(Paper presented by Arindam Sen at a Seminar organised by the Indian Institute of Marxist Studies (IIMS) at Mysore on 8 February, 2003)
We meet here in the third year after Y2k at a critical juncture in the world economy and polity, a juncture pregnant with contradictory trends and possibilities. War clouds gather overhead dark and deep, as part of that sordid imperialist offensive called globalisation; at the same time we witness unmistakable signs of a rising tide of people’s resistance. Amidst worldwide stagnation or recession, the US economy is reeling under one body blow after another: the stock market bubble bust, the aftermath of S11, the colossal collapses like Enron and world.com, and so on. If the morning really shows the day, the beginning of the 21st century does not augur well for the world’s rich and powerful, while it definitely holds out challenging prospects for the fighting forces of the poor and oppressed.
But am I getting too optimistic? The other day I was discussing the global capitalist crisis with a septuagenarian comrade. He did not seem to share my enthusiasm. “Well, I have been hearing all such talk of crisis for the last four decades” – he said matter-of-factly – “but nothing came out of it”. And he added: “I’m afraid this time too the bloody imperialists will manage it, somehow.”
I could not simply brush off this observation born of experience. Indeed, in about a decade from now, we will be observing the 100th year of publication of Lenin’s celebrated treatise which characterised imperialism as the last, moribund stage of capitalism. How come capitalism is still alive and kicking? Has resilient capitalism proved Lenin wrong?
This is a very legitimate question, if we do not look upon Lenin and Marx as gods. We must find a proper answer to it, otherwise we cannot update our understanding of the laws, the discovery of which in Capital made possible the transition from utopian to scientific socialism, and which Lenin further studied and clarified in Imperialism, the Highest Stage of Capitalism. So please bear with me as I dwell for a while on matters not very exciting.
First of all, it must be remembered that Lenin used expressions like decaying, moribund, etc. in relation to imperialism not to preclude the possibility or fact of growth, but in an altogether different sense, very specific sense:
“Monopoly, oligarchy, the striving for domination and not for freedom, the exploitation of an increasing number of small and weak nations by a handful of the richest or most powerful nations – all these have given rise to those distinctive characteristics of imperialism which compel us to define it as parasitic or decaying capitalism. … It would be a mistake to believe that this tendency to decay precludes the rapid growth of capitalism. It does not. In the epoch of imperialism, certain branches of industry, certain strata of bourgeoisie and certain countries betray… now one and now another of these tendencies. On the whole, capitalism is growing far more rapidly than before.”1
High-speed but uneven, lopsided growth and pronounced decay thus constitute a unity of opposites (where the latter is the principal aspect of the contradiction); so do monopoly and competition (cf. Marx on the “unity”, “synthesis”, ”movement” comprised by these two: “Monopoly produces competition, competition produces monopoly”2.) The growth-decay unity, like the competition-monopoly movement, has today become much more pronounced at all levels: inter-sectoral (the “new economy” vis-à-vis “smokestack industries”), inter-national (say, Argentina compared to the USA), inter-personal (with the rich-poor divide growing sharper everywhere) and so on. It is easy to demonstrate that other features of imperialism discussed by Lenin – such as export of capital predominating over export of commodities, the rise of the “financial oligarchies” and “international monopolist capitalist associations”, etc. – are much stronger today than ever before. As for “parasitism”, Lenin had already talked of “the financial strangulation of the overwhelming majority of the population of the world by a handful of ‘advanced’ ‘countries’ – by “international banker countries” and “usury imperialism” – a trend that has assumed more institutionalised shape with the rise of the transnational financial corporations and the IMF, World Bank, Asian Development Bank etc.
But to show how the course of imperialism has followed Imperialism is not our main concern today. On the contrary, we need to ask ourselves: how does capitalism, for all its decadence, moderate or manage its irresolvable contradictions and thus continually postpone a collapse Marxists have long expected to be impending?
Well, there is an important political dimension to the question – the split in the socialist movement, the shortcomings of the communist parties, etc. But please allow me to concentrate on the less discussed, i.e., economic aspects.
In the past, capitalism has been able to overcome, to different degrees on different occassions, recurring problems of stagnation/recession/crisis thanks to various voluntary measures3 as well as an inbuilt involuntary mechanism. The latter refers to massive destruction of productive forces through large-scale wars and/or system-wide crisis, which create a new space for the expansion of capitalist production through a painful process of restructuring, much as new trees come up sometime after a devastating forest fire. The classic example was the Great Depression (GD) merging into the second world war (as JK Galbraith put it), which essentially4 laid the material basis for a quarter century (1948-73) of almost uninterrupted expansion – or extended reproduction, to use a technical term. The sustained rise in the demand of the commodity labour power (itself sparked off by an initial short supply of other commodities) led to near-full employment and steady wage rise. The latter in its turn stimulated demands of most other commodities and thus acted as the engine for economic expansion. In such conditions the capitalists urged the state to run health, education and other projects to aid the reproduction of quality labour power with taxpayer’ money. The enhanced prestige of Soviet Russia and the rise of a socialist camp after the Second World War also exerted a pressure for reconstructing capitalism with a human face.
Such in brief was the political economy of the welfare state, and the strategy paid off profusely. In two to three decades, however, the space for expansion newly created by the devastating war was exhausted and following the oil shock (1973) the bad old maladies began to resurface: overproduction, excess capital, surplus labour. State help for reproduction of labour power was no longer deemed necessary, rather the capitalists favoured the transfer of state funds from social programmes to the private sector in the shape of trade credits, direct subsidies, tax cuts etc. They also raised the demand of privatisation so as to find investment opportunities for their excess funds. Thus began the era of neo-liberalism, soon to become a global offensive.
This latest phase of imperialism has got several distinctive features such as the incredibly fast and massive movements of finance capital across the globe through stock and currency markets, the global stranglehold of mega corporations and their ever deepening intrusion into all domains of public and private life, the predominance of ICE (information-communication-entertainment) and FIRE (finance-insurance-real estates) companies and so on. But today we are not going to discuss these. Let us stick to the question: what are the most important crisis management techniques today? These include: speculation, autophagia, labour shedding, burden-shifting.
In the face of market-glut in almost everything and falling profit rates in manufacturing sectors, speculation in foreign currencies, shares, bonds etc. has emerged as capital’s latest Eldorado. By the late 1990s, the volume of transactions per day in foreign exchange markets alone came to over $ 1.2 trillion, which was equal to the value of all trade in goods and services in an entire quarter.5 Swindling and speculation are now regarded as a science: in fact the 1997 Nobel in economics went to American hedge-fund operators Robert Merton and Myron Scholes, who developed a model for pricing “derivatives” like stock options – a model expected to help speculate ‘scientifically’. In a bizarre symbolism, their own firm Longterm Capital Management went bust in a year. Not far behind was the great dotcom collapse of 2000-2001 which wiped out $ 4.6 trillion in investor wealth on Wall Street – an amount that was half of the American GDP and four times the wealth wiped out in the 1987 crash.6 Such was the ignominious anti-climax to the carefully engineered, state-sponsored stock market frenzy for the ‘new economy’, and it signalled the end of the dramatic bubble-driven boom in the USA in the second half of 1990s. A striking illustration, indeed, of the bankruptcy of capitalist ‘recovery’ today!
Second, growing centralisation of capital and forced cartelisation are traditional traits of imperialism; now in the battle of titans these have assumed truly diabolic proportions. Thus in recent years we witnessed a spate of mega mergers and acquisitions like the Mobil-Exxon merger, the Daimler Benz-Chrysler-Mitsubishi combination, the Renault takeover of Nissan, etc., and we also saw cases where ‘deals’ could not be arrived at, and MNCs like retailer giant K-mart went bankrupt. Such instances of capital cannibalism, or capital reproducing itself by autophagia, only help individual firms survive at the cost of others; for the economy as a whole they only mean further contraction and decay.
Third, saving on the wage bill by means of mechanisation and higher workload is a time-tested strategy of the capitalist class. Today it is being used with unpredented vengeance, not sparing the so-called “white-collar workers” and those in the safest jobs. The reduced purchasing power of vast sections of the population leads to further shrinkage of the market, calling for further downsizing. So the vicious cycle goes on, stagnation leads to recession.
Fourth, transferring the burden of crisis from the centre of world capitalism to the peripheries under the grand name of globalization – with the WTO as the flagship leading the G7 offensive against the third world – is a technique we are discussing (and protesting) everywhere nowadays. So I need not go into details. I would only draw your attention to the fact that the slow but sure ruin of industry and agriculture in much of the third world is severely undermining an important mainstay of imperialism: the export of capital from advanced capitalist countries. Once again, the short term ‘solution’ only aggravates the problem in the long run.
Can’t there be better, more farsighted solutions, then? Well, there is no dearth of good ideas. In connection with the problem just mentioned, for example, George Soros wrote in 1998:
“The most urgent need is to arrest the reverse flow of capital. That would ensure the continued allegiance of the periphery to the global capitalist system, which would in turn reassure the financial markets at the centre and moderate the ensuing recession…”7
Nobody took this piece of good advice – like many others scattered in his The Crisis of Global Capitalism – seriously. Our Amartya Sen, hailed as “the conscience of the economic profession”, also laboured much to give a welfare tinge to late capitalism. For his noble ideas he got the Nobel belatedly, but there is no change in the ground rules of the game. Blind forces of the world market or “market fundamentalism” and the unruly TNCs reign supreme, creating a situation which prompts Soros to exclaim that the global capitalist system is “coming apart at the seams”.
Even this cursory survey of imperialism’s post-war trajectory reveals that it is indeed the decaying last stage of capitalism, but within that we can discern different phases. One such was the very extraordinary phase (circa 1948-73) of comparatively long-drawn, overall expansion in the front-ranking capitalist countries and to a lesser extent on the world scale, a phase of “general prosperity” in the words of Marx.8 This illustrates the tremendous resilience of capitalism, and we Marxists should have no difficulty in recognising that. But can it resurrect that exceptional ‘golden’ period? As we have seen, that phase was a product of peculiar eco-political conditions, and cannot be recreated simply by recourse to the “intelligent policies” of those days. The choice between New Deal and Reagonomics, between welfare statism and neo-liberalism, is decided primarily by the specific material requirements of the bourgeoisie in a particular period – by the immediate class interests of the dominant bourgeoisie – and not by good or bad wishes of statesmen.
Well then, cannot the spectacular achievements in science and technology help imperialism out of the crisis? Over the last 10-12 year we have experienced, both in America and India, the limits and the shocks involved in IT-led, ‘new economy’ – based growth, which essentially meant windfall profits for a few and ruin for many. We have seen enormous enhancement of agricultural productivity, but has that solved the problems of farmers in France or the Philippines or India? With overproduction (read underconsumption) and excess capacity affecting almost all sectors from cars and computers to farm products and telecommunications, no end to the persistent crisis is in sight. Yes, modern technology does have the potential of bringing about unprecedented prosperity and peace for the entire world population; but that potential can only be actualized by liberating science from the prison of greedy corporate sponsors.
The only possibility – a very abstract theoretical possibility, if we were to look for one – of world capitalism partly and temporarily rejuvenating itself would thus rest on some kind of a re-enactment of the Great Depression – World War II scenario. But anything even remotely comparable to that would entail the very real risk of the global chain of imperialism snapping once again at its weakest link, as happened after both the world wars. Moreover, even a big conflagration short of a world war but involving some of the major powers may mean not just MAD (mutually assured destruction of two nuclear powers) but globally assured extinction of the humankind.
The practically irresolvable structural or general crisis of imperialism stems from the most crucial or principal contradiction of capitalism: that between socialised production and private appropriation. Today the contradiction is growing sharper and sharper as globalization promotes the first aspect and transnational monopolization the second on a truly global scale. And this means that the ground is prepared more solidly for the inevitable transition to socialism, where the contradiction is resolved by socialization of appropriation (alongside already socialized production).
I said inevitable transition, not imminent. But don’t think it is just a matter of conviction or an old Marxist credo. With your own eyes you can see the crisis spreading from the peripheries to the centre of the imperialist system: from Latin America and East Asia to Japan, parts of Europe and the USA. And very interestingly, the mass movements against the onslaughts of capital in crisis are also progressing along the same – periphery to centre – direction.
Yes friends, it is necessary to take note of both the widely publicized “mobilizations against globalisation” in the West and the usually less dramatic but more sustained people’s movements in the East. Both are important, each complementing the other. Are not the advances made by the PT (Workers’ party) and the MST (Landless Peasants’ Movement) in Brazil and the election of President Lula most encouraging? So is the protracted Venezuelan resistance to blatant US exploitation and domination under the leadership of President Chavez, who was ousted last year in a US-backed coup, but soon restored by people’s power, and who is under constant threat from the CIA. But in cases where the people go beyond the bound of legality and take revolutionary steps, the media often tries and blacks out such news. For instance, did you know what happened in Ecuador on the first 21st January of the 21st century – that is on 21 January 2000? Insurgent masses captured the seats of power as the military got breached from within. Counter-revolution regained initiative pretty soon, but the event remains significant and symbolic. In early 2002, insurgent masses in Argentina came close to seizure of power, while militant movements in Columbia, Bolivia and Paraguay remain constant headaches for the national elites and their American master. I need not recount all the movements; hats off to the toiling people who are challenging the lone superpower from its very backyard, i.e., from Central and South America. They are in the van, but we in South Asia and people in other parts of the third world are also catching up.
The series of anti-globalisation and lately anti-war marches that started from Seattle on the eve of the 21st century have been very correctly hailed as a new internationalism. Are they not remarkable in terms of numerical strength, continuity, militancy and above all, a steady advance in the level of consciousness? Slogans expressing solidarity with the third world (e.g., “drop the debt”) has became prominent, and the general spirit is manifestly anti-imperialist in very concrete terms. Writes PR Dubhasi, a keen observer of the movement:
“… If the SAP (Structural Adjustment Programme – AS) imposed by the World Bank and the IMF on the underdeveloped countries leads to their economic dependence, increases the gap between the rich and poor countries, worsens poverty and unemployment and leads to deprivation of the common people, if market economy and capitalism erodes natural resources and pollutes the atmosphere, then surely it is necessary to find an alternative. In the name of free market economy there cannot be commodification of everything – of human values, cultural diversities and free gifts of nature. In the name of free economy MNCs cannot be allowed to run riot. The civil society and the local community must have the space to act and where necessary the state has to intervene. These are some of the ideas which the protest movements stand for.”9
The great diversity of forces involved in this movement – from TUs to NGOs covering environment, gender and other social issues to militant anarchists – is certainly a great source of strength. As for the lack of political and organizational cohesion, one need not be too worried. The Marxist approach to situations where they are a negligible minority was demonstrated in practice in the First International (1864-71) and later laid down by Engels in letters to comrades trying to intervene in the upcoming labour movement in America in the 1880s:
“The masses must have time and opportunity to develop, and they have the opportunity only when they have a movement of their own – no matter in what form, as long as it is their own movement – in which they are driven further by their own mistakes...”
In another letter he wrote:
“… above all, give the movement time to consolidate; do not make the inevitable confusion of the first start worse confounded by forcing down people’s throats things which, at present, they cannot properly understand, but which they will soon learn.”10
The more far-sighted among the million marchers, who display such exemplary conviction and determination, will in time come to appreciate the value of Marxism as the best aid to their own movement. This is our conviction. The demonstrations are but a concentrated expression of a broader popular disenchantment with TNC-dominated capitalism, which is visibly growing and creating new soil for a reinvigoration of the communist movement in Europe, just as the resurgent left movement in Latin America and elsewhere is doing in the Third World. Of course, it remains for Marxists to sow and reap on these soils – soils rendered more fertile by the growing crisis of capital and diverse movements in East and West.
And that, my friends, is quite a formidable task. I would even say that the new prospects themselves hold out the biggest challenge for Marxists. For to build on these potentials, we Marxists need not only to exert ourselves, not only to intensify our propaganda and organisational work a hundred times; we must radically improve our theoretical arsenal, our strategy and tactics, our organisational methods.
Yes, I do feel that the central challenge before Marxism is that of its adequate enrichment and renewal. Renewal commensurate with the increasing velocity of changes and developments all around: in economic structures, in forms and features of class struggle and in the realm of ideas – in the sciences natural and social, in politics and culture, everywhere. It has to draw nourishment, for example, from the advances in, say, quantum mechanics; from critical engagements with trends like postmodernism and feminism; from comradely interaction with the new social movements on environment, gender and other issues. Basing ourselves on the proletarian class stand, materialist viewpoint and dialectical method, we must boldly expand the horizon of our theory and practice by critically assimilating all that is valuable in the entire spectrum of human endeavours. We must brace up for the challenging prospects of the 21st century in the ever-youthful spirit of Karl Marx:
“We do not set ourselves up against the world in doctrinaire fashion with a new principle: Here is the truth! Here you must kneel! … we do not seek to anticipate the new world dogmatically, but rather to discover it in the criticism of the old… It is not our task to build up the future in advance and to settle all problems for all times; our task is ruthless criticism of everything that exists, ruthless in the sense that the criticism will not shrink either from its own conclusions or from conflict with the powers that be…”
And lest one should forget, let us add that for Marx the people’s “weapon of criticism” always included “criticism by weapons”, because he was a philosopher who believed that it was not enough to explain the world, the point was “to change it”.
The 19th century gave us Marxism, the First International, the Paris Commune. The 20th century gave us the Russian and Chinese revolutions, the other liberation struggles, and technological advances preconditioning the transition to a happy and just society. In the light and shade of the 21st, a new world is struggling to be born, the dreams of millions of our martyrs around the earth are waiting to be fulfilled, and it demands of us enormous courage and sacrifice to make this happen:
For if I shall not burn,
And you shall not burn,
If we shall not burn,
Then who will dispel the dark?
Notes and References
1 Imperialism, the Highest Stage of Capitalism, VI Lenin, Selected Works in one volume, p 260.
2 Karl Marx to PV Annenkov, December 28, 1846, Selected Works in three volumes, Vol. I, p 523.
3 The more important measures include: (a) expanding the geographical frontiers of the capitalist order – from colonial expansion a few centuries back, to the recent penetration of East Europe and Russia, for example, (b) introduction of new commodities including services such as modern health aids and consumer durables; (c) radically improving productivity and cutting costs by technological innovations; (d) long term economic policy adjustments, such as keynesianism; (e) special one-time measures like the post-war Marshall Plan; (f) the war economy or “military industrial complexes” (a term first used by American president Eisenhower) as a guaranteed investment avenue for accumulated excess capital; and so on.
4 Various other factors also helped the process, such as the USA remaining largely unscathed in the war, and capable of financing a capitalist resurgence in Europe and Japan.
5 “Capitalist crisis and corporate crime in America” by Walden Bello, Global Outlook, Issue Number 3 – Winter 2003.
7 The Crisis of Global Capitalism, p 176.
8 In The Class Struggles in France, 1848 to 1850, Marx described the situation in 1850 as follows: “With this general prosperity, in which the productive forces of bourgeois society develop as luxuriantly as is at all possible within bourgeois relationships, there can be no talk of a real revolution. Such a revolution is only possible in the periods when both these factors, the modern productive forces and the bourgeois productive forms come in collision with each other.” (Selected Works of Marx and Engels in three volumes, Vol. I, p 289.)
9 “Peoples Movement against Global Capitalism”, EPW, 9 February, 2002.
10 Frederick Engels to Frederick Adolf Sarge, November 29, 1886, to Florence Kelley – Wischnewetzky, 28 December, 1886 Marx Engels Selected Correspondence, p 374 and p 377. q