A Proletarian Revolution pamphlet: $2.00
This pamphlet contains a selection of articles, published in the magazine Proletarian Revolution from 1983 to 1998. They present the analysis of capitalism's economic crises in general, and the system's current economic decline in particular, that has been worked out by the League for the Revolutionary Party.
The LRP is proud of its work on capitalist crises. Our theory revives the scientific understanding initiated by Karl Marx and uses it to come to grips with the economic conditions of the post-World War II era. Our articles here are both descriptive and theoretical, but readers are urged to see the most developed theoretical presentation of our analysis in our book, The Life and Death of Stalinism: A Resurrection of Marxist Theory. Our work on political economy is one facet of our struggle to combat the legacy of Stalinist, social democratic and other pseudo-socialist falsifications of the meaning of Marxism.
Our theory is not meant for a few intellectuals but for an entire working-class vanguard, who have to understand the system in order to change it. Of course, no theoretical work can predict events perfectly. Genuine Marxists constantly re-examine their past work in order to learn from practice. Ignoring errors or hiding them is the method of demagogues, not revolutionaries dedicated to advancing class consciousness. The articles are presented as published, errors of analysis included. (A few sections have been omitted: those that diverge from the theme of economic crisis, passages repetitive of other articles in the pamphlet, and topical references of lesser interest today. The omissions are marked [...].)
A number of points distinguish our analysis.
1. For Marxists, economics is not pure theory. It is "political economy": it is part and parcel of the class struggle. For example, we argue that the unexpected and prolonged prosperity period that followed World War II rested on the huge defeats of the working classes at the hands of fascism, Stalinism and "democratic" imperialism in the preceding periods. As well, the cyclical recoveries in the post-boom period of the last quarter-century also depend on political efforts by the ruling classes to intensify its exploitation of the workers.
2. We differentiate between the cyclical crises of overproduction that occur every five to ten years (the "business cycle") and the long-term -- epochal -- decay that Marxists like Lenin and Trotsky dated to approximately the beginning of the 20th century. In this epoch, the productive forces of the world economy are fundamentally marked by stagnation, not expansion. Economic expansion occurs, and sometimes even more rapidly than before, but it is not all-sided: expansion in some countries or some economic sectors takes place at the expense of others. Observers who see no fundamental difference between capitalism's progressive epoch and our own are led to mistakenly expect that the system can overcome its long-term decline without resorting to depressions, counterrevolution and imperialist war.
3. We recognized the end of the post-World War II boom in the early 1970's as a re-surfacing of the conditions that characterize the epoch of decay. The norm for this epoch is not the temporary prosperity that the imperialist countries achieved in the 1950's and '60's. The world is returning to a status parallel to pre-war years of spreading depression conditions, instability of financial markets and intensifying inter-imperialist rivalries.
4. We link the tendency of the rate of profit to fall, a law of capitalist development discovered and analyzed by Marx, to the onset of the epoch of decay (and not just to the cyclical crises -- a misunderstanding of Marx's view). We explain, in ways that could only be sketched by Marx, why the falling rate of profit tendency dominates the countertendencies in this epoch. In particular, we show the connection between this tendency and key characteristics of capitalism in this imperialist epoch, most importantly increasing concentration and centralization of capital and the enormous expansion of fictitious capital, as in the overvalued U.S. stock market today.
5. We regard the decline and collapse of the Stalinist system as an aspect of capitalist decay. The Stalinist economies were a particular form of statified capitalism, created by the overthrow of the Soviet workers' state launched by the Russian workers' revolution of 1917, and extended by the counterrevolutionary seizure of political power by Stalinist forces elsewhere. In contrast to virtually all analysts, we foresaw Stalinism's collapse, over a decade before it happened, and predicted the Stalinist rulers' attempts at "market reforms" and their eventual failure. The reasons the Stalinist sub-system fell help us understand the present overall decline of capitalist economies.
Moreover, the downfall of Stalinism led to a temporary surge of profits by the Western imperialists, given the sheer looting that it made possible, especially in Russia, along with the intensified exploitation of workers in East Europe. But the loss of the USSR also meant the loss of a powerful prop for world imperialism, as Stalinism had been despite the Cold War: it took a small share of profits for itself while stabilizing the system as a whole. Thus its fall has greatly destabilized the capitalists' world order.
The destabilization caused by the fall of the USSR is widely recognized now, at the end of a decade that opened with the U.N.'s Gulf War and ends with NATO's war over Kosovo. But we saw it coming well beforehand, based on our understanding of imperialism in general and Soviet imperialism in particular.
Moreover, our analysis led us to predict that the Cold War would in all probability end not with a hot war between the USSR and the West but rather with an intensified imperialist rivalry among the U.S., Germany and Japan.
6. The working classes in the advanced industrial countries since the end of the boom, under the pro-capitalist misleadership of the trade union bureaucrats and (outside of the U.S.) the Social-Democratic and Stalinist ("Communist") parties, have been in prolonged retreat. However, the bourgeoisie is well aware that the proletariat has enormous social strength. The bourgeois attack on the workers has been steady but carefully incremental; governments have stepped in to rescue and nationalize large firms in danger of collapse. The bourgeoisie has pulled out all stops to forestall a new great depression -- fearful of the mass "anarchy" that would occur when the masses of workers erupt.
Despite the proletariat's enormous potential social power, its social consciousness is terribly backward. It sees no alternative now to capitalism and its depredations. The missing factor is advanced class consciousness. This pamphlet is aimed to play a role in promoting working-class understanding of the nature and limitations of capitalism. This is an essential part of our task as working-class revolutionaries: to work now to theoretically arm the developing vanguard in order to build the mass proletarian revolutionary parties of the future.
Here is a summary of the articles in the pamphlet.
Karl Marx and the World Crisis was written in mid-1983, during the cyclical crisis in the first Reagan Administration in the U.S. That was the time when the migration of factories and jobs from the industrial Midwest to the non-union South and Southwest reached its peak; sections of the Midwest became the "Rust Bowl." Internationally, revolutions had recently overthrown two of imperialism's favorite compradors, the Shah of Iran and Somoza in Nicaragua; and the upsurge of the mass workers' movement Solidarity in Poland had signalled the death agony of Stalinism.
This article provides the theoretical explanation for the decline that set in after the post-war boom. Unfortunately, we used the term "crisis" to refer both to the period of decline as well as to the immediate cyclical downturn. This reflected the error of suggesting that the capitalism would have difficulty recovering from its immediate crisis, which it was able to do. The article correctly argued that a return to the conditions of imperialist prosperity that prevailed during the boom was impossible, and that the crisis pointed to an intensified attack on workers' living standards. Reagan's "solution" -- massive military spending combined with tax cuts for the rich -- wiped out social programs and intensified exploitation to line the pockets of the bourgeoisie. It also deepened the foundation for today's soaring fictitious capital.
After the Crash was published in early 1988; the title refers to the stock market collapse that hit Wall Street and other financial centers in Fall 1987. It explains the nature of fictitious capital, which fueled the overvaluation of stocks then, just as it does today.
The Death Agony of Stalinism, written in late 1988, a year before the downfall of the Berlin Wall, uses the LRP's analysis of statified capitalism to summarize the economic and political collapse of the Stalinist system in the USSR and East Europe. (The second half of this article, presenting a revolutionary program for the working class, is omitted; it appears in expanded form in our book on Stalinism.)
S& L Swindle Exposes Capitalist Decay was written in late 1990. It is a case study of one example of the Reagan-era "prosperity" in the U.S.: the collapse of the Savings and Loan institutions, which wiped out the life savings of millions of workers and enriched a swarm of politically connected capitalists.
Asian Crisis Jolts World Capitalism, Spring 1998, and The Specter of Economic Collapse, Winter 1999, analyze the financial crisis that exploded in Asia in 1997 and is still spreading across the globe and is devastating the lives of the exploited and oppressed in country after country. Bringing the story to the present, these articles show among other things that the U.S. economy is not immune from the worst crisis since the Great Depression of the 1930's.
Karl Marx and the World Crisis
Socialist Voice No. 19, Summer 1983
After the Crash
Proletarian Revolution No. 31, Spring 1988
The Death Agony of Stalinism
Proletarian Revolution No. 33, Winter 1989
S& L Swindle Exposes Capitalist Decay (by Eric Nacar)
Proletarian Revolution No. 38, Winter 1991
Asian Crisis Jolts World Capitalism
Proletarian Revolution No. 56, Spring 1998
The Specter of Economic Collapse
Proletarian Revolution No. 58, Winter 1999