firm evidence for a decline in the role of value relations. What he has pointed to have been changes in the way the law of value operates. However, as I have demonstrated, these do not in themselves constitute a fundamental change, rather they are different forms of the operation of that law.

2. Monopolies are still subject to the law of value, and moreover although they dominate markets do not and cannot totally control them. Moreover, monopolies are not permanent; they can be broken or changed, either by other monopolies or by changing technology.

Nor it seems are nationalised industries immutable. The reversion of such industries to the private sector does allow the capitalists to ‘take part’ once more. Ticktin may suggest that it makes no difference if a nationalised industry is privatised, since the government still intervenes and regulates it,22 but he is missing the point. Whilst industries were nationalised capital could only intervene in them indirectly, through selling to them or purchasing at discounted prices, but they were not hermetically sealed off from the rest of the economy. Once they are privatised capital is again in a position to directly exploit the labour expended in such industries. I am sure that the capitalists who now own and control the privatised industries would be quite surprised to be told that really it makes no difference! What has escaped Ticktin’s attention is that the privatised industries will now be participating in the formation of the general rate of profit, this means either that rate will fall or as seems more likely the social rate of surplus-value will increase to bring the profits of such industries up to the rate of the previous private sector. Certainly if one looks at the reductions in the workforce, coupled with large increases in productivity, that has been the result of privatisation, along with increases in prices for individual consumers (i.e. mainly the working class) we can see that the rate of exploitation has increased spectacularly.

Ticktin also mentions in connection with monopolisation and nationalisation the huge increase in bureaucracy, state and private. Here too we can see this going into reverse. The introduction of computers, and information technology generally has meant that all ‘service’ sectors are now in the process of reducing their labour force.

3. That finance capital does operate as a separate sector of capital cannot be denied, nor that it is parasitic. Moreover, since the ending of the dollar’s connection with gold and the deregulation of currencies which occurred in the 1980s it is also obvious that there are today huge amounts of finance capital swirling around the world seeking the highest possible profits. The combination of de-monetarisation of gold, information technology and deregulation means that today capital can be transferred around the globe in an instant. What Ticktin singularly fails to do however, is to provide any theory of money. He maintains that finance capital has become an ‘abstract internationalist and conscious form of capital itself’.23

But this abstract capital must have a national base from which to operate from, and more particularly to protect it. In other words although the forms of capital become more internationalised, it still cannot shake itself free from a particular state formation, nor ultimately – as Ticktin himself recognises – from productive capital. The dream of making money from money on an ever expanding basis is a pipe-dream, it can only operate for relatively short time periods, and then the markets crash. So, finance capital is not in reality such an independent form as its practitioners dream of. The short-termism of this form of capital is actually spilling over into the productive sectors. The Permanent Innovation Economy based upon computers and information technology, plus the need to increase the rate of capital circulation, plus the need to decrease the rate of commodity utilisation introduces a tendency for productive capital adopt this short-termism.24

4. The elimination of the reserve army of labour? Mass unemployment is once more the norm throughout the world. Moreover, the tendency for unemployment to rise has been on an upward trend since 1968! This rising tendency coincided with the downturn of the long-wave of 1945. This is not confined to the advanced capitalist countries, because even in those countries with very low wages modern capital equipment displaces labour in the productive sectors.

5. The welfare state? This has been under attack for well over a decade now, not only in Britain but world-wide. In Britain as is evident by opening any newspaper these days, the welfare state is being rapidly dismantled.

6. More and more concessions to the working class? Not only is the welfare state being dismantled, but no major ‘reforms’ have been enacted since the post-war period. Not only are there no more concessions, but the basic organisations of the working class are today under attack in all capitalist countries. Trade unions are being shackled and absorbed. The success of the ‘fight against inflation’ is in fact an indicator of the success of the bourgeois counter-offensive.

What then is left of Ticktin’s theory of declining capitalism? I would argue that the theory stands in tatters, and this is because events themselves have disproved it. The test of all theory is experience, and I have demonstrated that experience has shows that just as the theory of catastrophism was shown to be false by events, so too has Ticktin’s theory. What is particularly disturbing about the theory of declining capitalism, as propounded by Ticktin, is that despite all his protestations that it is not a catastrophist theory, it still carries within it the idea of capitalism inexorably sliding towards perdition. It is true that he specifically argues that capitalism will continue to exist until it is overthrown, but if that is the case how does this fit in with his basic premise of the dialectics of rise, maturity and decline. There does seem to be a contradiction here. Rosa Luxemburg used to argue that capitalism would come to a sticky end from its own internal contradictions, but qualified this by saying before that actually happened the proletarian revolution would have taken place. In similar vein Ticktin points to the choice ‘socialism or barbarism’, and I would agree with him in this respect, but the idea of a capitalism that has been on the skids for the last 100 years does rather suggest that at some point it will really take a nose-dive into oblivion.

There is another aspect to what Ticktin puts forward. He argues that not only is the present period that of capitalist decline but also one of transition. He says: ‘We have to take another step and argue that at a certain point in this double process of the decline of capitalism and the transition to socialism, each of which has its own laws even if they are closely intertwined, the failure of socialism to come into being causes the evolution of monstrous forms and threatens the world with the possibility of barbarism. Indeed barbarism has already arrived with Stalinism and Fascism and wars. The point, however, is that the forces of production are increasingly railing against the relations of production producing either revolutions or forms which transform the market.’25

So, we are in a period of declining capitalism, a transition period – which may or may not arrive at socialism – and in an epoch of barbarism. There are certainly numerous barbaric military regimes still around, and we certainly still have Stalinist China. But there are not any classical fascist regimes left and Stalinism in Russia has disintegrated. Surely the concept of ‘socialism or barbarism’ was based upon the collapse of capitalism, but, there being no successful revolution, in this sense collapse referred to the mode of production collapsing. I certainly agree that the failure of socialism to arrive has produced many monstrous forms. It is perhaps in this sense that Ticktin points to fascism and Stalinism. They are today out-dated forms, but the barbarism is still encroaching. Perhaps we should not look for the spectacular ‘big bang’ collapse of capitalism into barbarism, but rather see capitalism transmuting itself into barbaric forms. If this is what Ticktin is really saying then I would agree with him. But on the present evidence I see no transitional forms that lead us to socialism, on the contrary all those forms of state property that socialists previously mistook for such transitional forms are in retreat. This may well be a part of the barbarism that we all fear, i.e. the destruction of the welfare state, and private monopolies allowed to run rampant, with at the same time an authoritarian state, creating larger and larger lazarus layers without hope.

What are the Concrete Issues at Stake?
I have been pondering this question, but did not deal with it so far, since I wanted to map out what the differences are on the basic theoretical questions. The conclusion I came to about what actually divides us is that Ticktin actually has hidden within his theory a catastrophist perspective. He does not seem to acknowledge the actual defeats that workers have suffered over the last decade, and because of this I think he feels that the socialist movement will make a relatively rapid recovery, even though he agrees it is in a bad state now. I take the contrary view, and feel that it is going to be a very long haul. Moreover, I do not think Ticktin takes a world view, but on the contrary seems to pay close attention to the advanced capitalist countries without seeing the rapid growth of previously underdeveloped ones. And because of this he fails recognise the huge growth in working class organisations that are just over the horizon in the developing countries. There is a further strand to Ticktin’s position – he sees no prospect of capitalism being restored in the ex-USSR etc. Again I mink he is being far too optimistic, and this colours his view of the general prospects for capitalism.

The fact that he keeps on saying he sticks to Lenin’s views also makes me wary of the type of political organisation Ticktin considers appropriate. There has been no discussion about the merits or otherwise of Bolshevism in the pages of Critique. Given all the experiences that have accumulated since November 1917 it behoves us all to come to some historical conclusion on this matter, since it will help determine the type of political organisations envisaged to assist in the transition to a socialist society.

There are other differences between us but as yet they are unstated. If one believes, as I do, that capitalism is only now reaching its age of maturity, then it means that one has quite different perspectives both in the advanced capitalist countries and the developing ones, and in the ex-state collectivist countries. Again one must have some view of what constitutes the ‘working class’ (see my article in the last issue of New Interventions Vol.4 No.3). Ticktin does not address this question at all, but rather talks about the working class as though it is some kind of immutable entity. If one looks at events over the last decade, one finds that workers have mounted struggles in quite different countries for very similar aims. These aims all centre upon the need for democratic freedoms, the right to organise independently, free speech, free press. These struggles have been mounted in such places as Russia, Korea, Brazil, the Philippines. In Chile for instance workers did not fight the military regime to establish a socialist one, but for the re-establishment of bourgeois democratic rights. The same happened in Spain and Portugal, Ethiopia, and so on. This should tell us something about the nature of the world politics in the coming epoch.

My discussion in the last but one issue of New Interventions about class formation is very pertinent to all this. It is quite clear to me that workers can only organise as a ‘class for itself’ once the basic bourgeois freedoms have been won. Industrialisation in itself is not sufficient to create a working class, it also requires ‘modernisation’ in a much broader sense, i.e. bourgeois democratic rights. Even in this country there is a need to win back many of the democratic forms that have been eroded over the last decade. Nothing is permanent, and needs to be fought for many times over.

Socialism can only be achieved by the conscious actions of the working class acting through the political organisations it creates. This means that I believe that the alternative ‘socialism or barbarism’ is a very real one. If capitalism is able to move from its present down-wave of slow growth, slumps etc to an upward-wave of rapid development then this will only multiply the present problems of unemployment, bad housing, run-down health services etc. In other words a new period of prosperity for capitalism will be bought at enormous cost to the bulk of the people of the earth. The cost could ultimately be the ruination of the global ecology, and then the system could collapse into barbarism. Just what the time-scale for all this would be I do not know. One of the aspects of ‘mature’ capitalism is the very rapid way in which it works, turns-over, and uses up materials and options. The system seems to be constantly changing gear upwards, accelerating all its dynamics. What are the strategy and tactics for the working class and socialists that flow from Ticktin’s theory of decline? It is here that we meet a large blank. Nothing that Ticktin has written so far indicates the type of challenges posed for workers, the policies which need to be pursued, and so on. I am not suggesting that we should expect the type of detailed blueprints hawked around by the many ‘Fourth Internationals’, but we could at least expect some projected strategies.

Given the implicit catastrophism within Ticktin’s theory, one is left wondering if there is not also some ultra-leftism lurking there. Certainly we have seen much ultra-leftism in the practice of those political organisation which did adhere to the Comintemist view of the world. But up to now Critique and Ticktin have eschewed any open alliance with such tendencies.

Here are a few issues that I feel need to be addressed.

1. What should be socialists’ attitude towards the decomposition of the traditional labour movement? Trade unionism in the advanced capitalist countries is in retreat. This is not merely because of the legal attacks, but also because of the changing nature of production. Even where we see large-scale working class actions in Europe, they have largely been very defensive ones to save jobs. There is a tendency for smaller, dispersed workforces, today in Britain 1.5 million people work from home. Millions more work as part-timers. How are such workers to be organised?

2. With the creation of a new world market, the previously underdeveloped countries are being developed. International solidarity becomes a key issue for all workers faced with the international mega-monopolies. It is also obvious that the existing trade union bureaucracies cannot respond to this situation, since most of them have been absorbed by their own national state bureaucracies. Taking into account this and point 1, we should be examining ways and means of developing new organisational forms for the working class to meet this challenge.

3. In the ex-Soviet Bloc countries, where the workers are only now beginning to form a class in itself, what should socialists’ attitude be towards helping such workers organise themselves?

3. What strategies should be adopted to defend welfare? Is it sufficient to be defensive or should we adopt offensive strategies? For example, here in Britain we have seen the Health Service progressively removed from even the those formal elements of democratic control which previously existed. Should we not be demanding a genuine democratic control, i.e. popularly elected bodies? To mount such a campaign successfully would be to win a victory for ‘working class political economy’, as Marx called it.

4. What should we advocate as a remedy for world poverty, while at the same time paying attention to the need to avoid ecological disasters? It is insufficient to merely say we need democratic planning. We must have concrete proposals. Global poverty needs global solutions, but what concrete measures can be advocated here and now that will actually do something, whilst at the same time taking a general socialist perspective forward. What measures can be taken against the predatory finance capital that zooms around the world sucking the life-blood from millions.

5. What concrete policies can we advocate for the elimination of unemployment? National localist solutions are insufficient. Just as there cannot be socialism in one country, there cannot be full employment in one country.

I will not go on, since I merely wished to indicate the type and scope of the questions needing addressing. I will, however, return to these at a not too distant date.


1. H. Ticktin, ’The Decline of Capitalism’, Critique No.23, 1991.

2. Ibid.

3. Ibid. Emphasis added.

4. Ibid.

5. V.I. Lenin, Imperialism: The Highest Stage of Capitalism, International Publishers, New York, 1934. p.11.

6. Ibid., p.14.

7. Ibid., p.80

8. Ibid., p.90.

9. Ibid., p.114.

10. Theses, Resolutions and Manifestos of the First Four Congresses of the Third International, Pluto Press, 1983, p.1.

11. L.D. Trotsky, The First Five Years of the Communist International, Pioneer Publishers, New York, 1945, Vol.1, p.211.

12. The idea of absolute decline was one that Trotsky, with certain reservations maintained to the end of his life. In the founding document of the Fourth International, The Transitional Programme or The Death Agony of Capitalism, we find: ‘The economic prerequisites 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. Already, new inventions and improvement fail to raise the level of material wealth.... The bourgeoisie itself sees no way out.’

13. Ticktin, ‘The Decline of Capitalism’.

14. Ibid.

15. Ibid.

16. ‘The Transitional Epoch, Finance Capital and Britain’, Critique No.16, 1983.

17. For the evidence of this proposition see Fernand Braudel’s three-volume study, Civilization and Capitalism.

18. Ticktin, ‘The Decline of Capitalism’.

19. Ibid.

20. Ibid.

21. Ibid.

22. Ibid.

23. Ibid.

24. I dealt with these aspects in my essays ‘Monopoly Capital Revisited’, Critique No.23, and ‘Marxism in the New Age: Towards the Twenty-First Century’, New lnterventions, Vol.3 No.3, October 1992.

25. Ticktin, ‘The Decline of Capitalism’.