It has often been stated that the correctness of Marxist theory – in its ability to predict the general course of development within the economy and society – demonstrates the superiority of foresight over astonishment. Never has this been better demonstrated than by the events of the current crisis, which has left the ruling class flailing blindly in search of an explanation or a solution.
“Human history is like palaeontology. Owing to a certain judicial blindness even the best intelligences absolutely fail to see the things which lie in front of their noses. Later, when the moment has arrived, we are surprised to find traces everywhere of what we failed to see.” – Karl Marx, Letter to Engels, 25th of March, 1868
It has often been stated that the correctness of Marxist theory – in its ability to predict the general course of development within the economy and society – demonstrates the superiority of foresight over astonishment.
Never has this been better demonstrated than over the last 20 years, and especially since the crash came in 2008, by the ruling elites who have stumbled from one crisis to another, flailing blindly in an attempt to paper over the gaping cracks and fissures becoming more and more visible within the system. For years it was heralded that the contradictions within capitalism had been overcome, an end to boom and bust was declared and we were taught to prepare for the ushering in of a new era of prosperity and advance for all.
Whilst this much vaunted “end of history” was toasted by the bourgeoisie, celebrating their own genius and patting themselves on the back over the perceived final “defeat of Communism”, at the same time, from the beginning of the 90s and since then, the Marxists have held a more sober assessment of the reality of the situation. The Marxists pointed out for years that it was impossible to get rid of the insoluble contradictions of capitalism within the confines of the current system; that the increase in debt, speculation, the encroaching of capitalism into the new markets of the former Eastern Bloc and China, and a further exploitation of countries in the developing world, whilst softening up these contradictions in the short term, would simply deepen these same contradictions and delay the crisis for the future so that when a collapse came it would be all the more spectacular.
This massive increase in debt and the development of capitalism after the dismantling of nationalised planned economies in a number of countries – bringing over a billion more workers in to the world market – gave the system a brief reprieve; a breathing space which quickly came to an end in 2008 as the vast amount of wealth being produced within the world economy on the basis of fictitious capital and paper money all of a sudden glutted up the market. This crisis of over-production expressed itself initially as a crisis of the banks. As the banks became nationalised, this debt itself became nationalised, and we’ve seen the transferral of the problem into a sovereign debt crises in one country after another, leading to the need for austerity measures and eroding the gains that have been made in welfare systems across Europe and in other countries, which had been gained over decades of struggle.
Organic crisis of overproduction
“No crisis is worse than one in which over-speculation in production is slowly developing, for it requires as many years to develop its results as a crisis in the trade in products and stocks and shares requires months.”- Frederick Engels, Letter to Marx, 24th of September 1852
Workers were then told we would have to accept temporary measures of austerity in order to rebalance the system; that the crisis would just be a short-lived affair and that after a period of belt tightening everything would be back to normal. After a while we had “green shoots”, we had hope, we had expectation. The working class, for honest reasons, kept their heads down in the belief that this crisis would go away and that we would be back on the road to reform and everything would be all right again as workers tried to solve their problems on an individual basis: doing overtime where it was available; getting further into debt; and eating into what little savings they had.
Whilst a large section of the working population was willing to swallow this perspective for a limited period of time, the development of consciousness within the class is far from being a homogenous process. Whist the majority of people were willing to keep their heads down, to “ride through the crisis”, there were those with more foresight who saw the crisis for what it was – a crisis of capitalism.
Alongside this, many workers and youth understood that the austerity measures of the Tory-led coalition government had to be resisted and fought against. We’ve seen a movement of the students in 2010, the biggest trade union demonstration in the history of the British labour movement called by the TUC, two days of a public sector general strikes, and strike action in the last six months by UCU, UNITE and Unison in higher education, Tube workers in London, the teaching unions, and the firefighters.
These are not isolated, accidental events, but are rather the specific ways in which the general crisis of capitalism is expressing itself in a number of industries. What will be needed to win these struggles, instead of small isolated strike action, will be a joint response linking all of these struggles together and fighting for a better deal for all. The realisation of this is beginning to dawn for many of those who’ve suffered defeats recently due to the failures of the leadership in these battles – a leadership which currently has no perspective on the cause of the cuts and who offer no strategy on how to fight back and win.
Whilst the class has taken a further pounding over the last few years, as terms, conditions and wages have further been eroded, the lessons of defeats have not gone unlearnt and a profound period of questioning and re-alignment has been opened up within society. There have been a number of disputes taking place whilst the largest sections of workers, the heavy battalions of the fighting working class have not moved into action yet. We will begin to see them stir in the future.
Within the struggle, there will always be periods of ebb and period of flow. This current period is coming to an end; lessons of previous defeats are sinking into the minds of struggling trade unionists and those who thought the crisis would be short lived are beginning to draw deep thoroughgoing conclusions about what life will be like under capitalism – of a “new normality” of economic stagnation and austerity. Under the cruel and brutal grinding teeth of the needs of the system a new collective consciousness is developing which is sending waves of terror up and down the spines of the most far-sighted analysts of the ruling class. More so will this be the case with the opening up of an election season over the next year.
Growth built on sand
“The question is, namely, how it happens that when the value of money, i.e., of gold, is falling, the rate of profit rises, while it falls when the value of money rises.
“Say the value of money falls by 1/10. Then the price of commodities, other circumstances remaining equal, rises by 1/10. If, on the other hand, the value of money rises by 1/10, the price of commodities falls, other circumstances remaining equal, by 1/10.
“If, when the value of money is falling, the price of labour does not rise to the same degree, then it falls, the rate of surplus value rises, and therefore, all other things remaining the same, the rate of profit also. The rise of the latter – so long as the ascendant oscillation in the value of money continues – is simply due to the fall in wages, and this fall is due to the fact that the change in wages only slowly accommodates itself to the change in the value of money. (so at the end of the sixteenth and seventeenth centuries.) If, on the contrary, when money rises in the value wages do not fall in the same proportion, then the rate of surplus value falls, and therefore, other things being equal, the rate of profit.” – Karl Marx, Letter to Engels, 22nd of April, 1968
Workers know they’re wages have not improved, that their terms and conditions are further being squeezed. This goes for both the private and public sectors. They also know that as wages have not improved the cost of living is going through the roof, property speculation has once again increase; food, heating costs, and transport: everything is becoming more and more expensive. At the same time the safety net of tax credits and housing benefit, which used to allow people the opportunity to have at least a basic standard of living are being hacked and slashed to shreds.
Whilst the Marxists did not deny the possibility of the economy coming out of recession, we explained time and again what measures from a bourgeois standpoint would be necessary for this to take place and what the inevitable outcomes of such measures would be. We also stated that such a recovery itself would be built upon sand and is no more than a blip on a graph charting the general course of development towards further stagnation.
With the nationalisation of some of the banks after the crash in 2008, and by pumping the economy with vast quantities of paper money – “quantitive easing” – a small reprieve may’ve been gained by the ruling class. Also, a concurrent squeeze in wages and the taking on of more staff at lower rates, along with precarious employment such as zero-hour contracts, have made the exploitation of the workforce greatly more profitable.
It would appear that there is more money in the economy, more wealth is being produced and seemingly the economy itself has been able to develop. But as we’ve explained previously, this pumping of the economy itself can do no more than hold off the inevitable furthering of the crisis as we begin to see the re-inflating of bubbles in property speculation and debt. The money itself, not being tied to production or an actual increase in wealth in society, simply lays the ground for the devaluation of wages and thus the increase in the price of many basic commodities and services. This is what we can see today and this in itself is what explains the seeming growth figures within the UK and the fact that the country is no longer in recession. The “green shoots” are once more in evidence but the reality of the situation, in spite of what the ruling class would like to convince themselves and others of, is that this growth is but a phantasm, soon to vanish into the wind as quickly as it came.
By creating growth on the grounds of further speculation, it was only a matter of time before this bled through into the wider economy and we begin to see the building of inflationary pressures leading to a further contraction of the economy and a squeezing of the living conditions of your average worker.
This is by no means a one sided process though, and the confluence of a small increase in production and wealth in British society, mixed with a further squeezing of the living conditions of workers is destroying any illusions that may’ve existed at the beginning of the crisis that as a society we’re “all in this together” or that the austerity measures being enacted by government and big business are short term. More and more workers are coming to the realisation that on the basis of capitalism all of the gains that have been fought for and won over the last century are no longer affordable within the confines of capitalism.
The desire for a bigger piece of the pie is a healthy and natural development, but it goes counter to everything that the capitalist system is about, and when workers see huge profits being made whilst they’re suffering further and further, is it any surprise that we’ve seen an increase in activity in the labour movement? When the next crash comes we’ll see the effects of this very precarious situation expressing itself in more and more militant actions.
Truth be told, we cannot be sure exactly what will cause the next crisis, whether it be events in the eurozone, a further political crisis in America over the debt ceiling, or even the opening up of crises and mass movements within China, India or other countries in the developing world. But the one thing we can be sure of is that it the current calm is merely a prelude to a bigger crisis. When this comes the bourgeoisie will be as ill prepared for this new phase of the crisis as they were for the last one. They hold on to the vain hope that everything will be all right and that they can hold off the inevitable, but these fine ladies and gentleman in their decadent homes and wine clubs will soon be faced with a brutal shock to their system.
Whilst a number of analysts are starting to understand the nature of this crisis, something the Marxists have explained for years, they are no more able to hold back the impending tide than the prayers of their confreres, the more naive of their ruling class brothers and sisters.
An anarchic and chaotic system
“The point of bourgeois society consists precisely in this, that a priori there is no conscious, social regulation of production. The reasonable and the necessary in nature asserts itself only as a blindly working average….. When the inner connection is grasped all theoretical belief in the permanent necessity of existing conditions breaks down before their practical collapse. Here, therefore, it is in the interest of the ruling classes to perpetuate this unthinking confusion. And for what other purpose are the sycophantic babblers paid, who have no other scientific trump to play, save that in political economy one should not think at all?” – Karl Marx, Letter to Kugelman, 11th of July 1868
Over the last period we’ve seen a succession of crises, fluctuations and disorder on the economic front and within wider society as a whole. Political and social events are impacting on one another at a faster and faster pace as contradictions continue to mount up.
At the beginning of each event we’ve been treated with the amusing spectacle of the most influential analysts shrugging their shoulders and scratching their heads in disbelief and confusion, trying desperately to understand what was happening only for them, after a few months, to profess the inevitability of such events having taken place. From the Arab Spring, to the eurozone crisis, the American governmental shut down: time and time again it is only after the event that the bourgeois commentators and politicians realise the impossibility of their position and the vanity of their attempts to maintain the status quo.
No doubt when the next crisis hits, after a short period of time we will get such explanations as the Marxists have continued to make throughout, albeit with their own class slant on the matter. Capitalism in by its very nature a system of chaos, of conflict and of struggle whereby the ruling class of different nations compete to undercut one another and where businesses and companies in one country after another have to look out for their own interests.
Whilst the most realistic thinkers in the employ of the bourgeois and the more incisive of bourgeois economists do see – and to a certain extent agree – with the conclusions that Marx drew about the cause of crisis under capitalism, these same people fail to see, or rather to accept, the only conclusion which can be draw from this: the need to radically change society. They pray that with this or that method of tinkering with the system they will be able to continue as before, exploiting the workers and reaping vast profits without any challenge to their system. They fail to see the underlying processes which are at work. The ruling class looks at nothing more than the surface of what is going on in attempts to lull itself, and the working population, into a false sense of security that everything will be okay in the end as long as they keep plugging away. It is this empirical method and mindless fumbling which is a sure sign of the senility of this capitalism system, which has long ago ceased to play a progressive role in society. The ruling class see no way out for themselves or society because they have nothing left to offer.
Impact on the class struggle
Working people are looking for an alternative. Under the blow of events and the hard, solid concrete needs of society to develop further, the consciousness of the working class will be hammered out and a realisation of the need for a fundamental change in the way in which we organise our lives will develop.
As working people start to draw more and more revolutionary conclusions the theories of Marx, Engels, Lenin and Trotsky will once again gain more prevalence and become flesh and blood in the workers movement. As revolutionaries, it is our duty to fight for these ideas within the wider labour movement, to combat the false arguments of the reformist leaders, who themselves hold even less answers than the ruling class.
The current leaders of the labour movement, the Millibands, Balls and McCluskeys of this world are in many respects a throwback to the past period of growth, reform and attempts to manoeuvre within the system. Whilst they may show the building of pressure from below and start reflecting the genuine aspirations of working people, albeit in a small way, they remain wedded to the system and without a perspective for change. They tail-end the bourgeois economists because they see no alternative to the current socio-economic system available. They’ve completely abandoned the ideas of socialism and see the problems of society as being one of the need for creating a “responsible capitalism” and for defeating “nasty” bankers and speculators who are going against the basic good instincts within humanity. They do not realise that by refusing to fight for a fundamental change within society they will lead the labour movement to further and more desperate defeats.
Without fighting on the basis of a socialist programme, any Labour government which may come into power next year will be forced by the bankers and speculators to inflict further austerity for the needs of the system. To accept the continued existence of the current system is to accept the logic of the system which itself demands cuts and austerity. The perspectives any future government will be one of intensive internal struggle. The revolutionary consequences on the mindset of the working class will be unprecedented in all of our previous history.
The choice that working people face in one country after another is not of this or that form of capitalism, but rather is one between the road of reform or revolution; or put another way: the question is one of barbarism or socialism. The question will put all political parties and tendencies to the test and most of which will be found wanting. The more experience working people have of the current system and its attacks, of the falsity of reformist ideas, the more revolutionary their conclusions will be, and an understanding of the need of Marxist ideas as a means to transforming society will become more and more important.
The advantage of foresight over astonishment
It is for this very reason that we study theory, and why we look at history not out of abstract academic curiosity but in order to develop an understanding of those very motive forces of historical development which are taking place right now. To understand how economic phenomena impact upon each other, how the class struggle is built upon the playing out of these contradictions and on how we can intervene in this process to further fight for the emancipation of all humanity. We understand that there is a profound connection between theoretical understanding and how it affects the way in which we fight to transform society.
Yet, all of this will forever remain a book sealed by seven seals for the bourgeois economists, even the best of them – people for whom history and the development of society appears to be no more than an unending list of unfortunate events and interesting personages following one after another; for whom economic processes can appear as simply witchcraft, a mystical process to be interpreted rather than understood.
In the words of Hegel these individuals, “Come from nothing through nothing to nothing”. Whilst a few of them may approach similar conclusions as the Marxists, they fail to see the underlying processes at work; for to do so would be to accept their obsolete historical position within society. The bourgeoisie represent a class which is at a historical dead end. Far from presenting humanity with any visions of progress or improvement, all these people can offer is death, destruction, pain and sacrifice for the working class in all countries around the world. The future of humanity lies not in the hands of Messrs’ Bourgeois but rather in the hands of this very working class who produce all within society and who are suffering under the burden of the current crisis.
Only when the working class conquers political power, sweeping away the decaying remnants of bourgeois and feudal society in Britain and around the world and set itself upon the tasks of socialist construction will mankind be able to free itself from the desolation and misery which is inflicted upon it and we can start to further the advance of civilisation for all. As Marx once said, “History is the judge; its executioner, the proletarian.” Hasten the day when we make true on that idea.
