WeeklyWorker

05.10.2005
More and more bureaucracy

The theory of decline and capital

In the first of two articles, Hillel Ticktin, editor of Critique, looks at the rise and fall of different modes of production and the problems of transition and non-transition

Aspects of the decline of modern capitalism are all too evident today - most notably the law of value, which is fundamental to the system. We see the constant tendency to replace the law of value with administration, resulting in increasing bureaucracy, both private and public, managerialism and a tendency to authoritarianism.

At the same time there is also the self-defeating attempt to force the market back to its former dominance. The logic of the situation leads to an increasing demand for control from below and the substitution of economic control, using prices to direct planning of use-values - hence the alternative logic of capital of reducing democracy and attempting to use pseudo-markets instead. Results are patently disastrous, as in public transport, education and health.

For instance, today we see Avian flu, yet a single company, Roche, has a monopoly on the production of vaccines. The poles of the basic contradictions are pulling apart and the mediations have become both more difficult and more of a fundamental change in capitalism itself. One result is that of disintegration - most obviously shown in the phenomenal rates of the rich getting richer, the poor poorer, not to mention crime and massive levels of unemployment.

In theoretical terms we are witnessing the promotion of the contradiction between use-value and exchange-value into a conflict. Huge levels of capital surplus are combined with low levels of growth with all its consequences. The gap between the potential and actual surplus product is rising. In the absence of planning, the system is becoming more chaotic, more disintegratory, and hence more irrational, with unpredictable consequences which threaten humanity itself.

As a result of the complexity of the system, with different sets of laws operating and a disintegrative process at work, it is hard to understand the society and confusion reigns in all aspects of the process of understanding. Commodity fetishism is partially overcome, but it is also supplemented by new derivatives like nationalism and racism. Despair, irrationality and confusion create an atmosphere at once demoralising and explosive. The crucial feature of the present time is that capitalism was overthrown in a part of the world during the period of its decline, but capitalism as a whole managed to hold out.

However, in order to hold out it resorted to three forms which altered the epoch. Firstly, it repressed and for this purpose saw itself in a permanent state of war with communists. Secondly, this in itself created the need to offer a more humane alternative than had existed, in comparison with the communist future. That altered the whole nature of the epoch itself, because it meant for the first time that capitalism accepted two forms of control over itself which negate the capitalist drive to accumulate. The first is the need for democracy, albeit bourgeois democracy.

The second, which is a partial result of the first, is the need for a rising standard of living for all. Underlying it all is the collision between the ever growing socialisation of the means of production and so of labour, as opposed to the ever smaller number of ever larger units of capital. Socialisation demands planning. Monopoly is itself a form of organisation, but it contains an element of competition and it continues to rely on an increasingly decadent form of the law of value.

As a result, the poles pull apart and there is disintegration mixed in with increasing forms of direct control required to run the system. Capitalism creates the potential for common ownership, but instead produces a hybrid form - capitalist nationalisation - which malfunctions, being neither socialist nor capitalist. It produces the potential for planning, but instead has a variety of forms of administration, a consequently increasing bureaucracy and with it growing corruption, which is greatest at the interface between the public and private sectors.

Theory of decline

All things organic and inorganic in the universe are born, grow, mature, decline and die. Decline is the necessary end period of any socio-economic formation, which has gone through its embryonic and mature epochs. Each of these periods will tend to go through the same phases, assuming that they last a sufficient period of time. When a mode of production is in decline, it has its own laws governing it. The period of decline may be shared with a phase of transition to the new society. The longer the decline lasts, the longer the shared period itself will exist.

Decline has to be decline of the laws of motion of the mode of production. Logically, as at the present time, there will be three sets of laws applicable in a declining mode of production: the laws of capitalism itself, the laws of the decline of capitalism and the laws of the transition. At the present time, the concept of decline appears discredited in two ways.

Firstly, because it is quite apparent that modern capitalist economies are growing and, secondly, because traditional Marxist theorists of decline are no longer making the case. Indeed, for many Marxists, the whole concept is an embarrassment precisely because people who claimed to be Marxists, of different kinds - from Gerry Healy, who kept anticipating the final capitalist crisis, to a variety of Stalinists - argued the case usually on a very primitive basis. Today Stalinism is dying and its doctrines discredited, while the dogmatists of various kinds have little influence. As a result, the concept of decline has to be investigated and understood cleansed of the pollution of dogmatic and Stalinist thought.

In modern times it is Edward Gibbon who is most associated with the concept of decline, when he wrote on the decline of the Roman empire. In fact, he was writing at a time when British society thought of itself as in decline. It was no coincidence that Oliver Goldsmith wrote The deserted village at the end of the 18th century, which contains the immortal lines: "Ill fares the land - To hastening ills a prey - Where wealth accumulates and men decay."

This attack on industrial capitalism was ahead of its time, but it was expressing something real. The embryonic phase of capitalism - the period of manufacture, as opposed to machinofacture - had come to an end and hence the condition of the population closely connected to it had began to decline, with the enclosures and the barbaric conditions in the early period of the industrial revolution.

This points to the fact that decline is not only one of the broad epochs of capitalism, but it also applies to the epochs themselves. In thought, it was the development of theories of evolution which brought the concept itself into more general discussion. Hegel produced his own theory of societal evolution. Darwin reinforced the concept when he showed how species came into being, flourished, declined and died.

At the same time, the growth of life sciences showed the same process existed for all organic entities. This division between organic entities and physical entities has only broken down in the last 40 years or so, as physicists have shown that the cosmos itself has the same life cycle. It was Lenin who developed the concept among Marxists, in his work on imperialism. It is clear that Trotsky also accepted the analysis of decline, particularly in the 30s, and the Stalinists went much further, in support of the view that the USSR was a haven from the collapse of civilisation.

During the 20s and 30s Oswald Spengler and Arnold Toynbee also took up the idea of decline, reflecting the horror of the World War I, the uncertainty provoked by the Russian Revolution and the visible economic decline, particularly of the British empire, which intensified with the great depression. Interestingly, no one actually theorised decline as such among Marxists. The Soviet Stalinists simply took Lenin at his word and proceeded from there, assuming among other things that there was a law of increasing misery and hence the standard of living in the west had to be going down.

To that they added a kind of doctrine, in which there was a permanent general crisis of capitalism. Trotsky held the components of a theory of decline: the growth of finance capital, the relative weakness of the bourgeoisie with the rise of the proletariat, etc. But he did not theorise them as decline. He developed a theory of long waves (which I think is fundamentally correct), but it is not linked to decline. One might have thought that the two great theorists before 1914, Hilferding and Kautsky, would have developed such a theory, but they conspicuously refused to do so.

It was Lenin who did conceptualise decline, though more empirically than theoretically. For Lenin decline is bound up with the growth of monopoly, interwoven with finance capital. But it is above all the demise of competition that he sees as the essence of the epoch. This is logical, but he does not spell it out. He gives empirical examples of decline in innovation. Imperialism and war are themselves aspects of it. Dialectics of decline The basis of Marxism lies in political economy and its method is dialectics.

In his The difference between the Democritean and Epicurean philosophy of nature, written in 1840 for his dissertation, Marx stated: "To be sure, it is a commonplace that birth, flowering and decline constitute the iron circle in which everything human is enclosed, through which it must pass. Thus it would not have been surprising if Greek philosophy, after having reached its zenith in Aristotle, should then have withered. But the death of the hero resembles the setting of the sun, not the bursting of an inflated frog.

"And then: birth, flowering and decline are very general, very vague notions under which, to be sure, everything can be arranged, but through which nothing can be understood. Decay itself is prefigured in the living; its shape should therefore be just as much grasped in its specific characteristic as the shape of life."

I have cited this to indicate, firstly, that Marx was well aware of the question of decline. Secondly, the conception of decline itself comes from the ancient Greek philosophers - most particularly Aristotle - but it was elaborated on in the 19th century with the acceptance of evolution, most particularly by Hegel and Darwin. The distinction between organic and inorganic is no longer necessary, as we see everything in evolution, including the cosmos and our sun. It is clear from this that decline is a necessary feature of any mode of production, and most particularly of capitalism, and if it is not in decline today we will have to ask at what point it will be so.

Decline represents limitations and disintegration of laws or, more accurately, it represents the point at which mediations between the movement of a phenomenon's poles become increasingly difficult to sustain without the two poles interpenetrating to the point of supersession. Mediations represent the points of interpenetration of the two poles. Over time the frequency and depth of mediation is such that the two poles are losing their difference. Logically their negation of each other is then negated and the system is superseded, but this process is not automatic and within a mode of production the class struggle plays a crucial role at this point.

If either class finds ways of ignoring or destroying the mediative interactions, then the system disintegrates rather than being superseded. In other words, the system remains in a state of negation with the poles standing in opposition to each other. Then ensues a crisis of the system, which is itself a mode of overcoming this point of equilibrium. In principle there could be many crises before the system is itself overthrown. If it is not, and the poles of the contradiction do not interpenetrate, the crisis is not resolved and the system disintegrates. Once it disintegrates, there is always the possibility of a society without any system and hence the intervention of barbarism.

Decline occurs at the point when the system is in process of supersession, but the process of supersession is a complex one. It is important to distinguish between decline and crisis. The decline of capitalism is long-term, affecting every aspect of the system. The system can suffer short-term and long-term crises. In its mature phase capitalism will only suffer short-term crises: that is, arising from a particular event. This may happen when the downturn in the economic cycle reaches a point where it cannot be resolved without a slightly longer period in which capital can enforce lower wages and worse conditions or else finding some external method of raising the profit rate. In the period of decline, these crises become prolonged, reflecting the increasing difficulty of defeating labour or finding a compromise, which is the more usual form today.

Crises, however, are resolved and mediations are found. In other words, a crisis occurs when the labour-capital relationship requires a new form of mediation, but in decline this becomes increasingly difficult and tends towards the formation of new bourgeois strategies - often inchoate and unplanned. There may be many crises before the system is overthrown, but the crisis which occurs at the point at which it can be overthrown we can call a terminal crisis. This is composed of a crisis in both the categories and in the class struggle, so in this instance we are speaking of a crisis where the working class has reached the point where it has sufficient strength to overthrow a weakened system.

It is theoretically possible for the decline/transition period itself to be frozen: ie, there is no actual transition to the new society and the decline/transitional period so weakens the system that eventually the society ceases to exist, because it is overthrown or for some other reason. Disintegration and supersession We only know in historical detail of two transitions and hence of periods of decline - to feudalism and to capitalism.

The absence of a transition in China, in the case of the Asiatic mode of production, is itself very interesting, but that is another discussion. When we discuss any mode of production, then it is the extraction of the surplus product which is crucial - and most particularly the form in which it is extracted. In the case of the ancient mode of production, that form was slavery and tribute. In fact the two were connected, as many (and at some points most) slaves were taken in war under the subjection of another tribe, nation, city-state or ethnic grouping. However, as Marx points out in the Communist manifesto, the ancient mode of production contained different forms like serfdom and wage labour as well, but they were subordinate to the main forms.

Decline therefore had to be decline in the form of the surplus product and indeed that was the case by the time of the Roman empire, in that the process of enslavement had slowed down. It obviously followed that, once the subordinate state had been subjected, it could no longer be enslaved if it were to be part of the empire. Instead tribute was paid. That in turn was costly, as there were constant revolts and large armies had to be maintained. By the 3rd century AD Diocletian had replaced slavery with serfdom. We can therefore regard the whole period of the Roman empire and some period before as the period of decline of the ancient mode of production. From this point of view the Roman empire is the period of decline and transition.

We may note here that Edward Gibbon in The decline and fall of the Roman empire points out the enormous rise of bureaucracy and its cost, but also that the burden of taxation was so great that ordinary Italians had taken to killing their newly born babies through leaving them to die in the open. He says that Constantine tried to ameliorate the taxation for the poor, but his measures had no effect. The transition itself took on its unique form with the end of the Roman empire, the rise of christianity and islam as the two feudal ideologies of control, and the particular forms of the extraction of the surplus product. The point to notice in this context is the confusion, the multiplicity of societal forms, the emergence and destruction of different societies. Byzantium here appears as the ancient mode of production frozen in its transition, unable to take the next step.

Decline of feudalism and rise of capitalism

The mature form of feudalism exists from roughly 700AD to 1100AD - the crusades mark the watershed between maturity and decline. Capitalism was coming into being. What is crucial here is the emergence of the surplus product in the form of money and hence the conversion of labour rents into money rents. The form of the surplus product had changed. That has to be explained with the rise of both agricultural and industrial production for a market, which in turn was facilitated by international trade. The implication is that the surplus product itself had risen sufficiently for such trade.

The feudal lords in this situation exemplify the nature of decline, in that they are only interested in consumption and hence squander their income in various forms of luxury. Then in order to raise their income they attempt to squeeze the peasantry and the Jews. They go for foreign adventures and the king, as the first feudal lord, does the same with taxation, internal and external wars and victimisation of groups from whom he can seize money and assets, particularly the Jews. The effect is ruinous.

At the same time, we have the rise of the bourgeoisie - first and foremost in Italy, where mass production of clothes and textiles is first encountered. They in turn trade with the world, inter-relating with the east, particularly India and China. We have to note that in both decline and transition the process is international. It never takes the form which Maurice Dobb wants to assign to it: that the emergence of the skilled worker into a capitalist is the basis of the emergence of capitalism. This is simply wrong in its categorisation.

The whole process of a system in decline, transition and emergence is international. In the process of decline there is also the rise of transitional forms like guilds, and that to the independent artisan is important. Whether the independent artisan is part of the embryonic form of capitalism or a transitional form emerging out of feudalism is itself in question. The initial form of capitalism is one of manufacture, as opposed to machinofacture: ie, it relies heavily on skilled workers and a mass of labourers.

Accumulation is first and foremost accumulation of capital, which finds its fullest expression in fixed capital, but in the early stage fixed capital was limited. It required the industrial revolution to replace manual labour with machinery, which has become evermore automatic. In this process, we witness the rise of value, money and, behind it, abstract labour. One cannot have value in its full existence unless we have abstract labour and abstract labour cannot exist in its full form before one has machine production.

In the early stages of capitalism, therefore, we only have proto-value and proto-capital. Marx says that the more developed is merchant capital, the less developed is capitalism. In other words, in the declining years of feudalism we see the emergence of merchant capital, which runs right through the early years of capitalism itself. But if the country remains bound within this period of buying low and selling high, then no value is created and it is only living off a form of deception.

This is similar to the period of primitive accumulation, where the European nations robbed the rest of the world. So we have three periods which merge in different ways, depending on the countries involved - decline of the old, transition and the emergence of the new. In this process, a whole series of different combinations came into existence. Which were able to develop depended on the particular correlations of class struggle and development of the categories.

Capitalism developed in all countries once it had succeeded in overthrowing feudal socio-economic relations, even though in many countries the political superstructure remained semi-feudal, as in France. Not all countries, however, were able to fully emerge into the initial stage of capitalism: eg, Holland. Spain too remained bound within its imperial forms and hence could not develop. Countries in eastern Europe were thrown backwards, becoming dependent on the more developed countries. They provided cheap wheat for the west European market and had to protect themselves against the predations of the west.

They, therefore, re-introduced a more slave-like form of serfdom. Hence in Russia we have the evolution of the autocracy or the semi-Asiatic mode of production. There are a number of points to be made in relation to this:

1. The evolution of capitalism to its mature form takes 700-800 years.

2. During that period we are talking of the decline of feudalism, which runs in parallel with the transition to capitalism itself, and even with emergent capitalism. Forms of feudal decline remain up to the 19th century.

3. There are abortive transitions - forms which are neither capitalist nor feudal - which in principle cannot last, but do last many hundreds of years.

4. In this process the value form evolves to the point where abstract labour comes into existence and the law of value can operate under competition. Labour-power becomes a commodity and wage-labour replaces all previous forms as the means towards the formation of the surplus product/surplus value. Money as the universal equivalent reaches its fullest form as the means of accumulation and hence as world money.

5. The forces of production are developed to the point where machines can operate under their own power and the potential of machines making machines is established. Hence at the point where abstract labour is established its demise is also heralded. When machines make machines, labour is no longer needed and hence there is no abstract labour, no value and no profit.

6. This logic, however, is aborted by a capital afraid of its own end. It refuses to go towards total automation as too costly and non-profitable. It turns to finance capital.

The class struggle

Whereas Dobb and other Stalinists saw the issue as a transition within one country, Brenner and his followers, like Ellen Meiskins Wood, see it as an international class struggle. It is clear that the class struggle does play a pivotal role in any change in the mode of production, but it cannot do so on an arbitrary basis or without the necessary change in the mode of production. The struggle of the peasantry in Europe played a crucial role in the decline and in the transition to capitalism, but it is not unilinear.

In China it looks very much as if the strength of the ruling class was such that it suppressed change. Indeed the same may be said of the ancient mode of production, where Marx argues that the Roman empire had to be overthrown from outside. Byzantium seems to prove that point. I

f the ruling class suppresses the development of the forces of production, whether through the elimination of science, as in the burning of books in China, or through their physical destruction, the transition will be aborted and the system will continue to exist even if in decline, ultimately to be overthrown from outside.