Towards a New Theory of the Decadence of Capitalism


The text which follows is based on a presentation made at a discussion meeting of Internationalist Perspective. It attempts to synthesize the recent debates and advances made within Internationalist Perspective on the conception of the decadence of capitalism, without in any way closing the debate or articulating a definitive position.

There are several reasons which have led us to again take up the concept of the decadence of capitalism. This re-examination is motivated by the inadequacy of the prevailing theories of decadence, in particular, the most influential among them, that of the International Communist Current (ICC), which does not take account of the real evolution of capitalism in this century. This re-examination is also motivated by the inadequacy of those theories which reject the notion of decadence, and which are no less incapable of accounting for the transformations undergone not just by capitalism on the economic plane, but also by the class struggle. Finally, such a re-examination has become necessary because of the inadequacy of the economic theories which have constituted the veritable foundation for the theories of decadence articulated by the communist left, specifically the theories of Rosa Luxemburg on the one hand, and of Henryk Grossman and Paul Mattick on the other.

These insufficiencies on crucial points of the revolutionary program of the proletariat make it indispensable to undertake an important theoretical effort to understand the world in which we live, with the goal of transforming it. Revolutionaries are useless if they are incapable of understanding the very world which they propose to overturn, because they are then incapable of grasping the actual historical perspectives, and can only give themselves over to sterile incantations.

A Short Historical Sketch of the Concept of Decadence

The concept of the decadence of capitalism first arose within the Third International, where it was developed by Trotsky in particular. Trotsky’s basic idea was that capitalism had reached the end of its historical course, that it had entered a phase of profound and permanent social and economic crisis. Trotsky soon fine tuned his conception by assimilating the decadence of capitalism to a pure and simple halt in the growth of the productive forces of society, a growth which had constituted the historic mission of capitalism. That vision seemed to correspond well enough to the reality of the first half of the 20th century: after the descent into barbarism represented by World War I, the economic reconstruction had been of short duration and limited amplitude, ending in a new crisis and a new world war. From that reality emerged a vision of [a cycle of] crisis-war-reconstruction characterizing world capitalism in our epoch, without any clear development of the productive forces over a complete cycle. It’s important to note, however, that Trotsky, at the same time, defended the idea that the superiority of "socialism" over capitalism manifested itself by the development of the productive forces in Russia. Now, we know that this development in Russia was only a capitalist development. Trotsky’s very description therefore contradicted his theoretical vision of a halt in the development of the productive forces on a world scale.

Trotsky’s vision was basically taken up by the Italian communist left around the magazine Bilan before World War II, then by the Gauche Communiste de France (GCF) after it. That vision, moreover, led the GCF to predict the immanence of a third world war after the end of the second, and to dissolve itself and choose exile at the time the Korean War. Fifteen years later, a different conception was developed by Marc C., an exile from the GCF, within the group Internacionalismo (in Venezuela), and then by Revolution Internationale (in France) and the ICC: following the obvious development of the productive forces between 1945 and 1968, the decadence of capitalism was defined no longer as a halt but as a slackening in the growth of the productive forces. This more nuanced conception was more in accord with the empirical observation of reality, but it became incoherent in its theoretical bases. In effect, it remained based on Luxemburg’s theory, which placed the necessity for non-capitalist markets to realize the surplus-value destined for capitalist accumulation, at the very heart of its explanation of economic crisis. In that theory, the disappearance or saturation of non-capitalist markets necessarily meant the breakdown, or at least the halt, of capitalist accumulation. Such a theory is, therefore, incapable of explaining the development of the productive forces which followed World War II, and which has very largely rested on the expansion of the market internal to capitalism.

The state of the question within the revolutionary milieu today is disheartening to say the least. On the one side, based on its conception of a slackening in the growth of the productive forces, the ICC has been led to systematically minimize, if not deny, any form of development of the productive forces and technological evolution (as can be seen in its fierce opposition to the notion of a "third technological revolution" in the 1980s, an opposition which went way beyond a problem of terminology), and to see in capitalism only a stagnation without end. The most complete expression of that vision is the ICC’s new "theory of decomposition", which in fact is merely a decomposition of theory; a "theory" powerless to comprehend and to explain reality, not just the post-WWII reconstruction, but also the present crisis. On the other side, a number of groups and individuals have been led to reject the very concept of decadence because of the incapacity of existing theories to account for the development of capitalism in the course of the 20th century. These groups and individuals have articulated a vision of capitalism which develops by always overcoming its crises, without making any qualitative distinction between periods of ascendance and decadence of the system. In general, those visions demonstrate their incapacity to provide an economic explanation for the world wars, and other essential features of contemporary capitalism, such as the hypertrophy of the state and the war economy.

This historical sketch of the state of the concept of decadence leads us to believe that it is necessary to go beyond the prevailing conceptions and develop a new theory of decadence which will not be encumbered by its past incoherence. Such a theory must also be based on a coherent crisis theory, one which is extricated from the sterile antagonism between the conceptions of Luxemburg and Grossman/Mattick.

The Necessity of a Concept of Decadence

Before examining the elements for a new theory of the decadence of capitalism, we first have to raise the question of the very need for such a concept. Inasmuch as the concept itself has been put in question, it is only right to ask if there is any reason to retain a conception of capitalist decadence. Such a concept seems to us to retain its fundamental importance for three principal reasons.

First, important changes, both quantitative and qualitative, have marked the evolution of capitalism, and distinguish capitalism today from what it was in the past. The most important of these changes include the appearance and significance of crises and world wars; the development of state capitalism and the war economy, with the growing control of the state over economic, political, and social life; the incapacity of capital to integrate ever growing segments of the world population, and the concomitant growth of famine, genocide, and permanent war. At the same time as it develops, capital self-destructs, and destroys social wealth and human [and, indeed, all] life on an unprecedented scale. Here, quantity is transformed into quality: the amplitude of these phenomena cannot be compensated by the simple quantitative growth in the scale of production.

Second, decadence is a regular phenomenon in the history of human societies and modes of production. There is a simple reason for that fact: humans never abandon the tools which they have forged before having utilized all the possibilities inherent in them, and having found new ones to replace them. Consciousness generally lags behind existence. Trotsky pointed out, quite correctly, that revolutions are not explained by the audacity of humans, but rather by their conservatism, by the fact that their ideas, and economic and political structures, lag behind the real evolution of society:

"The swift changes of mass views and moods in an epoch of revolution thus derive, not from the flexibility and mobility of man’s mind, but just the opposite, from its deep conservatism. The chronic lag of ideas and relations behind new objective conditions, right up to the moment when the latter crash over people in the form of a catastrophe, is what creates in a period of revolution that leaping movement of ideas and passions which seems to the police mind a mere result of the activities of ‘demagogues’."1

The decadence of capitalism, like that of earlier social forms, is a product of the gap between the objective social and economic evolution on the one hand, and the mode of production and corresponding political and ideological structures, inherited form the past, on the other.

Third, the decadence of capitalism is the reverse side of a positive necessity, that of communism. If the revolution was merely a moral imperative, it would never be made. Humans only make revolutions because they are compelled by an imperious need. And this imperious need derives from the incapacity of the existing order to fulfill their wants, in particular their material wants. The continuing inability of capitalism to assure the social and economic development of humanity in accordance with the state of development already attained is a necessary condition of the communist revolution, which will put an end to the reign of capital. The decadence of capitalism corresponds precisely to the historical period in which it becomes a fetter on the development of society, and in which communism, therefore, becomes an objective necessity.2

For all of these reasons, the concept of decadence is, and remains, indispensable if we are to grasp the historic trajectory of capitalism, and the movement towards communism.

Some Elements for a New Theory of Decadence

Once again, we do not make any pretence of articulating a new theory that is completely worked out. Rather, we want to point to certain elements which we believe to be indispensable to the development of such a theory.

1) The recognition that there is a development of the productive forces under decadence; the insufficiency of purely quantitative economic criteria in the determination of capitalist decadence.

Previous conceptions basing the decadence of capitalism on a simple halt or slackening in the growth of the productive forces are insufficient for several reasons. First, contrary to a superficial reading of history, the periods of decadence of earlier modes of production have continued to know a development of the productive forces, despite widespread famines or epidemics. More to the point, the development of the productive forces is specifically an imperious need for capital, a necessity from which it cannot extricate itself. The tendential fall in the rate of profit intensifies competition between capitals, and, thereby, the need to accumulate, because only that accumulation, and the technological progress which accompanies it, makes it possible for individual capitals to obtain a surplus-profit, and stay afloat in the competitive struggle. Indeed, the development of the productive forces continues even in more or less generalized periods of crisis, as is the case today. Thus, at the very moment that entire segments of the world economy collapse into the chaos of famine and war (as is the case with much of the African continent today), technological transformations and industrial growth continue in the most powerful economies.

The example of the present period illustrates not just that a conception of decadence based on a halt in the growth of the productive forces is mistaken, but that so to is a conception of decadence based on a slackening of that growth. True, in the long run the self-destruction of capital through crises and wars must entail a slackening in the growth of the productive forces relative to the potential for the development of capital. But a notion of slackening is incapable of grasping the real dynamic of capital, which is constituted by a dual contradictory movement of growth and destruction, of development of the productive forces and the reverse movement towards the expulsion of a growing part of social wealth and living labour from the cycle of production. Therefore, decadence cannot be defined on the basis of simple quantitative criteria. Rather, the decadence of capitalism means, first, the exacerbation of the contradictions of capital, under the form of crises, wars, the destruction of capital, and the expulsion of living labour from the cycle of production; and second, the transformation of capital into an historic fetter on the development of society, a fetter which is measured qualitatively by the extent to which the state of development deviates from the potential for development.

2) Recognition of the insufficiency of the classical theories of economic crisis: . The necessity for a unified crisis theory.

This point has been largely dealt with in the recent text of comrade Sander on this question.3 In this text, we will utilize only the essentials. Marx clearly pointed to two fundamental contradictions of capitalism which made its crisis ineluctable. First, the tendential fall in the rate of profit, which results from capitalist accumulation because of the growing weight of constant capital relative to variable capital in the production process, but which also intensifies the accumulation of capital because it increases still more the weight of constant capital in order to appropriate a surplus-profit which will alone permit the individual capital to compensate for the general fall in the rate of profit. This tendential fall in the rate of profit drives capital imto a growing contradiction. Second, the widening gap between the enlargement of the scale of production and the enlargement of the market necessary to realize the exchange value contained in that production. That gap continues to grow not just because of the growth of the exchange value of the total production, but also because of the much more rapid growth of the quantity of use values constituting that production, this latter being the result of the increased productivity of labour. Marx, however, had not combined these two contradictions into a coherent and explicit crisis theory, and his successors focused on one of those contradictions to the exclusion of the other, Luxemburg focusing on the second, while Grossman/Mattick concentrated on the first. As a result, those thinkers articulated a partial view of reality, not permitting a satisfactory understanding of the economic contradictions of capitalism in its phase of decadence.

In reducing the contradictions of capital to the fall in the rate of profit alone, the Grossman/Mattick school tended to put off the concrete prospect for the economic breakdown of capital. In effect there is no absolute limit to the fall in the profit rate which makes the accumulation of capital impossible. While being the historic motor of the development of the crisis of capital, the tendential fall in the rate of profit cannot alone provoke a generalized breakdown of capital. The play of competition makes it possible for the most competitive capitals to survive the elimination of the less competitive.

In seeing the elimination of non-capitalist markets as an absolute barrier to capital, the Luxemburgist school made the economic breakdown of capital into an immediate, and permanent, fact of life, and thereby eliminated the complex historical dynamic which would bring about such a breakdown. The Luxemburgist theory is incapable of accounting for the expansion of capital after the exhaustion of non-capitalist markets in the course of the twentieth century. The only attempt to update this theory so as to explain the economic growth following World War II was made by the ICC, which pointed to the massive recourse to credit. If the development of credit, and of fictitious capital, is one of the key features of contemporary capitalism, it in no way resolves the basic problem of Luxemburg’s theory. The irony is that Luxemburg herself had correctly rejected the recourse to credit as a solution to the problem of the accumulation of capital. Credit creates no effective demand (in the Marxist understanding of the term) for production.

The incapacity of either of these schools to provide an adequate theoretical framework to grasp the economic contradictions of capital, and, therefore, the economic bases of the decadence of capitalism, compels us both to again take up the elements of Marx’s own analysis, and to go beyond them by integrating those elements in a more coherent crisis theory, one which is suited to the present reality. The economic analysis of capital does not reveal any absolute limit to the development of capital, but rather a growing accumulation of contradictions which can only explode in more and more massive and profound economic breakdowns, consonant with the dynamic vision of decadence which we have sketched.

3) Recognition of the importance of the transition from the formal to the real domination of capital.

The transition from the formal to the real domination of capital expresses the transition from the extraction of absolute surplus-value to the extraction of relative surplus-value in the immediate process of production; the implications of that transition are fundamental for the functioning of capital as a totality, and, therefore, for the class struggle too. The generalization of relative surplus-value is closely linked to the generalization of the domination of capital over the whole of the economy and society, this domination being the economic condition for the general fall in the value of the means of consumption of the proletariat, and therefore for the very growth of relative surplus-value. Under the real domination of capital, capital operates exclusively according to its own economic laws. There is a unification of the processes of production and circulation in a global process of reproduction and accumulation of capital, the formation of an average rate of profit, the integration of science with production and circulation, and the penetration of the law of value into every realm of social activity. These profound social transformations bring about an expansion of productive capacities, which accelerates the development of capital, and, therefore, also its decadence.

Although the two concepts are not the same, there is a close link between the real domination and the decadence of capital. The decadence of capital, an historical period in which the contradictions of capital determine its very mode of existence on a world scale, implies the real domination of capital on a global scale. This world domination of capital does not mean that all immediate production everywhere on the globe is really, or even formally, subject to capital. The control of capital has been geographically expanded into new areas throughout both the twentieth century and the previous one, and capitalist decadence itself is accompanied by the expulsion of insufficiently productive forces from the process of capitalist production, something which is happening today on an increasingly large scale. Nonetheless, all national and regional economies today are directly or indirectly determined by the imperatives of the world market, over which the most powerful capitals preside precisely because they are the most productive. In the phase of the decadence of capitalism, therefore, the features of the real domination of capital impregnate all economies.

The real domination of capital is also closely linked to state capitalism. The real domination of capital transforms the state into the collective administrator of the national capital (or even the supranational capital, as is the case to a certain extent today, especially in Europe). Indeed, the forms taken by state capitalism, and the armaments and other policies followed by states in the twentieth century have been strongly determined by crises, wars, and other manifestations of the decadence of the system, but the tendency to state capitalism itself cannot be reduced to the simple consequences of decadence. The tendency for the state to assume a totalitarian control over the economy and the whole of society already existed at the end of the nineteenth century, before World War I, as can be seen with the progressive integration of the unions and mass parties into the state apparatus in that period.

Implications for the Class Struggle and the Determination of Class Lines

The conception of the decadence of capitalism which we have developed here is far removed from the caricature provided by the ICC, for whom everything hinges on the outbreak of World War I. The explicit recognition of the absence of any limit to the development of capital, the recognition that the development of productive forces continues in decadence, and the focus on the transition to the real domination of capital, have important implications for the class struggle and the delimitation of class lines in the present epoch.

If capital continues to develop in its phase of decadence, even if this development is below its potential, one can no longer insist on a Manichean opposition between the ascendance of capitalism, a golden age of development for capital in the course of which improvements in the living conditions of the proletariat were possible, and its decadence, a dark period in the course of which such development and improvements have become impossible. It is true that durable improvements in the living conditions of the proletariat become much more difficult in the decadence of capitalism, but they are not systematically ruled out, and such obstacles cannot be explained merely by a simple halt or slackening in the growth of capital. Thus, the durable reforms in the working day won by the proletariat cannot only be explained by the better economic health of capital in that epoch, but also by the transition from the formal to the real domination of capital. The reduction of labour time was a powerful stimulant for the accumulation of capital and its transition to the extraction of relative surplus-value, those economic sectors based largely on the extraction of absolute surplus-value and a low organic composition of capital being the first to be threatened by the reduction in labour time. That reduction in labour time, therefore, was not due only to the class struggle, but was also a weapon in the hands of the most modern capitals in their struggle against the more backward.

The integration of the unions and mass political parties within the state apparatus in the present epoch is explained, therefore, not just by the economic contradictions of capital which tend to make improvements in living conditions more difficult and limited in time, but also by the more and more totalitarian domination of the law of value and capital over the totality of society, and by the growing gap between the accumulation of capital and the satisfaction of human needs under decadent capitalism. Capital tends to subject the whole of society to its imperatives of profit and accumulation, and to no longer tolerate independent class struggle, this latter threatening those economic imperatives in the short run, and capital’s social domination over the long run. Similarly, the impossibility for the proletariat to engage in parliamentary politics, and to provide critical support for certain factions of the bourgeoisie against others in the present epoch, has its basis in the real domination of capital and the integration of all its different factions in the global process of reproduction and accumulation of the national capital under the control of the state.

Finally, if any policy of support for so-called national liberation struggles or for factions of the bourgeoisie which champion them is prohibited for the proletariat in the present epoch, this is not simply because any national development has become impossible. It is true that the majority of "national liberation struggles" in the course of the twentieth century have been merely episodes in the confrontation between the great imperialist powers, and that the emergence of new capitalist powers has become much more difficult and more rare, but the example of the development of Japan in the twentieth century shows that such development is not impossible. Nonetheless, the world domination of capital, through the world market, if not by armed force, compels emergent capitals to forge themselves on the bases of the features of the advanced capitals, including the muzzling of the class struggle.

Implications for thge Transition from Capitalism to Communism

The conception of the decadence of capitalism which we have developed also has important implications for the understanding of communism and the period of transition from capitalism to communism. The Trotskyist theory of a halt in the development of productive forces goes hand in hand with a simplistic view of the progress and development of the productive forces in history. In short, capitalism is an obstacle to that development and communism will permit it to continue. This is a productivist vision which can no longer be accepted today. Productivism as an ideology is an integral part of capitalism; it corresponds to its "historic mission" of the development of the productive forces. Communism, by contrast, is not synonymous with the growth of the productive forces, but rather signifies their liberation in conscious human social activity. The goal of communism is not the infinite growth of production and of the human population – a goal which would be completely illusory because of the physical limits of the globe – but the satisfaction of human needs and desires.

Capitalism will perish because of its incapacity to continue its mission of the development of the productive forces of humanity, but that in no way means that communism must continue that mission in its place. On the contrary, the disappearance of capital means that the historic program of the development of the productive forces has come to an end, at least in terms of quantitative growth. The period of transition from capitalism to communism which will follow the communist revolution is, from this point of view, effectively transitory to the degree to which a development of the productive forces will still be a necessary objective. That development, however, will be henceforth oriented towards a new goal emphasizing the qualitative transformation of production and living conditions over the quantitative growth of production.


M. Lazare


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