Characteristics of Mature Capitalism

Characteristics of Mature Capitalism (Revised)

Rawlinsview: June 1, 2013

In the journalistic back and forth of the “MSM” mainstream media and the dialogue familiar to the university student. One side of the conversation defends the “market” or “free market” approach, the antique “laissez-faire” concept. The other side defends the importance of government regulation or intervention to correct the “excesses” of the market, to stimulate growth and employment, to develop core infrastructure, to concentrate capital resources toward undeveloped areas and sectors, and occasionally to act charitably toward the aged and infirmed and “those” less fortunate. The system would work better if it were left alone. The system can be improved if we tinker with it or manage it with greater efficacy.

Fundamental historical forces and established social facts have transcended the original context of this dichotomy as it was framed during the period of the rise of mass Socialist movements at the beginning of the 20th century, during the collapse of the colonial system through and following the second world war and again during the last great period of economic crisis,  social and intellectual upheaval following the civil rights movement in the United States, the rise of anti-imperialist movements in Africa, Asia and Latin America, the Cuban Revolution(1959), the defeat of US imperialist intervention in Vietnam (c1974), and then after the Sandinista Revolution in Nicaragua (1979), the revolutionary civil war in El Salvador (1980s), the overthrow of the Shah in Iran (1979), The Revolution in Grenada (1979), and crowningly the overthrow of the Apartheid regime in South Africa (c.1990-1994).

More or less loudly and quietly a new epoch has come in to being brought by combinations of resounding blood and turmoil and small incremental changes in the way of life of the earth’s citizens.

Capitalism has failed, and socialism has not triumphed.

The Victory of the Commodity

The primary feature which defines the present epoch is the penetration of commodity production as the dominant feature of economic life for virtually all of the world’s populations.

This is a fact of life which it was possible to predict, but was as yet 100 years away at the close of the 19th century.

Involvement of the entire world society in relations of commodity exchange remained an incomplete development at the end of the Second World War.

Though not complete in an absolute sense, and though variations and even new forms of production relations continue to develop, the qualitative fact is such that pre-capitalist forms of subsistence production–which remained substantial throughout the 20th century and various movements and institutions of resistance to the operation of the law of value¹–including the establishment of anti-capitalist regimes–have, in their mass, given up their ghost to the modern god–the commodity.

The Universality of the Republican Nation State

In the political sphere, the history of the 20th century may be defined by the transformation of the world’s political structure such that the inexorable assertion of the right of nations to self determination has won out against all forces opposing it. It is now the case that nearly all of the worlds citizens live in more or less modern nation states which are more or less self governing republics. (There are notable exceptions such as Saudi Arabia which remains an hereditary monarchy but such are few and far between). In making this statement I make no judgement as to the degree of internal democratic or civil development each nation may or may not have other than to say that beauty is often in they eye of the beholder.

The dominant wars and revolutions of the 20th century drove forward this process and drove the colonial arrangement out of existence and set the imperialist powers on the run. No state has been returned to monarchical or other non republican governmental form in the recent course of history. No existing nation states have been dissolved or successfully robbed of their sovereignty. Attempts to repress the natural tendency toward nationhood on the part of like peoples sharing common histories and languages have proven doomed to relentless bloodshed and eventual failure.

No form of political or military force proved able to forestall these two powerful tendencies in the long course of history. Neither the stateist socialism of countries governed by Stalinist political parties, nor the traditional political powers of Europe. Nor the hyper-capitalist young imperial power of the United States. Monarchies and colonial arrangements collapsed into failing wars or revolutions, and markets opened up to virtually everyone everywhere.

The massive advancements in transport technology and infrastructure which occurred throughout the 20th century and the ‘warp speed’ advancement in communications and information access and storage which occurred at the end of the 20th century and at the beginning of the 21st century have reinforced this general tendency and driven forward the development of a worldwide cosmopolitan civil society.

The Development of Productive Forces.

Capitalism has done humanity the favor of having effectively buried itself in overproduction. As the gross productive capacity has risen however, the social needs of large sectors of the world’s population remains unmet. Another historically unique characteristic of the present epoch is that in terms of simple capacity the productive forces of the broad human race are now sufficient to provide for the basic material needs of the whole of the world’s population. Thus hunger, disease, poverty, and ignorance must be understood as purely social dysfunctions of the capitalist system. These problems at present stand as proof of the inability of the operation of the “law of value,” the “invisible hand” or other understandings of “natural” market mechanisms to effectively allocate social resources.

Governmental intervention in market operations is the life support of the system.

The established social fact of the welfare state and the inescapable reality that government spending represents between 20 and 60 percent of GDP in all developed societies, such that macro level economic planning, regulation and monetary/financial intervention is an integrated aspect of modern capitalist society. These mechanisms do not simply exist as commonly understood (especially on the left) as mediating forces in the class struggle, or to alleviate social disproportions, but also because they have become essential to the basic operation of the capitalist system itself as they are directly integrated into the process of appropriation and distribution of surplus value now that the classical “laissez faire” operations of the capitalist market have been rendered by its own contradictions, not just socially unviable, but in fact unviable at an economic level without perpetual state intervention.

Effectively the epoch of state-monopoly capital and classical imperialism, which reigned for much of the 20th Century, may now be seen as another developmental phase of the capitalist system rather than as its “final stage.” Specifically this may be understood by grasping that imperialism served two key functions in the development of capitalism as a world system, one is broadly understood in that it was the mechanism of exploitation of the developing world on the part of the imperial centers. Concurrently, as described by Lenin,² it was the system of competition between the imperial centers in which each vied for advantage over the other. Less well understood is the degree to which the imperialist system served to drive forward the expansion of the social relations of capitalism globally bringing us to the point where we are now–that is, thoroughly extending commodity relations to the whole of the system.

Expansion of the global proletariat.

Concurrent to the trends described above it may now be considered that the majority population of most of the world’s nations are more or less best described as proletarians³ in the classical sense. This is to say that they are non owners of significant social means of production and that to the extent that they are employed they are so engaged in production for the market in a relation in which the means of production is owned either socially, by a state entity, or privately by some or another form of capitalist concern. Even in agriculture, in most cases, the mass of production is carried out by toilers who are either fully or partially proletarianized.

The cosmopolitan proletariat.

The working class has matured along with the system that created it. It is now, all hand wringing aside, much stronger than its dying mother and in need of only one last bowl of warm milk before it comes to know its own power.  The advancement of communications and information technology, the establishment of global networks of rapid travel, the internationalization of popular culture, and the desperate mechanisms of monopoly capital as is roves  the globe in search of cheap labor and drives huge migrations of workers in search of employment has created a literate, informed, cultured, multi-lingual and globally interconnected working class which mirrors the development of globalized monopoly capital.

It is considering these factors at the starting point that set the condition for understanding the prospects for the development of a political movement in the 21st century whose object is the advancement of the social interests of the working class and the elevation of the working class to political power.

1. Preobrazhensky E.A. The New Economics (1926) English Translation Brian Pearce Clarendon Oxford (1965)
the law of value is the spontaneous regulation of the production process in commodity society”

1a. This is an excellent introductory series to Marx’ Value Concepts

2. Lenin, VI  Imperialism the Highest Stage of Capitalism (1917)
Lenin’s Selected Works, Progress Publishers, 1963, Moscow, Volume 1, pp.667–766.

To the numerous “old” motives of colonial policy, finance capital has added the struggle for the sources of raw materials, for the export of capital, for spheres of influence, i.e., for spheres for profitable deals, concessions, monopoly profits and so on, economic territory in general. When the colonies of the European powers,for instance, comprised only one-tenth of the territory of Africa(as was the case in 1876), colonial policy was able to develop—by methods other than those of monopoly—by the “free grabbing” of territories, so to speak. But when nine-tenths of Africa had been seized (by 1900), when the whole world had been divided up,there was inevitably ushered in the era of monopoly possession of colonies and, consequently, of particularly intense struggle for the division and the redivision of the world.

3. The Manifesto of the Communist Party
Marx/Engels Selected Works, Vol. One, Progress Publishers, Moscow, 1969, pp. 98-137;

In proportion as the bourgeoisie, i.e., capital, is developed, in the same proportion is the proletariat, the modern working class, developed — a class of labourers, who live only so long as they find work, and who find work only so long as their labour increases capital. These labourers, who must sell themselves piecemeal, are a commodity, like every other article of commerce, and are consequently exposed to all the vicissitudes of competition, to all the fluctuations of the market.

[End note]

Readers of this are encouraged to consider the relevance of Trotsky’s prescient critique of  the Stalinist ideology of “Socialism in One Country” as presented in his “Criticism of Fundamentals”  of the Draft Program of the Communist International.”  Text below is linked to the full article.  As always readers’ comments are encouraged.

…The extreme diversity in the levels attained, and the extraordinary unevenness in the rate of development of the different sections of mankind during the various epochs, serve as the starting point of capitalism. Capitalism gains mastery only gradually over the inherited unevenness, breaking and altering it, employing therein its own means and methods. In contrast to the economic systems which preceded it, capitalism inherently and constantly aims at economic expansion, at the penetration of new territories, the surmounting of economic differences, the conversion of self-sufficient provincial and national economies into a system of financial interrelationships. Thereby it brings about their rapprochement and equalizes the economic and cultural levels of the most progressive and the most backward countries. …

By drawing the countries economically closer to one another and leveling out their stages of development, capitalism, however, operates by methods of its own, that is to say, by anarchistic methods which constantly undermine its own work, set one country against another, and one branch of industry against another, developing some parts of world economy while hampering and throwing back the development of others. Only the correlation of these two fundamental tendencies – both of which arise from the nature of capitalism – explains to us the living texture of the historical process.

Imperialism, thanks to the universality, penetrability, and mobility and the break-neck speed of the formation of finance capital as the driving force of imperialism, lends vigor to both these tendencies. Imperialism links up incomparably more rapidly and more deeply the individual national and continental units into a single entity, bringing them into the closest and most vital dependence upon each other and rendering their economic methods, social forms, and levels of development more identical. At the same time, it attains this “goal” by such antagonistic methods, such tiger-leaps, and such raids upon backward [sic] countries and areas that the unification and leveling of world economy which it has effected, is upset by it even more violently and convulsively than in the preceding epochs.

Trotsky, Leon; The Draft Program of the Communist International: A Criticism of Fundamentals (1928).
First Published: In English in 1929, The Militant. Source: The Third International After Lenin 1929, New York.Translated: 1st version unknown translator in Russia, US edition, Max Shachtman.
Transcription/HTML Markup: Sally Ryan, 1997, subsequent HTML updating by David Walters, 2003.
Copyleft: Leon Trotsky Internet Archive ( 2002, 2003. Permission is granted to copy and/or distribute this document under the terms of the GNU Free Documentation License.

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1 Response to Characteristics of Mature Capitalism

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