Has Capitalism entered its Decadence since 1914?

I. A Brake on the Productive Forces since 1914 – or their Acceleration?

Historical materialism

No civilization has lasted forever, they all have known a phase of expansion and one of decline, and there is every reason to think that the same goes for capitalism. Like with all past modes of production, its obsolescence is inscribed in its contradictory dynamic. In this way Marx has considered at least at four occasions that capitalism had reached its apogee (1) but, at the end of his life, Engels concluded that they both have been mistaken, estimating that this system still had a long future before it: “History has wronged us and all who thought alike. It has made it clear that the level of economic development on the continent at that time was far from mature enough for the elimination of capitalist production; it has proved this through the economic revolution which has gripped the entire continent since 1848.” […] “If even this mighty army of the proletariat has still not reached its goal, if, far from achieving victory with a great blow, it has to advance slowly from position to position in a hard, tough struggle, this proves once and for all how impossible it was in 1848 to conquer social transformation by simple surprise.” (2)

This diagnostic of obsolescence of capitalism has nevertheless been taken up by the III. International and several of its fractions, and it is this theoretical foundation that the ICC has adopted to articulate its political positions: “Since the First World War, capitalism has been a decadent social system.” (3) With the human and material destruction of the two world wars and the slowdown of growth from 1914 to 1945, this analytical framework, postulating a brake on the development of the productive forces, could still be defended just after the second world war, and even until the 1970s for certain characteristics, since capitalism has always shown itself incapable of developing the majority of the countries and of the population of the planet. (4) This is no longer the case ever since, as the article ‘250 years of modern capitalism’ develops in a deepened way, (5) on which we rely for the development of the polemical elements that are analyzed hereafter.

A brake on the absolute production of wealth since 1914?

Marx retains three great elements within the productive forces: the sphere of material production (science included), the population (the development of the working class in particular) and nature. As the ICC has always argued its theoretical corpus of ‘capitalism’s decadence since 1914’ departing from the first of these three elements, and only very subsidiarily from the second, (6) we limit ourselves here to these first two aspects, reserving the right to treat the third in another contribution. Effectively, struggling with the first two aspects, and recently surfing on the ecological thematic, the ICC has started evoking this problematic here and there, in order to attempt to validate its diagnostic of the ‘decadence’ of capitalism. Before we come back to the latter, we first present our arguments on the first two elements of the productive forces.

For a start, we have to examine the basic credo of the ICC, the existence of a supposed brake on the development of the material productive forces since 1914 compared to their growth in the course of the preceding century. It is attested by absolutely nothing, because global economic growth after 1914 is six times greater, in absolute terms, than before, as the following graph indicates:

Graph 1.1 - Global GDP (1820-2015)Graph 1.1: Global Product 1820 – 2015, based on purchasing power parity and in constant US$ of 2011.

In effect, in absolute terms, world GDP has been multiplied by four in 102 years of so-called ‘ascendance’ of capitalism (a mean annual growth rate of 1.4% between 1811 and 1913), whereas it has multiplied by twenty-three in 102 years of so-called ‘decadence’ (or a mean annual growth rate of 3.1% between 1913 and 2015). The [annual] growth rate of the material productive forces has thus been more than two times higher during ‘decadence’ than during ‘ascendance’! And no subtraction (like unproductive costs or credit for example) can fill up this enormous difference, in spite of the ICC contenting itself with affirming this, without ever demonstrating it at the hand of sustainable data. Moreover, to prove that there would have been a real brake on growth since 1914 supposes a division of the growth rate by more than a half. Well, in more than 50 years of existence, the ICC has never been capable to put forward the least figure showing a simple division by half of the growth rate during ‘decadence’!

What to think of the theoretical seriousness of an organization that affirms that the 19th Century knew “a formidable expansion”, whereas its growth rate is less than half of that in the 20th Century? What to think, when it affirms that capitalism after 1914 is “in permanent crisis of overproduction”, and that its growth is confronted with “heavy obstacles”, whereas this growth is twice as high compared to its said “ascendant phase” ?

A brake on the relative production (per inhabitant) of wealth since 1914?

What to think, finally, of a platform supporting that “capital has become incapable of extending its social domination, if only to keep pace with population growth”, whereas the growth of global GDP per inhabitant – which takes the growth rhythm of the population into account – arrives at exactly the same conclusions, since it has multiplied by 2.2 in 93 years of ‘ascendance’ (a mean annual growth rate of 0.84%), and by 4.7 in 93 years of ‘decadence’ (a mean annual growth rate of 1.68%). In other words, if the growth of the material productive forces per inhabitant has been twice as important in ‘decadence’ as in ‘ascendance’, capitalism has been capable, and not incapable of extending its social domination, if only to keep pace with population growth” (see the following graph). Every sensible reader will conclude that this platform is not only erroneous, but that it affirms the exact opposite of reality! Very annoying for “Marxists” whose approach is supposed to be founded on the materiality of objective facts.

Graph 1.2 - Global GDP per inhabitant (1820-2006)

Graph 1.2: Global Product per Inhabitant (1820 – 2006)

A Brake on the population since 1914?

Here, the findings are still more implacable, because the world population has increased more rapidly after the First World War than before!

Graph 1.3 - World Population and its projection until 2100

Graph 1.3: The World Population and its projection until 2100

Effectively, it increases from 1.042 billion inhabitants in 1820 to 1.793 billion inhabitants in 1913, a multiplication by 1.7 in 93 years of ‘ascendancy of capitalism’ (or a mean annual growth rate of 0.58%) and, attaining 6.54 billion in 2006, it has multiplied by 3.6 in 93 years of ‘decadence’ (or a mean annual growth rate of 1.4%), which is more than twice as much in ‘decadence’ than in ‘ascendance’!

Production versus distribution of wealth

But producing more wealth and engendering a more abundant demography after 1914 than before does not forcibly mean to ameliorate the condition of the population on the planet, it remains to be examined who has profited from this wealth, and how it has been distributed, because this increase could very well have been captured by a minority, thereby leaving the immense majority in the most complete destitution. This is, by the way, what the ICC supports in its platform and in its pamphlet on the trade unions:

The only thing that capitalism can extend across the world today is absolute human misery which already is the lot of many backward countries.” ; “Inflation, a permanent phenomenon since World War I, immediately devours any wage increases.” (…) “As capitalism entered its decadent phase it was no longer able to accord reforms and improvements in living conditions to the working class.” (…) “While during the ascendant period of capitalism the length of the working week effectively fell due to the pressure of workers struggles […], under decadent capital­ism the number of hours has remained the same when it has not actually risen.” (7) In other words, no amelioration of the real incomes of wage earners, neither of their working conditions, nor of their sanitary conditions, neither a decrease of their working time, but “extension across the world of absolute human misery” similar to that “which already is the lot of many backward countries”.

Such affirmations need, at least, to be objectified. As the ICC has never done so in half a century, let’s help it by examining everyone of these assertions, both at world level and in a particular country, not an arbitrary one, but one that has been the subject of a meticulous analysis by Marx in Capital, namely England. It is about examining if capitalism really has “extended absolute human misery across the world” and whether the real incomes and working time have stagnated after 1914… all are crucial not only from an analytical or economic point of view, but above all from a political and militant one.

The distribution of incomes before and after 1914

The following graph illustrates the distribution of incomes for the whole of the world population before and after 1914. It shows that, if the median income per inhabitant has increased from $0.75 in 1810 to $0.90 in 1914 (in 104 years), it has leaped from $0.90 in 1914 to $8,- in 2018 (again in 104 years). The increase during so-called ‘decadence’ has been 7.4 times higher than that during ‘decadence’ so-called ‘ascendancy’!

Graph 1.4 - Income Distribution of the World Population (1810, 1914, 2018)Graph 1.4: The Income Distribution of the World Population (1810, 1914, 2018)

In addition, the part of inhabitants living above the absolute poverty threshold has increased from 13% in 1810 to 36% in 1914, representing 504 million inhabitants. Well, so-called ‘decadent’ capitalism has clearly done better, since this part has increased from 36% to 89% and it has been able to extract from absolute poverty six billion persons more than in 1914, which is twelve times better than in so-called ‘ascendant’ capitalism. ‘Decadent’ capitalism has not only almost eradicated absolute poverty, since in 2018 only 11% of the population have remained under this threshold (which were still 2/3 in 1914), but it has made increase the incomes of the immense majority of the world population like never before, much more rapidly than before 1914!

Amazing as this can appear to militants formed to the ICC doxa: albeit ravaged for long by the most absolute misery, traversed by numerous wars and famines making tens of millions of deaths, handicapped in its development by a galloping demography, capitalism has nevertheless been able to extract the essence of the Third World from this disastrous state, and to push a significant part of it onto the roads of a growth that would pale many Western leaders. To the discharge of these militants, it is true that all “theoretical” assertions of their mother house rendered them incapable of perceiving this objective state of the world as it really is: “The inability of the under-developed nations to lift themselves up to the level of the most ad­vanced countries can be explained by the follow­ing facts: 1) The markets represented by the extra-capita­list sectors of the industrialised countries ha­ve been totally exhausted by the capitalisation of agriculture and the almost complete ruin of the artisans. (…) 3) Extra-capitalist markets are saturated on a world level. Despite the immense needs of the third world, despite its total destitution, the economies which haven’t managed to go through a capitalist industrialisation don’t constitute a solvable market because they are completely ruined.” (8)

The reality of a very significant development of the former Third World, among which India and China, but also of numerous other Asian countries and even some in Africa, comes to sweep all these theoretical assertions and peremptory affirmations about the global extension of absolute misery and the impossibility of increasing the real incomes of the wage earners in ‘decadence’. They are not only wrong, but the exact inverse of reality! In fact the ICC swims in an ethereal fiction of petitions of principle that do not rest on any objective basis, because it conceives the world according to its ideas, and not how it really is. Such is the very particular ‘scientific method of analysis” of the ICC!

Yes, but, the ICC adds “While during the ascendant period of capitalism the length of the working week effectively fell due to the pressure of workers struggles … under decadent capital­ism the number of hours has remained the same when it has not actually risen.” (ibid.) Again, not only is nothing further from the truth, but reality is likewise the inverse since working time has decreased much more rapidly in ‘decadence’ than in ‘ascendancy’:

Graph 1.5 - Weekly Labor Time 1870-2000Graph 1.5: Weekly Labor Time 1870 – 2000 in twelve developed countries

Life expectancy and the body length of inhabitants before and after 1914

If there is a domain that summarizes everything we have seen until now, it’s the evolution of life expectancy at birth and the body length of the inhabitants. In effect, these are the results of a variety of factors that conjugate with one another: when they regress or stagnate, this is mostly in the wake of low incomes, deplorable housing, sanitary and hygienic conditions, as well as of exhausting working conditions, that weaken and wear the organism, and when they increase, it is evidently the inverse result in all these essential dimensions of life. So, knowing that a worker at Liverpool – an emblematic city of the English industrial revolution – had a life expectancy at birth of about 25 years in 1860, and has one between 65 and 70 years at present, one understands that this indicator allows us to approach an ensemble of aspects of the life of the wage earners under capitalism in a more qualitative way. In addition, these indicators evade the endless discussions about what ought to be ‘subtracted’ from the growth of the GDP (improductive unproductive sectors, etc.) and what not. In effect, the number of inhabitants of a certain age or their body length are undeniable realities that diverse quibbles cannot make miraculously disappear. They are, by the way, essential aspects of the productive forces about which the ICC keeps silent, as these arguments frontally contradict its theory of the ‘decadence of capitalism since 1914’.

In fact, what does the evolution of these factors, demonstrated in the following graph, show us? That they have regressed or almost stagnated before 1914 and have doubled or strongly increased afterwards! In other words, capitalism has been able to make live a much more considerable number of inhabitants, taller and in better health in ‘decadence’ than in ‘ascendance’, and this with a much longer life expectancy, as a result of multidimensional improvements of life: higher real incomes, better conditions of life, work, sanitation, medical care and housing, etc. We are thus light-years away from the elucubrations of the ICC about the so-called ‘decadence of capitalism, the impossibility of real and sustainable reforms and of consequent national development since 1914…’ !

Graph 1.6 - Life Expectancy at Birth of the World Population since 1800Graph 1.6: Life Expectancy at Birth of the World Population since 1800

Graph 1.7 - Income per Inhabitant and Median Body Length (Men in the Netherlands, 1820 – 2009)

Graph 1.7: Income per Inhabitant and Median Body Length: Men in the Netherlands (1820 – 2009). (9)

The development of the working class since 1914

However, the ICC does not only content itself with reversing the reality of the material and human development of the productive forces, real incomes, working time, the improvement of the overall state of the population and of its life expectancy, despite the population explosion in the 20th Century; it also reverses this apropos of the development of the working class after 1914 : “World War I marked a definitive turning point in two particularly significant aspects of capitalist expansion: imperialist expansion, and the proportional growth of the working class in society.” (…) “This marked decline in the expansion of the ‘principal productive force’ continues up to the present time. (…) In the underdeveloped countries this decline is even more pronounced. (…) Until 1914, the population effectively integrated into the capitalist economy grew faster than the world population. That was during the ascendant phase of capitalism. This tendency has, since then, been definitively reversed.” (10)

Here is another one of those “theoretical” affirmations, asserted with the faith of a coal-man that leaves one stunned: “definitively reversed”. In reality, a year before the very moment these lines were written by the ICC in 1973, this thesis had already been refuted by a very well-documented work by S. Rubak, published with éditions Spartacus: “La classe ouvrière est en permanent expansion” (“The working class is in permanent expansion”) … but when we see today the hundreds of millions of jobs created in many Asian and other emerging countries, there’s no longer room for doubt! But, here again, the ICC refuses to really recognize it because it claims, without ever providing the slightest proof, that the employment growth in China, for example, would largely correspond to the destruction of industrial employment in the former developed countries: Has Chinese capital developed the productive forces? In its own terms, yes, but what is the global and historic context in which this is taking place? It’s certainly true that the expansion of Chinese capital has increased the size of the global industrial proletariat, but this has come about through a vast process of de-industrialisation in [the] west, which has meant the loss of many key sectors of the working class in the original countries of capital, along with a great deal of their traditions of struggle.” (11)

Here we can see that, despite a few concessions of form to make it appear that it takes reality into account, substantially the ICC reaffirms its long-standing doxa on the impossibility of a real development of the productive forces in decadence. Indeed, for this organization, the development of countries would not correspond to anything very real but would be the result of artifices, such as credit or communicating vessel mechanisms: the industrialization of emerging countries would mirror the deindustrialization and the delocalizations in the developed countries.

Nothing could be further from the truth because industrial employment in China has exploded without having decreased in the Triad (Europe, USA, Japan) as the following graph clearly shows us: 86 million industrial jobs in the Triad in 1960 and 20.1 million at the same date in China; 44 years later (2004), there are slightly more jobs in the Triad (90.3 million) and many more in China (169.2 million)! Global industrial employment has thus increased 2.4 times, from 106 million to 259.5 million between 1960 and 2004, without any decrease in the old industrialized countries… here we can measure the whole ‘scientific rigor’ and the superficiality of the ICC’s argumentation!

Graph 1.8 - Employment in Manufacture (1960-2004)Graph 1.8: Employment in Manufacture (1960 – 2004)

– End of the first part –

II. A Halt to Real and Sustainable Reforms after 1914 – or their Accentuation?

(Click below on page 3)


1 More details on the process of obsolescence of the modes of production in history and its application to capitalism by Marx and Engels, can be found in Chapter IV of : ‘Dynamiques, crises et contradictions du capitalisme’ (Ed. Contradictions, 2010): L’obsolescence du capitalisme (pdf, French language).

2 Engels’ introduction of 1895 to Marx’s ‘Die Klassenkämpfe in Frankreich 1848 – 1850’. (“The class struggles in France”). The quotations have been translated from ‘ML-Werke’. Source: MEW Vol.22 (Karl Dietz Verlag Berlin, 1972).

3 The first sentence of the Basic Positions of the ICC.

4 Until 1967, world population growth was higher in the group of people living below the absolute poverty line. In other words, from the industrial revolution until that date, capitalism had been relatively impoverishing the world’s population, but since then the opposite has been true, as nowadays (2018) only 11% of the population still live below the absolute poverty line (See the graph 1.4).

5 Cf. M. Roelandts, March 17, 2020: 250 ans de capitalisme – §1 à §3. (pdf, 48 p.) Since the end of November 2020 these chapters are available in English on this site: 250 years of modern Capitalism: A reconstruction of its dynamics (Table of Contents). [Editor’s note]

6 This is the case for all its basic texts (its platform and pamphlets) and almost all the articles in its international theoretical journal International Review’.

7 Quotations from the ‘Platform of the ICC’, §3, §6 and §7; and from the pamphlet ‘Unions against the working class’, Ch.3: ‘The unions in decadent capitalism’. Note: Whereas the English text speaks of “many backward countries”, the quoted phrase in French reads “Third World countries”. (Translator’s note)

8The proletarian struggle under decadence’; article in the International Revue no. 23 (4th quarter of 1980). Its canvas was written by the ICC’s soul (Marc Chirik), the article was completed by FM.

9 Source : Olson R.S., ‘Why the Dutch are so tall ?

10 From the ICC’s pamphlet on the decadence of Capitalism, Ch. 5: “The turning point of the 1914 war”.

11 International Review no. 149, 2nd quarter of 2012, Gerrard: ‘Decadence of capitalism part XIII: rejection and regressions’.

9 thoughts on “Has Capitalism entered its Decadence since 1914?”

  1. In terms of CM’s piece, ive reread some and it appears i may well have misunderstood the first part of the intro and  i can now see in the section on Brake on the Productive Forces that there is agreement with the idea of periods of ascendancy and decline in capitalism.  Im afraid i got that wrong but i still cannot find anywhere that actually agrees that 1914 was a turning point and that capitalism is in decadence now.  In fact items 2 – 6 of the introduction are full of criticisms of the ICCs positions about the political consequences of decadence eg reformism, leftism, national question, national development, identity politics, workers councils.

    If i am misunderstanding this, please let me know, but my interpretation of the text is that it must be saying capitalism is still in its ascendant period?

    I would also like to question the statistics on the rate of exploitation during the 20th Century. These statistics are just based on the UK and are therefore not representative of the world economy as a whole against which the UK has declined significantly. Whilst I can see that rate of exploitation would vary on against factors eg stagnation of the 30s and the increased wage levels and population levels will both tend to reduce the rate of exploitation as is shown in the chart, I am wary about the overall idea that it has reduced over the 20th Century. Do these figures represent the weakness of the UK relative to others ie lack of investment? The undoubted advances in technology over the century would seem to complement the increased figures for increased GDP and increased population that are mentioned elsewhere but I would have thought exploitation would overall increase therefore just as the rate of profit falls because C generally increases at a faster rate than V. Anyway is there a clarification for these figures please?

    I cant comment to much on FC’s contribution as there has clearly been an ongoing discussion that i dont know about but i think its wrong to discard the view of a period of decline for capitalism based on purely economic issues.

    As I’m inclined to think that the term decadence has come from Luxemburg’s analysis that economic decay must happen after its ascendant period has come to an end, I am now more inclined to use the term obsolescence but i do not treat this is as overly important. I keep using both terms. 

    I would argue along with most that imperialism and the 1914 war marked the turning point for capitalism.  It marked the end of the ascendant period and the onset of decadence/obsolescence.  My view is that none of the economic theories of capitalist crisis can be used to explain this change, they just dont make sense as an explanation of this change in period. 

    I think that the changes in that period are political and social and this is why so many agree on 1914 as the change in period because of the onset of imperialism, the completion of the world market and the military confrontations this creates, the emergence of state capitalism to take control of national economies and international relations and i would agree with those including Luxemburg who saw this as a period of wars and revolutions – although clearly that has not worked out as permanent world wars or permanent revolutions. It has also been a period of increased exploitation of the working class. These are signs of capitalism’s decline, ie of the social relations being a fetter on the productive forces!  The issue is what could have been done with the productive forces if we didn’t have capitalism not of permanent crisis or stagnation or saturated markets or even low rate of profit (as capital seems to adapt by increasing in size)

    I believe that it is luxemburg’s theory of accumulation, and the early ICC positions on this topic, that got us all believing incorrectly that decadence meant economic stagnation and decline.

  2. The author of this (and other) works in progress, has set himself the task to confront the positions of the ICC with reality. In doing so, he is contributing to a necessary revision of the heroic effort of the ICC to synthesize the historical contributions of the Italian, German-Dutch, and other Communist Lefts. I can only confirm the urgent need for this work.

    Unfortunately, he does so in partly self-chosen isolation from other comrades and from the work of analyzing present reality, taking a position, and contributing to the actual class struggle, even with the present limited possibilities. He has defended this double isolation with reference to Lenin that withdrew from the life of his party to write Materialism and Empiriocriticism; an exceptionally bad example, and in no way justifying C.Mcl.’s retreat, that has reached now about five years. Unfortunately, the dangers of this isolation from class struggle are starting to become evident when his latest publications ignore the specter of generalizing inter-imperialist wars that are haunting the proletariat, from the Middle East to Indochina, and from the Caucasus to Libya.

    When the Communist International, following the efforts of mainly Lenin and Luxemburg to understand the causes of World Ware One, declared “The contradictions of the capitalist world system which were hidden deep within it have burst forth with tremendous force in a single huge explosion – the great imperialist world war” (Manifesto of the CI), this was understood by many in a mechanistic way as the end of the capitalist mode of production, because capitalism would not be able to restore itself. Indeed the national capitals that had suffered most from the war – Germany, Hungary, Italy, and Russia – completely collapsed, and so did their state power, followed by revolts and revolutions by the workers and bigger parts of a hungry and war-tired population. In Germany, this led the KAPD to theorize a ‘death crisis capitalism’ on the basis of Luxemburg’s theory of extra-capitalist markets. This theory found some evidence in the disastrous situation of the German economy but was contradicted by the post-war boom of the capitals that had won the war. In his American exile, Paul Mattick in full Depression elaborated a theory based on the tendential fall of the profit rate. Both theories could argue more or less correct that World War was the consequence of certain economic contradictions of capitalism.

    [It is an incontestable merit to have shown] that both the theory of Luxemburg and that of Mattick/Grossman were one-factor explanations when Marx in each of his analyses of several recessions underlined another factor as the main cause and that all factors are related to each other (La crise qui vient [pdf document available]). Linked to this C.Mcl. showed the reality of productive orders of capitalism as determining the continued survival of capitalism. However, in his aim to refute the ICC-version of the theory of decadence of capitalism, he had to follow its long-term view point of ‘before’ and ‘after 1914’. In doing so, the question of war, which is essential to the several theories of decadence, seems to have been lost.

    First, let’s have a look at the theory of decadence as the ICC sees it. Is it true that capitalism, like all productive orders historical modes of production before it, develops according to a curve with rise, summit, and downfall? As far as I know, Marx and Engels never said anything like that. What they did say was that communism contrary to productive relations in the past will have no exploitation and repression and that the proletariat as an exploited class will have no economic power to base its political struggle, as the bourgeoisie could do. Therefore in his First draft of Civil War in France, Marx underlines that the Commune – this finally discovered form of proletarian dictatorship – is only a form in which the liberation of labor will take place by the implementation of a proletarian economy. This is of course totally unacceptable for the ‘Leninists/Trotskyists’ in the ICC, and these kicked out, for they would have to accuse Marx of Stalinism.

    When capitalism is not overcome by the proletarian revolution, it will continue, finding new ways (‘productive orders’ in the words of C.Mcl.) and by a re-division of the world between imperialist powers (inter-imperialist wars) and the following redistribution of surplus-value extorted form the proletariat. Therefore it is important to analyze economic and demographic figures not as before and after 1914, but as well according to the ‘the real development’ of capital and labor: crisis, war, reconstruction, crisis. Finally, for any analysis that can explain for each generation of proletarians in each region of the world what they are living and what are the class forces of their situation, more details are needed than an overview of 250 years of world industrial capitalism or that of GB/UK. Latter can be symptomatic for the developments on the Continent, or even North-America. In this respect a good job has been done. But the world proletariat understood as the enormous masses that have lost their means of subsistence without all finding work in capitalism, from Iraq to Chile and from Pennsylvania to South Africa, cannot be satisfied with an analysis that centers around the old industrial centers of world capitalism. And neither the unemployed coal miners and steelworkers in the USA will be satisfied with the statement that there has been no net loss of jobs by the transfer of their industries to Asia.

    F.C. 13-11-2020

  3. Link commented on Topic: Has Capitalism entered its Decadence since 1914?
    November 6, 2020:

    I would like to start of by absolutely agreeing with CM’s presentation of empirical facts about the developments during the past century. The ICC in particular has had major problems recognising what has been actually happening in the world economy because it is stuck in Luxemburg’s theories about accumulation being dependant on non-capitalist markets.

    I however disagree with the interpretation that leads to a rejection of the idea of decadence and indeed the suggestion that the ICC presents falsehoods.

    Luxemburg, Lenin, Bukharin and others are I think to be applauded for their efforts at the start of the 20th century to understand how capitalism was changing at that time. With hindsight we can say they all got some things right and some things wrong. With regard to the Luxemburgism taken up by groups in the 30s and later by the ICC, it seems to me that it is possible to say that her ideas made a certain sense and were justifiable in the context of world developments up to say the 1960s. It seems to me that it is only since then during an extended period of reaction and of continued growth of the capitalist economy and world population that her thesis about non-capitalist markets really needs to be seriously questioned and for my part definitively abandoned.

    CM takes this criticism of the ICC to an extreme however in rejecting the concepts of decadence/obsolescence (I become less concerned about the label to be used, the point is that a significant change in capitalism development took place).

    The ICC’s unwillingness to reject Luxemburgism leads it into many problems because certainly in the early days and to some extent today explains decadence as an economic crisis, as permanent crisis, market saturation and a product of the lack of pre cap markets and these explanation do not hold up any longer. Some of the assessments it makes on workers struggle, political activity and economic development are as a consequence faulty and open to serious questioning. Now I do agree that there are issues that the ICC has got wrong

    However, just because luxemburgism is wrong does not mean we should reject an understand of imperialism and the completion of a world market and the changes in capitalism. Nor should we reject Marx’s view of historical materialism which identifies for all exploiting societies a period of ascendancy and a subsequent period where the relations of production become a fetter on the forces of production. I cannot agree therefore that to recognise the continued growth of capitalism in decadence should lead to seeing dangerous political aberrations in rejecting reformism, national question, its interpretation of historical materialism and so forth.

    My explanation for this viewpoint is thats I think it has been clear for sometime that the onset of decadence/obsolescence should not be seen as the onset of an economic crisis. It is not determined by the amount of non-capitalist markets available nor is it a product of a certain rate of profit and nor a certain amount of overproduction. Decadence/obsolescence is a political and social even a historical development that is not in itself an economic crises but it creates an environment where the contradictions within capitalism are sharper and more prone to generate crises.

    In fact Grossman’s following explanation of capital expansion (from Chap 2 The Law of Capitalist Breakdown seems a far more insightful view of how capitalism has grown within decadence, and it rejects Luxemburgism and provides an explanation of why capitalism can continue to grow even within decadence.

    “Despite the fall in the rate of profit, accumulation proceeds at an accelerated tempo because the scope of accumulation expands not in proportion to the level of profitability, but in proportion to the weight of the already accumulated capital: ‘beyond certain limits a large capital with a small rate of profit accumulates faster than a small capital with a large rate of profit’ (Marx Capital Vol 3)”

    After all the basis of capitalism and what differentiates it from previous societies is precisely the ongoing accumulation of constant capital. We can never expect it not to continue to grow outside of overt crises. Decadence can only represent a fetter on the growth of productive forces not their decline.

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