Ashok Mitra: The World and the Left / Marx in Question - a rejoinder by Kolkata Marx Circle

The following article by A.M. was carried as First Person Singular in The Telegraph, Calcutta on June 15, 2016.

The World and the Left:

Western Capitalism is in crisis but not the one marx Foretold

by Ashok Mitra

We are living in a world full of uncertainties; anything might happen, or not happen. Even so, my instant reaction to those who confidently assert the imminent total eclipse of Marxism and the Left in the global context are, to use the vernacular, talking through their hat. Just take a look at the intense economic crisis the Western capitalist countries are currently facing. The crisis is one of over-capitalisation. Technological progress has an impulse and momentum of its own. The demand for investing more and more, thus, further broadens and deepens the capital structure as well. The phenomenon is continuously accompanied by a shrinkage in wage labour. Once the wage bill begins to contract, the dilemma of capitalism is glaringly revealed. Progressively superior technology implies increasingly higher and higher labour productivity. The consequence is an extremely fast rate of expansion in productive capacity. Capitalism suddenly realises the mess it has created, and is creating, for itself. There is mammoth productive capacity, but where is the demand for the output that might be produced. Demand deficiency generates a situation from which capitalism is seemingly unable to extricate itself.

In Marx’s schemata, a steadily falling rate of profit is inevitable. In the capitalist system, until the culminating point is reached where profit shrinks to zero. Marx conceived a parallel development too. As capitalism expands, every day new factories get set up and workers fill the factories. A large cluster of such factories covers the capitalist economies. But, with capital intensification, the size of the wage bill comes under attack and discontent among the workers keeps mounting. Soon they learn the craft of organising themselves into coherent entities, which rise in protest against the trend towards continuous shrinkage of the wage bill and increasing exploitation of the workers. Marx had envisaged a coincidence: at about the moment the rate of profit threatens to fall to zero, workers all over the economy gather together and strike the blow that vanquishes the capitalist class; a new social system emerges.

Way back in the early 1930s, stagnation of demand had already caught up with capitalism in both Europe and the United States. Massive unemployment in country after country generated intense social discontent; industrial unrest was a daily feature. Capitalism, however, would withstand that major crisis, thanks to the fortuitous availability of an economist of the wisdom and calibre of John Maynard Keynes and a politician of the stature of Franklin Roosevelt possessing large practical sense. Keynes recommended creating money via large budgetary deficits and using these extra funds to launch public works that could create employment. The money that went into the pockets of the newly engaged was immediately spent in the market to increase the purchase of goods and services. Demand picked up and capitalism got saved.

For nearly a decade now, the US and most of Western Europe are once more being visited by a similar crisis. It is an era of super-computers and super-super-computers. Breath-lessly rapid technological advance has soared productivity per worker to fantastic heights. That apart, major sections of the population in both continents have already attained a level of comfortable living, so much so that their urge for new goods and services is steadily declining. Most of West Europe and large segments of the US have already practised the Keynesian methodology and have arranged a safety net in the form of a public sector of sizeable magnitude. Nothing, however, is of any avail. There is little enthusiasm for new investment because both income and employ-ment growth is only marginal year after year.

Writing his works more than 150 years ago, Marx could hardly foresee the specific twists and turns capitalist growth would take. But it would be plain silly to underestimate the majesty of this overall prognosis. Nonetheless, we cannot but face the awkwardly knotty issue: none of the social revolutions that have taken place since Marx’s time has been in accordance with his formulation. Even the very first revolution that took place in October/November 1917, the transformation of the Czar’s empire into the Soviet Union had zero link with Marxian formulation. The territory constituting the Russian empire was mostly agricultural and pastoral along with some stretches of desert, and hardly any industry worth the name. The First World War was about to end; although the Czar was on the victorious side, the Russian economy was in a shambles, the soldiers could not be paid their wages, and their families were starving in the countryside. The Army revolted in Moscow, chaos ensued, providing Lenin and the Communist Party to seize power.

The next most significant social trans-formation was the popular democratic revo-lution in China. But it was planned and organised by a social force that Marx had once considered, with a measure of contempt, as “a sack of potatoes”—the peasantry.

The revolution in Vietnam was more in the nature of a national liberation movement against foreign aggressors, which was led and inspired by the Communist Party. Once more, though, it did not follow the Marxian agenda.

When Fidel Castro and his comrades took to the hills and valleys to conduct guerrilla warfare against the military regime in Cuba, the country’s Communist Party severely castigated them in the strongest terms; they were supposedly not following the revolutionary grammar. Once the revolution was successful, the same party surrendered itself lock, stock and barrel to Fidel.

Both Lenin and Rosa Luxemburg suggested a temporary respite for the capitalist system from the doom awaiting it. Imperialism could offer capitalism the opportunity to extract raw materials at cheap rates; at the same time, the subjugated countries might provide a dumping ground for goods and services that would not be absorbed within the capitalist economies. Low raw material cost could reduce, up to a point, variable costs in the process of production, thereby allowing scope for liberalising a bit the size of the wage bill, which, in time, would contribute to enlarge market demand. In addition, the occupied lands would be forced to accept exported goods from the imperial countries. The most classic example of the kind of imperialism Lenin and Luxemburg had etched is the Indian empire set up by the British. There were in Asia parallel empires set up by other European nations such as the French and the Dutch. Africa offered an equally lush opportunity for European imperialism. Alongside Britain, France, Germany and Italy lorded over the hapless Africans.

Latin America as a whole illustrates a different version of imperialism Lenin and Luxemburg had foreseen. Although not formally occupied by American troops, nearly all the countries in Central and South America were ruled ruthlessly by Army Generals loyal to the US. The entire continent was at the disposal of the Americans to extract oil and raw materials. The American corporate sector had complete grip over the economy of each of these countries. This was the situation even half-a-century ago. The inspiration set afire by Castro and Guevara has since then totally transformed the situation in Latin America. Venezuela followed the lead of Cuba, Bolivia was not far behind, and, sooner or later, the rest of the countries rose against American overbearingness as well; the US was as good as totally ejected from Latin America. A couple of years ago, Washington D.C. planned a counter-attack, achieving limited success here and there. It is at the moment a see-saw, but there is absolutely no prospect of a return to the overwhelming imperial dominance the US had exercised south of the Panama Canal.

Oil imperialism was another kind of manoe-uvre the Anglo-Americans had enforced on West Asia. The Bush-Blaire blunder in Iraq has ensured the death-knell of that too. The conflagration these two foolish Western leaders set off has now eventuated into the major crisis West Europe is facing in coping with the migrant victims of the Islamic State aggression.

Western capitalism is in very grave crisis. But, admittedly, what is occurring has little semblance with Marx’s scheme of things. Even within the US, despite the rate of profit threatening to drop down to zero, there is not the least danger with its coinciding with a revolt on the part of the working class. True, there is unemployment and resulting discontent here and there. But, social security payments of a very generous order keep a very large majority of the unemployed quietly content. Stray discontentment such as “Occupy Wall Street” soon turned into a fading fad.

Are we not in a position to reach a tentative conclusion? Marx, the great savant, was able to foresee with his profound wisdom the difficulties mature capitalism was likely to experience. There is no deficiency in the faculty of his thinking. It was naturally impossible for him to foresee the exact shape in which economic events would evolve over the decades and centuries that were to follow. That hardly matters: the text he scripted concerning class consciousness and the inevitability of confrontation between social classes such as those who exploit and those who are exploited remains sacred. It is a question of time before social and economic inequalities are extradited from human society and a classless State as dreamt by Marx emerges as a reality. The problem arises with those who refused to deviate from a mechanical interpretation of everything Marx said. The trouble the Left is facing in many countries is because of such a mechanistic frame of mind.

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The following is a rejoinder to A.M.’s article by Kolkata Marx Circle. A part of the rejoinder was published in The Telegraph (July 4, 2016). The rejoinder is being carried here in full.