Crisis of Capitalism Vs. ‘Crisis’ of Marxism

Arindam Sen

(On the occasion of Marx’s Birth Anniversary, May 5, we reproduce this article that appeared in the Birth Centenary Year of Marx, in the September 1983 issue of Liberation. We invite you to re-read this article in this fresh phase of capitalist crisis, when a renewed interest in Marxism is witnessed globally. We have taken the liberty of correcting minor stylistic errors in the original. Ed/-)
Karl Marx
As during the lifetime of Karl Marx, so over the hundred years following his death a very interesting phenomenon has been witnessed throughout the globe. A certain set of bourgeois economists appear on the scene, set themselves at repudiating Marxism and declare it dead. Then again appears another set and confirms the death with great pedantry. During the last century, in fact the best of bourgeois brains have been caught up in fighting against the ‘corpse’ of Marxism. Latest in the series was Lord Keynes, the great savoir of post-war capitalism from the brink of collapse, who complimented Marxism as the economics of the underworld. Yet, barely after a quarter century, the bewildered bourgeois world found itself asking – Is Keynes relevant anymore?
And the spectre of Marxism continues to haunt the bourgeoisie around the world.


Of the hundreds of arguments forwarded by bourgeois economists seeking to “prove Marx wrong” on the economic plane, most are easily refuted. Take for instance the charge that Marx was wrong in speaking about the tendency of the average rate of profit to fall. Now, we know that Marx also spoke of certain factors countering this tendency, such as enhanced productivity of labour, lower price of machinery, etc., and that he also pointed out the intrinsic tendency of successful competition to lead in the direction of monopoly. But in his time the latter tendency was only in its embryonic form and his whole economic analysis was based on the then existing competitive capitalism, where market conditions forced prices down in the direction of costs. Later on, that tendency towards monopolization became the dominant one and was sufficiently analysed by Lenin, who showed how the rate of profit can be artificially held high by charging monopolistic prices on the market. Lenin and many subsequent researchers (e.g., Paul Sweezy: Theory of Capitalist Development; Paul Baran and Paul Sweezy: Monopoly Capital; Dalip S. Swamy: Multinational Corporations and the World Economy) have also showed how in the epoch of imperialism and neo-colonialism the imperialist powers have been able to more than offset, in their homeland the tendency of the average rate of profit to fall by making enormous super-profits through the exploitation of cheap labour, raw materials in the colonies, semi-colonies and neo-colonies. But monopoly capitalism not only delivers super-profits; it also delivers chronic inflation, caused by, inter alia, artificially high monopoly prices. And inflation though not disliked by capitalists up to a certain stage, has in the last dozen years got dangerously mixed up with stagnation and posed new threats to profitability. This is one of the numerous examples showing how the objective developments after Marx’s death, far from refuting the Marxian doctrine, served to further enrich the same. But certain charges against it are of a bit more serious nature. Limited space will, however, allow us to touch upon only two of them – those against the thesis of inevitability of capitalist crisis and the thesis of pauperization of the work-force and growing industrial reserve army under capitalism.
Prior to the great depression of 1929-33, there was a spectacular rise in capitalist production, thanks to the ‘rationalisation’ which shifted the crisis onto the shoulders of the working class. In fact, within ten years after the First World War, production levels in all industries far surpassed the pre-war level. In those days the Ford miracle(which greatly reduced costs and enhanced competitiveness by introducing the conveyor belt system) was counter-posed to Marxism and the thesis of general crisis of capitalism was declared null and void. But then the acute shrinkage of markets caused by huge lay-off showing to ‘rationalisation’ led to the crash and the Ford miracle simply did not work. Still the bourgeois economists rely on miracles even today. To quote their Nobel-Laureate hero Samuelson, “The miracles of sustained growth in production and living standards have taken place in the second-level countries – Japan, Germany, Italy, France, Scandinavia, Western Europe generally… The growth experiences of the years 1950-70 revealed that a market economy enriched by government planning and macro-economic control could perform favourably in comparison to past epochs of both capitalist and communist development.” But as we know, ‘growth experience’ has ‘suddenly’ refused to repeat itself – and economists and politicians all over the capitalist world are now chorusing that a recession even worse than the 1929-33 crisis has gripped the world. According to the World Economic Survey, 1983, of the United Nations recession in the ‘western world’ has been the largest and the deepest since the Great Depression of 1930s; the anticipated recovery in the second half of 1982 did not materialize and global output growth decelerated for the third consecutive year to reach 0.2%. And unfortunately, this time no more ‘miracles’ are in sight.
Despite all this, a few questions do remain. Are not, for instance, the workers in the advanced capitalist countries far better-off than their forefathers and even than their brethren in the socialist countries? Is not the Marxist theory of pauperization of working class under capitalism thus refuted? But, Marx says, “it is possible with an increased productiveness of labour, for the price of labour-power to keep on falling, and yet this fall to be accompanied by a constant growth in the mass of the labourers’ means of subsistence, although the gap between the labourers’ and capitalists’ positions would keep on widening.” (Capital, Kerr Edition, Vol. I, page 573). And Marx made this point over and over again; e.g., in “Wage, Labour and Capital” he writes that a “rapid growth of productive capital brings about an equally rapid growth of wealth, luxury, social wants, social enjoyments. Thus, although the enjoyments of the workers have risen, the social satisfaction that they give has fallen in comparison with the increased enjoyments of the capitalists, which are inaccessible to the worker, in comparison with the state of development of society in general.” (Selected Works: Marx and Engels, Vol. I, page 163).
Thus Marxism does not rule out a rise in nominal and real wages on the basis of increased productiveness of labour. Moreover, Marx had repeatedly stressed the potentiality of the working class movement to resist the capitalist tendency of pauperization of vast masses, and this really proved to have played a major factor in this regard. And Lenin’s formulations about the workers’ aristocracy and super-profits under imperialism can be easily extended to explain the present situation where exploitation of the Third World by international finance capital has increased a hundred times since Lenin wrote and has provided sufficient super-profits to feed and clothe a tiny minority of the world proletariat living in the West. On a world scale – and any serious and honest discussion on this question must be on a world scale in the present era of internationalization of capital – the truth of the Marxist-Leninist formulation is not hard to see; but precisely for that reason the bourgeoisie would have us shut our eyes on the world and yet gaze at the West in admiration.
During the 20-25 years’ ‘respite’ from crisis, in the Western world preceding the 70s, another ‘refutation’ of Marxism gained wide currency. Along with a fair rise in wages, there was almost full employment in advanced capitalist countries and this was counterposed against Marx’s ‘prediction’ about the inevitability of a growing industrial reserve army under capitalism. That this was but a temporary palliative has been proved by the growing unemployment and wage-cuts throughout and beyond the decade of the 70s; and this fully substantiated once again the truth of what Marx said more than a century back when he warned that if one were simply to say “the working class receives too small a portion of their product, and the evil would be remedied by giving them a larger share of it, or raising their wages, we should reply that crises are always preceded by a period in which wages rise generally and the working class actually gets a larger share of the annual product intended for consumption.” (Capital, Vol. II, Kerr Edition, page 476). But still the question remains: how are we to explain that phenomenon? What objective factors and subjective schemes of the international bourgeoisie lay behind that longest respite?
Among objective factors, the most notables ones are: the opportunity to utilize the surplus-labour in the under developed countries; the huge accumulated demand for consumer goods after the war years during which consumer goods were in scanty supply; certain scientific and technological breakthroughs leading to rapid growth of new industries like computer, nuclear power, space aviation, etc.; the new US-centered economic and political system of world capitalism. But the cumulative effect of all these factors taken together, though powerful, could not heal up the basic maladies of capitalism. So demonstrated Pat Sloan as early as in 1973 citing sufficient data that “Britain opens the 1970s with several major failures of large companies; a record figure for capital investment abroad; and a record figure since 1945 for unemployment. Marx’s ‘model’ is confirmed by real life. And stocks and shares boomed as unemployment rose.” (Marx and the Orthodox Economists, page 96-97). And he further observes, quoting from an article in The Times Business News of 30 December, 1971: “productivity has improved much faster than in the previous decade” but “employees have suffered large scale redundancies.” While “productivity has been rising at an unusually fast rate,” on the other hand output has grown more slowly, on average, since 1965. “Hence we are back once again with one of the basic contradictions of capitalism: growing production of the one hand, but growing unemployment on the other.” (pages 101-02).
And enormous data have been furnished by the bourgeois magazines to show what was true for Britain at that time, was and remains broadly true also for western capitalism as a whole.
As regards subjective factors, the conscious application of the theories of Beveridge, Pigou and Keynes (most notably, Keynes’s General Theory of Employment, Interest and Money, 1936) which were worked out during and after the Great Depression, really imparted a new lease of life to crisis-ridden capitalism, particularly after World War II. The pragmatist concepts and systems of ‘welfare state’, a ‘fair share for workers’ etc. were zealously put into practice. These concepts and measures, which were later developed and echoed by disciplines of Keynes including Samuelson as quoted before, were proclaimed to have fired the final, fatal shot at Marxism. But their point of departure was the acceptance of the Marxist formulation about anarchy of production under capitalism, (which Keynes calls “the decadent international individualistic capitalism”) and efforts to overcome the same by means of state interference. These concepts and measures therefore mainly confirmed the superiority of Marxism as a science. And this was quite apparent when, after two decades or so, they gave rise to the peculiar, hitherto unknown malady of chronic and galloping inflation even during stagnation. Keynes thus failed to deliver the goods in perpetuity, and governments in all western countries are now more or less tending towards monetarism, old or new without any conspicuous success so long, of course. The whole episode can now be taken to have come to a close, and can be briefly summed up as follows. The Keynesian pragmatism has so far represented nothing less and nothing more than the ultimate extent to which the basic maladies of capitalism as diagnosed by the Marxist doctrine can be ameliorated within the framework of capitalism in the particular historical conditions of the quarter-century following World War II; thereby, however, further complicating those maladies, i.e., further intensifying the “general crisis of capitalism” envisaged by Karl Marx. And this implies that, although there are really no such signs at present, in theory, the world capitalistic system can still hope to devise some new ways and means suitable in the present historical conditions for temporarily ameliorating the crisis – for giving a face-lift, so to say, capitalism – but only at the cost of further exhausting the intrinsically limited store of palliatives and making the ultimate doom all the more certain.
This methodology of explaining new developments in capitalism, which was adopted by Marx when with the onset of a new industrial boom just after the crisis of 1847 he exclaimed that there could be no real talk of revolution in a period of rapidly growing productive forces, and by Lenin in his “Imperialism, the Highest Stage of Capitalism,” does not, however, find favour with impetuous petty bourgeois radicals professing Marxism. So, in despair, they either begin to question the historical inevitability of the revolutionary overthrow of the world capitalist system or are driven to various anarchist theories and practices. But those who have assimilated the militant, scientific outlook of the proletariat, continue to adhere to this methodology and are preparing themselves in greater earnest for a more protracted war than envisaged a century back, profoundly convinced that after all the future belongs to socialism and the people.


What the bourgeois economists failed to achieve in the sphere of economics, their agents in the working class movement, that is, the revisionists, sought to do in the realm of politics, of their numerous streams of attack on Marxism as a political system, here we can deal with only a few.
First, the trend of casting serious doubts on the destiny of Marxism with words in praise of Marx. As a representative of this vulgarization, we may choose ‘No Marx for Moscow’ – an article by Hiranmay Karlekar in the May 1 magazine of the Indian Express. The author begins by criticizing the “rigid dictatorial control on the lives of the people” and “the ban on all but approved ideas” in the socialist (including the USSR) countries and declares: “The colourless communist dictatorships today are an affront to the spirit of the philosophy which Marx propounded along with Engels. The world of socialism, according to Marx, was to be a world of freedom.” Of course, he also holds Marx responsible “to some extent” “for planting the terrible seeds” of revolutionary overthrow of capitalism and dictatorship of the proletariat, but mainly blames Lenin for disobeying the “prophetic” warning of Plekhanov against attempting to build socialism in backward Russia and for his “What Is To Be Done?”, which “emphasizes obedience and secrecy and rules out open functioning and internal democracy” – since all these provide the basis for the present state of affairs in all the socialist countries. However, a greater ‘culprit’ than Lenin was Stalin and here Karlekar comes full circle in his sly but now hackneyed scheme of slandering Marxism. As opposed to “the path of freedom which Marx had in his mind”…, he concludes; “power has corrupted all communist regimes and extinguished such revolutionary sparks as they might once have had.” At first glance, the learned Mr. Karlekar might be accused of only the crudest ignorance of what Lenin said and said not, but a closer study will easily reveal the familiar falsification by means of placing Lenin and Stalin against Marx and Engels, while lumping the social imperialist Russia and Socialist China together.
As we see, Karlekar’s center of attack is the dictatorship of the proletariat. That this cornerstone of Marxism has remained, over some hundred years, the center of attack by the international bourgeois and its apologists (both the shrewd ones like Karlekar and the crude ones like the one we quote below) only speaks for the victory of Marxism. In fact hundreds of volumes have been offered in this crusade. A peculiar instance is furnished by Vasamoorti who concludes his slanderous “Marxism – Relevance and Practice” with a cautions hope : “the Communist Parties, particularly of France and Italy, have openly and courageously affirmed their allegiance to democratic norms and practices” and “rejected a vital Marxian concept : ‘the dictatorship of the proletariat’… Anyhow the development appears to be a healthy and promising both for democracy and communism. Western democracy seems to have asserted its inherent strength once again. But the suspicion remains whether all this is not a mere strategy on the part of the particular parties to capture power in the circumstances they are placed…”
While Vasamoorti represents the old, crude method of hitting out at all the Marxist concepts and all the Marxist leaders simultaneously, a much more refined version of slandering has come into the offing in the period following the victory of socialism in a number of countries. It consists in counter-posing different Marxist and pseudo-Marxist theoreticians against one another, quoting them without perspective and with distortion. An intelligent representative of this trend is the Polish renegade Professor Leszek Kolakowski, presently an Oxford professor, author of the three-volume “Main Currents of Marxism” which is a favourite with bourgeois professorial ‘researchers’ into Marxism. Here we cannot go into the hundred and one natural falsifications of Marxism that he makes, but certainly we can present one specimen or two from the third volume of his book – “The Breakdown”.
Towards the end of this book, in tune with almost all the bourgeois slanderers against Marxism, the Oxford professor, too, finds the main culprit in Lenin: “There is no doubt that this universalisation of Marxist ideology is due first and foremost to Leninism, which showed itself able to direct every existing social claim and grievance into a single channel and use the impetus thus provided to secure dictatorial power for the Communist Party.” And simply for this flexibility he solemnly declares: “Leninism has raised political opportunism to the dignity of a theory” (page 492), conveniently forgetting that throughout the book be has repeatedly condemned the dogmas and rigidities of Marxism-Leninism. And the idea outlined here is developed in broader perspective in the “Epilogue”. While declaring that “Marxism has been the greatest fantasy of our century”, he admits in a would-be-scientific, neutral tone that “Marxism as an interpretation of past history must be distinguished from Marxism as a political ideology”, for the former “has been a valuable addition to our intellectual equipment and has enriched our understanding of the past.” He thus seeks to separate the interpretative aspect of Marxism from the aspect of changing reality (“political ideology”) and emphasises and praises the former against the latter - just the opposite of what Marx did in his early “Theses on Feuerbach” as the real point of departure for the Marxist philosophy. In this way he demonstrates his ‘unbiased’ ‘open-minded’ attitude to Marxism and then goes on to proclaim that “Marxism has been frozen and immobilized for decades…” However, “the effectiveness of Marxism as an instrument of political mobilization is quite another matter” and this effectiveness has been really great. But how? According to Kolakowski’s analysis, shattered hopes and decaying culture on the one hand and increasing “human aspirations throughout the world” on the other “leads to rapidly growing frustration and consequent aggressiveness. Communists have shown great skill in exploiting this state of mind and channelling aggressive feelings in various directions according to circumstances, using fragments of Marxist language to suit their purpose.” (pages 523-30).
This wrath of a spokesman of the enemy class we accept as a tribute to Lenin and to Marxism as a whole. Indeed we should still further develop our flexibility on questions of practical politics like mobilizing the “aggressive” masses in innumerable channels – something which is strongly opposed by Kolakowski; at the same time we must not give up our ‘rigidity’ on such questions of principle as the dictatorship of the proletariat – something which is sincerely advised and hoped for by friends like Kolakowski and Vasamoorti.
But this does not mean we should overlook the objective factors which help and embolden the likes of Kolakowski and Karlekar to speak of the “breakdown” or “crisis” of Marxism. The main such factors are : the restoration in USSR, controversies on China, and confusions on the question of unity and struggle within the international communist movement; the three are, however, so deeply interlinked that one might as well say they are one.
The rude shock of the Russian restoration was overcome by the communist revolutionaries and the struggling masses rather quickly thanks to the great polemical and educative role played by Chairman Mao and the CPC. The basic features of Soviet revisionism and imperialism were thereby elucidated, and certain fundamentals of Marxism regarding socialist construction upheld. But as an unwarranted byproduct of this wholesome process there gradually developed, particularly during the years of the Cultural Revolution, a peculiar dogmatic framework of formula-mongering, or formalising Marxism and attributing infallibility on Mao-Tse-Tung.
So, when towards the end of the last decade the Chinese communists broke the shackles of the cult of cultural revolution to emancipate their minds, criticized and rectified some major mistakes committed by the Party under Mao and effected certain major policy shifts, the whole sky broke down upon those who failed to move beyond that immutable framework. Socialism in China was in peril, they thought, and so was Mao-tse Tung Thought. And this anxiety – which was quite natural given the sentimental attachments China commanded after the degeneration of Russia, Vietnam etc. – prevented them from attempting a sober, objective analysis of the new developments. Some of them simply did not take care to study China from Chinese sources and were misled by bourgeois propaganda; some others did that – a few of them quite diligently – but from within that mechanical framework. So they failed to see that a great historical experimentation is now being carried on in China on building a socialist material civilization and socialist spiritual civilization and that while certain concepts and policies might be open to question (in fact the Chinese Comrades themselves are very critical about their mistakes and problems as would be apparent to anyone who regularly studies the Chinese journals and books on Chinese economy like those by Xue Muqiao and Ma Hong), there is no reason why we should not be optimistic. They failed to realize that this great creative practice of integrating the universal truth of Marxism-Leninism and Mao-tse Tung Thought with the peculiar Chinese realities in the context of the present international economy and polity cannot but give rise to many new ideas, experiments and problems which cannot be lightly explained away by quoting authorities. So, while fraternal suggestions and criticisms after responsible study and in proper method and perspective were welcome, jumping to conclusions was highly unwarranted and harmful. But many preferred the latter to the former. One after another, hesitatingly or in a straightforward manner, many petty bourgeois intellectuals like Charles Bettleheim and a number of revolutionary organizations came out against the CPC, often in a mood of sad dejection. This gave a fresh impetus to the Trotskyites and other disruptive, anarchist elements – who were lying low for some time past – to raise their ugly heads once again with the slogan of a Fourth International. The situation thus got extremely complicated, transient fellow-travellers began to desert the ranks and slanderers had a field day.
This state of affairs was reflected, among other things, in the dissolution of certain Marxist-Leninist parties and groups in some countries which gave staunch opponents of Marxism good grounds for attack. Now, the emergence of these parties during the cultural revolution in China was objectively an experimental effort that failed mainly because these parties could not take deep roots in the soils of their own countries, i.e., in the class struggle and the struggle against revisionism. But in striking contrast a few Marxist-Leninist parties like those in India and Norway, which were founded around the same time, continued their forward march despite all odds. If one considers both sides of the medal together, one will discern not a defeat of Marxism-Leninism in those countries but a victory of the fundamental Marxist-Leninist proposition – (a) that inner-party struggle cannot be copied or regulated from outside and that it must base itself on concrete questions of revolutionary theory and practice in the country concerned; and (b) that conditions for a breakthrough in correct revolutionary advance in Party-building and class struggle can only be built up from within and over a protracted, painstaking process and this requires not only honest desires but also certain objective factors.


So these are the historical background, the objective and subjective factors behind the present complicated state of affairs. Can we not, therefore, say that today Marxism is in crisis? Now, we know that Lenin spoke of crisis of Marxism in his own country while concretely illustrating how the development of both Marxism and revisionism are related to concrete historical conditions. In “certain features of the historical development of Marxism,” he divides the six years’ period just preceding 1910 into two equal halves which were sharply differentiated between themselves and goes on to say: “It is precisely because Marxism is not a dogma, not a completed, ready-made, immutable doctrine, but a living guide to action, that was bound to reflect the astonishingly abrupt change in the conditions of social life. That change was reflected in profound disintegration and disunity, in every manner of vacillation, in short, a very serious internal crisis of Marxism” in the period following the start of low-ebb roughly in the summer of 1907. Why? Because, “in the preceding period, extremely wide sections of classes that cannot avoid Marxism in formulating their aims had assimilated that doctrine in an extremely one-sided and mutilated fashion. They had learnt by rote certain “slogans”, certain answers to tactical questions without having understood the Marxist criteria for these answers. The ‘revolution’ of all values in the various spheres of social life led to a ‘revision’ of the most abstract and general philosophical fundamentals of Marxism. The influence of bourgeois philosophy in its diverse idealist shades found expression in the Machist epidemic that broke out among Marxists. The repetition of ‘slogans’ learnt by rote but not understood and thought out led to the widespread prevalence of empty phrase-mongering.” (Collected Works, Vol. 17)
This period of “internal crisis of Marxism”, we know, appeared some years after the ideological, organizational and tactical foundations of Leninism had been laid (through “What Is To Be Done?”, “One Step Forward, Two Steps Back” and “Two Tactics” respectively) and after unprecedentedly rich revolutionary experience was gained. Such in fact are the dialectics of historical development, on which the Marxists – proletarian vanguards – confidently base themselves but which makes petty bourgeois revolutionaries confused and despondent.
The present phase of the international communist movement, however, does not resemble the above-mentioned period of Russian revolution in the magnitude and intensity of problems. We can say that Marxist-Leninists of the world today are facing certain theoretical and practical problems and tasks such as making an overall analysis of contemporary imperialism; clarifying the multifarious factors responsible for degeneration of socialist countries and elucidation of the actual relations of production and class structure in those countries; solving certain sharp debates on socialist construction; devising a concrete form of principled unity and principled debates among communist parties so as to be suitable at the present phase of the international communist movement; generalizing the most important achievements of science in the last 50 years on the basis of materialist philosophy and so on. Quite a lot of significant groundwork has been collectively made on these subjects but this remains to be completed and summed up so as to make real theoretical breakthroughs; pending that, the sum total of the above problems in their cumulative effects is bound to keep the situation complicated. But of course this cannot be called ‘crisis’.
Every great ideological and theoretical breakthrough is preceded and pre-conditioned by a period of complicated controversies, and every such period invariably gives rise to a major advancement - this is a law of development of Marxism testified by its long history. In fact this is a law of development of all sciences generally. Confusion and clarity is a unity of opposites. The two are locked in eternal and unconditional struggle and, given required conditions, they interpenetrate and transform each other : the old confusion changes into new clarity and the new clarity becomes old and over-shadowed by new confusions and so the process goes on, taking the clarity to a higher plane in each turn. This is how Marxism develops – it develops not in a straight line but in waves, in spirals, and everything depends on requisite conditions, which include both objective factors and the communists’ conscious subjective efforts.
Are these conditions maturing on a world-scale? Yes, they are, and a most important pointer to this is the fact that ideologically and politically more and more Marxist parties and groups have in the recent past dared to break with blind faith and find their own bearings in the changing world, thus becoming able independently to integrate the universal truth of Marxism with the concrete conditions and the concrete practice of revolution in their respective countries. This is indeed a most fundamental positive factor which hits hard at the stronghold of international revisionism and paves the way for a new, higher phase of unity in the international communist movement. Precisely, herein lies the objective basis of our scientific optimism – not only in a general, ultimate sense, but also in the sense of immediate practicality, i.e., in the sense that in the present decade and in the decades to come Marxism is bound to score ever newer victories in theory and practice. To work for the preparation of these objective and subjective conditions, and particularly for the creative integration of the universal truth of Marxism with the concrete conditions of our respective countries with great singleness of purpose : this is precisely what living, fighting, developing, advancing Marxism demands of us on the death centenary of Marx.