Capitalism – Running Out of Options
Written By: Lars Ulrik Thomsen
The current crises in capitalism gives rise to an analysis of the general features of its development over a long period of time, for example from the 1970s until today, as a sufficient to understand the general trends. There have been very big changes since the 1970s; The productive forces have been revolutionised and the relations of production have also changed significantly. In this article I will analyse three important areas: 1. The development of profiteering, 2. State monopolistic rule and 3. The effects of the wars of imperialism.
1. A large number of studies have been made of the rate of profit, all of which confirm its declining tendency as a law of capitalism.
Aside from a brief recovery in the 1950s and 60s and again in the 1990s, the profit rate has continued to decline.(1)
Capitalism tries to counter this tendency in various ways. They intensify exploitation by extending the working day and they use social dumping by moving production to low-wage countries, first to Eastern Europe and later to more distant nations. This provided some stabilisation in the 1990s, but with the dotcom crisis in 2000 and the financial crisis in 2008 it was clear that there was a new decline in the rate of profit.
The current deep crisis will put the rate of profit further under pressure and what opportunities does capitalism have to stabilise its system? The apologists of capitalism talk about new innovation, robot technology and the like, as a way to create renewed growth. It would also be an option under "normal conditions", but we no longer live under normal conditions and instead live under chaotic and unstable ones. Therefore, it is more or less utopia to imagine a new wave of technical discoveries that should be able to save capitalism.
2. The second area that matters to capitalism is its forms of government.
They take place under state monopoly capitalism (SMC) in a more or less supranational framework. For example as in the EU or through international organisations such as the World Bank and the IMF.
Before going into more detail on the subject, I would like to recall The Class Struggles in France where Marx analysed the political revolutions of the 1840s.(2) Marx demonstrates here how the bourgeoisie is prepared to break the constitution in order to defend its system against the working class. It is an important doctrine that is also relevant today. State monopoly coincides with the breakthrough of imperialism in roughly the year 1900 and is linked to the era of monopoly capitalism. SMC has gone through various phases from the fascist forms of government in 1920s and 30s Europe, and to renewed forms in the 1970s and 90s.
The development since then is characterised by extensive regulations of the production conditions, so that today it is the financial capital that determines development both economic and political. We see this particularly clear in the new millennium where the media and politicians use the phrase; there are no alternatives to the policy pursued!
It is also the general tendency in SMC that democracy is abolished and that the bourgeoisie governs society with sovereignty. If they lose referendums or elections another will be held until they achieve the desired result.
The current crisis in capitalism is also a crisis for SMC and will necessarily lead to new and changed forms of government. What character they get is still unknown but what we can see is that capital is trying to repeat the model from 2008 with astronomical aid packages. Experience from that time shows that the interventions carried out, had the opposite effect of the desired, they did not solve the crisis but intensified it. The crises of capitalism have a cleansing effect which is the precondition for new recovery. If you slow it down, the crisis will continue indefinitely.
The big and crucial question is how long will the population find themselves in deteriorating living standards, poorer job opportunities, and experiencing cuts in public service? The aid packages given in 2020 are of an order of magnitude larger than ever seen before, but they must be covered through increased fees, taxes and cuts in the public service.
3. The third area that is crucial to capitalism are the wars of imperialism.
They have taken a huge extension since the dissolution of the Soviet Union in 1991. Never before has the modern world seen such protracted wars that span decades, e.g. in Afghanistan, wars that are seen by the peoples to be completely superfluous but which are an important part in imperialism's dreams of world domination. It is about containing, fighting competitors, and slowing down the development of socialist countries. These wars have developed into a threat to the stability of the western countries due to the large refugee flows they produce.
"With the financial crisis of 2008 and the current deep crisis, capitalism has entered a phase of permanent crisis that threatens the existence of the system."
We are experiencing an unparalleled right-wing turn since 1930s Europe, which is also being promoted by the bourgeois media, playing on the fear of the unknown. The lack of the Soviet Union as a peacemaking and stabilising factor in the world community is obvious. All efforts of the Soviet Union's were promoted towards world peace and in combating nationalism and racism.
Summary: The basic trends of the decline in the rate of profit continue interrupted by individual economic cycles in the last century. With the financial crisis of 2008 and the current deep crisis, capitalism has entered a phase of permanent crisis that threatens the existence of the system.
The conditions of production can no longer accommodate the new productive forces and must therefore be replaced by social property and democratic planning.
We must see the development in connection with the laws that exist in materialist dialectics, where the struggle of opposites leads to a new development to make a leap from quality in a new quantity and vice versa.
We have reached the point that Marx described in Capital, where the hour of the expropriators strikes, and they themselves become expropriated!(3)
It presupposes the international struggle and solidarity of the working class!
BIBLIOGRAPHY
1- See Michael Roberts blog from 25. of July 2020.
2- McLellan, David (2011).Karl Marx: Selected Writings. Oxford University Press. p.313.
3- Capital, K. Marx, First English edition of 1887; Chapter Thirty-Two: Historical Tendency of Capitalist Accumulation.