REVIEW

Capitalist Crisis and Making of a Marxist

- Arindam Sen

Back in the dog days of the Great Depression, “a very bourgeois American first-year graduate student” (as he would describe himself in a letter to a friend decades later) from Harvard landed in the London School of Economics. After a year he returned home a confirmed Marxist and devoted the rest of his long and highly productive life to the propagation of Marxism.
How did the ideological transformation come about? He had an occasion for sharing that experience with young students in another foreign university nearly half a century later.
“The year 1932-1933 proved to be a turning point in the history of the 20th century. The prelude to World War II, if not the first act itself, was under way in the Japanese invasion of what was then called Manchuria. The Great Depression hit bottom in Western Europe and North America, giving rise to two simultaneous experiments in capitalist reform: the liberal New Deal in the United States, and the fascist, war-oriented Hitler dictatorship in Germany. The first Soviet Five-Year Plan, launched a few years earlier, suddenly began to appear to a crisis-ridden world as a beacon of hope, a possible way out for humanity afflicted with the peculiarly modern plague of poverty in the midst of plenty.
“Nothing I had learned in the course of what was presumably the best education available in the United States had prepared me to expect, and still less to understand, any of these momentous developments.

My state of mind as I arrived in London in the fall of 1932 was one of bewilderment and confusion edged with resentment at the irrelevance of what I had spent the last four years trying to learn.... And fortunately for me the situation at the London School was very favourable... there was Harold Laski in political science, a brilliant teacher who had been fired from Harvard for his role in the Boston police strike of 1919,... exposing a wide circle of students to a sympathetic interpretation of Marxian ideas. And above all there were the graduate students in all the social sciences, a variegated group from all over the world... I soon began to see the world through different eyes. What up to then had seemed a senseless chaos of inexplicable disasters now appeared as the logical, indeed inevitable, consequence of the normal functioning of capitalism and imperialism. And I had as little difficulty as most of my new friends in accepting the thesis that the way out of the crisis was through revolution and socialism, a course that the Russian Bolsheviks were pioneering and in which they needed all the support like-minded people in the rest of the world could give them.
“I returned to the United States after my year at the London School a convinced but very ignorant Marxist. By the fall of 1933, things were already different at home from the way they had been only a year earlier. The shocking growth of unemployment to a quarter of the labour force, the collapse of the banking system, and the beginnings of New Deal reforms -- not to mention developments abroad -- had unleashed powerful social movements that had their reflection in intellectual and academic circles. Graduate students and younger faculty members at some of the larger universities like Harvard began to take an active interest in Marxism: the discussion groups proliferated, and even a few formal course offerings made their appearance.
It was under these circumstances that I acquired a mission in life.... That mission was to do what I could to make Marxism an integral and respected part of the intellectual life of the country...”
Isn't this interesting -- the way the crisis of moribund capitalism, the achievements of emerging socialism and the ideological appeal of Marxism-Leninism combined to remould the life of the young man in our story? That was Paul M. Sweezy delivering his first lecture in Hosei University, Tokyo, where he was invited for a serialised talk on “Marxism Today”. (He was not alone in negotiating this distance from liberal bourgeois humanism to communism in more or less the same period, as we will see below). He delivered altogether four lectures, a reworked version of which was published by Monthly Review Press in 1981. Happily for Indian readers, a reasonably priced Indian impression has been recently brought out by Cornerstone Publications. We strongly recommend it to all our readers, for the little book sheds a lot of light on the fundamentals of Marxism in general and on the workings of late imperialism in particular, thereby enormously helping us understand the basic causes of the current crisis of capital.
To return to his first lecture, having created a bridge of communication with his audience with reminiscences of his student days, Professor Sweezy takes up the first thing in Marxism -- “the dialectical mode of thought” and “the Marxist meaning of materialism”. From philosophy he moves over to political economy in the next pair of speeches. “My purpose in this lecture and the one to follow”, he says at the start of the second speech, “is to try to sketch... the main outlines of an overall Marxist theory of capitalism in the last quarter of the 20th century.”  The fourth and last lecture titled “Marxism and its future” is devoted to questions of scientific socialism in a contemporary context. Between them the four lectures thus cover all three “component parts of Marxism”, as Lenin had described them, and that in a remarkably original and creative manner.
The second lecture titled “The Contradictions of Capitalism” dwells on basic categories like commodity, circuits of capital, surplus value, primitive accumulation and overaccumulation of capital; this is complemented by a pair of appendices that Sweezy added while preparing the work for publication. In the first of these we get a masterly description of “The Law of the Falling Tendency of the Rate of Profit”, which -- as we have seen in a recent article in Liberation (December 2008) -- Marx regarded as “the most important law of modern economy”. The second appendix examines the “changes in the forms and methods of competition” during “the transition from competitive to monopoly capitalism”. The importance of this discussion becomes evident when one recalls Lenin's remark that imperialism is the monopoly stage of capitalism -- a remark that is liable to be misinterpreted as elimination or reduction of competition in the monopoly stage. Then in the third lecture Sweezy gives us what we could call a general theory of -- as the title goes -- “Centre, Periphery and the Crisis of the System”. Here he delves deep into the process of evolution of capitalism and shows that
“... capitalism as we know it today started in its very earliest infancy as the dialectical unity of self-directed centre and dependent periphery.... the driving force has always been the accumulation process in the centre, with the peripheral societies being moulded by a combination of coercion and market forces to conform to the requirements and serve the needs of the centre.”
On the authentic theoretical foundation built in course of the three lectures, particularly on the concepts of overaccumulation of capital and the centre-periphery contradiction, Sweezy now develops his “diagnosis of the present crisis of the global capitalist system.”
“As always happens under capitalism”, he observes, “the seeds of crisis are sown in a preceding period of prosperity. In the case now under examination, this period can most conveniently be dated from the end of World War II”, which was marked inter alia by US hegemony over the global capitalist system.
“The period of undisputed US hegemony lasted somewhat more than a quarter of a century, after which it began to weaken as the defeated powers of World War II gradually recovered their strength. The world capitalist system works most smoothly when there is one undisputed hegemonic power, and the eroding and ending of that undisputed hegemony always signals the onset of a time of troubles and crisis. In both respects the post-World War II period has run true to form.
“Under the US hegemony, global capitalism had the benefits of a functioning and flexible international monetary system and a relatively free flow of international trade and capital movements. Gold and the dollar were established by the Bretton Woods agreements as interchangeable forms of universal money. The growth of trade and payments created a great demand for an increased supply of universally acceptable forms of money. The United States could and did satisfy this demand by running deficits in its balance of payments, thus pushing dollars out into the economies and banking systems of the rest of the world. For the United States this privilege was a source of enormous power, enabling the country to draw on the resources of the world almost at will. It was also a source of temptation and danger. The temptation was to abuse the privilege, the danger that abuse would wreck the system. As we shall see, the temptation was too great for the United States to resist.”
What the US actually did, Sweezy points out a couple of pages later, was to pursue a path of debt-dependent growth through excessive deficit financing and thereby create a huge “dollar overhang” or oversupply in the international monetary system. This weakened the system itself and at the same time created “a sword of Damocles hanging over the head of the dollar”. But the malady came to notice not before the 1970s; till then capitalism seemed to be doing fine:
“... ever since 1945 the upswings of the business cycle have been long by historical standards, the downswings short and shallow. The contradictions of the system seemed to have been so much reduced, if not actually eliminated, that they could realistically be thought of as a thing of the past.
“But underneath the surface and mostly out of sight, certain long-term tendencies were at work that pointed to stormy weather ahead. The most important, I think, were the following: (1) overinvestment, (2) the vast expansion of the debt structure, (3) weakening of the international monetary system, and (4) growing inequality between the centre and the periphery.”
Three long and eventful decades have passed since these words were spoken, but they still sound so relevant, so accurate as a description of the fault lines of capitalism today! Sweezy discusses each of the four problems, and we cannot resist the temptation of reproducing at least a part of that:
“The consequence of all these coexisting, and largely interacting, trends and tendencies is twofold. In the centre we observe a faltering of the capital accumulation process, renewed stagflation, and an out-of-control explosion of the debt structure. In the periphery the scenario includes declining standards of living for the masses, accompanied by increased political oppression; astronomical rates of unemployment..., malnutrition, even starvation.... Both parts of the global system are thus in a state of at least latent crisis, and signs that breaking points are being reached are not wanting...”
Would it be incorrect to assert that well before the onset of the present phase of neoliberal restructuring, globalisation and financialisation Sweezy -- or Marxism, if you will -- was able to anticipate the acute systemic crisis capital today finds itself in? The strength of this analysis and its subsequent development would become all the more evident if one goes through such works as Monopoly Capital (with Paul A Baran,1966), Deepening Crisis of U.S. Capitalism (with H Magdoff, 1981),  Stagnation and the Financial Explosion (with H Magdoff, 1987), The Irreversible Crisis: Five Essays (with H Magdoff, 1988) The Limits of Imperialism (2000). Particularly important in this regard was his 1994 work The Triumph of Financial Capital where he described the evolution of monopoly capital into a system in which financial capital was ascendant, attaching to itself “the locus of economic and political power.”
From crisis of capitalism Sweezy moves on to problems and prospects of socialism in his last lecture. Here he draws attention to the “general trend”, starting with the Russian revolution, of “the displacement of revolutionary Marxism from its birthplace in Western Europe to regions where conditions were more favourable to its taking hold and flourishing” and discusses the class nature of the revolutions and post-revolutionary societies that emerged in those capitalistically less-developed countries. His contention is that “revolutionary movements in the periphery are certainly proletarian”, but the societies they brought into existence -- whether called “the first phase of communism or socialism” -- were “transitional and as such bound to be characterised by fundamental contradictions and conflicts.” On this point he radically differs from the then Soviet and Chinese leaderships, because
“... in their view this form of society is definitely not characterised by antagonistic social or class conflicts. Official Soviet doctrine, for example, sees Soviet society (now called “advanced socialism”) as consisting of two non-antagonistic classes (workers and peasants) and one stratum (the intelligentsia), presided over by a “state of all the people,” and impelled forward toward communism by the “scientific and technological revolution.” The Chinese view has been moving in the same direction since the death of Mao Zedong, though it has not yet attained quite such a clear-cut and neatly formulated expression.
It is quite clear that this theory of socialism as a form of society in its own right that is free of antagonistic contradictions and moved entirely by scientific- technological forces has no basis in classical Marxism, and amounts to a sweeping negation of the fundamental principles of historical materialism that class struggle is the motive force of history right up to the attainment of a classless and stateless communist society.”
Actually, the “Chinese view” circa 1979 was not moving exactly in the same direction as mentioned here, (in that it spoke of a long period of “primary phase of socialism” rather than mature communism claimed by Soviet leadership). Broadly, however, Sweezy seems to strike the right key when he points to the denial or downplaying of the role of classes and class struggle in post-revolutionary societies as a deviation from Marxism or Marxism-Leninism (“I use the terms interchangeably”, he says). The consequences of this and other deviations in the two countries are now before all of us to see.
One may not necessarily agree to all that Sweezy says. But there is no denying that he made a very valuable contribution to the development of Marxism in the course of explaining the contradictions of monopoly capitalism in late 20th century. In this he had as his comrades-in-arms a highly committed group of Marxist scholars who emerged during and after the Great Depression within and without the US. Many of them joined together to launch the Monthly Review magazine in 1949 and in 1951 the Monthly Review Press emerged as a leading publisher of Marxist and radical books. Sweezy’s political activism included work on the “League against Fascism and War” and various popular front organizations in the 1930s. In the McCarthy era the he was subpoenaed on two occasions. He refused to answer questions and was charged for contempt of court and consigned to the county jail (from which he was released on bail). The legal battle continued for three years until it was disposed off by the U.S. Supreme Court in 1957.If capitalism produces its own gravediggers on a daily basis, periods of crisis tend to be particularly fertile in producing its most formidable intellectual enemies as well as new waves of revolutionary movements. As the good work started by Sweezy and others in the wake of the Great Depression goes on (a fine example being the recent Monthly Review Press publication The Great Financial Crisis by JB Foster and Fred Magdoff), can we expect the present turmoil to give us another fresh crop of Marxist intellectuals who can help achieve new breakthroughs in the battle of the working class on the theoretical front?