Neoliberal triumphalism and capitalist reality

Why we are Marxists

Written by Alan Woods

Two decades have passed since Francis Fukuyama published a book entitled The End of History and the Last Man, proclaiming the definitive triumph of market economics and bourgeois democracy. This idea seemed to be confirmed by almost 20 years of soaring markets and virtually uninterrupted economic growth. Politicians, central bankers and Wall Street managers were convinced that they had finally tamed the economic cycle of booms and slumps. Now, two decades after the fall of the USSR, not one stone upon another remains of the illusions of the bourgeoisie. The world is experiencing the deepest crisis since the 1930s. Faced with a catastrophic situation on a world scale, the bourgeois of the USA, Europe and Japan are in a state of panic. In the 1930s, Trotsky said that the bourgeoisie was “tobogganing to disaster with its eyes closed.” These words are precisely applicable to the present situation. They could have been written yesterday. For the last twenty years the bourgeois economists boasted that there would be no more boom and slump, that the cycle had been abolished. It is an actual fact that for decades, the bourgeois economists never predicted a single boom and never predicted a single slump. They had worked out a wonderful new theory called the “efficient market hypothesis.” Actually, there is nothing new about it at all. It amounts to the old idea that: “Left to itself the market will solve everything. It will automatically balance itself out. As long as the government doesn’t interfere, sooner or later everything will be fine.” To which, John Maynard Keynes issued the very celebrated reply, “Sooner or later we’re all dead.” In the first decade of the 21st century, it is becoming increasingly clear that capitalism has exhausted its progressive potential. Instead of developing industry, science and technology, it is steadily undermining them. The productive forces stagnate, factories are closed as if they were matchboxes, and millions are thrown out of work. All these are symptoms that show that the development of the productive forces on a world scale has gone beyond the narrow limits of private property and the nation state. That is the most fundamental reason for the present crisis, which has exposed the bankruptcy of capitalism in the most literal sense of the word. The plight of Ireland and Greece provides graphic confirmation of the diseased state of European capitalism. Tomorrow the contagion will spread to Portugal and Spain. But Britain and Italy are not far behind. And France, Germany and Austria will follow them inexorably on the downward path. The bourgeois economists and politicians, and above all, all the reformists, are desperately seeking some sort of revival to get out of this crisis. They look to the recovery of the business cycle as salvation. The leaders of the working class, the trade union leaders and the Social Democratic leaders believe that this crisis is something temporary. They imagine it can be solved by making some adjustments to the existing system, that all that is needed is more control and regulation, and that we can return to the previous conditions. But this crisis is not a normal crisis, it is not temporary. It marks a fundamental turning point in the process, the point at which capitalism has reached a historical dead end. The best that can be expected is a weak recovery, accompanied by high unemployment and a long period of austerity, cuts and falling living standards. The crisis of bourgeois ideology Marxism is in the first place a philosophy and a world outlook. In the philosophical writings of Marx and Engels we do not find a closed philosophical system, but a series of brilliant insights and pointers, which, if they were developed, would provide a valuable addition to the methodological armoury of science. Nowhere is the crisis of bourgeois ideology clearer than in the realm of philosophy. In its early stages, when the bourgeoisie stood for progress, it was capable of producing great thinkers: Hobbes and Locke, Kant and Hegel. But in the epoch of its senile decay, the bourgeoisie is incapable of producing great ideas. In fact, it is not capable of producing any ideas at all. Since the modern bourgeoisie is incapable of bold generalisations it denies the very concept of ideology. That is why the post-modernists talk of the “end of ideology”. They deny the concept of progress simply because under capitalism no further progress is possible. Engels once wrote: “Philosophy and the study of the actual world have the same relation to one another as onanism and sexual love.” Modern bourgeois philosophy prefers the former to the latter. In its obsession to combat Marxism, it has dragged philosophy back to the worst period of its old, outworn and sterile past. Dialectical materialism is a dynamic view of understanding the workings of nature, society and thought. Far from being an outmoded idea of the 19th century, it is a strikingly modern view of nature and society. Dialectics does away with the fixed, rigid, lifeless way of looking at things that was characteristic of the old mechanical school of classical physics. It shows that under certain circumstances things can turn into their opposite. The dialectical notion that gradual accumulation of small changes can at a critical point become transformed into a gigantic leap has received a striking confirmation in modern chaos theory and its derivatives. Chaos theory has put an end to the kind of narrow mechanical reductive determinism that dominated science for over a hundred years. Marxist dialectics is a 19th century expression of what chaos theory now expresses mathematically: the inter-relatedness of things, the organic nature of relations between entities. The study of phase transitions constitutes one of the most important areas of contemporary physics. There are an infinite number of examples of the same phenomenon. The transformation of quantity into quality is a universal law. In his book Ubiquity Mark Buchanan shows this in phenomena as diverse as heart attacks, avalanches, forest fires, the rise and fall of animal populations, stock exchange crises, wars, and even changes in fashion and schools of art. Even more astonishing, these events can be expressed as a mathematical formula known as a power law. These remarkable discoveries were anticipated long ago by Marx and Engels, who put the dialectical philosophy of Hegel on a rational (that is, materialist) basis. In his Logic (1813) Hegel wrote: “It has become a common jest in history to let great effects arise from small causes.” This was long before the “butterfly effect” was ever heard of. Like volcano eruptions and earthquakes, revolutions are the result of a slow accumulation of contradictions over a long period. The process eventually reaches a critical point at which a sudden leap occurs. Historical materialism Every social system believes that it represents the only possible form of existence for human beings. That its institutions, its religion, its morality are the last word that can be spoken. That is what the cannibals, the Egyptian priests, Marie Antoinette and Tsar Nicolas all fervently believed. And that is what Francis Fukuyama wished to demonstrate when he assured us, without the slightest basis, that the so-called system of “free enterprise” is the only possible system—just when it is beginning to sink. Just as Charles Darwin explains that species are not immutable, and that they possess a past, a present and a future, changing and evolving, so Marx and Engels explain that a given social system is not something eternally fixed. The analogy between society and nature is, of course, only approximate. But even the most superficial examination of history shows that the gradualist interpretation is baseless. Society, like nature, knows long periods of slow and gradual change, but also here the line is interrupted by explosive developments ‑ wars and revolutions, in which the process of change is enormously accelerated. In fact, it is these events that act as the main motor force of historical development. The root cause of revolutionary changes is the fact that a particular socio-economic system has reached its limits and is unable to develop the productive forces as before. Marxism analyses the hidden mainsprings that lie behind the development of human society from the earliest tribal societies up to the modern day. The materialist conception of history enables us to understand history, not as a series of unconnected and unforeseen incidents, but rather as part of a clearly understood and interrelated process. It is a series of actions and reactions which cover politics, economics and the whole spectrum of social development The relationship between all these phenomena is a complex dialectical relationship. Very often attempts are made to discredit Marxism by resorting to a caricature of its method of historical analysis. The usual distortion is that Marx and Engels “reduced everything to economics.” This patent absurdity was answered many times by Marx and Engels, as in the following extract to Engels’ letter to Bloch: “According to the materialist conception of history, the ultimate determining element in history is the production and reproduction of life. More than this neither Marx nor myself have asserted. Hence, if somebody twists this into saying that the economic element is the only determining one, he transforms that proposition into a meaningless, abstract and senseless phrase.” The Communist Manifesto The most modern book that one can read today is the Communist Manifesto, written in 1848. True, this or that detail will have to be changed, but in all the fundamentals, the ideas of the Communist Manifesto are as relevant and true today as when they were first written. By contrast, the immense majority of the books written one and a half centuries ago are today merely of historical interest. What is most striking about the Manifesto is the way in which it anticipates the most fundamental phenomena which occupy our attention on a world scale at the present time. Let us consider one example. At the time when Marx and Engels were writing, the world of the big multinational companies was still the music of a very distant future. Despite this, they explained how “free enterprise” and competition would inevitably lead to the concentration of capital and the monopolisation of the productive forces. It is frankly comical to read the statements made by the defenders of the “market” concerning Marx’s alleged mistake on this question, when in reality it was precisely one of his most brilliant and accurate predictions. Today it is an absolutely indisputable fact that the process of concentration of capital foreseen by Marx has occurred, is occurring, and indeed has reached unprecedented levels in the course of the last ten years. For decades the bourgeois sociologists attempted to disprove these assertions and “prove” that society was becoming more equal and that, consequently, the class struggle was as antiquated as the handloom and the wooden plough. The working class had disappeared, they said, and we were all middle class. As for the concentration of capital, the future was with small businesses, and “small is beautiful”. How ironic these claims sound today! The entire world economy is now dominated by no more than 200 giant companies, the great majority of which are based in the USA. The process of monopolisation has reached unprecedented proportions. In the first quarter of 2006 mergers and acquisitions in the USA amounted to $10 billion dollars a day. This feverish activity does not signify a real development of the productive forces, but the opposite. And the pace of monopolisation does not diminish but increases. On November 19-20, 2006 the value of mergers and acquisitions in the USA amounted to a record of $75 billion - in just 24 hours! Takeovers are a kind of corporate cannibalism that is inevitably followed by asset-stripping, factory closures and sackings – that is, by the wholesale and wanton destruction of means of production and the sacrifice of thousands of jobs on the altar of Profit. At the same time there is a constant increase in inequality. In all countries the share of profits in the national income is at a record high level, while the share of wages is at a record low. The real secret of the current boom is that the capitalists are extracting record amounts of surplus value from the working class. In the USA the workers are producing on average a third more than ten years ago, yet real wages stagnate or fall in real terms. Profits have been booming and the wealthy are becoming ever wealthier at the expense of the working class. Let us take another, even more striking example: globalisation. The crushing domination of the world market is the most important manifestation of our epoch, and this is supposed to be a recent discovery. In fact, globalisation was predicted and explained by Marx and Engels over 150 years ago. Yet when the Manifesto was written, there was practically no empirical data to support such a hypothesis. The only really developed capitalist economy was England. The infant industries of France and Germany (which did not even exist as a united entity) still sheltered behind high tariff walls ‑ a fact which is conveniently forgotten today, as Western governments and economists deliver stern lectures to the rest of the world on the need to open up their economies. On a world scale the results of globalised “market economics” are horrifying. In 2000 the richest 200 people had as much wealth as the 2 billion poorest. According to the figures of the UN, 1.2 billion people are living on less than two dollars a day. Of these eight million men, women and children die every year because they do not have enough money to survive. Everybody agrees that the murder of six million people in the Nazi Holocaust was a terrible crime against humanity, but here we have a silent Holocaust that kills eight million innocent people every year and nobody has anything to say on the subject. Alongside the most appalling misery and human suffering there is an orgy of obscene money-making and ostentatious wealth. Worldwide there are at present 945 billionaires with a total wealth of $3.5 trillion. Many are citizens of the USA. Bill Gates has a personal fortune estimated at around $56 billion. Warren Buffet is not far behind with $52 billion. Now they boast that this unseemly wealth is spreading to “poorer nations”. Among the super-rich there are 13 Chinese, 14 Indians – and 19 Russians. And this is supposed to be a reason to celebrate! Class struggle Historical materialism teaches us that conditions determine consciousness. The problem is that consciousness is lagging behind the objective situation, the mass organisations are lagging behind that, and above all, the leadership of the working class is lagging even further behind. This is the main contradiction of the present period. It must be resolved, and it will be resolved. Idealists have always presented consciousness as the motor force of all human progress. But even the most superficial study of history shows that human consciousness always tends to lag behind events. Far from being revolutionary, it is innately and profoundly conservative. Most people do not like the idea of change and still less of a violent upheaval that transforms existing conditions. They tend to cling to the familiar ideas, the well-known institutions, the traditional morality, religion and values of the existing social order. But dialectically, things change into their opposite. Sooner or later, consciousness will be brought into line with reality in an explosive manner. That is precisely what a revolution is. Marxism explains that in the final analysis, the key to all social development is the development of the productive forces. As long as society is going forward, that is to say, as long as it is capable of developing industry, agriculture, science and technology, it is seen to be viable by the great majority of people. Under such conditions, men and women do not generally question the existing society, its morality and laws. On the contrary, they are seen as something natural and inevitable: as natural and inevitable as the rising and setting of the sun. Great events are necessary to permit the masses to throw off the heavy burden of tradition, habit and routine and to embrace new ideas. Such is the position taken by the materialist conception of history, which was brilliantly expressed by Karl Marx in the celebrated phrase “social being determines consciousness.” It takes great events to expose the unsoundness of the old order and convince the masses of the need for its complete overthrow. This process is not automatic and takes time. In the last period it appeared that the class struggle in Europe was a thing of the past. But now all the accumulated contradictions are coming to the surface, preparing the way for an explosion of the class struggle everywhere. Even in countries like Austria, where for decades the ruling class bought social peace by reforms, stormy events are being prepared. Sharp and sudden changes are implicit in the situation. When Marx and Engels wrote the Manifesto, they were two young men, 29 and 27 years old respectively. They were writing in a period of black reaction. The working class was apparently immobile. The Manifesto itself was written in Brussels, where its authors had been forced to flee as political refugees. And yet at the very moment when the Communist Manifesto first saw the light of day in February 1848, revolution had already erupted onto the streets of Paris, and over the following months had spread like wildfire through virtually the whole of Europe. We are entering into a most convulsive period which will last for some years, similar to the period in Spain from 1930 to 1937. There will be defeats and setbacks, but under these conditions the masses will learn very fast. Of course, we must not exaggerate: we are still in the early beginnings of a process of radicalisation. But it is very clear here that we are witnessing the beginning of a change of consciousness of the masses. A growing number of people are questioning capitalism. They are open to the ideas of Marxism in a way that was not the case before. In the coming period ideas that were confined to small groups of revolutionaries will be eagerly followed by millions. We can therefore answer Mr. Fukuyama as follows: history has not ended. In fact, it has hardly begun. When future generations look back at our present “civilisation”, they will have approximately the same attitude that we adopt towards cannibalism. The prior condition for attaining a higher level of human development is the ending of capitalist anarchy and the establishment of a rational and democratic plan of production in which men and women can take their lives and destinies into their own hands. “This is an impossible Utopia!” we will be told by self-styled “realists”. But what is utterly unrealistic is to imagine that the problems facing humanity can be solved on the basis of the present system that has brought the world to its present sorry state. To say that humanity is incapable of finding a better alternative to the laws of the jungle is a monstrous libel on the human race. By harnessing the colossal potential of science and technology, freeing them from the monstrous shackles of private ownership and the nation state, it will be possible to solve all the problems that oppress our world and threaten it with destruction. Real human history will only commence when men and women have put an end to capitalist slavery and taken the first steps towards the realm of freedom. Tuesday, 11 January 2011