Has Capitalism entered its Decadence since 1914?

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

Real wages and working time before and after 1914

For the ICC, the ‘ascendant’ period of capitalism permitted “winning real and lasting improvements in living conditions from a prosperous capitalism (…) But this situation changed radically at the dawn of the 20th Century. (…) henceforward, the struggle for progressive and lasting improvements within this society no longer had any meaning. Not only could a capi­talism at the end of its tether not concede any­thing, but its convulsions began to destroy a num­ber of the gains made by the proletariat in the past. Faced with a dying system, the only real gain the proletariat could make was to destroy the system.” (1)

These are strong assertions that deserve, at the very least, to be seriously objectified, as they are so contrary to everyone’s perceptions. Objectivations that are all the more imperative from the point of view of immediate struggles and militant orientations since the ICC affirms that “the struggle for progressive and lasting improvements within this society no longer had any meaning” and that therefor “the only real gain the proletariat could make was to destroy the system.” However, as the ICC has never put forward any serious validation of its claims in almost half a century of its existence, it will be necessary here to examine the accuracy of these assertions and the two reasons which are supposed to form their basis, namely, on the one hand, that “inflation, a permanent phenomenon since World War I, immediately devours any wage increases” and that “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.” (2)

These two reasons are all the more surprising since it is well known, even in the absence of statistics, that real wages have risen considerably and working time has fallen since 1914, much more than in the 19th Century. Let us, however, objectify these assertions and impressions by relying on the statistics of the evolution of annual working time and real wages published in the article “250 Years of Modern Capitalism”. (3)

The findings are beyond appeal and prove the exact opposite of all the ICC’s assertions. Indeed, real wages (i.e. inflation deducted) in the ‘ascendant’ phase of capitalism were multiplied by 1.58, i.e. three times less than in the so-called ‘decadent’ phase where they were multiplied by five. As for working time, it fell by 573 hours (-17%) in the ‘ascendant’ phase, half as much as in the ‘decadent’ phase, where it fell by 1,203 hours (-41%):

Graph 2.1 - Real wages and annual labor time (1760-2001)Graph 2.1.: G.B.: Real Wages and Annual Working Hours (1760 – 2001)

The rate of exploitation of the wage earners before and after 1914

But the ICC not only asserts the exact opposite of reality regarding the two most important aspects of the conditions and struggles of the working class, which are the evolution of working time and real wages; it repeats the same offense with regards to its rate of exploitation. Indeed, it claims, without giving any reference other than its own certainties, that “if the worker of the 19th Century worked 5 hours for himself and 5 for the capitalist (figures frequently reported by Marx) today the worker works 1 hour for himself and 9 for the boss.” Therefore, it concludes: “In reality, the rate of exploitation, in other words the relation between the amount of surplus value that a worker produces and the wages he receives, has never ceased to grow.” (4) However, basing oneself on reliable and duly sourced statistics (cf. ‘250 Years of Modern Capitalism’), the rate of exploitation is multiplied by 1.6 during the ‘ascendant’ phase (the 87 years from 1827 to 1914), then has sharply declined until 1974, in order to subsequently rise again, but remaining below the level reached in World War I. In other words, the rate of exploitation increased sharply in ‘ascendancy’ and decreased in ‘decadence’, which is the exact opposite of what the ICC claims.

Graph 2.2 - Rate of Surplus-Value (1760-2001)Graph 2.2: The Rate of Surplus-Value (1760 – 2001)

Unemployment before and after 1914

The same applies to unemployment, since the ICC claims that “in the ascendant period of capitalism, unemployment, even when it exploded massively in times of acute crisis, was never very long-lasting. As soon as the crisis was resolved with the opening of new markets, there was a new perspective for workers to find work quickly.” (5) By contrast, “(Progress) engendered a permanent tendency towards unemployment, which in the decadence of capitalism has tended to become chronic.” (6) Again, reality does not correspond in any way to this schema, completely invented to correspond with the ICC’s theoretical framework. It is true that unemployment varies more in ‘decadence’ than in ‘ascendancy’, but it is not “chronic” as the ICC asserts: twenty years of mass unemployment between the two wars, followed by a period of full employment during the Glorious Thirties, followed by another period of high unemployment. As for the average unemployment rate during the ‘ascendancy’ of capitalism (5.82% from 1812 to 1914), it is higher than that of ‘decadence’ (5.66% from 1914 to 2006) and it is more permanent (between 3% and 9%), and thereby is at odds with the ICC’s assertions that unemployment during ‘ascendancy’ “was never very long-lasting. As soon as the crisis was resolved with the opening of new markets, there was a new perspective for workers to find work quickly”.

Graph 2.3 - Unemployment rate (1760-2016)Graph 2.3: The Unemployment Rate (1760 – 2016)

On the nature and function of the Trade Unions since 1914

That the ruling class was able to definitively integrate the trade unions into its system at the outbreak of World War I and make them its most ardent defenders in the face of the revolutionary desires of the proletariat is easily demonstrated by a number of objective facts (trade unionists even became ministers for their services to the bourgeoisie). The now institutionalized nature of the trade unions is beyond doubt as far as we are concerned.

However, in order to effectively and tangibly perform this function of Trojan horse within the proletariat (the maintenance of the demands within capitalist legality and their limitation to it), the bourgeoisie owed them a debt of gratitude and gave them some grain to grind by confiding them with a role as negotiators of the work force. This corresponded to an imperative for the ruling class to prevent the possible development of a new revolutionary wave similar to the end of World War I. Indeed, by the scale of its social movements, through its ability to impose an end to the world conflict and even by its ability to take power in many places between 1917 and 1923, the working class succeeded in making fear change camp. Now sufficiently numerous and concentrated, the working class is in fact exercising a potential or actual pressure on capital. It is this capacity and pressure by the mass of wage-earners in the 20th Century that forced the ruling class to keep it within capitalist legality by diverting its protests towards purely claim-oriented objectives or towards dead end streets, etc.

And who would be better situated for ensuring this role than the old organizations in which the labor movement had placed its trust?! They were the ones entrusted with encapsulating the social movements. It is this role as negotiators of the labor force, a role that has henceforth been institutionalized, which has enabled the trade unions to gain the confidence of the wage earners and at the same time ensure the maintenance of social conflict within the framework of capitalism.

It is thanks to the material strength arising from this role that the trade unions have been able to establish their influence and lock the working class into the capitalist system. In other words, because real wage increases, reductions in working hours and social improvements have been devolved to the forces of the left, the trade unions were able to anchor their hold on the working class.

This is the material basis for understanding why the latter has continued to trust them, despite their institutionalized character and their role as guardians of the social order within the framework of capitalism.

By contrast, the theses of the ICC are incapable of explaining it without falling into an idealistic schema, that is to say an explanation by the sole force of ideology and mystification. Indeed, as it would no longer be objectively possible to obtain real and lasting reforms after 1914 and the only role of the trade unions would be to sabotage and/or defeat the workers’ struggles, how can it be explained that the proletariat still gives them its confidence? Three explanations are then possible:

1. Either the working class is deeply stupid and masochistic to the point of putting its trust for a Century in organs that would bring it nothing materially and constantly lead it to defeat in its struggles. This is a deplorable observation, but it is implicit in the ICC’s ‘explanation’.

2. Or, as the ICC asserts, the ‘prosperity’ of capitalism before 1914 would give the power of the bourgeoisie a material basis and a possibility for trade unions to push for real and lasting reforms for the class, whereas all of this would then disappear because ‘decadent’ capitalism would be “in a crisis of permanent overproduction”, that “the only thing that it may today spread throughout the world, is absolute human misery” and “that it ceases to be in a position to grant reforms and improvements in favor of the working class.” In this context of ‘decadence’, the power of the trade unions within the working class is therefore now based solely on the ideological and mystifying forces of the latter, and then one falls into the purest idealism.

3. Or we are looking for a materialist explanation for this paradox, that the working class still globally trusts the forces of the ‘left’ in spite of their anti-worker role. Materially, this is only possible thanks to the concessions granted via these “left wing” apparatuses throughout the short 20th Century (a five-fold increase in real wages and a near cutting by half of the working time). It is thanks to these economic, social and political achievements that the working class could have been duped, conscripted and defeated at key moments in its struggles. In other words, the counter-revolutionary nature and role of the forces of the ‘left’ can be explained by material reasons and not by the sole strength of their ideologies. Certainly, like any institutionalized body, the left-wing parties and the trade unions are developing a mystifying ideological corpus towards the working class, but this alone cannot suffice to explain their influence in its midst, this influence draws its roots in a material reality, namely the reforms granted to the wage earners. Only this material basis can explain the ideological strength of the left and the trade unions, a strength all the greater as these material and political achievements were far more important after 1914 than before, as we just have seen.

Moreover, in addition to its idealistic foundations, the ‘explanations’ for the counter- revolutionary character of the forces of the [bourgeois] left put forward by the ICC lead to enormous nonsense. Indeed, if the condition of the working class had really not known improvements during a century of ‘decadence’ as it claims, then, in view of all the attacks it has suffered since the end of the Glorious Thirties, the wage earners should have returned to a state of destitution in which they found themselves at the beginning of the 19th Century. However, one does not need to be a statistics enthusiast to know that this is completely false because, despite all attacks it has had to endure, the present working class is still in a material situation incomparably superior to that of the beginning of the 20th Century.

In fact, despite its recurrent statements about the need to trust the capabilities of the working class historically, in reality, the ICC spreads enormous mistrust towards it. Indeed, how can one trust a class that has systematically given credit to its worst torturers for nearly a century without any material basis, that is, by the mere ‘virtue’ of their ideological evil spells? Anyone in his right mind will logically conclude that such a social class is incapable of unmasking these mystifications since it has not been able to do so for a century, of which more than half has been spent in economic crisis, incessant attacks and sabotage by the forces of the ‘left’.

Ignoring the most elementary material realities of this world, in particular concerning the situation of the working class, here the ICC is indeed in its role as impostor: it pretends to be what it is not, to be the most consistent defenders of the immediate and historical interests of the proletariat! In fact, it is only a tiny group living in the ethereal world of its idealistic petitions: it represents the idealistic pole within the Communist Left.

C.Mcl., August 14, 2019.

 

Source: Les impostures du CCI (Courant Communiste International)

Translation: H.C., October 2020. Reviewed by the author.

Last corrections: November 6, 2020

 

III. The national question before and after 1914

Click below on page 4

 


Notes

1The proletarian struggle under decadence’; MC & FM in International Revue no. 23 (4th quarter of 1980.

2 Extracts from the ICC’s platform: §6 – The proletarian struggle under decadent capitalism, and from its pamphlet on the trades unions: §3 – The unions in decadent capitalism. The impossibility of reforms.

3 See: 250 years of modern Capitalism: A reconstruction of its dynamics (Table of Contents). The graph 2.1 on real wages and annual working hours in Britain/ the UK has been taken up hereafter.

4 Extracts from No.’s 74 and 105 (2nd quarter of 2001 ) of its International Review.

5 The ICC’s Manifesto on Unemployment, 2004 (French language).

6 Correspondence on Crisis Theories and Decadence, Part 1: Our reply in International Review No. 105, 2nd quarter 2001.

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

  1. 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.

  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. 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.

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