The Collapse of Capitalism (1922)

From the February 1922 issue of the Socialist Standard
There is a notion widely held in certain circles that capitalism is in a state of collapse, or at least, that its collapse is imminent; and this is interpreted to mean that the existing system of society will reach a point at which the production and distribution of commodities will cease, and the whole of the mechanism of Society will fail any longer to operate. Those who propagate this conception naturally accept the view that the tactics of the working class organisation must be framed with this collapse always in mind.
The illustration given recently by one of them—Mr. Palme Dutt—was the comparison of the present social order to a house admitted to be in a far from perfect condition. Of the occupants there was a section which considered redecoration and repair to be sufficient, while another section thought that nothing less than demolition and building anew would meet the needs of the situation. These sections represent the reformists and revolutionaries respectively. Now, however, the war and the Russian revolution have brought new factors to bear, and the dispute has been removed to another plane, the only question now being not whether to destroy, but how to rebuild. The house is said, in fact, to have collapsed about the ears of the dwellers through its own rottenness.
This sounds plausible indeed, but argument by analogy is dangerous. Has capitalism collapsed? and to what extent have the war and the Russian revolution altered, apart from having merely intensified, the previous structural defects?
The Third International lays it down that “The present is the period of the breakdown of Capitalism,” but does the evidence support this or do the “Third’s” adherents act as if it were true? The answer is decidedly no.
In America Max Eastman (Communist) says “This statement is not true of the United States in the same immediate sense that it may be true of Europe. We are not in the period of the breakdown of
Capitalism . . . ” (Liberator, October.)
He continues: “We (the American Communists) are employing tactics that could never be appropriate in any other period.” Now, the American Communist Party has “gone west,” and it is generally agreed that part, if not all, of the cause of their failure, was their attempt to apply a policy based on a condition of affairs which did not exist. Does that support the view that Capitalism is in collapse?
In Canada, which was wildly alleged to be on the verge of revolution at the time of the post-war Winnipeg strikes, a general election has just taken place which has led to the defeat of the conservative party by avowedly capitalist Liberals; the election having been fought on a tariff issue. There has not, apparently, been one Socialist returned.
In Australia, despite its heavy roll of unemployed, and its wage reductions, the “Proletarian” (Melbourne, 7th November) writes: “But until the full force of the present world depression reaches our shores the Australian working class will not be very susceptible to Communist propaganda.”
In Europe, where the full effect of the trade depression has been felt, does the economic system show any noticeable lack of vitality, or do the capitalists act in any but their accustomed aggressive manner towards the workers? In spite of the enormous amount of unemployment, curtailment of production, and relative overstocking of markets, are there any strikingly new factors to be considered after one has allowed for the expected after-war depression, the destruction of the war and the blockade, the new political frontiers and the chaos of the exchanges, all of them more or less normal phases of capitalism or the usual experiences after previous wars?
The struggle for markets may have been intensified, but does this call for new revolutionary tactics?
What of the Russian revolution? Here, again, the importance has been overestimated. The replacing of Czarist feudal Russia by a capitalistic republic even if the latter remains permanently under the Bolshevik Government, is the net result of the revolution, and it has only loomed so large because of the more or less accidental circumstances that it was the Bolsheviks who were brought into prominence by it.
If capitalism were in collapse would the Bolsheviks be relying on capitalist enterprise to rebuild Russia, a process which they admit will take decades at least? Would our own Communist Party feel the need to ally itself with the Labour Party to get the latter into power? The fact is the capacity of the capitalist system to recover from its depression has been under-rated and the Communists have in practice been forced to discard their theory. From the day when Marx and Engels wrote “There is a spectre haunting Europe—the spectre of Communism” there have continually been people who have under-estimated, as well as others like Hyndman, who never understood, but were always seeing revolution imminent in every momentary pause or set-back in capitalistic development.
In the minds, too, of some of its adherents, this theory of collapse is nothing but a failure to appreciate the Marxian viewpoint. The idea of an actual physical stoppage of production is not Marxian. Societies do not collapse like jerry-built houses. Marx wrote :—”The knell of capitalist private property sounds when the monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with it, and under it,” but as Boudin particularly points out (Theoretical System of Karl Marx) “He does not say that production under the old system must become impossible before a revolution sets in” and again, “as far as the purely mechanical breakdown of capitalism is concerned . . . it is not a physical breakdown, as would be necessary in order to exclude the necessary intervention of conscious human activity, but rather a moral bankruptcy. Certainly there is absolutely nothing in the capitalist system to prevent it from relapsing into a sort of new feudalism or slavery . . .  ” (p. 253). What Marx did mean, therefore, by the idea of the breakdown of Capitalism was the working-out of its inherent contradictions plus recognition by the workers that the continued existence of a system of society based on their exploitation is unnecessary and intolerable and that the class of exploiters no longer performs useful social functions. The moment of that recognition is the moment of the overthrow of class domination.
But it may be said “Capitalism can no longer employ its wage slaves, nor feed the unemployed.” But did it ever? Is unemployment new? and did Capitalism even in its days of most virile expansion and development provide an adequate standard of living for workers, employed or unemployed? Did the capitalists trouble about security for their victims? Everyone knows they did not: and yet the system survived.
It is of no use waiting for the system to collapse, nor preparing a new economic structure to replace it. It will not go until the workers determine that it shall go, and the pressing service revolutionary organisations can perform is to prepare the workers’ minds for the possibility of the immediate establishment of Socialism. To return to Palme Dutt’s analogy, we have not yet reached the stage of convincing the worker that there is anything wrong with the house at all; he still thinks it is the unneighbourliness of the people upstairs or in the house next door.
Edgar Hardcastle

Local Class Alliance


Image: Ebenezer Howard’s “Three Magnets”. [Source: “Garden Cities of To-morrow”, 1902]

The politics of class alliance at national level are well understood and well executed in South Africa in terms of the National Democratic Revolution (NDR) policy developed during the last nine decades, which led to the democratic breakthrough of 1994. The NDR remains the dominant framework of South African politics, having been refreshed at Polokwane in 2007. At national level, the interests of the working class continue to be well articulated through the South African Communist Party (SACP), and the trade union movement whose largest centre is COSATU.

The petty bourgeoisie, on the other hand, has no dedicated political expression at national level, and nor has the peasantry. They are compelled to rely on others. This is in spite of the large size of these segments of the population in South Africa. It is a consequence of the “sack-of-potatoes” nature of both of these two classes, the rural petty-bourgeoisie who are the peasants, and the urban peasants, who are the petty-bourgeois.

Both classes are made up of individualists, who aspire to live autonomously, with everything of their own. The working class must represent the interests of these (mostly very poor) sections of the population at national level, while the established bourgeoisie would wish to exploit them as political foot-soldiers for capitalism, and also to exploit them directly, in the predatory way that the big bourgeoisie likes to feed off the small bourgeoisie, which Rosa Luxemburg described so well in Chapter 2 of “Reform or Revolution?” (linked below).

At local level, the situation is reversed. In South Africa, the organised working class has hardly any formal presence at, in particular, electoral ward level. Here the petty-bourgeois individualists are working on home ground and at the same scale as their own business operations. COSATU Locals and Socialist Forums are in the shade, if they exist at all. The SACP generates cadres, and organises and assists the masses, including the ANC, in many different ways, but it does not stand candidates in elections.

In terms of theory, too, there is very little that would serve as ideological guidance to the working class, locally, whereas the petty-bourgeoisie has an abundance of material and history to rely on, some of which is linked below. The town is the birthplace of the bourgeoisie and the natural territory of the petty-bourgeoisie, and the municipality is the “executive committee” of the local bourgeoisie. Not only is it their instrument, but it is their regenerator, whose job it is to reproduce bourgeois relations at local level and to bring forth new generations of bourgeois-minded councillors and bureaucrats.

In the past, one effective working-class tactic was to confront this concentration of local bourgeois strength with an organised workers’ democratic power. In Russia, this took the form of the “soviet”. The first one, as Vladimir Shubin relates, was set up in the textile manufacturing centre of Ivanovo in 1905. Another tactic, problematic though it has been, is the setting up of producer and consumer co-operatives. This series will have to develop both of these perspectives in due course.

In this part, our CU job is to review some of the debate in the literature of petty-bourgeois development. Let it be understood that it is not the aim of the working-class to drive any other class to early extinction. In the spirit of the same “18th Brumaire of Louis Bonaparte” wherein Karl Marx described the peasantry, though sympathetically, as a “sack of potatoes”, because they could not unite, the working class must lead the weaker classes and make provision for them in terms that will satisfy them. For the classic peasantry, this meant giving them land and a market for their produce. For the petty bourgeoisie, it is the freedom to do business, and the guarantee, against the predatory monopolists, of a market. We, as the proletariat, also need these classes as allies against the monopoly bourgeoisie. Therefore, as partisans of the working class, we should read these works with a serious interest.

Housing by People (click this link for an MS-Word download, which includes diagrams that do not come through on the web page), by John Charlewood Turner, is a discussion of housing, from a partly-idealised but well-educated point of view, of where decisive power should lie, who should act, and how these responsibilities should be divided up. It can serve us as a small link to the great, beautiful and necessary field of study called urbanism, of which very little emerges into the general public realm. Urbanism is a site of ideological struggle. It is also a labyrinth, in which it is easy to get lost.

“Barking dogs and building bridges” is Lauren Royston’s subtle and patient destruction of the simplistic bourgeois platitudes of Hernando de Soto. Glen Mills’ 2006 Business Day article “Thinking out of the matchbox” briefly summarises the general situation in South African housing, which has not changed in the mean time. There is still no public discussion of design, except at the “Top billing” level of snobbery and eclecticism, or at the level of the most banal, hopeless utilitarianism, in the press. [Click the links below]

How will things change? The communists must strive to reproduce, in every locality, the same well-expressed and solid class alliance which has up to now underpinned the NDR at the national level. This means providing for both the petty-bourgeoisie/peasantry, and the working class. Both must be able to see a clear way forward, in alliance with each other, at local level, where, at present, it is working-class organisation that is lacking.



Karl Marx, Class Struggle and Labour-Centred Development

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Image: Ben Selwyn on ‘Labour-Centred Development’ [Source:
Benjamin Selwyn



Karl Marx has often been interpreted as formulating an economic determinist, Eurocentric and historically linear conception of human development. Where they exist, such interpretations understand ‘development’ as capitalist modernisation. If correct, this critique leaves Marxism ill-equipped to interpret and contribute to transformations of the conditions of labouring classes under neoliberal globalisation. This article argues against such interpretations by discussing how, for Marx, the form and content of class struggles, their relations to the national state, and their articulation through the world system were the key to understanding divergent processes of human development. Marx’s insights are particularly relevant under contemporary globalised capitalism. This article argues, further, that Marx provides us with the basis for formulating a labour-centred approach to human development and development studies.

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