In Defense of Historical Materialism (Part I)

4. What is the Horizon for Estimating the Obsolescence of Capitalism?

Link is worried about analyses that question the beginning of the obsolescence of capitalism in 1914 and that postpone its advent to the present period as we defend, or that estimate its advent in the near future as Anibal postulates. He is concerned about this because predictions are always difficult to make, especially since nothing in the present situation would indicate a clear trend, he thinks. (1) Link and Anibal therefore want us to clarify why we believe that the beginning of the obsolescence of capitalism begins with the 21st Century. (2)

Of course, making economic forecasts is always a very difficult exercise, and the best ones who have tried have often been wrong, including Marx, Luxemburg, Bordiga. Yet it is necessary from a militant point of view. Revolutionaries cannot wait quietly in their armchairs for history to unfold and then pronounce on its evolution! We are not academics afraid to make mistakes. We must be part of history in action. Thus, the Communist International in 1919 was right to diagnose the entry of capitalism into its phase of decadence and to trace a revolutionary perspective. It was the best framework of analysis to understand the world and its evolution at that time and to try to change it in a revolutionary way. Moreover, all the economic data (curbed economic growth, economic crisis of 1929…) and all the historical events (wars, state capitalism, fascism, Stalinism…) combined to confirm this diagnosis. Consistent with this analysis, almost all Marxists after 1945 thought that capitalism was going to experience a new economic crisis and that the third world war was going to break out soon. A time of ‘Wars and Revolutions’, ‘Socialism or Barbarism’, such were the slogans of the time.

However, this was only briefly the case, at the time of the Disastrous Thirty Years (1914-1945). The absence of world war and revolution for more than three-quarters of a century now, the strong growth in the USA after the New Deal, in Europe and Japan after 1945, in some Asian countries and the Dragons in the 1950s, in China from the mid-1970s onward, and finally in all the emerging countries for the last three to four decades … all this has overturned, in whole or in part, almost the entire framework of analysis laid down by the Communist International in 1919. The problem is not to be wrong (especially when everyone else is wrong at the same time), but to persist in the error when the situation changes.

If historical hindsight invalidates the diagnosis of the entry of capitalism into its phase of obsolescence during the First World War, on the other hand, a century later, an accumulation of factors tends to demonstrate that we are probably witnessing such an event for the following six reasons:

  1. World GDP per capita growth has slowed considerably since the 1960s: from 3.2% to 1.3% (Graph 13). This fall has been cushioned since the 1980s by the emerging countries, but they too have been experiencing a slowdown since the beginning of the 21st Century (Graph 16), starting with China (Graph 17). The decline is therefore structural, not cyclical, on a historical scale: half a century for the old developed countries (Graph 14) and two decades for the emerging countries.

  2. This observation of a long-term structural decline is reinforced when we examine the core of economic dynamics, namely the evolution of overall factor productivity gains (labor and capital productivity): these are declining everywhere, in both developed and emerging countries (Graphs 15 and 16). Indeed, this decline began after the Second World War in the United States, in the 1960s in Europe and in the 1970s in Japan (Graph 15). While this decline in the Triad has been partly offset by the rise in productivity gains in emerging countries since the mid-1980s, the latter have also been in decline since the beginning of the 21st Century (Graph 16). In other words, the economic engine is now running out of steam everywhere in the world, albeit at different rates and intensities. For how long? For ever? For two or three decades? It is impossible to say for sure! However, the forecast is fairly certain, because historical hindsight is long enough to draw up reasonably good prospects, even if this means correcting ourselves tomorrow if capitalism were to take a different course.

  3. This evolution is also reflected in the general living conditions of the population. While social struggles have been able to wrest some of this prosperity to the benefit of the wage earners, this has no longer been the case since the 1980s in developed countries. This is translated in a decrease of the wage share of GDP (Graph 19) and a consequent increase in the rate of surplus value (Graph 20). Other unequivocal indices confirm this evolution: stagnation and even declines in life expectancy at birth or in certain age categories in some countries (USA, Russia, South Africa…), and, significantly, even the size of the population is beginning to decrease (in the USA and recently in the Netherlands)! The still significant economic growth in the emerging countries, the development of the wage-earning sector and the consequent social struggles still allow concessions to be wrested from capital. We will probably have to wait two or three decades before we see a deterioration of living conditions and a generalization of impoverishment on a world scale.

  4. The end of the geo-economic bipolarization of the world through the integration of half of the world’s population into the dynamics of accumulation on a global scale (emerging countries) has given rise to a true global market and a wage-dominated society within which the contradictions of capitalism will be deployed more and more in all their violence.

  5. A new geopolitical bipolarization of the planet is taking place between China and the United States. In the medium term, it contains the danger of a third world war with terrifying prospects for the very existence of humanity, given the weapons that will be used. For the moment, however, it is contained by the considerable military advantage of the United States, the absence of historical defeat of the proletariat in the developed countries (in spite of the profound retreat it has suffered) and the social conflicts in the emerging countries.

  6. Last but not least, the world is beginning to be confronted with major ecological issues as the planet’s load will increase by another 3 billion inhabitants (Graph 21), which will significantly increase the stakes around vital resources as illustrated by this latest update of the model developed by the Club of Rome (Graph 22) and therefore the economic and imperialist tensions between all countries.

In other words, we believe it is reasonable to think that the phase of obsolescence of capitalism began with the entry into the 21st Century.

Graph 13: World GDP per capita, annual and decennial growth (1960 – 2012) – Source: L. Decroix, Research Gate (2015).


Graph 14: Real GDP per capita Real GDP per capita growth – UK and US – Source: R.J. Gordon (2012): “Is U.S. Economic Growth Over?” (opens pdf).


Graph 15: Total factor productivity growth: capital and labor (1890 – 2015) – Source: R. Bergeaud et al. (2017): Future growth: Secular stagnation versus technological shock scenarios.


Graph 16: Growth in Labor Productivity (1970 – 2019) – Source: (2019).


Graph17 - Volume GDP growth and inflation in China
Graph 17: Volume GDP growth and inflation in China (2000 – 2020) – Source: E. Chaney (2020): Coronavirus : avertissement brutal pour l’économie mondiale.


Graph 18: Innovation intensity index (1800 – 2000) – Source: Y. Besançon (Nov. 2015) Progrès technique, productivité et prospérité dans les pays développés.


Graph 19: Wage share of world income (1970 – 2010) – Source: M. Husson (2014): La théorie des ondes longues et la crise du capitalisme contemporain (opens pdf).


Graph 20: Evolution of the rate of surplus value in the UK (1760 – 2000) – Source: 250 Years of Modern Capitalism (Ch. 1).


Graph 21: World population growth in % and in absolute terms (1700 – 2100) – Source: Our World In Data (2019).


Graph 22: Update of the Club of Rome Report ‘The Limits to Growth’ (1900 – 2100)

As the material productive forces slow down structurally all over the world, as the conditions in which human productive forces live begin to deteriorate and as humanity faces major challenges from the plunder and destruction of nature … we find it paradoxical and astonishing that Link now wants to convince us of a theory about the eternal growth of capitalism: “My point was that this is precisely what has happened to capitalism over the past three centuries and that we cannot or should not expect capitalism to show economic decline in decadence because it is a system that must always grow.” By defending the entry of capitalism into decadence in 1914, Link is already going against history, but by adding the idea of permanent growth of capitalism, (3) Link is going against it twice over, since capitalism is beginning to slow down structurally everywhere in the world, even in the emerging countries.

C.Mcl., January 2022.

The second part (Chapters 5 ff.) can be read here


Next page: Text boxes


1 “There appear to be many political analyses today that suggest that change is afoot but it is clearly a complex period with little clarity of direction and it seems to me that too often revolutionaries have been wrong in their predictions as to how capitalism will develop (including as I say Marx) and of working class revolution. Such forecasts worry me.” (Link)

2 “Furthermore, the economic perception of decadence must also imply a purely economic cause for the onset of decadence itself. Luxemburg does this in the sense that the restriction of non-capitalist markets means a restriction on accumulation. However, neither the falling rate of profit nor the markets theory can identify a specific numerical level of the factors that trigger decadence or even crises. This period of decline must come out of a conjunction of factors rather than a single cause.”(Link).

3 “We should therefore recognise economic growth and increasing accumulation as a permanent feature of capitalism and in particular of its decadence, and not ground an understanding of decadence on the halt or reduction of economic growth. We should recognise that this ongoing growth of accumulation is part of the material conditions and part of the economic contradictions of capital.” (Link).

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