Periodisation of capitalism, revolutionary positions and the Marxist basis of its obsolescence

 

1) The economic root of class societies
2) The Marxist basis of the obsolescence of capitalism
3) When does the obsolescence of capitalism occur ?
4) The causes of the slowdown in labour productivity
5) Other manifestations of the obsolescence of capitalism in the 21st century
6) Rate of surplus value and periodisation of capitalism
7) Formal and real domination of capital over labour
8) Evolution of capitalism and revolutionary positions
...
Original in French translation DeepL

 

1) The economic root of class societies

 

In all societies where the means of production are monopolised by a minority, this minority can make the rest of the working population work for its own benefit through the extortion of surplus labour. This is the economic basis of all class societies according to Marx : «Capital did not invent surplus labour. Wherever a part of society holds a monopoly of the means of production, the worker, whether free or not, is forced to add to the labour time necessary for his own maintenance additional labour time in order to produce the means of existence of the owner of the means of production, whether that owner be an Athenian [nobleman], an Etruscan theocrat, a Roman citizen, a Norman baron, an American slave master, a Vlachic boyar, a landlord, or a modern capitalist » [1].

As for what distinguishes the different class societies, it is the way in which this surplus-labour is extorted from the producer : « The different economic forms assumed by society, slavery, for example, and wage-labour, differ only in the mode in which this surplus-labour is imposed and extorted from the immediate producer, the worker » [2]. This is what Marx defines as the characteristic social relations of production of each mode of production in history : tribute, slavery, serfdom, wage-labour for, respectively : tributary royal societies (the tax imposed on peasants), the ancient mode of production, the servile mode of production (the Middle Ages) and the capitalist mode of production.

And it is this specific form of extortion of surplus labour, specific to each mode of production, which constitutes the basis, the key to the intelligibility of these societies : «This specific economic form in which unpaid surplus labour is extorted from the direct producers... It is the basis of every form of economic community, arising directly out of the relations of production and at the same time the basis of its specific political form. It is always in the immediate relationship between the owner of the means of production and the direct producer (the various aspects of which naturally correspond to a certain degree of development of the methods of labour, and thus to a certain degree of social productive force), that we must seek the deepest secret, the hidden foundation of the whole social edifice and consequently of the political form which the relationship of sovereignty and dependence assumes, in short, the basis of the specific form which the state assumes at a given period » [3].

In capitalism, it is the social relation of wage-labour production which allows the extortion of surplus-labour in the form of surplus-value and which therefore constitutes ’the deepest secret, the hidden foundation’ of this mode of production : "Capital presupposes wage-labour, wage-labour presupposes capital. They are the condition of each other ; they create each other", said Marx in his explicitly titled work - Wage Labour and Capital. Thus, in his words, wage-labour constitutes ’the basis of every form of economic community directly resulting from the relations of production and at the same time the basis of its specific political form’.

Wage-labour in capitalism is a social relation between the owners of the means of production and the producers who do not have them and who, in order to subsist, are obliged to rent their labour power to these owners. Wage-labour thus constitutes the specific social relation between capital and labour, it articulates the stakes that are set for the appropriation of the maximum of surplus labour (the surplus value) by the employers and the defence of a decent wage by the employees. It is the class struggle materialised by the rate of surplus-value (surplus-labour/necessary labour) which thus measures the degree of exploitation (the balance of power) of wage earners in relation to employers (surplus-value/wages).

As wage-labour is the foundation of capitalist exploitation, and therefore of the class struggle around the appropriation of surplus value, it is logical that Marx should advocate its abolition : "Besides, and quite apart from the general servitude implied by the wage system, the workers must not exaggerate the final result of these daily struggles. Let them not forget : they fight the effects, not the causes ; they delay the descent, they do not change its direction ; they apply palliatives, but do not cure the disease. (...) On their banner they must erase this conservative slogan : ’A fair wage for a fair day’s work’, and inscribe the revolutionary watchword : ’Abolition of wage-labour’" [4].

 

2) The Marxist basis for the obsolescence of capitalism

 

If wage-labour is ’that specific economic form in which unpaid surplus labour is extorted from direct producers’ in capitalism and constitutes ’the deepest secret, the hidden foundation’ of this mode of production, then it is in this social relation that the dynamics and contradictions of this mode of production must be sought. Marx states this explicitly when he locates the place where the obsolescence of capitalism resides, namely wage labour : "...Beyond a certain point, the development of the productive forces becomes an obstacle for capital ; therefore the capitalist relation becomes an obstacle to the development of the productive forces of labour. Having reached this point, capital, i.e. wage-labour, enters into the same relationship to the development of social wealth and the productive forces as corporations, serfdom, slavery, and becomes an obstacle which must necessarily be got rid of. (...) The growing inadequacy of the productive development of society to the relations of production which were its own until then is expressed in acute contradictions, crises, convulsions" [5].

The fundamental limits of capitalism according to Marx lie neither in monopolies and imperialism (Lenin), nor in the exhaustion of pre-capitalist markets (Luxemburg), nor in the tendency of the rate of profit to fall (Grossman-Mattick), nor in the transition from the formal to the real submission of labour by capital (Internationalist Perspective and Critical Materials), nor in unequal exchange (Samir Amin), etc., but in the contradictions of its fundamental social relation of production : wage labour.

At the end of his life, in Book III of Capital, Marx reaffirms this definition of the obsolescence of capitalism by specifying the dimension of the salaried social relation that he retains to determine the obsolescence of the capitalist mode of production : "Here the capitalist system of production falls into a new contradiction. Its historical mission is to make the productivity of human labour flourish, to make it advance radically, in geometric progression. It is unfaithful to its vocation as soon as it puts, as here, an obstacle to the development of productivity. By this it simply proves, once more, that it is entering its senile period and that it is surviving more and more" [6].

Marx tells us three fundamental things here :
1- That the historical mission of capitalism is to develop the productivity of wage labour (which implies the reduction of the time taken to produce commodities through the intensification of wage labour and its mechanisation [7]).
2- Capitalism fails in this historical mission when it no longer manages to develop this productivity of wage labour.
3- At that point, when capitalism "impedes the development of productivity (...) it enters its period of senility" during which "it survives more and more".

This is the definition of the period of obsolescence of capitalism according to Marx, a period whose advent he situates when the social relation of wage production slows down the development of labour productivity instead of accelerating it in accordance with its historical mission. It is now a question of objectifying it with statistical data.

 

3) When does the obsolescence of capitalism occur ?

 

Marx thus situates the entry of capitalism into its period of senility at the moment when wage labour slows down the growth of labour productivity. Let us specify from the outset that it is not a question here of measuring conjunctural variations in productivity, but a multi-century movement on the scale of a mode of production, a movement which corresponds to the anthropological vision of Marxism : the succession of modes of production bringing the levels of productivity - and thus the levels reached by the productive forces - to higher and higher stages until a society of abundance is possible, making it possible to abolish the law of the value. Indeed, throughout its existence, capitalism has constantly developed the productivity of labour as never before in the history of humanity: from low levels during the industrial revolution (few machines and a lot of labour), it increases with increasing mechanisation.

However, as Marx had foreseen, this tendency to increase labour productivity is not infinite ! It encounters historical limits inherent in the wage production relationship. These limits were reached during the second half of the 20th century in the developed countries and at the beginning of the 21st century in the emerging countries, as the following two graphs show : productivity gains reached their maximum in the USA in the 1940s (the black curve in graph 1 below), in Europe and Japan during the 1950s and 1960s (red and green curves) and in the emerging countries, the peak was reached in 2007 (graph 2) While the decline in productivity gains in the Triad (North America, Europe and Japan) may have been partly offset by increases in emerging countries during the 1980s and 1990s, the latter have been in decline since the beginning of the 21st century :

Graph 1 : Aggregate factor productivity growth [8]

Graph 2 : Labour productivity growth

Indeed, what is important to note, and fundamental, is that after these various peaks, productivity gains decline all over the world. In other words, capitalism enters into decadence when wage labour is no longer able to develop productivity gains sufficiently. The social relation of production typical of capitalism (wage labour) then becomes a hindrance to the development of the productive forces and this hindrance begins at the hinge between the 20th and 21st centuries.

 

4) The causes of the labour productivity slowdown

 

The increase in productivity gains can be explained by various factors : investments in new technologies, the intensity of research and development, the increasing education of the population, the quality of public infrastructures, legal guarantees for the business world, the intensity of emulation and/or competition, etc. However, two elements predominate : the intensity of innovation and the organisation of work. Innovation is understood here as the invention of new technologies and their application in the production process. To take an extreme example, Leonardo da Vinci conceived a great many inventions but did not live in an era conducive to their application in the productive sphere. As for the organisation of work, it has evolved in the search for increasing productive efficiency : the shift from home-based work to workshop work, Taylorism, Fordism, Toyotism. However, the innovation intensity indicator started to slow down during the 1950s and 1960s and declined from the 1970s onwards, as shown in graph 3 :

Graph 3 : Innovation intensity indicator - Jan Vijg

As for the organisation of work, it has not seen any significant improvements since the invention of Toyotism in the 1960s, and worse, with the tertiarisation of the economy (cf. below), it is evolving towards regressive forms : individualisation of the employment contract, uberisation of work via the platform economy, a return to computerised homeworking carried out for poverty wages and working hours without any more limits... In other words, capitalism, which since 1850 has extorted its profit essentially through relative surplus-value (i.e. through productivity gains), is now reverting to forms of absolute surplus-value extortion through the increase of working time (graph 23), the decrease of the wage share (graph 22) and - increasingly - through the absolute decrease of real wages as well.

Finally, in addition to the slowdown in the intensity of technological innovations and a return to regressive forms of work organisation, the structural slowdown in productivity gains is also the result of the shift from a predominantly industrial economy (and therefore one with high productivity gains) to a predominantly tertiary economy, where productivity gains are much lower (four times lower on average !) since they are linked to personal services (i.e. where the time taken to provide the service is much less compressible). To understand this easily, it is enough to take a few examples of tertiary activities : for example, an artistic performance (a concert, a play, etc.) cannot be the subject of productivity gains, as playing Beethoven’s 9th symphony in a quarter of an hour instead of an hour would make no sense ! Similarly, although we can hope to make some productivity gains by generalising distance learning, education - which remains one of the biggest public expenditures - still requires a significant and incompressible number of years of study.

 

5) Other manifestations of the obsolescence of capitalism in the 21st century

 

As we have just shown, productivity gains have been slowing down all over the world since the beginning of the 21st century, albeit at different rates and intensities. This observation of a long-term structural decline in the dynamics of capitalism is then manifested in a whole series of other areas, of which we present some of the most significant :

1- The growth of world GDP per capita has slowed considerably since the 1960s : from 3.2% to 1.3% (Graph 4). This fall was cushioned from the 1980s onwards by the emerging countries, but the latter have also experienced a slowdown since the beginning of the 21st century (Graph 2), starting with China (Graph 5). The decline is therefore structural and not cyclical on a historical scale : for more than half a century for the old developed countries (Graphs 6 and 7) and two decades for the emerging countries.
 
Graph 4 : World GDP per capita, annual and decennial growth

Graph 5 : China : real GDP growth and inflation

Graph 6 : Developed country growth rates (OECD) : GNP/capita.

Graph 7 : Real GDP growth per capita - UK and US

2- For the first time since the beginnings of capitalism, the share of industrial employment at the global level - i.e. the sector that constitutes the core of the dynamics of this mode of production - began to decrease at the beginning of the 21st century, as shown in the following graph (black dashed line) :

Graph 8: Evolution of the share of industrial employment in total employment

3- Until the beginning of the 21st century, capitalism was always able to find an outlet for its contradictions : first, by plundering and destroying its pre-capitalist environment during the savage capitalism of the industrial revolution; then, by phagocytising the entire planet through colonisation ; then, by spectacularly developing productivity gains and distributing them more or less equitably during conventional capitalism ; and finally, by massively delocalising production to low-wage countries during neo-liberal capitalism (from the 1980s on). The situation is quite different today. Indeed, the end of the geo-economic bipolarisation of the world during neo-colonial capitalism via 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 real world market and a wage-dominated society within which the contradictions of capitalism are now unfolding in all their violence without any possible outlet !

4- Economic growth and human development are closely related, but the two concepts are nevertheless distinct. Economic growth is usually measured by GDP/capita and human development by the HDI - the Human Development Index - or other similar indicators. It is highly significant that until the 20th century, GDP/capita was positively correlated with the HDI : increases in the HDI were strongly dependent on economic growth. However, from the 21st century onwards, the correlation has become negative, i.e. economic growth continues (albeit at a slower pace) but with a deteriorating human development (graph 9)!

Graph 9 : Dynamics of the correlation between Human Development Index values and economic growth rates, 1980-2010

5- This deterioration in living conditions is reflected in many ways : in terms of standard of living by a decrease in the wage share (graph 22), an increase in working hours (graph 23), a deterioration in working conditions, an increase in the rate of surplus value (graph 10), etc., but also physically by a stagnation and even a decline in life expectancy at birth (or in certain age categories) in certain countries (USA, Russia, South Africa, etc.) and by a decrease in the number of children born in the EU. but also physically by a stagnation and even a decline in life expectancy at birth (or in certain age categories) in some countries (USA, Russia, South Africa...) and by a decrease in the size of the population (in the USA and recently in the Netherlands) ! Never seen before ! Of course, the still significant economic growth in the emerging countries, as well as the development of the workforce and the resulting social struggles, still allow concessions to be made in favour of employees. It will probably be two or three decades before we see a deterioration in living conditions and a generalisation of impoverishment on a global scale.

6- Following the physiocrats, Marx was the first modern economist to integrate nature as a factor of production, whereas classical political economy considers it as a positive externality, i.e. free of charge (the capitalist does not pay for the pollution he generates, nor for the depletion of natural resources, nor for the CO2 he emits, etc.), which it still is today, despite some ’ecological’ taxes that serve more as greenwashing than anything else. However, the world is beginning to face major ecological challenges as the planet’s population will grow by another 3 billion, which will significantly increase the stakes around global warming, vital resources and pollution. This will have a double consequence in the next two to three decades : on the one hand, it will transform the nature of positive externality into negative internality, which will strongly strain the profitability of capital ... which will be essentially paid for by increased austerity of wage earners, and on the other hand, it will increase tenfold the economic and imperialist tensions between all countries. Indeed, a new geopolitical bipolarisation of the planet is taking place between China and the United States. In the long 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 time being, 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 (despite the profound setback it has suffered) and the social conflicts in the emerging countries.

We therefore believe that our diagnosis of capitalism entering a phase of obsolescence in the twenty-first century is fully justified ... but this does not imply that the labour movement had to use nineteenth century political tactics in the twentieth century! This is what we will examine in the next three chapters by analysing the periodisation of capitalism and the consequent evolution of revolutionary positions.

 

6) Rate of surplus value and periodisation of capitalism

 

As Marx writes in the first pages of the Manifesto : "The bourgeoisie cannot exist without constantly upsetting the instruments of production, hence the relations of production, hence the whole of social conditions". Indeed, from the daily wage to the monthly wage indexed on prices, via the piece-rate wage, wage-earning - this fundamental social relation of capitalism - has been considerably transformed over time. Therefore, contrary to a widespread opinion, capitalism does not function identically throughout its existence. Certainly, its objective is always the same - to make enough profit - but the way in which it is achieved evolves greatly over time and across the world.

Based on the dominant mode of extraction of surplus labour, either through the increase in real working time and the decrease in real wages (absolute surplus value), or through the increase in productivity gains (relative surplus value), Marx laid the foundations for a periodisation of capitalism in his time : the formal and real domination of capital over labour as well as the transition from one to the other. It takes place during the first century of the industrial revolution as we shall examine in the next chapter. The important thing to note at this point is that Marx uses the wage relation and the formation of the rate of surplus value to periodise capitalism.

Indeed, "The history of all society up to the present day has been the history of class struggles", and the rate of surplus-value, which relates profits to wages, is one of the expressions of this balance of power between the classes, and is therefore a good indicator of the evolution of capitalism! The evolution of the rate of surplus-value will therefore be used to determine the periodisation of the capitalist mode of production.

Four productive orders and five major periods emerge from its profile over two and a half centuries since the beginning of the industrial revolution in Great Britain (graph 10), productive orders to which we must add those of totalitarian state capitalisms such as fascism, Stalinism and Maoism during the 20th century :

Graph 10 : Rate of surplus value

1) Savage capitalism (1760-1855) : the rate of surplus value almost doubles during the first century of the industrial revolution because the balance of power is clearly in favour of the owners of the means of production. Indeed, the emerging working class was small, young, rural and poorly educated, and unorganised due to the legal prohibitions in force. The profit in those days came essentially from the extortion of absolute surplus value, i.e. through the reduction of real wages and the increase in working time (graphs 11 and 12). Nevertheless, relative surplus value (i.e. that generated by productivity gains) gradually took over from 1790 onwards (Graph 12).

2) Colonial capitalism - I (1855-1917) : from 1855 onwards, profit is exclusively generated from relative surplus value (graphs 11 and 12) and the rate of surplus value stabilises as a consequence of the numerical development of the working class, its struggles, the emergence of its first organisations and colonial prosperity. These elements combine to explain the slow but steady decrease in working time and the slow but steady increase in real wages (graph 11). At the end of this period, the world was entirely divided into colonial domains and the raging imperialist competition led to the First World War. On the side of the exploited, the weight of the working class in the active population reached its maximum (33% - graph 13). Moreover, it was highly concentrated in large production units and took place in a society of extreme inequalities (graph 14). It was this context, combined with the horrors of the First World War, that gave a quantitative and qualitative boost to a wave of social movements between 1917 and 1923 that is still unequalled today (graph 15).

3) Colonial capitalism - II (1917-1945) : this social wave - of which certain episodes were insurrectionary in nature - was stopped by a mix of physical repression and political concessions (granting of the right to vote...) ; economic (reduction of working hours and wage increases... graph 11) and social (introduction of various types of benefits... graph 16). Social peace will be bought by the dominant (graph 14), which leads to a decrease in the rate of surplus value (graph 10). These concessions by the dominant will be the basis for the emergence of a middle class in the 20th century (graph 17), which will stabilise the body politic and thus the power of the bourgeoisie. The defeat and crushing of this wave of social mobilisation led to what can be called the ’thirty disasters’ with their attendant wars, totalitarianism (fascism, Stalinism, strong regimes) and economic crisis. Nevertheless, for those who had a job and escaped the throes of the two world wars, their material situation improved, albeit only modestly compared to what would happen after the Second World War. The latter broke out in an obsolete colonial production order and at the initiative of a Germany humiliated by the Treaty of Versailles (graph 18) : it had been deprived of 10% of its population, 20% of its territory, 25% of its agricultural production, 30% of its coal production, 80% of its iron production, its entire merchant fleet and all its colonies ! It is not for nothing that Hitler’s economic war cry will be "Export or die" ! These are the economic roots of the Second World War.

4) Conventional capitalism (1945-80) : boosted by the devalorization of fixed and variable capital after the 1929 crisis in the United States (graph 21) and by the war in Europe (graph 20), the prosperity of conventional state capitalism allowed for a prolonged decrease in the rate of surplus-value under the numerical pressure of the working class and its mobilizations (graph 15), even if the latter were well framed by the trade unions and left-wing forces within capitalism (graph 19).

5) Neoliberal capitalism (1980-...) : following the crisis in the profitability of capital during the 1970s (graphs 20 and 21), the need to recover the rate of profit was ensured by a formidable compression of the wage share (graph 22), an increase in the annual working time (graph 23) and a deregulation of the labour market. The rate of surplus-value will therefore suddenly recover. This strong attack on the living conditions of workers was made possible by a combination of factors :
1- The slow de-industrialisation since the 1950s in the Anglo-Saxon countries and its acceleration in all developed countries in the early 1970s (Graph 24).
2- The structural rise in unemployment since 1973 (Graph 25).
3- The subsequent decline in social mobilisation (Graph 15).
4- The growing indebtedness of households forced to compensate for the decline in the wage share (Graph 26).
5- The development of the individualisation of the wage relationship to the point of its current uberisation, which breaks down solidarity between employees.
6- Finally, the strategy of the ruling class aiming to move social revolt from the streets to the parliamentary arena (cf. the policies of the left in power at that time: the common programme in France with the arrival of Mitterrand and the left in power, the historic compromise in Italy, the democratisation of the dictatorial regimes of Greece and Portugal in 1974 and Spain in 1975...).

These are the four productive orders (savage, colonial, conventional and neo-liberal capitalism) which have marked the two and a half centuries of the existence of the capitalist mode of production, with a break in colonial capitalism at the end of the First World War following intense social mobilisations which led to a parenthesis of half a century of reduction in the rate of surplus value.

Graph 11 : Real wages and working time

Graph 12 : Labour productivity, real wages and working time

Graph 13 : Distribution of the working population - Europe + North America

Graph 14 : Share of total wealth of top 1% (income + wealth)

Graph 15 : Index of strikes in 16 Western countries

Graph 16 : The social share of the state in Europe in total national income

Graph 17 : Distribution of property in the United Kingdom

Graph 18 : The price of German defeat at the Treaty of Versailles in 1919 [9].

Graph 19 : Unionisation rate

Graph 20 : France : Rate of profit ; Margin rate = +/- the rate of surplus value and the efficiency of capital = the return to accumulation - 1924 = 100

Graph 21 : Profit rates in the US

Graph 22 : Share of wages in world income

Graph 23 : USA : Annual working time and Gini coefficient

Graph 24 : Industry’s share of total employment

Graph 25 : Unemployment rate - EU-15 and France

Graph 26 : Wage share (right) and household debt (left) as % of GDP (USA)

 

7) Formal and real domination of capital over labour

 

The publication of an unpublished chapter of Capital in which Marx analyses the processes of formal and real domination of capital over labour has generated many different theorisations of these concepts. However, if we retain one of the essential aspects he underlines when he elaborates this distinction, he defines them as follows :
a) Formal domination covers the period when capital extracts surplus-value essentially in an absolute way by increasing the time and intensity of labour and by decreasing real wages.
b) Real domination covers the period when capital extracts surplus-value essentially in a relative way, i.e. thanks to productivity progress which decreases the wage costs by lowering the prices of the products which enter into their composition.

It is quite possible to date these processes by looking at two and a half centuries of evolution of the rate of surplus-value, real wages, working time and labour productivity (Graphs 10, 11 and 12).

The period of formal domination during which working time increases and real wages decrease goes until 1800, at most 1830-50. As for labour productivity, it hardly increases at all until 1790, a little more rapidly afterwards. From then on :
a) The period of exclusively formal domination lasts about half a century until 1790, i.e. the period when the extraction of surplus-value comes from the fall in real wages and the increase in working time.
b) The period of transition from formal to real domination is from 1790 to 1850.
c) After 1850, profit results exclusively from the extraction of relative surplus-value because working time decreases and real wages increase, only productivity gains allow its increase.

We see a double interest in this analysis. On the one hand, Marx highlights a periodisation of capitalism based on the rate of surplus-value, which confirms our choice of periodisation of capitalism described in the previous chapter and which is based on this same criterion. On the other hand, the definitive transition to the real domination of capital over labour was completed at the time of the great economic crisis of the mid-19th century and the drafting of the Communist Manifesto (1848): this stage confirms us because it corresponds in every respect to our periodisation corresponding to the end of savage capitalism and the beginning of colonial capitalism. Marx will draw important implications for the politics of revolutionaries, which we examine below.

 

8) Evolution of capitalism and revolutionary positions

 

The great economic crisis on a European (and even North American) scale corresponds to a major evolution in the attitude of the bourgeoisie and therefore in the positioning of revolutionaries. Indeed, faced with the rise of social movements, the bourgeoisie became more timid and often allied itself with the forces of the Ancien Régime. This stage marks an important evolution in Marx’s strategy: while he supported the progressive nations and fractions of the bourgeoisie, he then theorised the concept of ’permanent revolution’ where the autonomy and place of the working class became much more central, an autonomy and place that was spectacularly illustrated during the Paris Commune.

The end of savage capitalism, the definitive transition to the real domination of capital over labour, the great economic crisis of the mid-nineteenth century, the revolutionary movements that followed, the writing of the Communist Manifesto and the creation of the Communist League (1847-52) mark a fundamental first stage in the ascending period of the world of capitalist production.

The second stage important within this ascending phase also corresponds to an economic, social and political turning point, and it is the one that occurs during the First World War with the outbreak of the wave of social movements in opposition to the latter and in search of revolutionary alternatives. It also implies changes in the accumulation of capital, in the strategies of the dominant parties and in the positions of the workers’ movement.

 

C.Mcl, 02/07/2022, first part ... to be continued