Part 1

Submitted by Alias Recluse on March 25, 2013

An Investigation of This Supposedly Victorious Capitalism – Claude Bitot

Preface to the Spanish Edition

Viewed exclusively from the perspective of economics, can we say that capitalism has a historical limit? For her part, the great Marxist Rosa Luxemburg responded by saying that while capitalism, as a mode of production, will undoubtedly reach a final stage, in which it will become “an objective economic impossibility”, she nonetheless dismissed this eventuality by stating that even before capitalism runs the full course of its historical trajectory, “the exacerbation of social and political antagonisms” will lead to “such an unsustainable situation” that there will be no need for capitalism to reach such a stage for it to disappear. This is what she said in 1913 in her essay, The Accumulation of Capital. Now, almost 90 years later, can we still uphold such a point of view? History has since shown that the class struggle, which according to Rosa Luxemburg was supposed to abbreviate capitalism’s lifespan, has not been capable of fulfilling this mission. Not because this struggle was non-existent, but because capitalism found within itself sufficient economic resources that enabled it to pull the rug out from under the feet of the class struggle and thus to render it so inoffensive that capitalism could prevent it from posing any serious danger to it as a system. This is what happened, for example, during the great crisis of 1929-1933, when capitalism, despite the spectacular collapse of its economy, managed to salvage the situation and thus neutralize the class struggle as the latter was conceived from a revolutionary point of view, so that the class struggle only resulted in reformist solutions: New Deal, Keynesianism, state intervention, not even taking into account the stage known as the “30 glorious years” after the end of the war in 1945, which witnessed, with the aid of the “Welfare State”, the implementation of a whole series of reforms (social security, pensions, minimum wage legislation, paid vacations, etc.), which had the effect of further attenuating the class struggle.

Does this mean that the class struggle must be considered to be null and void during the final stage of capitalism? No, since it is clear that capitalism will not disappear on its own without human intervention. It is true that humans make their own history but, as Marx said, they do so under determinant conditions. However, as the history of the 20th century has demonstrated, it is clear that these conditions never arose. This means: as long as capitalism possesses an economic margin of maneuver to overcome its crisis and thus enable it to continue the process of accumulation, we will not be able to count on the class struggle to put an end to it. For this to happen it will be necessary for capitalism to have reached its objective economic limits and thus to have come to the end of its possible historical course and then it will be abolished by human action.

In order to discover a victorious solution that would lead to a non-falsified communism, through what kind of complex process will this human action have to proceed? This cannot be precisely discerned, since the struggle for the final liquidation of capitalism has not yet begun. However, what can be discerned at this point—and this is the objective of this “investigation” concerning contemporary capitalism—is that the capitalist system has now entered, not a serious and permanent economic crisis that would herald its imminent collapse—it would be ridiculous to claim this to be the case—but a boundary zone of its development that we shall call the “end of its historical cycle”: from now on—since 1975, more or less—the system has lost its economic dynamism and no longer functions except in slow-motion; socially, in order to recover something of its old vitality, it is condemned to gradually dismantle the reformist mechanisms that it created, which will not fail to have consequences for the “social peace” that it was capable of establishing; it is structurally exhausted, and must expend ever more labor in order to reproduce capitalist social relations (the massive increase in unproductive jobs—jobs that do not create surplus value—which violates the logic of the system, a growing sector of the population that has been expelled from the wage labor force and condemned to exclusion, precarious living conditions, off-the-books work, welfare and charity, and part-time work); politically, it is running out of heirs, as bourgeois democracy is being abandoned by a growing number of voters; ideologically, it no longer has any credible alternatives to offer, as classical bourgeois ideals are being exhausted, even if they are experiencing a slight revival by brandishing the bogey of the pseudo-threat of the “fascist danger”.

Obviously, this situation that is being created, which could last quite a long time, is not a very pleasant epoch for us to live in, since we are experiencing the decline of a world, the decline of the capitalist world that first saw the light of day some five centuries ago. In this world, because no credible and tangible alternative that can replace it has yet appeared on the horizon, many people, in order to escape, deliver themselves over to a kind of flight forward in all kinds of diversions, in the “festive”—there has never been so much “festivity” about everything and nothing—since they have to be distracted, for a lack of anything better. It does not matter, this world is still our world, the one we have to analyze, examine, and decipher, and this is the purpose of this work, which is imbued with the idea that it will ultimately be vindicated by an emancipatory revolution.

June 2002

Part 1

“But unless all theoretical reasoning should be entirely valueless, in so far as it allows for predictability it points to the demise not only of capitalistic prosperity but also to the end of capitalism itself.”

(Paul Mattick, Critique of Marcuse: One Dimensional Man in Class Society, Herder and Herder, New York, 1972, p. 101)


Today, its apologists present capitalism as “the impassable and limitless horizon of humanity”. For them, “the market economy”, so they say, is the best of all possible systems. Defined as “the production of goods and services”, it is this system which, measured in terms of “growth”, allows, thanks to its competition and its private initiative, continuous progress with regard to the production of wealth, and of incessantly renewed use values that everyone can have access to in accordance with their merit.

This apologetic credo encounters an echo that is all the more overwhelming insofar as it is based on a very tangible reality: for capitalist society in the last instance presents itself as an immense showcase of commodities permanently displayed to the gaze of the masses. In other times, when there was less capacity for production, it was more difficult to make capitalism pass for a “consumer society”. The goods produced were limited, only the tiny minority of the bourgeoisie could have access to them. The people, for their part, could only tighten their belts, as their consumption was reduced to what was strictly necessary. With the enormous productive powers that are now set in motion, such an image of capitalism, which is to some degree obsolete, has evaporated. Mass production has provided confirmation of the idea that most people can have access to this wealth. As a result, the prevailing idea of capitalism has undergone a transformation. Instead of being synonymous with poverty, exploitation and misery, it has become synonymous with abundance and limitless consumption. Capitalism has therefore been rehabilitated.

For its apologists, we are experiencing the advent of “victorious capitalism”. They discover the proof for this victory not only in the material advances of capitalism (with the new technologies of production, information and communication), but also in its spiritual conquests: henceforth, few are those who would dare to radically challenge capitalism; they would only reap ridicule and sarcasm; by way of an amused patronizing attitude they would be made to see that they are only the last representatives of a permanently superannuated past; its apologists, as intellectuals, exist for the purpose of declaring that there is no credible alternative to capitalism, that communism has failed and can only lead to “totalitarianism”. From now on, since capitalism is the only system that can be conceived, all that remains, in the form of opponents, are a handful of vague social reformers who, under diverse labels, feel uncomfortable about certain “excesses” of capitalism, and denounce its “ultraliberal” features, but are very careful not to challenge it as a system, and just want to make it “more human” and “more moderate”.

Thus, everything is proceeding in the best possible way in the best of all capitalist worlds. Capitalism “has won” and its apologists derive from this fact the conclusion that it is programmed for eternity. “The crisis”? But what crisis of capitalism are you talking about? The entire world has lined up behind “the market economy”, previously underdeveloped regions have seen businesses sprout up like mushrooms and world trade has never been so prosperous. It is true that there has been a certain slowdown in the rate of growth since 1974, but it is nothing serious: these “twenty calamitous years” will be followed by “twenty marvelous years” (Le Monde, December 17, 1994). In short, the discourse of the apologists praising capitalism is inexhaustible and insuperable. The only weak spot that still exists, in some regions of the world, is the rise of religious fundamentalism and nationalism, or, in the West, the “fascist danger”, which seemingly poses a threat to “our democratic societies”. But all of these things are part of the game. However much we may feel like victors, the sense of having some alleged enemy never loses its appeal: this reinforces social cohesion and allows the flame to keep burning.

This is one way of looking at today’s capitalism. It is the view of its apologists who, as we have pointed out, do not lack arguments to support their point of view. Another, very different view is possible, however.

Capitalism, in fact, has no reasons to celebrate. The “high technology” that it is so proud of? It is instead its tomb; it is not machines, however sophisticated they may be, that make profits, but men, men who, in the crucial sector of profitable production, are being eliminated by these very machines. “The return to liberalism” that is so praised by the experts of economic science? It is instead a confession of failure, the failure of the Keynesian “neo-capitalism” that was the object of so much praise in the past and which, with its State-induced unproductive consumption for the purpose of maintaining “general demand”, ended up plunging capitalism into the bottomless pit of monetary inflation and the collapse of the rate of profit; in fact, this “return”, with the retreat of the State that it implies, signifies the return to cyclical crises, with a catastrophic “1929-style” crisis as the end-point of the process. “The full employment” that capitalism was supposed to have attained? For twenty years now we have witnessed the emergence of massive and constantly increasing unemployment, the increasing precariousness of those jobs that still exist, and the pure and simple exclusion of a mass of men and women from the workforce who are condemned to public assistance and private charity, many of whom find themselves in the street “without any stable living situation”. And the famous “consumer society”? Today, capitalism, in order to restore its rate of profit to some extent and to make its enterprises competitive on the world market, is obliged to reduce real wages; this is why it is making the workers of the entire world compete with each other for the purpose of finding the cheapest labor power possible, and thus condemns millions of people to unemployment, who can only survive thanks to subsidies that are subject to constant reductions; under these circumstances, how can we claim that “an ever increasing” consumption is possible if a growing mass of men and women are excluded from its enjoyment? Even the “left/right” divide is blurring; it is becoming ever less credible, and has reached the point where their programs are basically indistinguishable, with hardly any nuances, and identical effects: even more unemployment, more people working part-time and temporary jobs, more people excluded from the wage labor force, more poverty, lower wages.

What conclusions should we draw from this capitalist reality? Is this a crisis? A crisis has the very precise economic characteristic of corresponding to a momentary slowdown of growth. Since 1974, however, the date that marked the end of the “thirty glorious years”, the economic expansion that followed pursued its forward march (even if it did so with weaker rates of growth) and has only been interrupted by recessions that were all overcome. As a result, we must admit that, at least if we interpret the word crisis in its strictest sense, what has been happening to capitalism for the last twenty years or so is something very different.

Frankly, it is at the end of a cycle. By this term we do not mean that it will collapse at any moment. This kind of prediction is too prone to the vagaries of chance to avoid attracting the scorn of those who believe capitalism is eternal, or, which amounts to more or less the same thing, those who think that it still has “glorious days ahead of it”. This term means that capitalism has now entered into a border zone, which could still last for quite a while, but which will have the effect of making the accumulation of capital, which is the defining characteristic of capitalism, more and more difficult, and finally impossible, and which will provoke its final collapse. The fall of the rate of profit, which up until now has been a mere tendency, will henceforth begin to be expressed in a form that will approach an absolute fall, and no longer a merely relative, but absolute decline of the surplus-value producing working class, the massive expansion of unproductive service-sector jobs, the rise of a form of unemployment that results in the definitive exclusion from the circuit of surplus value production of part of the active population; these are so many other indices of this end of capitalism’s cycle.

In fact, this other view that we have of capitalism has some points in common with that of its apologists. The latter are in effect capable of thinking that capitalism is victorious, because, having overcome all the obstacles in its path, it has attained such a degree of power that it has reached the point where it no longer, so to speak, has any enemies, but on the other hand this moment of its greatest triumph is also revealed as the beginning of its end, and indicates at the same time both its success and its objective limit, a limit that can now be glimpsed.

Obviously, its apologists can object that our point of view is false, since it is based on a kind of mistaken analysis, the Marxist analysis: the labor theory of value, the theory of surplus value, the distinction between productive and unproductive labor, and the law of the falling rate of profit. For our part, we think that only Marx’s analysis allows us to understand anything about capitalism, not only to know how it works, but also to know why it will ultimately collapse. The apologists’ point of view which tends to assume that capitalism is “unsurpassable”, or to put it another way, that it cannot die, is an aspect of the vulgar and super-vulgar economics that Marx had already denounced in his time. Once capitalism, he explained, had begun after 1825 to undergo its periodic crisis cycles, and the class struggle between the bourgeoisie and the proletariat began to assume explicit and threatening forms, “[i]t sounded the knell of scientific bourgeois economy. It was thenceforth no longer a question, whether this theorem or that was true, but whether it was useful to capital or harmful, expedient or inexpedient, politically dangerous or not. In place of disinterested inquirers, there were hired prize fighters; in place of genuine scientific research, the bad conscience and the evil intent of apologetic” (“Afterword to the Second German Edition of Capital” (1873), in Karl Marx, Capital, Vol. I, International Publishers, New York, 1967, p. 15).

With regard to today’s apologists, it is obvious that nothing has changed in this regard and that their rejection of the scientific content of Marx’s analysis is not innocent.

This study of the course of capitalism refers to the twenty-five countries of the OECD. One might object to its partial character. Actually, such an objection would
be not at all fair. This study addresses those countries in which the most advanced tendencies of the capitalist world can be verified, dividing them into three major geo-economic categories: Western Europe, North America and Asia, including Japan, along with some of the Pacific Rim countries of Southeast Asia. Elsewhere, the capitalist mode of production does not offer the same field for observation. The latter category includes countries that are either semi-developed, or else even undergoing regression (the allegedly former socialist countries), which, in any event, will never reach the level required to form part of the “triad” set forth above, as well as those that must be considered to be out of the competition altogether.

We have not thought that it was necessary to “update” this text, which was written in 1995. The “financial crisis” that has since struck Southeast Asia, Russia and Latin America, is nothing but an expression of the drastic and historical decline of the rate of profit that will henceforth characterize capitalism: due to its inability to invest in the real economy with any prospect of sufficient profitability, capital is becoming “speculative” for the purpose of artificial valorization, until the moment when a stock exchange crash takes place; this is what happened in October 1987 and then again in 1997 and 1998, but in the last instance with serious economic consequences as in Southeast Asia. In France, the proposed reduction of the work week to 35 hours will have no other effect than to incite the capitalists to modernize their productive apparatus a little more, which will cancel any possible job gains this proposal intended to create, while the “annualization of working time” demanded by the employers will result in making labor more “flexible”, that is, clearly, more productive.

I. The Accumulation of Capital and the End of Its Cycle

The accumulation of capital as goal

In order to avoid saying the word, “capitalism”, its apologists currently use the expression “market economy”. This expression is obviously not innocent. It is intended to foster belief in the existence of an economy whose purpose would be the production and the consumption of goods: commodities are produced, they are sold on the market and with the money made from this sale other commodities are purchased that will allow for the satisfaction of needs. Since everyone sells something, the entrepreneur who sells his “products” as much as the wage workers who sell their “labor”, we would thus be living in an economy in which the market is the means placed at the service of consumption. In this manner, the notions of exploitation, private appropriation, profit and capital accumulation are completely concealed.

Marx defined this kind of economy as “simple commodity circulation” and further defined it by means of the formula: Commodity-Money-Commodity; with C-M-C one sells in order to buy and one buys in order to consume: “Consumption, the satisfaction of wants, in one word, use-value, is its end and aim.”1 Marx used the example of the peasant who “sells corn, and with the money thus set free buys clothes”. For the contemporary ideologues of “the market economy”, this is how things take place today, more or less. This is, in fact, pure bunk. An economy of this kind, which functions according to the circuit C-M-C, prevailed when production was essentially carried out by small individual producers, artisans and peasants, the owners of their means of production, that is, when the economy was still pre-capitalist. With the expropriation of the great majority of these small producers for the benefit of employers who concentrated the means of production in their hands and utilized wage labor, “the market economy” became something completely different. Instead of C-M-C we have M-C-M: the circuit has been totally reversed, it starts with money and returns to money, but the latter emerges from the circuit in a larger amount than it started because “[t]o exchange £100 for cotton, and then this same cotton again for £100, is merely a roundabout way of exchanging money for money, the same for the same, and appears to be an operation just as purposeless as it is absurd”.2

This is the capitalist economy properly speaking, whose goal is not use value—which plays the subordinate role in the commodity circuit of a simple intermediary—but exchange value. In the old form of the simple commodity economy, one sold in order to purchase useful things for living and no one was exploited; in the capitalist commodity economy, one buys in order to sell for the purpose of “obtaining a profit”, or “making money”, and exploits the labor power of others; in order to do this, the capitalists who possess the means of production only need to buy human labor power for the purpose of extracting surplus value from it, since it has the property of being able to create more value than is required for its maintenance, or its wages; from then on, all that has to be done is to realize this surplus value in the form of money by selling the commodity in which it is crystallized on the market.

Capitalism exists from the moment when a certain quantity of money invested in production returns from the production process in a larger magnitude than it was when it entered it; profit is the difference between these two magnitudes. It is only in this circumstance that money is transformed into capital. But this circumstance is not enough to ensure the accumulation of capital. For, assuming that a capitalist, having realized his profit in the form of money, spends it on luxuries, driven by the desire for enjoyment rather than enrichment, in this case there will be no accumulation of capital; there will only be simple reproduction of capital: once his profits are squandered he will find that his capital is identical in magnitude to what it was when he started; he will be no wealthier than he was before.

For Marx, this simple reproduction of capital was the essential characteristic of the ancient economy: “But the ancients never thought of transforming the surplus-product into capital. Or at least only to a very limited extent. (The fact that the hoarding of treasure in the narrow sense was widespread among them shows how much surplus-product lay completely idle.) They used a large part of the surplus-product for unproductive expenditure on art, religious works and public works. Still less was their production directed to the release and development of the material productive forces—division of labour, machinery, the application of the powers of nature and science to private production. In fact, by and large, they never went beyond handicraft labour. The wealth which they produced for private consumption was therefore relatively small and only appears great because it was amassed in the hands of a few persons, who, incidentally, did not know what to do with it. Although, therefore, there was no over-production among the ancients, there was over-consumption by the rich, which in the final periods of Rome and Greece turned into mad extravagance.”3

The ancient world therefore did not produce for the purpose of accumulating capital. And if they “never thought of transforming the surplus-product into capital”, as Marx observed, this was because the productive forces were very underdeveloped: because their economy “never went beyond handicraft labour”, the surplus product, or profit, was also underdeveloped; for the latter to become really significant would have required a significant increase in the productivity of labor (if, in one day of labor, most of the worker’s time is devoted to reproducing his labor power due to the low productivity of labor, the surplus value extracted would be derisory), a development that in turn implied the development of machinery, the division of labor, and the application of the natural sciences to production, none of which existed in either ancient Rome or Greece. Otherwise, the ancient peoples would have “thought”, just like the modern capitalists, of transforming their surplus product into capital; they would have subjectively acquired the mentality proper to the latter, which Marx defined as “[t]his boundless greed after riches, this passionate chase after exchange-value”.4 In short, if the ancients did not feel impelled to engage in the appropriation of abstract wealth and its constant increase, this is because the historical conditions for the accumulation of capital did not exist.

When Marx speaks of the individual capitalist he does not hesitate to compare him to a hoarder. Like the latter, his “subjective aim”, insofar as he is “endowed with consciousness and a will”, is “the appropriation of ever more and more wealth in the abstract”.5 But the capitalist, as Marx points out, is not just any old miser: “But while the miser is merely a capitalist gone mad, the capitalist is a rational miser. The never-ending augmentation of exchange-value, which the miser strives after, by seeking to save his money from circulation, is attained by the more acute capitalist, by constantly throwing it afresh into circulation”.6

Another factor intervenes, however, a more objective one, which drives the capitalist to relentlessly throw his money into the circulation process: the competition of the other capitalists. For, if by chance he were to refrain from the incessant renewal of this operation, what would happen? In such a case, he would soon cease to exist as a capitalist. His competitors, having invested their profits more productively, in the form of more efficient machinery, more modern buildings, and additional labor power, will produce commodities more cheaply than our profligate or hoarding capitalist who emulates Harpagon, and the latter will be supplanted and quickly ruined by his competitors. Every capitalist is therefore subject to “the immanent laws of capitalist production … felt by each individual capitalist, as external coercive laws. It compels him to keep constantly extending his capital, in order to preserve it, but extend it he cannot, except by means of progressive accumulation”.7

There is still one more fact to consider. Because the capitalist is compelled to “[extend] his capital, in order to preserve it”, we see that there is another difference between him and the hoarder: by acting in this manner, he is forced to increase his productive capital. Capitalism as a system is not just a pile of gold that continually accumulates; it is also an industrial world that undergoes development: machines, buildings, workers’ labor power, all comprising the productive forces of society, productive forces that for Marx form the material basis of a higher form of society, communism. Of course, the capitalist has no use at all for this latter aspect of the system, since, “[f]anatically bent on making value expand itself, he ruthlessly forces the human race to produce for production’s sake; he thus forces the development of the productive powers of society, and creates those material conditions, which alone can form the real basis of a higher form of society, a society in which the full and free development of every individual forms the ruling principle”.8

This is the positive side of capitalism, without which the latter would have no historical value at all; otherwise it would be nothing but an absurd system that consists of the accumulation of abstract wealth, money capital, for the sake of accumulation. Besides, even the individual capitalist, unlike the classical hoarder, does not entirely surrender himself to this logic. Marx observes that, like Goethe’s Faust, “Two souls, alas, do dwell with in his breast”.9 During the first stage of the capitalist mode of production it was the first tendency, that of renunciation and avarice, which had the upper hand and constituted its exclusive passion, but with industrial progress it gave way to luxury and extravagance, although “the most sordid avarice and the most anxious calculation” are always lurking behind the capitalist’s enjoyments.10

The individual capitalist is one thing, however, and the capitalist system is another. In the latter, the individual capitalist is nothing but a cog in the machine. The system forces him, by means of the external coercion imposed upon him by the effect of the spur of competition to which he is subject, to act in such a way that the constant growth of the capital invested in his business becomes a necessity, and his supreme goal—or else he disappears as a capitalist—up to the point that, “[i]f to classical economy, the proletarian is but a machine for the production of surplus-value; on the other hand, the capitalist is in its eyes only a machine for the conversion of this surplus-value into additional capital”.11

Therefore, the accumulation of capital, and nothing else, is the goal! “That is Moses and the prophets!” It is also “the historical mission of the bourgeoisie”.12 A mission that no one has been able to cause to change course up until now, although some have tried to do so. Thus, Malthus, who already during his time, on the pretext of saving capitalism from the threat of overproduction, appealed to the capitalists to produce for the unproductive consumption of the idle aristocrats, the beneficiaries of government pensions and the clergy. This enraged Ricardo’s supporters, who were horrified by such an absurd proposal. For a more modern version of this notion, we may mention the critical ideologues of the “consumer society” who claim that capitalism is no longer anything but an out of control “productivism” and “consumerism”, which is alienating and destructive of nature but whose main vocation—production for the purpose of creating surplus value and the accumulation of capital—barely exists anymore.

In fact, if such a situation were actually to prevail, this would mean the extinction of production due to the loss of all incentive for the capitalists. Their goal is profit and the latter is not made to be consumed, but to be accumulated. If they were to act otherwise, others would take their place and they would be eliminated. Not only do capitalist enterprises not operate only to avoid losses, but they do not even operate at all without making a profit, which would condemn them to a condition of simple reproduction rather than the extended reproduction of capital. The one thing that the system can consent to, in certain historical situations, is to make the masses consume more, raising real wages, and accepting higher taxes imposed by the State on the profits of capital, in order to raise the level of the social wage. But it will only do so on the condition that this does not impede the pursuit of the accumulation of capital, and if the extraction of surplus value is increased thanks to a higher level of the productivity of labor.

If such a method of capital accumulation, accompanied by “mass consumption” and the “Welfare State”, becomes a hindrance, it will be challenged, as we are currently witnessing with “the end of Fordism” and the gradual return to “pure hardcore” liberalism. As another kind of con game, we shall also cite the environmentalist ideology that consists in attributing the evident degradation of the natural environment, not to capitalist development that, oriented towards the quest for maximum profits, results in such degradation, but to “material development”, considered as blind “productivism” whose underlying logic is not profit, but “technology”, and the latter leads to what will be called the “ravages of progress”. In reality, capitalism could not care less about material development, technology and progress, considered as autonomous categories. It only takes them into consideration if they can support its accumulation, insofar as they can serve as means that allow for the augmentation of the production of surplus value, while it will abandon them if they are no longer sufficiently profitable: as testimony to this fact, we need only refer to the industrial zones that, no longer capable of being attractive and dynamic poles of accumulation, are scrapped, delivered over to deindustrialization, and condemned to return to a condition of underdevelopment, since capitalism is unable to develop the forces of production unless they increase the volume of profit.

“Therefore, save, save, i.e., reconvert the greatest possible portion of surplus-value, or surplus-product into capital! Accumulation for accumulation’s sake, production for production’s sake: by this formula classical economy expressed the historical mission of the bourgeoisie, and did not for a single instant deceive itself over the birth-throes of wealth. But what avails lamentation in the face of historical necessity?”13

One question arises, however: how long can this infernal cycle of capital accumulation last? How long can such a “historical necessity” have a reason to exist?

The limits of capital

One may cite the existence of crises as a limit of the accumulation of capital. Crises take place because a problem arises on the market: in order to pursue the accumulation of capital it is not enough to extract surplus value from exploited labor power, it is also necessary to realize this surplus value in the form of money, and therefore, to successfully sell the commodities that contain this surplus value, which implies that one must find markets and buyers with money. If this is not accomplished, if the market does not absorb all the commodities that were produced, we have a crisis of overproduction. For Marx, the market ends up saturated because “[o]ver-production is specifically conditioned by the general law of the production of capital: to produce to the limit set by the productive forces … without any consideration for the actual limits of the market or the needs backed by the ability to pay”.14 Crises are precipitated, then, primarily by the anarchy of capitalist production: “The enormous power, inherent in the factory system, of expanding by jumps, and the dependence of that system on the markets of the world, necessarily beget feverish production, followed by over-filling of the markets, whereupon contraction of the markets brings on crippling of production.”15 This causes the accumulation of capital, instead of proceeding harmoniously, to proceed as a discontinuous industrial cycle, composed of stagnation, average levels of activity, prosperity and finally overproduction and crisis: the production curve ceases to rise and is replaced by one that falls, bringing about a situation of negative accumulation. But this depression is only temporary. Within a relatively short period of time, the infernal cycle of capital accumulation begins again. For this to take place all that is required is that the equilibrium is reestablished between production and the market. In order to bring this about, a mass of commodities is destroyed and factories are scrapped, while part of the working class, having become superfluous, goes to join the industrial reserve army. Once this “purge” has been completed, expansion can begin again. It starts slowly at first, and then a new productive frenzy takes possession of capitalist production until it swings towards the abyss of a new crash. And the same script is repeated.

Crises, although they appear to obstruct the system, are simultaneously the solutions to its contradictions. In fact, despite their periodicity, that is, their repetition at quite regular intervals, we observe that up until now (since 1825, the date of the first capitalist crisis, there have been approximately twenty of them), despite the fact that some of them have been especially severe (such as that of 1929), they have only been simple disturbances in the forward progress of capital accumulation. It is true that Marx thought that they would ultimately prove to be fatal for capital accumulation: “These contradictions lead to explosions, cataclysms, crises, in which by momentaneous suspension of labour and annihilation of a great portion of capital the latter is violently reduced to the point where it can go on…. Yet, these regularly recurring catastrophes lead to their repetition on a higher scale, and finally to its violent overthrow.”16 His prediction has not been confirmed up to this point. In this respect, Marx was only claiming that there would be such violent crises that they would provoke the collapse of the capitalist system; he does not tell us why they will eventually become fatal for the system.

More pertinent is his demonstration based on the decline in the average rate of profit, that is, the fact that capital advanced in production will yield, in percent, a constantly decreasing profit as the historical development of capitalist production advances. “Hence the concern,” Marx observes, “of the English economists over the decline of the rate of profit. The fact that the bare possibility of this happening should worry Ricardo, shows his profound understanding of the conditions of capitalist production…. Development of the productive forces of social labour is the historical task and justification of capital. This is just the way in which it unconsciously creates the material requirements of a higher mode of production. What worries Ricardo is the fact that the rate of profit, the stimulating principle of capitalist production, the fundamental premise and driving force of accumulation, should be endangered by the development of production itself…. There is, indeed, something deeper behind it, of which he is only vaguely aware. It comes to the surface here in a purely economic way — i.e., from the bourgeois point of view, within the limitations of capitalist understanding, from the standpoint of capitalist production itself — that it has its barrier, that it is relative, that it is not an absolute, but only a historical mode of production corresponding to a definite limited epoch in the development of the material requirements of production.”17

Today, the apologists of capitalism, and even some of its detractors, have introduced a deeply ingrained element of confusion: they present capitalism as an unlimited system of production, while it is actually a limited economic system because it does not produce for the sake of production, and much less to satisfy needs, but in order to permit the valorization of capital which, in step with the rhythm of its accumulation, declines, until the rate of profit falls to zero, and production will come to a halt and society will regress to an underdeveloped condition!

The rate of profit declines because, for any given capital, the proportion of constant capital (c) (machines, buildings and raw materials), which does not itself create surplus value, increases to the detriment of variable capital (v) (the living labor power that is necessary to set in motion the constant, or dead, capital) which has created it.

Thus, a capital of 100 units whose organic composition is 20c+80v will yield (based on a rate of exploitation of labor power of 100%) 80 units of surplus value and the rate of profit will be 80sv/100=80%. But if the organic composition rises and becomes 50c+50v, the rate of profit will fall to 50%. If it rises to 90c+10v, the rate of profit will fall to 10%, and so on until the constant capital (constant in the sense that it only transfers its initial value to the commodity that is produced) will assume such a preponderant scale in relation to the variable capital (variable because, by creating surplus value, it increases its initial value) that the valorization of capital will be, so to speak, nullified.

It is true that Marx took pains to emphasize that this fall of the rate of profit is a tendency: it can be temporarily counteracted by diverse procedures that have a tendency to revalorize capital. Thus, a reduction in the price of raw materials or of machines will tend to have the effect of lowering the organic composition of capital which, in turn, expresses a value relation and therefore will once again raise the rate of profit. The same result will be obtained by lowering the price of labor power (up to the point of reducing wages until they fall below the value of labor power), or by increasing the rate of exploitation of labor power (prolonging the part of the working time for which the worker is not paid, or decreasing the amount of time the worker labors to reproduce his labor power, or extending the length of the working day, or a combination of these methods). The effect of these countertendencies is to cause the fall of the rate of profit to be expressed in a nonlinear curve, which fluctuates and, viewed from a long-term perspective, can even rise after a stage of decline. But this revalorization of capital is only temporary since the dominant, and we may even say historical tendency, is always the same: for any given magnitude of capital, it is composed of a constantly growing proportion of constant capital (especially in its fixed component) and a constantly diminishing proportion of variable capital is necessary, and this always rising technical composition of capital has the effect of augmenting its organic composition (despite the decrease in the prices of raw materials and machines as a result of the increasing productivity of labor) and therefore leads to a fall in the rate of profit to an even lower level.

Marx then drew this final conclusion: “The real barrier of capitalist production is capital itself. It is that capital and its self-expansion appear as the starting and the closing point, the motive and the purpose of production.”18

In an especially rich chapter of the Grundrisse, he employs a different explanation of the limits of capital, a limit observed in this instance from the perspective of the relation between fixed capital and living labor. Thus, during the early days of capitalist production, the means of labor (the tools) had only a weak productive power, since the primary force of production was human labor power, with its arms, its brain, its nerves, its skills and its mastery of a trade. During this stage, Marx writes, “the quantity of labour employed [is] the determinant factor in the production of wealth”.19 But from the moment when machines are introduced, or rather, as Marx put it, “an automatic system of machinery … set in motion by an automaton, a moving power that moves itself” (Karl Marx, Grundrisse. Foundations of the Critique of Political Economy, Penguin Books, Baltimore, 1973, p. 692), it is the latter that becomes the “determinant principle of production—of the creation of use values” (ibid., p. 700). During this process, living labor “is reduced both quantitatively, to a smaller proportion, and qualitatively, as an, of course, indispensable but subordinate moment, compared to general scientific labour, [and the] technological application of natural sciences” (ibid.); it only subsists in the form of “the individual living workers” who are “subsumed under the total process of the machinery itself” (ibid., p. 693).

Nonetheless, we must not commit the error of believing that from that point forward it is the machine that, replacing living labor, creates surplus value and therefore allows for the revalorization of capital. In this stage, the machine is simply the principle agent of the creation of use value; it does not add exchange value to products except in two cases: 1) because it is itself a product of living labor it transfers, as it is used up, a certain quantity of this labor to the use values for the production of which it is utilized; 2) because its utilization allows for the increase of the productivity of the worker and therefore of the rate of exploitation to which the latter is subject. This having been said, the machine is under no circumstances a means of revalorization. To the contrary, by constantly expelling more and more human labor power from the process of production, it undermines the very foundations of the capital valorization process. Hence, Marx concludes, “[a]s soon as labour in the direct form has ceased to be the great well-spring of wealth”, that is, of use values, the exploitation of living labor also ceases “to be the condition for the development of general wealth”, and therefore “production based on exchange value breaks down” (ibid., p. 705).

Obviously, this kind of collapse of capitalism described by Marx is purely theoretical. Just like the fall of the rate of profit that tends towards zero, it is only an indication of the direction in which capitalism is headed due to the development of its fixed capital component. In order for this tendency to be completely realized there would have to be an almost total automation of production. It is, however, clear that before such an endpoint, one that would render capitalism totally impossible, is reached, capitalism will have collapsed long before, because the accumulation of capital will have entered a well-defined end stage of the cycle announcing its final collapse. This stage must be identified with precision and the theory of capital accumulation elaborated by Marx provides us with the key that allows us to do so.

Capital accumulation under normal conditions

The goal of capitalist production is to extract surplus value for the purpose of creating new additional capital. This surplus value, measured in relation to the invested capital (constant capital plus variable capital), is the profit, which is at the same time a simple “mystified form” of surplus value, as Marx says, insofar as it appears to be derived not from the exploitation of wage labor, but from the act of sale, profit appearing in this case as a simple differential between the market price of the commodities and their cost of production.

Over the course of capital accumulation, we have seen that the constant component of capital increases to the detriment of its variable component. The reasons for this rise in the technical and organic composition of capital are the desire for profits and competition among the capitalists. The latter want to expand their market share of sales, and therefore their mass of profits, and to do so they must reduce the cost of production of their commodities in order to be competitive. The most effective way to obtain this result is to introduce more efficient machines that will be cheaper than workers. We must point out, however, that the replacement of workers by machines will be determined by the wages of the workers. If the “price of labor” is low, so low that it is less than the cost of using machines, the capitalist will not introduce machines. The capitalist does not modernize for the sake of modernization, as if he were in love with technology. What is decisive for him is the final cost of the production of commodities. If the employment of new machines reduces that cost, he will not hesitate to follow the road of “modernization”. As a result, improvements in the production of machines, the greater diversity of their operational uses (the famous “innovations”), and their reinforced capacity for executing tasks in the production process, their utilization becomes increasingly advantageous and the general tendency is for constant capital to increase in relation to variable capital.

Here, however, a contradiction arises: if, for any given capital, the variable capital is diminished, the mass of surplus value (or profit) will be diminished to the same degree. Thus, if capital advanced in the amount of 100 units, which is composed of 50c+50v, yields, with a rate of exploitation of labor power of 100%, a mass of surplus value of 50 units, for the same amount of capital advanced, but whose composition is now 80c+20v, the mass of surplus value will be no more than 20 units. It is true that, in order to compensate for this loss, the capitalist can increase the rate of surplus value by increasing the amount of unpaid labor time (by prolonging the working day or by reducing the amount of time that is necessary for the reproduction of the value of labor power). But even allowing for the rate of surplus value to increase from 100% to 200%, the mass of surplus value will still not exceed 40 units, whereas it was 50 units during the first stage. And another phenomenon must also be taken into account. If we assume that the value of 20v represents 20 workers (1v=1 worker), we will observe that the number of workers has fallen precipitously compared to what it was under the former organic composition, when there were 50 workers.

At this stage, however, the contradiction is still a relative one. For, in order to increase the mass of surplus value, all that will be needed is to increase the amount of capital advanced, and at this point credit plays a decisive role if the capitalist lacks the requisite liquidity. Thus, if one multiplies the initial advanced capital by 3 (100 x 3) its organic composition will be 240c (80c x 3) + 60v (20v x 3), the mass of surplus value will be 60 and the number of workers will be 60, and therefore the number of workers will have been relatively reduced, but it will have increased in absolute terms.

It is this schema of capital accumulation that Marx utilizes in Volume I of Capital: “But, if the progress of accumulation lessens the relative magnitude of the variable part of capital, it by no means, in doing this, excludes the possibility of a rise in its absolute magnitude. Suppose that a capital-value at first is divided into 50 per cent. of constant and 50 per cent. of variable capital; later into 80 per cent. of constant and 20 per cent. of variable. If in the meantime the original capital, say £6,000, has increased to £18,000, its variable constituent has also increased. It was £3,000, it is now £3,600. But where as formerly an increase of capital by 20 per cent. would have sufficed to raise the demand for labour 20 per cent., now this latter rise requires a tripling of the original capital.”20 From these computations Marx draws the conclusion that the “[a]ccumulation of capital is, therefore, increase of the proletariat”.21

Once it has reached this stage, starting from a given amount of capital, the accumulation of capital encompasses, in conformity with the pace of extended reproduction, an ever-larger circle that extends its field of operations to the entire planet, although the effects of this process are felt to various degrees and unequally. This accumulation is accompanied by various tendencies: 1) due to the rise of the organic composition of capital, there is a tendential fall of the average rate of profit; 2) in parallel with this development, there is an absolute increase in the mass of profit or surplus value; 3) there is an absolute increase in the workers’ labor power, and only a relative diminution of the latter.

The fall of the rate of profit is compensated for by the increase of its mass and the relative diminution of living capital is compensated for by its absolute increase. As long as these contradictory tendencies can be reconciled, the accumulation of capital can proceed normally. It is only disturbed by the fact that it proceeds according to the rhythms of an industrial cycle that collapses (crisis), and then expands (recovery). But crises, as we have already pointed out, are only momentary interruptions of accumulation. When the latter is operating at its maximum efficiency, it can proceed without crises. This is what happened, more or less, during the “thirty glorious years” when capitalism disciplined itself by way of the state, and the latter immediately implemented “anti-cyclical” measures in order to launch a “recovery” as soon as an economic recession appeared on the horizon.

The accumulation of capital at the stage of the end of its cycle

Let us return to the schema we outlined above. In our last step, we had an advanced capital composed of 80c + 20v, which yielded 20 units of surplus value and a rate of profit of 20%. If we change the composition of the advanced capital to 95c + 5v, the mass of surplus value will be no more than 5 units and the rate of profit will fall to 5%. Under these conditions, for the mass of surplus value to rise in relation to the former organic composition, we will have to multiply the initial advanced capital by a factor of 5, which will give us 475c (95 x 5) + 25v (5v x 5) = 25 units of surplus value, with a rate of profit that is still 5%. In other words, from this point forward we need a considerable mass of capital in order to obtain a sufficient mass of surplus value: whereas previously it was sufficient to advance 100 units in order to yield 20 units, now we need to advance 500 units to yield 25 units. The devalorization of capital is therefore evident. In order to counter it, at least partially, it is of the utmost importance for capital to attempt to modify the relation that prevails between constant capital and variable capital.

The solution is to increase the rate of surplus value by increasing the productivity of labor. In this way, the time that the worker works to reproduce the value of his labor power will be reduced, and the time he works for free for capital will be correspondingly increased. This is the source of the famous “profits of productivity”. This method is not new, but by introducing even more productive machines (“high technology”) it was possible for the productivity of labor to rise spectacularly. Thus, it has been calculated that the productivity of labor more or less doubled between 1960 and 1992 in the major industrial countries.

Now, starting with an organic composition that has risen to 95c + 5v, but with the current rate of surplus value being 200% due to the increase of the productivity of labor, in order to extract a mass of surplus value of 25 units we only need to multiply our initial advanced capital by a factor of 2.5 instead of 5. Then we will have: 237.5c (95c x 2.5) + 12.5v (5v x 2.5) = 25 units of surplus value, thus making for a rate of profit of 10% instead of the 5% we previously obtained.

In this way, the rate of profit is partially reestablished and the mass of surplus value continues to grow; however, one new element in the accumulation of capital makes its appearance: by considerably increasing the productivity of labor by means of an ever more powerful machine technology, capital is led to absolutely reduce the number of workers needed for the production of surplus value. For, in order to produce 25 units of surplus value we no longer need any more than 12.5 workers (1v = 1 worker) whereas previously we needed 20 workers to produce a mass of surplus value of 20 units. Half of the workers are therefore definitively expelled from the production process.

Obviously, our example is schematic and in reality this absolute reduction in the number of workers is not reproduced in the same proportions, but it serves to illustrate an important fact: from now on, the accumulation of capital destroys more jobs than it creates. Whereas previously new investments increased the share of variable capital, now they have the effect of reducing it. In this case, after a conjunctural crisis, the economic recovery will not lead to a significant increase in the demand for labor, since in the meantime there will have been “restructurings” and “modernizations” eliminating personnel rendered superfluous for the production of surplus value and who will not be replaced.

This is the point at which capitalism enters the stage of the end of its cycle. The latter is not the end of accumulation, but points in that direction, for the pursuit of accumulation has the effect of gradually eliminating living capital; in other words, capital is henceforth actually sawing off the branch upon which it sits: it lives on living labor and it is replacing living labor to a growing extent by dead labor—the contradiction is obvious.

Marx glimpsed such an end to the cycle of capital when he wrote: “A development of the productive forces that would diminish the absolute number of labourers, i.e., enable the entire nation to accomplish its total production in a shorter time span, would cause a revolution, because it would put the bulk of the population out of the running.”22 Today, if we are not yet in a revolutionary situation, it is clear that we are in that situation characterized as “out of the running”, if not for the majority of the population, at least for a significant part of it—since, over the last twenty years or so, permanent, massive and increasing unemployment has become a fact of life in all the advanced capitalist countries.

Confronted by this situation, there is no shortage of charlatans who come to tell us that from now on production will be taken care of by machines, and that the latter rather than the workers will be responsible for producing wealth, and that the only problem that remains to be solved is the problem of distribution. This is to carry out an Olympian abstraction from the capitalist nature of this production, whose goal is not to produce “wealth” (use values) but to extract the surplus value that only living capital is capable of creating.

Share the work! That is what other charlatans proclaim—in fact, they are frequently the same ones. They claim that by reducing the length of the working week, without reducing the weekly wage, or by reducing it by a small amount, it will be possible to eliminate unemployment. In other words, if we return to the illustration of our initial schema, with 237.5c + 12.5v, based on a rate of exploitation of 200%, we have seen that we obtain a mass of surplus value of 25 units with a rate of profit of 10%; by “sharing the work”, therefore, by reducing the hours worked by 50%, the rate of exploitation drops to 100%, the mass of surplus value would be no more than 12.5 units (assuming the total wages remain the same) and the rate of profit would fall to 5%. This is the brilliant solution implied by the call to “share the work” issued by our charlatans who, within this same capitalism (which they have taken for granted as the unsurpassable horizon), want to have their butter and the money the butter costs at the same time! Work half the time and make the same money! To paraphrase Marx’s observation concerning Jeremy Bentham, one could say that these people are geniuses of petty bourgeois stupidity! In fact, even if the working day were to be reduced by a certain proportion, this would not create a significant number of jobs: with the “new technologies”, the workers will be forced to work under conditions of a much higher productivity of labor, which will cancel the creation of any new jobs.

Next we shall take a look at the various facets of this end of capital’s cycle, as they appear within contemporary capitalism.

II. The Various Aspects of the End of Capital’s Cycle

From the tendential to the absolute fall of the rate of profit

The development of fixed capital indicates … the degree of development of wealth generally, or of capital”, according to Marx (Karl Marx, Grundrisse. Foundations of the Critique of Political Economy, Penguin Books, Baltimore, 1973, p. 707). The graph on the following page, concerning France, gives us some idea of this degree of development.

We see that from 1890 to 1950, the share of fixed capital invested per worker remained at a very modest level, as did its rate of growth: over a period of sixty years, it multiplied 3.7 times. During that stage, machinery was still far from having overtaken living capital. The machine, in general terms, was still no more than a complement to the worker. It only assisted him in certain operations, basically leaving him as the master of the job. After 1950, however, machinery took off, as the graph makes clear. Between 1950 and 1990, that is, over a period of forty years, it multiplied 10.4 times. Even though this figure, measured in francs, cannot be relied upon as an exact measure, it nonetheless gives us a good enough idea of its spectacular rise.

This great leap forward of machinery has been so enormous that in certain productive operations it has almost completely replaced the worker. This has been the case, for example, with the introduction of robotics, a by-product of the electronics industry. During the 1980s, it was estimated that there were 3,000 robots in France, 20,000 in Europe, and 65,000 in Japan (Japan has a broader definition of what qualifies as a robot). The various kinds of robots in use range from simple manipulative robots controlled directly by a human operator, up to the “intelligent” robots that are capable of understanding the functions required of them thanks to sensors.

[Graph omitted]: Value of Fixed Capital Invested per Employee (in francs per employee) (Source: A Century of Macroeconomic Data, by P. Villa)

Used primarily in the automotive and machine tool industries, robots are limited to welding, painting and manipulative operations. However, they are now having an impact on other sectors, such as agriculture/food production, chemical/pharmaceutical and construction, and sales of robotic equipment has increased by 23% in France in 1994 (see Le Monde, March 23, 1994). In fact, without even taking robotics into account, we can see that entire sectors, such as iron and steel, petrochemicals, and nuclear power, operate on the basis of a living capital reduced to its a minimum. As an example, we can cite the case of the Aluminum-Dunkerque factory of the Pechiney conglomerate which, with only 580 people, produces half of all the aluminum produced in France (see Le Monde, November 4, 1994).

Such a degree of mechanization is still exceptional. The organic composition of capital, however, as the above graph indicates, has in general risen considerably. Whereas in 1950 it was expressed as 87,000 francs of fixed capital per worker (the other component of constant capital, circulating capital, is not considered in this context), in 1993 it was 1,030,000 francs per worker, which means that the organic composition of capital was multiplied by 11.8 times.

Under these conditions, the rate of profit has had to fall because, “[t]his mode of production produces a progressive relative decrease of the variable capital as compared to the constant capital, and consequently a continuously rising organic composition of the total capital. The immediate result of this is that the rate of surplus-value, at the same, or even a rising, degree of labour exploitation, is represented by a continually falling general rate of profit. (We shall see later why this fall does not manifest itself in an absolute form, but rather as a tendency toward a progressive fall.)”23

With this last parenthetical statement, Marx alludes to the “counteracting influences at work, which cross and annul the effect of the general law, and which give it merely the characteristic of a tendency”.24 Marx enumerates the following influences: the increase of the rate of surplus value, the reduction of wages below their value, the reduction of the price of the elements of constant capital, and the investment of capital in colonies where “the rate of profit is higher … due to backward development, and likewise the exploitation of labour, because of the use of slaves, coolies, etc.”25 (which brings to mind today’s “relocations”). In other words, Marx is saying that the law of the fall of the rate of profit is entirely relative: it may trace a descending curve for a while and then, due to the various counteracting factors mentioned above, it may then rise again.

As a result of these fluctuations, some will say that it is hard to deduce from the phenomena a general law of the fall of the rate of profit, even one that is just a tendency. In fact, this could be true as long as the organic composition is not very high and only rises very slowly. Thus, if from an advanced capital of 10c + 90v, which yields a rate of profit of 90% (the rate of exploitation being 100%), we progress to a situation where we have an advanced capital of 20c + 80v, and the rate of profit falls to 80%, it will be relatively easy to counteract this decline; it would suffice, for example, to increase the rate of exploitation from 100% to 120%, which would yield a rate of profit of 96%.

This will no longer be the case, however, if the organic composition of capital undergoes a considerable increase. Thus, if the latter increases from a proportion of 20c + 80v to 80c + 20v, the rate of profit, which was initially 80%, will fall to 20%, and even if the rate of exploitation is increased from 100% to 200%, the rate of profit will still not exceed 40%. In this case, the law of the falling rate of profit is fully verified and becomes absolute: the rate of profit will never again be 80%, regardless of the procedures employed to restore it to its former rate. The figures provided for this example are obviously arbitrary, but they are useful for the purpose of illustrating this reality: as we saw above, with regard to the case of France, the fixed part of constant capital, after having only slowly increased over a very long period, suddenly took off after 1950 and multiplied 10.2 times between 1950 and 1990; even if, in the meanwhile, the rate of exploitation had increased (thanks to the advances made with regard to the productivity of labor, which increased between 1950 and 1990 by approximately 150%, according to data provided by the OECD), it is clear that the growth of the rate of surplus value has not been able to compensate for the negative impact on the rate of profit due to the spectacular increase of the share of the fixed part of constant capital.

We shall put it this way, without beating around the bush: if the fall in the rate of profit could be counteracted on every occasion in proportions such as would cancel out each instance of decline, it is obvious that the law of the falling rate of profit would hardly have any meaning at all. In fact, it must be pointed out that once constant capital has increased considerably (which presupposes a historically advanced stage of capitalism), the fall of the rate of profit that results from that increase in constant capital can only be partially contained, and that this fall must increasingly assume, instead of the relative form it has assumed until now, an absolute form, and eventually must result in a spectacular and irreversible devalorization of capital.

Today, such an absolute fall in the rate of profit is verified by the transformation of capital into a purely financial product, circulating in a closed circuit and upon speculative foundations. Effectively, we can discern an increasingly clear divide between the real economy and the fictitious economy: because it lacks the means for sufficient valorization in production, capital is trying to compensate for this shortfall by engaging in stock market and financial ventures where it appears that “money makes money” as if by magic. Since capital yields little in industry, the banks only reluctantly advance money capital for purposes of productive investment; they only do so at high rates of interest, that is, to the detriment of industrial capital; in this way, an important part of the surplus value extracted by the latter passes into the hands of finance capital; at the same time, due to the high interest rates, the owners of capital prefer to invest their money in finance capital, since this investment yields more than investment in industry; capital therefore hopes to artificially valorize itself in operations (speculations on the movement of interest rates and the value of currencies, and by means of mergers and acquisitions) in which it would seem to possess the power of self-creation, of creating its own surplus value disconnected from its productive basis; it then becomes a fictitious capital that, after having undergone excessive expansion in value, and thus engendering the illusion that it has become profitable at a good price, suddenly deflates, revealing that it was nothing but a “speculative bubble”, as in the case of the stock market crash of October 1987.

For this reason, we must emphasize this fact: the current vagaries of speculative capital, which go from one financial market to another at the speed of light thanks to computer networks, in search “of easy money instead of investment in production” (as the chorus of lamentation of the decomposed reformist left complains in a very capitalist manner), are not the bitter fruits of a neoliberal “policy” that, as a result of “deregulation”, has deliberately favored finance capital to the detriment of industrial capital, but are instead the consequences of a very real historical fact, that of the fall of the rate of profit that characterizes capitalism at the end of its cycle.

By saying this we are not claiming that the rate of profit cannot by any means be restored, as we shall see below. What is crucial to understand is that the latter, due to its absolute decline, is less and less capable of playing its role as “motive power of capitalist production” (Karl Marx, Capital, Vol. III, International Publishers, New York, 1967, p. 259).

The absolute decline of the surplus value producing working class

The rates of industrial employment, as a percentage of the total active population, for the six major countries of the OECD, during the years from 1960 to 1990, are shown in the chart below:

[Chart omitted]

Until 1970 there was an increase in the number of industrial workers, except for Great Britain (for the six countries taken as a whole, the average rose from 38.2% in 1960 to 39.7% in 1970). After that it declined regularly, falling to an average of 31.4% in 1990, a decline of 7.3%. The most spectacular decline took place in Great Britain, formerly the “workshop of the world”, which saw the percentage fall from 48.4% in 1960 to 28.7% in 1990. The country with the highest percentage of industrial workers is West Germany, with 39.1%. Over the course of the 1980s, job losses in manufacturing industries of the OECD countries are depicted in the following chart (in percentages per year):

Country % Change in Manufacturing Employment Per Year
Greece +1
Japan +.7
Denmark +.3
Germany -.05
Australia -.15
Canada -.25
Sweden -.3
Netherlands -.4
United States -.45
Portugal -.5
Iceland -.65
Ireland -.75
Spain -.8
Italy -.95
Luxemburg -1
Finland -1.2
Belgium -1.4
France -1.7
Norway -2
Great Britain -2.6

It can be seen that all the developed capitalist countries, except for Japan and Greece, lost industrial jobs during that period. For the United Kingdom, between 1980 and 1990, this loss amounted to 28%, or 2 million jobs; for France, it was 18%, or 1 million jobs; for Italy, it was 10%, or 600,000 jobs; for the United States, it was 5%, or 1 million jobs (between 1991 and 1994 it lost another 2 million jobs); for West Germany it was only 1%, or 200,000 jobs (but between 1991 and 1994 it lost 800,000 jobs in the metal industry alone—Le Monde, February 17, 1995).

In France, the changing employment figures by sector are shown on the following graph:

[Graph omitted]: Employment by Sector (in thousands, annual averages) (including temporary, part-time and apprentice workers, but not military personnel) Source: INSEE

While the commercial service sector gained 2,541,000 jobs and the non-commercial service sector (public services) gained 1,070,000 jobs between 1975 and 1993, the manufacturing and civil engineering/construction sectors lost 1,485,000 and 723,000 jobs, respectively.

Thus, since 1975, there has been an absolute decline in numbers of the members of the working class, that is, of that class of wage workers that is essentially responsible for the creation of surplus value, even if a fraction of the class in the tertiary sector, employed in transport, food supply, packaging and distribution, also produces surplus value.

In order to explain this decline, one could adduce the “relocations” of activities that are sent to the “newly industrialized countries”, especially to Southeast Asia, where wage labor is cheap. It is a fact that the share of the countries of Southeast Asia in world manufacturing exports has risen from 6% in 1970 to 16% in the early 1990s (see Alternatives économiques, No. 23), while the total value of consumer goods imported by the OECD countries from the countries of the Far East has risen from 40.1 billion dollars in 1985 to 95.1 billion dollars in 1990 (see the study published by the General Trust: Should We Be Afraid of the Newly Industrialized Countries in Asia?, April 1993). The clothing, watch-making, basic electronics, and toy industries, whose production processes still require a large proportion of human labor, have to some extent been shifted towards the low-wage countries where, therefore, the rate of profit is higher. As an example, we may cite the Thomson corporation, which employs 13,400 people in Malaysia, 5,400 in Singapore and 7,800 in Mexico, as opposed to only 4,300 in France and Germany. By virtue of the principle of communicating vessels, the fraction of the working class that was lost in the OECD countries, will be found in the countries of the periphery, which makes it impossible to speak of an absolute diminution of the working class if one considers the phenomenon on a world scale, where the working class instead has a tendency to increase, if not relatively, at least in terms of absolute numbers.

However, one other consideration must be taken into account. While it is true that relocations have led to job losses in the highly developed countries, the rise in exports of semi-finished products and machinery from the latter to the countries of the Far East, which have increased from 35.1 to 50.7 billion dollars in 1985 and from 64.5 to 111.1 billion dollars in 1990, respectively (according to the study published by the General Trust cited above), should have compensated for those job losses, as the increase in exports of capital goods should have served as a factor for job creation. Yet this is by no means the case, despite the fact that the exports from the OECD countries to the countries of Southeast Asia are much greater than their imports from the latter, as the former sell more to than they buy from the latter. The reason for this is that the growth of production in the highly developed countries is no longer a factor for job creation but, to the contrary, it contributes to job losses. This was revealed by a German study for the years prior to 1980: “Between 1953 and 1960, 100 billion marks invested in capital goods created two million jobs; between 1960 and 1965, the same amount of investment only created 400,000 jobs; between 1965 and 1970, it eliminated 100,000 jobs; between 1970 and 1975 it eliminated 500,000 jobs. And the pace of job destruction has continued since then.”26

We are now in the midst of the end of capital’s cycle. Advanced machinery has made possible a massive increase in the productivity of labor, and therefore of the rate of surplus value (between 1960 and 1973, productivity gains averaged 4.4% per year for the OECD countries taken as a whole); on the other hand, however, this advanced machinery has also had the effect of eliminating part of the working class that has become superfluous for the production of surplus value; we must point out, nonetheless, that if a fraction of the working class has been evicted from the circuit of valorization and is condemned to permanent unemployment, the fault does not lie with machine production itself (in order to prevent such unemployment all that would have to be done is to implement a corresponding reduction in working hours, and to maintain the same wages), but is due to the fact that this machine production is developing within the framework of capitalist relations of production which render such a solution impossible; unemployment is thus not “structural” unemployment, as some would try to make us believe, but capitalist unemployment, a very specific aspect of a capitalism that has arrived at the end of its cycle and which, by continuing to pursue its accumulation, definitively excludes a growing portion of living labor power from the production process.

If, as a result, it is true that the working class, on a world scale, is not shrinking in absolute terms, it is nonetheless also the case that, in the highly industrialized countries (which are responsible for approximately 70% of world production), such a process of absolute diminution is well entrenched, and the highly industrialized countries only show the other countries the image of what will soon be their own future:

“‘Group No. 1’, in Changchun, in northern China, is a city within a city (…). For ten years, the factory has been adapting to western norms. Whereas, between 1956 and 1985, only one million Liberation trucks came off its assembly lines, ‘Group No. 1’ now has to produce one million vehicles per year, of which 65% will be cars by 2005. In order to carry out what must undoubtedly be called a revolution, in 1985 the Chinese government transformed this state enterprise into a mixed private-public corporation, 40% of which is owned by Volkswagen. Today, the factory produces 140,000 trucks, 25,000 Golfs, 25,000 Jettas and 30,000 black Audis for the Chinese leadership class on four assembly lines, which represents one-fourth of Chinese auto production. In order to quadruple this production within ten years, the factory has no intention to create any new jobs. To the contrary, 7,000 jobs will be eliminated each year (….). Official statistics indicate that in Changchun the unemployment rate is already approaching 20% of the population” (Le Monde, October 10, 1995).

The rapid expansion of employment in the service industry and its increasingly artificial character

Capitalist production, due to its commercial character, requires a certain number of wage workers to be devoted to the sale of commodities, advertising, and commercial management; others work in banks, insurance companies, and the real estate sector; and yet others work for the state as administrators, teachers, health care workers, police, and in the military; finally, there is a whole layer of workers incorporated in the service sector working for corporations, local governments and private individuals. This entire “tertiary” sector is, in general terms, “unproductive”: it does not produce surplus value for capital, but constitutes capital’s “overhead costs” that are more or less indispensable for this mode of production.

Marx, in Capital, had already emphasized, with the development of machine production, the tendency of the ever more exorbitant increase of these “overhead costs” of capital: “the extraordinary productiveness of modern industry, accompanied as it is by both a more extensive and a more intense exploitation of labour-power in all other spheres of production, allows of the unproductive employment of a larger and larger part of the working-class, and the consequent reproduction, on a constantly extending scale, of the ancient domestic slaves under the name of a servant class, including men-servants, women-servants, lackeys, &c.”27 Today, this increase of “services” of all kinds has literally exploded. You be the judge:

[Chart omitted]: Percentage of labor force employed in the services sector. Source: OECD Jobs Report, 1994

For the countries listed in the chart above, since 1960, in France, the United States and Japan, the service sector has surpassed the industrial sector. In 1970, except for Germany, the tertiary sector was the largest sector. In 1990, it was larger than the industrial sector in all the countries listed. Thus, in 1993 the “services” were staffed by 87 million wage workers in the United States as opposed to only 18 million in industry. In other words, for each productive worker, almost five unproductive workers….

As you can see, it was between 1970 and 1990 when the percentage employed in services underwent a veritable explosion. While in 1960 the average percentage employed in services in the six countries surveyed was 42.8%, between 1970 and 1990 it rose from 49.2% to 63.7%. How, on the basis of these statistics, are we to understand such an increase?

In fact, the service sector jobs created during that last period no longer had much to do with the classical service categories (banks, insurance companies, etc., which, for their part, witnessed a tendency to decline). A large proportion of them are low-paid, unskilled, precarious “odd jobs”. Thus, the United States created 2.6 million jobs of this kind between March 1991 and February 1994. This led to a reduction in the official unemployment rate, which cannot, however, conceal its artificial character. Some commentators have been compelled to recognize this phenomenon: “In twenty years (in France) there have certainly been job losses: 1.8 million in industry (information technology and the increases in productivity thus achieved), 1.15 million in agriculture and 500,000 in construction. At the same time, however, 4.2 million service jobs have been created, in both the private and the public sectors. Of course, one could ask about the social benefit of these jobs: does the future of society consist in multiplying the number of security guards, home aids and call center employees?” (Alternatives économiques, No. 22, 4th Trimester of 1994, p. 14). These commentators console themselves by adding: “But these jobs exist, and they are multiplying”, rather than asking what is obviously the fundamental question: what good is such a capitalist society, that was based initially on the creation of a class of wage workers who produced surplus value and now turns 63.7% of these wage workers into unproductive workers? Pizza delivery drivers, hamburger flippers and other “local jobs”; is this the future of capitalist society? Will it still be able to reproduce itself?

It is clear that such “job categories” have all the hallmarks of the decline of the capitalist mode of production. They correspond to the end of its historical cycle. They are the artificial products of a system that is decomposing and that is trying to reverse the process by means of endless swindles, thus striving to “make work”, at the same time that it no longer has anything to offer, with massive unemployment and the increasing precariousness of the jobs that do exist there to remind it.

The rise of unemployment and expulsion from the circuit

As is depicted on the graph on the following page, the total number of unemployed in the twenty-five countries of the OECD has risen from 11 million in 1974 to 35 million in 1993. And this is the official figure, that is, the adjusted figure, since the real number is much higher: a large number of the unemployed are not counted as such since they are not enrolled on the official lists (or else because they have been deleted from the lists), whether because they are the beneficiaries of special programs (such as the RMI [subsidy for long-term unemployment—Note of the Spanish Translator]), or whether they are enrolled in “training courses” designated as “community employment contracts”, not counting those who are subjected to compulsory “early retirement”. In fact, there are 60 million unemployed workers of every description that should be counted. In France, the total number of unemployed according to the Minister of Labor was 3,306,000 in February 1995, i.e., 13% of the active population, whereas in reality the number exceeds 5 million.

To these figures we must add partial unemployment, which has been disguised as “part-time work”. These are the “precarious” jobs: temporary workers, short-term contractors, participants in various training programs, apprentices. In France, the number of persons in this category amounted to 1,404,000 in 1994, that is, 5.6% of the active population. In Great Britain they numbered almost 6,000,000, that is, 27% of all the wage workers (Le Monde, March 18, 1994). In the United States, 30 million people fall into this category, which means that 25% of the active population are employed working in “temporary jobs” (Le Monde, March 15, 1994). As can be demonstrated, such “under-employment” in these latter two countries is enormous. It also serves to artificially lower the official unemployment rate which, in the United States, was only 5.7% in early 1995.

[Graph omitted]: Millions Unemployed in the OECD Countries

In any event, in the light of the real unemployment figures, all governments are cultivating a truly “surrealist” artistic touch. “What kind of credibility can still be conceded, for example, to the official British or American data?”, asks Le Monde Diplomatique in its issue of July 1994. “The leaders of the United States themselves confess that the results attributed to the unemployment figures are based on ‘statistical anomalies’. As for the British results, according to John Wells, a professor of economics at the University of Cambridge, between 1 and 2 million unemployed persons ‘are overlooked’.” In a brief news item, the same journal reveals that “last January, after having taken into account the discouraged workers who are not counted by the official statistics, American Express calculated an unemployment rate of 9.6% for Japan (rather than 2.7%), 12.3% for Britain (rather than 9.8%) and 9.3% for the United States (rather than 6.4%). (Source: The Amex Bank Review, January 24, 1994)”.

Another example of falsification is offered by the fact that the newspaper Le Monde only takes into consideration the official unemployment rate for West Germany (7.5%) … although reunification took place four years before! And this is the same newspaper, on the other hand, that revealed (Le Monde, November 20-21, 1994) that unemployment in Germany was estimated at 5.3 million persons (3 million in the West and 2.3 million in the East), that is, a figure similar to that of 1933….

In any case, since 1974 the unemployment rate has undergone a vast increase and the question arises concerning just what this means.

Such massive and growing unemployment, which has successively struck all the highly industrialized capitalist countries, does not coincide with the classical industrial reserve army inherent to the process of capital accumulation. As can be seen on the graph immediately above, the industrial reserve army existed prior to 1974 in numbers ranging from 12 to 17 million persons. Even if some countries could boast of having realized, during the “thirty glorious years”, almost full employment, a country such as France, for example, which, with some 350,000 unemployed in 1973, now has at least 5 million unemployed, indicates that some other phenomenon is at work here: in twenty years, unemployment has multiplied by more than 14 times and such a rate of growth is far higher than the requirements implied by a temporarily out of work labor force (the industrial reserve army) needed for the accumulation of capital to proceed smoothly.

As the graph indicates, with the recession of 1974 unemployment rose to some 15 million persons. After that, however, instead of declining due to recovery, the number of unemployed continued to rise until it reached, on the eve of the 1981 recession, 23 million. Here we can see that economic growth during this period caused unemployment to increase by 8 million persons. With the recession of 1981-1982, unemployment underwent another leap forward until it reached 30 million. But then, although there was a decrease in unemployment of 6 million persons, the number of unemployed finally reached 29 million on the eve of the 1991 recession. While the subsequent recovery did not cause an increase in this number, it caused it to decline very little. With the recession of 1991, the official unemployment figure rose to 35 million in 1994 and it is obvious that the recovery, as we can see today, will have no major effect on employment.

It can thus be seen that if the various recessions have engendered unemployment, the recoveries that followed them were incapable of reabsorbing it, and even had the tendency at times, to the contrary, to exacerbate it. Since then, unemployment has only gathered momentum, as it has demonstrated a tendency, despite its ups and downs, to increase. This confirms the fact that once the “fat is trimmed” during a recession, enterprises “modernize” and make an effort to obtain profits with a reduced staff of wage workers. This is the kind of unemployment typical of a capitalism that has reached the end of its cycle: the accumulation of capital continues, but it does not cease to eliminate jobs.

The deep cause of this kind of unemployment is the imbalance, which will be flagrantly expressed from now on, between the development attained by the modern productive forces which, as has been seen, have by way of machine production made a gigantic leap forward since the 1950s, and the capitalist relations of production: law of value, market, wage system, profit. The latter are obsolete and their preservation leads to an explosion of unemployment. A growing mass of men and women can no longer manage to enter the framework of these relations and are excluded from them. As long as the capitalist mode of production set relatively simple productive forces in motion, it was capable of using the bulk of the labor power at its disposal. Despite its anarchic crises, which periodically threw masses of workers into the streets, it was capable of using them again once the economic recovery was underway. This is no longer the case today. From now on, the measures taken to end the crises no longer lead to significant numbers of additional, new jobs. For good or for ill capitalism pursues its accumulation with a diminished working class, while it leaves an increasing mass of workers in the lurch, who are rendered useless as far as the capitalist type of production is concerned.

Actually, this tendency was already operative prior to 1974. This explains why, in the United States, automation, according to Pierre Souyri, eliminated 2 and a half million jobs per year between 1955 and 1970.28 But this elimination of industrial jobs was not yet translated into massive unemployment because “tertiary” employment was undergoing a constant increase (it rose from 30% of the wage labor force in 1950 to 60% in 1968 in the United States), thus cushioning the force of the blow and preventing a major rise in unemployment. Beginning in the 1970s, however, such absorption of unemployment by way of service jobs was no longer possible. From that time on, massive and permanent unemployment became unavoidable and became clearly apparent. It also affected the “tertiary” sector, despite its continuous expansion during that period. This is why in France, in 1993, while the unemployment rate was 14.3% among industrial workers, it was 13.9% among office employees, 5.8% among middle level professionals and 4.9% among executives (Alternatives économiques No. 22, p. 17).

A situation then arose where unemployment struck all the categories of wage labor, the productive workers as well as the unproductive workers and even, to a certain extent, the aristocracy of wage labor: the executives, without forgetting the future “college graduates”, for whom “the social elevator is out of order”, as the tormented liberal Alain Madelin says. In other words, the “white collars” are feeling the squeeze, too. In this fourth compartment of the “tertiary” sector, which not so long ago was depicted as a new, comfortably situated petty bourgeoisie that had escaped the proletarian condition, the uncertainty of existence is on the increase. And in fact, with the most insignificant recession, a growing mass of these salaried petty bourgeois can sense the fragility of their situation: “During the recession of 1991-93 (in the United States), explains the ideologist of the ‘post-industrial’ society, Daniel Bell, more than 45% of the jobless were office employees, that is, twice as much as during the previous crisis, ten years before. The problems of IBM, the closure of enterprises, the shift of managerial and engineering jobs towards perfectly adapted new societies, no longer offers the security that ‘white collar’ status once guaranteed, so it was thought” (see Le Monde, March 2, 1995).

In fact, it is clear that from now on capital is dragging along this mass of “tertiary” jobs like a ball and chain, which it does not know what to do with and which weighs down, due to its unproductive role, its rate of profit. “Trimming the fat” in this sector renders it just as imperative to restructure and modernize the services. According to the views of the capitalist experts themselves, such a trend “could make 25 million jobs disappear in the United States in a private sector that has 90 million jobs (…). This is calamitous news for the millions of employees and mid-level executives in the service industry and for the workers who play subsidiary roles in that industry” (The Wall Street Journal Europe, March 19-20, 1993, quoted in Le Monde Diplomatique, July 1994).

But if the services have ceased to play the role of pressure valve for industrial unemployment, and they are themselves engendering their share of superfluous persons, what is happening at the other end of the chain? A surplus of unemployed is produced, from every social background, who find themselves totally excluded, and have no reasonable expectation of ever returning to their old jobs or even finding any job at all. This is already the case to a large extent in France, with 786,000 young people between the ages of 16 and 25 who in March 1993 were registered as unemployed; the same is true of the one million unemployed categorized as “long-term” unemployed, as well as the one million people participating in the RMI program, not counting the rejects, the unclassifiables, the anonymous, and the homeless, whose reinsertion into the workforce can no longer be seriously considered. And we must add all the illegal immigrants. The latter often find work in workshops where they are not legally declared by their employers at the same time that they are subject to an untrammeled exploitation. Others, however, are not so “lucky” and end up, in order to survive, engaging in all sorts of trafficking. In short, we have reached the poorhouse, the welfare office, the kingdom of crime, and the “hospital of the active labour-army”, as Marx called it. (Karl Marx, Capital, Vol. I, International Publishers, New York, 1967, p. 644).

To define all these welfare recipients, paupers, excluded, and underground people as unemployed persons, or to see them as nothing but a simple industrial reserve army, is utterly inadequate. The unemployed are workers who are temporarily excluded from the work force and Marx defines the industrial reserve army as a “stagnant” layer of the proletariat that is characterized by “extremely irregular employment” (Karl Marx, Capital, Vol. I, International Publishers, New York, 1967, p. 643). Those who are today called the “new poor”, the “long-term unemployed”, and the “RMIs”, are those who have been definitively ejected from the wage labor force, who live permanently on state assistance, on handouts from charities, on begging, or simply by scraping by somehow from one day to the next. In other words, they are the living expression of that definitive ejection from the circuit of part of the population when capitalist accumulation enters its end-stage of its cycle. “Capitalist production,” Marx wrote, “therefore, under its aspect of a continuous connected process, of a process of reproduction, produces not only commodities, not only surplus-value, but it also produces and reproduces the capitalist relation; on the one side the capitalist, on the other the wage labourer.”29 From now on, capitalism, with this process of exclusion, destroys that relation; instead of producing and reproducing the wage labor force, it eliminates it, in its own way: decomposing it, declassing it, transforming it into an amorphous social layer; it is no longer a matter of proletarianization, but of lumpenproletarianization. With this social decomposition of a fraction of the wage labor force, capitalism announces, in this respect as well, that it has entered into its final historical stage.

In conclusion, we shall say that it is not the existence of massive unemployment that causes capital to enter the period of the end of its cycle (during the crisis of 1929 unemployment was even more extensive), it is because unemployment, from now on, arises and develops with economic growth itself: between 1974 and 1991, the general index of industrial production rose by 17.9 in Great Britain, 19.5 in France, 27.5 in Italy, 32.6 in West Germany, and 38.4 in the United States, while at the same time unemployment has risen, for all the countries of the OECD (official figures) from 11 million persons in 1974 to 36 million in 1993; nor is it because of the return of the industrial reserve army (which existed to some extent before 1974), but because a large part of this mass of unemployed persons can no longer, unlike what took place in the past, expect to be periodically absorbed into active service in the industrial army, since they have been definitively excluded from the wage labor force.

III. From the End of the Cycle to the End of Capitalism

What end of capitalism?

As we have already pointed out, the end of the cycle of capital is not the end of capitalism, it is only capitalism’s last stage; a stage that could extend over an entire historical period but which will ultimately come to and end. Today, of course, when the ideology of capitalism has celebrated its crushing victory, and capitalism is “victorious”, “the unsurpassable horizon of humanity”, and “the end of history”, it sounds scandalous—or irresponsible—to speak of capitalism coming to an end. This is the opinion of not only the apologists, but also of many of those who still present themselves as critics of capitalism: the latter do not rejoice in its rule; they think that it is an alienating system, but at the same time they cannot conceive of its coming to an end, because they are so impressed by the ability it has so far demonstrated to overcome its contradictions, and to find solutions to escape from the impasses it encountered; as a result, persuaded that capitalism will always be able to “rejuvenate itself” whenever it seems to be undergoing its death throes, they eventually underwrote a complacent skepticism about its disappearance, and are always careful to avoid any kind of catastrophism, while at the same time engaging in facile sarcasm: “R. Boyer correctly recalls that capitalist social relations have for the last one hundred fifty years, and especially during the 20th century, proven their considerable flexibility and have also proven that those who have announced the onset of the ‘final crisis’ are behind the times”, as F. Chesnais, for example, writes in his book The Globalization of Capital.30

In fact, this kind of reasoning leads to a position that objectively supports the dominant point of view concerning the “eternity” of capitalism and “the end of history”. More precisely, behind the semblance of pessimism we most often find a dissimulated version of support for capitalism, that of “capitalism with a human face”: its proponents are not at all pleased with capitalism, but since they do not see how it can be made to disappear, they end up accommodating themselves to it as long as it undergoes some degree of “reform” and thus becomes more bearable. Hence the accent on its “considerable flexibility”, that is, on its possibilities for improvement, of “moderating” its ways if given a little help to do so.

This point of view is not new. It has historically characterized every social democratic current, all of which sought to rule out the economic collapse of capitalism. Today, this utopia of a capitalism without objective limits returns with a vengeance. By not seeing the current economic situation as anything but a “crisis”, its advocates rely on past experiences of crises in order to validate new reformist tinkering (“sharing the work”, etc.), thus imagining that what worked yesterday—fiddling with capitalism—can very well work again today. However, the failure of all the policies implemented during the last twenty years to exorcise the specter of increasing unemployment and exclusion, provides proof that this will not work. The reason for this is that since then capitalism has been undergoing something very different from a mere crisis. It has entered the end stage of its cycle. This end stage can be prolonged for the purpose of delaying the moment of the final collapse of the system, but the measures taken to achieve this cannot constitute a new springboard that will allow it to set in motion a new victorious dynamic.

It is precisely due to this end of capitalism’s cycle that here and there the vague and confused feeling arises that it can be abolished gradually. This nourishes a neo-reformism: there is a chance that we can implement a gradual and peaceful “transformation” that will lead to a new society whose contours are not very clear but which will nonetheless be a “post-capitalist” society. In other words, the contemporary phenomena that indicate that capitalism is now in the last stage of its cycle: the diminution of the surplus value-producing working class, the multiplication of unproductive jobs, some of which (the “odd jobs”) have hardly anything to do with the capitalist mode of production, and the pure and simple exclusion from the labor force of a fraction of the population that is being transformed into a kind of Roman proletariat living off the dole, will be so many reasons for the promotion of “structural reforms” that will have the effect of allowing for the smooth transition of society into a “post-capitalism”. This is the position, for example, of André Gorz, who elaborates such a neo-social democratic point of view in a book with the revealing title of Les chemins du paradis: L’agonie du Capital.31

This is the “optimistic” version of the end of capitalism. But there is also a “pessimistic” version, as exemplified by Pierre Souyri in his appendix to La Dynamique Du Capitalisme Au XXe Siecle.32 Souyri, although he begins by admitting that it is “impossible to conceive of complete automation within the framework of capitalism”, nonetheless imagines the prospect of this complete automation being established in some capitalist countries. On this assumption, these countries, due to the distortion of world exchange and the resulting compensation of the rate of profit, expropriate part of the surplus value produced by the countries that are less technologically developed, that is, the ones that still use significant amounts of living labor in production. Pierre Souyri then deduces that the countries where automation has been generalized will be able to reconvert the labor power that has become superfluous with regard to production to unproductive jobs, and this unproductive labor power will derive “its income, directly or indirectly, from the surplus value that comes from foreign sources”. From a capitalist point of view, however, what sense would it make for the most technologically advanced countries to expropriate part of the world’s surplus value, if instead of being used for capital accumulation it is devoted to maintaining their populations? Were they to do this, one would have to conclude that these countries have ceased to be capitalist countries, since they no longer function according to the logic of capital accumulation. Which would mean that this idea is a pure and simple fantasy with respect to the end of capitalism.

Pierre Souyri does not stop there. He considers, finally, another scenario where the most backward capitalist countries go the way of generalized automation. From the moment they do so, surplus value extraction is rendered almost impossible, and “capitalism decomposes from within” and with it all of society decomposes, and the consequence would be, Souyri explains, the existence of such large numbers of “plebian criminals” that the latter would have to be subjected to a “massive policy of imprisonment” or else pure and simple destruction: “The creation of concentration zones and various forms of genocide will then become the preconditions for domestic peace and for the survival of capitalist society under barbarous and absurd forms.” In fact, having reached this point, one could ask just what “capitalist society” we could still talk about!

Pierre Souyri’s vision is nothing but the symmetrical opposite of that of the neo-social democrat André Gorz. The latter imagines the end of capitalism will proceed according to a incremental, although “optimistic” process, and capitalism will disappear gradually in the form of a slow death and thanks to a series of reforms that will deliver us to the “paths to paradise”. Souyri also imagines a gradual process, but in his “pessimistic” version, capitalism disappears by decomposing from within and simultaneously drags society down into a “generalized barbarism”. As is evident, these two scenarios have one idea in common: the belief that capitalism will perish by means of a slow process of decline whose endpoint will be its complete decomposition, rather than as a result of contradictions whose most visible manifestations will take the form of increasingly more violent crises that will finally cause the collapse of the capitalist system, once these crises become insuperable as a result of the capitalism’s entry into the final stage of its cycle.

In fact, just as the phenomena of decomposition and social exclusion that were evident at the dawn of capitalism betokened the end of the cycle of the Middle Ages, the current phenomena of social decomposition indicate that capitalism has entered the final stage of its cycle. But none of them in themselves entail the end of capitalism. Because capitalism is “a contradiction in process” (Marx), only its crises can precipitate its end, crises that become insuperable and which bring about the abrupt collapse of the system. In other words, the theory of the decomposition of capitalism that entails its slow death, must be opposed by the theory of the collapse that leads to its violent death, as Marx had foreseen, once the system has reached its final stage: “These contradictions, of course, lead to explosions, crises…. Yet, these regularly recurring catastrophes lead to their repetition on a higher scale, and finally to its violent overthrow.”33

It is this process that leads the system to its doom, the process that is currently taking place in today’s capitalism, that we shall now analyze.

The partial restoration of the rate of profit

As we saw above, what characterizes capitalism from now on is its falling rate of profit. This situation leads to a slowdown that borders on paralysis. Investments are not sufficient, since the profitability of capital is deficient. Capital then has a tendency, as we have seen, to leave the productive sphere in order to become a purely speculative financial product. At the same time, unemployment increases, together with the risks of a “social upheaval” that could finally break out and endanger “the social consensus”. To partially restore the rate of profit in order to provide the economy with some dynamism then becomes the highest priority.

To achieve this goal, one of the means utilized is to subject labor power to more intensive exploitation, so that it will produce a relatively larger portion of surplus value. This is the meaning of the famous “productivity gains”. However, when we examine the history of these gains, we note that they have declined since 1973: whereas the rate of increase of the productivity of labor was 4.4% per year between 1960 and 1973 for the countries of the OECD, between 1973 and 1992 it never rose above 1.6% per year. Increasing productivity has proven to be only a very partial constraint on the fall of the rate of profit. The “new technologies” have not led to the expected results. To the contrary, by further reinforcing the predominance of fixed capital to the detriment of living capital, they have had the effect of lowering the rate of profit, due to the inability of productivity gains to compensate for this decline.

As a result, it is imperative for capital to try a different approach. While, during the 1980s, it never stopped singing the praises of “technological change” and other forms of “modernization” and the advantages they bring in their wake—soon we will have “factories without workers”, who will be replaced by robots and everyone will only work four hours a day, and there will be entertainment, culture, adult education programs—now all that modernist quackery is silenced and what we hear instead is a much more realistic and crude language, one that is, in short, frankly more capitalist: “reduce labor costs”, that is what it says!

What this means is, reduce real wages. Not only the wages of the workers who produce surplus value, but also those of the workers who work in sectors related to the realization of surplus value whose incomes lower profits because of the unproductive nature of their activity. Hence the repeated admonitions of international institutions like the IMF and the World Bank: Reduce the costs of doing business! Repeal minimum wage legislation! More flexibility of labor with regard to pay and hours of labor!

“Taking them as a whole, the general movements of wages are exclusively regulated by the expansion and contraction of the industrial reserve army….”34 With the ejection from the circuit, since 1974, of a growing mass of workers, composed of unemployed people of all varieties, the industrial reserve army is used to hold down the wages of those who still have jobs.

Furthermore, this industrial reserve army exercises its influence on a world scale: circumstances are therefore even more favorable for capital due to the immense reserves of the jobless. Hence the famous “relocations” of business to the other side of the world, where even cheaper labor power can be found. We must point out that these “relocations” do not exclusively follow the West to Southeast Asia route, as many people believe, but also go the other way. “The Asian ‘dragons’ have launched an assault on the British market”, reads the headline of the newspaper Le Monde in its issue of February 1, 1995. Thus, a representative of a Taiwan enterprise explained: “We want to minimize costs by moving closer to the European market. And labor is not cheap in Taiwan; it is no less expensive, in any case, than it is in Northern Ireland. Besides, we have a labor shortage and therefore the labor market is unstable.” For its part, the Korean corporation Samsung (No. 14 worldwide in sales) has decided to establish its operations in northern England and is doing so, as the same article in Le Monde points out, “largely because of its low cost of doing business: labor costs, we are told, are certainly a little higher than in Korea. But productivity is higher here. Thanks to the unemployment crisis in Europe and the significant rise in wages in Korea and Taiwan, the differential is being gradually reduced”.

So, in the guise of a wages “policy”, the job market acts as regulator: this is the only philosophy of “globalized” capital that underlies the reduction of wages in favor of the rate of profit. This process is still underway, as the chart below shows.

[Chart omitted]: Increases in Real Wages for the Lowest Paid Workers (average annual percentage increase or decrease during years indicated). Source: OECD Jobs Report 1994

We see that, during the 1980s, wages fell by 13% in the United States, 10% in Canada and 8% in Australia. They continued to rise, however, in all the other countries surveyed: 5% in France, 8% in England, 18% in Italy and even 25% in Germany. Nonetheless, these OECD statistics must be understood in their context. Thus in France, between 1984 and 1993, the monthly net wages of office employees and blue-collar workers stagnated (see Alternatives économiques No. 22, p. 41). On the other hand, according to Le Monde (February 11, 1995), “wages on the other side of the Channel are now closer to those of Taiwan or Korea than they are to those of the other member countries of the European Union”. And in the United States, there seems to be evidence of a surge in the numbers of “low paid workers”: in 1992, 18% of full-time employees made less than $13,000 a year (this figure is equal to the official poverty line), as opposed to only 12% in 1979 (Le Monde, April 4, 1994).

In any event, a certain disjunction is arising between the Anglo-Saxon countries, where wages are falling, and the other capitalist countries, where wages only display a tendency to stagnate, or even to undergo a major increase, as in Germany.

Which of these two tendencies will prevail? As usual, American capitalism shows the other capitalist countries the road they must follow. To restore the rate of profit to some degree, it is of vital importance from now on not only to put an end to “Fordism” (sharing the profits from productivity increases with the wage workers), but also to reduce wages. In any case, the direction in which we are heading is towards the accentuated pauperization of an increasingly larger mass of workers.

The great last resort: the return to liberalism

Starting in the late 1970s in the capitalist world, we began to hear a whole discourse that maintains that, from now on, only “market forces” are capable of restoring dynamism to the economy. And in order to allow these forces to work, we have to resolve to open up the borders so that the whole world will be one big free trade zone. This is what is called the “return to liberalism”.

This return to liberalism was depicted, by its opponents as well as its supporters, as “a choice”; a wise choice by its supporters, but a mistaken choice by its opponents. We shall see that this “choice” was actually a necessity for capital.

In order to understand why, we shall review some recent history. If we cast a glance back at the old capitalism from prior to 1974, what features does it display? Those of a patched up capitalism, half nationalized, that functioned on the basis of a “mixed economy” that a Marxist like Paul Mattick defined as follows: “‘Mixed economy’ means that a part of the national production remains production for the profit of private capital, while a smaller part consists of state-induced production yielding no surplus value.”35 This kind of capitalism emerged from the crisis of 1929. That crisis had dramatically revealed the insufficiency of demand. That was why, in order to overcome the crisis and prevent it from recurring, governments concluded that public consumption had to be increased, by means of public spending: it was the job of the state to stimulate demand. This was carried out during the 1930s by means of financing giant public works projects and, after 1945, buy way of a whole series of orders for goods from private business: transportation infrastructure, sports stadiums, hospitals, public housing projects, arms production, etc.

In this manner, as soon as there was any sign of a slowdown in economic expansion, the “pump was primed” by means of state-financed production. But where did the state get the money to finance its purchases? Largely from taxes on the profits of private business. This led to the following situation: the state, by submitting its purchase orders to private businesses, returned to them part of the surplus value that it had taken from them, but without this part thereby constituting additional, new surplus value, since it originated in the deductions previously imposed by the state on the private sector in the form of taxes.

This “mixed” functioning of capitalism could only be viable if the private sector produced a large enough quantity of surplus value to finance “public consumption”, which implied a relatively high rate of profit. The decline of the latter, consequent, as we have seen, on the spectacular rise of the technical and organic composition of capital, would lead to the general crisis of 1974, which was a crisis not of overproduction, but of the profitability of capital. From then on, the Keynesian prescription of “public consumption” was dead in the water. It was no longer possible to continue to increase the tax burden imposed on private business at the same time that the “life force” of capitalist production—the rate of profit—fluctuated dangerously. This gave rise to the universal protest of private capital, which cried out: Less government! Lower taxes! Fewer compulsory deductions!

The questioning of the “mixed economy” then became de rigueur. Under the right wing baton of the neoliberals, as also under the left wing baton of the social democrats, a gradual disconnection from the state as an agent of direct economic stimulus began: a whole series of state enterprises were privatized, or else restructured with a view to abolishing them as “public services” and subjecting them to the criteria of profitability. And the state was also put in the crosshairs as an agent of social redistribution: taxes on private enterprise were reduced, resulting in the decline of the “Welfare State”, as the latter saw its sources of income further depleted.

The appeal of the “return to liberalism” is obvious: it is an attempt to provide a means of restoring the rate of profit, allowing the laws of market to operate on their own, and to install the latter as the sole arbiters of the price of labor, eliminating the subsidized public enterprises and even circumventing the nation-state by implementing a borderless “globalized” system of free trade, where the multinationals reign supreme: there are 37,000 multinationals worldwide, with 200,000 subsidiaries; they employ 73 million wage workers and numerous subcontractors; in ten years their investments have multiplied by a factor of four, four-fifths of which were invested in the North and one-fifth in the South; furthermore, they have been transformed into “integrated conglomerates” (industrial groups combined with financial firms), which increases their independence.

Many commentators—from a wide range of perspectives—have criticized Marx’s Capital, accusing him of having based his analysis of capitalism solely on the liberal English economy of the 19th century, when other countries sensibly departed from that model—Germany and France, for example, where the state played an important role in the development of capitalism, which modified the way it functioned. This critique would make more headway after the 1930s, with the appearance of “mixed economies” that witnessed a reinforcement of the role of the state. At that time it was concluded that Marx’s analysis had been invalidated by the facts, by the transition of modern economies to an “organized capitalism” rather than the large-scale economic anarchy ruled by the blind laws of the market that Marx was believed to have deciphered. After that, Marx was reduced to the status of just another 19th century author whom one might read out of curiosity, but who was in any event now obsolete. With the “return to liberalism”, these criticisms of Marx have become outdated. The subsequent development of capitalism confirms his analysis. What he was capable of observing in 19th century England is now, at the end of the 20th century, verified, but this time on a world scale, where vast free trade zones have been established: the European Union (the EEC), the North American Free Trade zone (NAFTA), and Southeast Asia (ASEAN), this triad now being responsible for 95% of world trade. In short, with this “globalized” liberalism that has broken free of national borders and nation-states in order to become “transnational”, “multinational” and “uncontrolled”, never before has capitalism so closely approximated the pure theoretical model described by Marx.

The complaints about this liberal orientation of world capitalism will make no difference, any more than the exhortations for its regulation. “Globalization is not the result,” P. Frémeaux writes in Alternatives économiques No. 23, “of a pure determinism. It is as much the result of the choices made by the governments of the major powers, as it is of the mechanical dynamic of capitalism (…). Which is why we do not have to give up and believe that the forces of the market, from now on globalized, will henceforth be imposed on states, whose sovereignty is limited to their territories, and that they are therefore powerless to control them. Take the current financial disorder, for example: it cannot subsist against the will of the major Central Banks if the latter really wanted to put an end to it (…). Capitalism is not a runaway train that has gone off the rails. It also gives rise to counteracting influences capable of limiting its perverse effects: the demands of the wage workers who are calling for more justice in the South as well as the North, and economic, social and environmental regulations. Against the logic of economic war and the temptation to retreat within national borders, the real challenge is giving globalization a positive meaning.”

An admirable display of gallantry of this kind of contemporary rhetoric that characterizes the vaguely leftist petty bourgeois thinking that, from now on, in the guise of a “reformist” discourse, reduces its goal to a program of support for capitalism (“giving globalization a positive meaning”) at the same time that it tries to convince itself that “capitalism is not a runaway train that has gone off the rails”…. And that it will not be possible to stop, as we shall add!

Thus, obviously, liberalism is no panacea. It is nothing but the only possible form of a capitalism that has reached the end of its cycle. During the 1930s, it owed its salvation to the crutch of the state that helped it to get back on its feet and survive. Today, the state is no longer much help to it. It has become an obstacle for capitalism. Those “who make the decisions” preach that we can dispense with it without any major disruption and that after the Welfare State will come the Welfare Market. We shall observe its first effects.

The return of the crisis dynamic

After 1945, the capitalist economy was characterized by sustained and regular growth, with only a few weak slowdowns that state interventions assumed the responsibility for rapidly terminating. After 1980, growth no longer displayed the same upward course. Thus, for France:

[Chart omitted]: Annual Rise or Fall of GDP in France (in %)

As you can see, while the recovery after the recession of 1975 was quite vigorous (an increase of 4.2% in the GDP), the state having intervened with the help of a budget deficit, after the recession of 1980-1981 (in France there was only a slowdown in economic activity), the recovery was slight and unsteady; afterwards, there was a phase of average activity until 1987, then prosperity until 1989 and finally the crisis arrived that had broken out first in 1991 in the United States, only to spread subsequently to Europe shortly thereafter.

This is a mirror image of the classical industrial cycle that Marx had identified in the 19th century. Some analysts, who are by no means Marxists, also recognize this: it is the return of economic cycles. “For half a century, writes Denis Clerc, public intervention at least had the merit of allowing for a significant reduction of the extent of short-term fluctuations (…). The return of the cycles means that this half-century has come to an end. And that public intervention, henceforth stigmatized, is increasingly giving way to the regulatory mechanisms of the market” (Alternatives économiques No. 20; 2nd trimester of 1994).

If we are to believe the “certified experts” of the system, the recessions of 1974-1975 and 1980-1981 were the result of “two oil shocks”. The crisis of 1991-1993, the first crisis caused by the new liberal course taken by capitalism, the longest (it lasted almost three years) and the most serious the capitalist world has undergone since the crisis of 1929, merits a very different kind of explanation.

In order for the accumulation of capital to proceed, it is not enough to extract sufficient surplus value from exploited labor; it is also necessary to realize this surplus value in the form of money on the market. As Marx emphasizes, however, “[t]he conditions of direct exploitation, and those of realising it, are not identical…. The first are only limited by the productive power of society, the latter by the proportional relation of the various branches of production and the consumer power of society. But this last-named is not determined either by the absolute productive power, or by the absolute consumer power, but by the consumer power based on antagonistic conditions of distribution, which reduce the consumption of the bulk of society to a minimum varying within more or less narrow limits”.36

An objection might be raised in opposition to this analysis, to the effect that Keynesianism, with its various prescriptions of “full employment policies”, “public consumption” and “high wages”, was successful, at least to some degree, in staving off the onset of the limits of reduced mass consumption that Marx evoked. But as we have seen, capitalism’s entry into the final stage of its cycle has rendered Keynesianism obsolete: due to the fall of the rate of profit, the state has had to reduce its taxes on private business, and therefore also to reduce its “public consumption”, while capital has enforced more strict wage standards, and has even reduced real wages, as in the United States and Great Britain. With the rise of unemployment, millions of individuals have seen their incomes reduced to unemployment insurance payments that are also subject to constant reductions and pauperism has returned with a vengeance, affecting entire sections of the population, as in the United States, where 27.6 million people depend, as of January 1994, on government food stamps (Le Monde, April 4, 1994), or as in Great Britain, where 13.9 million people are living in poverty, as opposed to 5 million in 1979 (Le Monde, February 11, 1995). In other words, “the consumer power of society” has been reduced. This is the most important reason for the crisis of 1991-1993, since, as Marx explains, “[t]he ultimate reason for all real crises always remains the poverty and restricted consumption of the masses as opposed to the drive of capitalist production to develop the productive forces as though only the absolute consuming power of society constituted their limit”.37

“[T]o produce … without any consideration for the actual limits of the market or the needs backed by the ability to pay” (Karl Marx, Theories of Surplus Value, Part II, Progress Publishers, Moscow, 1968, Chapter 17, pp. 534-535) is for Marx the cause of the periodic fluctuations of the capitalist economy. With the return to liberalism, the capitalist economy has relapsed into that state of economic anarchy. With “globalization”, almost no one can be controlled. The borderless market, within which the multinationals obey only their impulses for enrichment, increasingly renders the economy more ungovernable by states. In order to remedy this state of affairs, a kind of “world government” would be necessary. But all attempts that have been made to move in that direction have only culminated in results that were the opposite of those intended. Thus, the G7 (the group of the planet’s seven richest capitalist countries), created in 1975, and which has held annual meetings since then, has restricted its efforts to making recommendations that accord with liberal orthodoxy. The World Trade Organization (WTO), which was created recently and replaced the General Agreement on Tariffs and Trade (GATT), has done nothing that goes beyond the latter’s code of good conduct.

Therefore, all the ingredients are present for the cycle of periodic crises to begin again. Denis Clerc was not mistaken when he said that this “alternation, increasingly more distinct, of phases of growth and phases of recession seems very much like a nostalgic photograph. For more than a century, between 1830 and 1940, capitalism was distinguished by such waves of activity” (Alternatives économiques, No. 20). But he forgot to mention how that cyclic movement culminated: the catastrophic crisis of 1929 that still haunts the memories of many people, that is, the bankruptcy of capitalism.

But we must also point out: it culminated in the bankruptcy of capitalism, no doubt, but one that was totally provisional. The reason for this was that, because it had not yet entered into its final stage of its cycle, it still had a significant margin of maneuver to escape the crisis. The problem that confronted it was how to sell its commodities, but it could resolve this problem without seriously threatening its profitability, since its rate of profit was still at a historically high level. That is why it was capable of finding the solution to its difficulties by means of various well-known Keynesian measures.

Today the situation is very different. Capitalism has entered the end-stage of its cycle whose most evident sign is the fall of its rate of profit, which from now on will be manifested in a form that tends towards an absolute decline and no longer a mere tendency. All the measures that it is currently implementing are intended to restore the rate of profit: reduction of wages, both in terms of direct pay and the social wage, and relocations in search of the cheapest possible labor power. In order to implement these policies it is compelled to turn to liberalism, with the market as the sole regulating force. This leads to a reduction in the capacity for consumption on the part of the masses and an ever more perceptible degree of anarchy on the market, and these two factors have the effect of driving capitalism towards a crisis dynamic. Since it can only proceed yet farther in this direction, because this is required by the profitability of capital, the crises can only become more violent until one of them finally triggers its economic collapse: unlike the situation in 1929, a “recovery” by way of public and private consumption will be impossible, because this would directly threaten the profitability of capital, which is already low, and would immediately lead to another impasse for the system.

To repeat, it is not “another 1929” that capitalism is headed for, but something that will have the appearance of a final crisis.

There is no unlimited accumulation of capital. If one does not admit this catastrophic career of capital that ends in “explosions, cataclysms, and crises” that will finally lead to the “violent overthrow” of capitalism (Marx), one must necessarily enter the mystifying universe of its apologists, who see it as a “natural and eternal” social form.


By evoking the end of capitalism in this manner we nonetheless leave an unresolved ambiguity: capitalism can, of course, economically collapse; but for it to really disappear revolutionary action is necessary, otherwise it will only rot in place.

This eventuality was not taken into account by Marx. For him, the final stages of capitalist development implied the exacerbation of its economic contradictions and, as a result, of its social contradictions, because “capital is not a thing, but a social relation between persons, established by the instrumentality of things”.38 In other words, the collapse of capitalism was at the same time the revolt of the working class against the bourgeoisie and its system, as the latter “begets, with the inexorability of a law of Nature, its own negation”,39 its “own grave-diggers”,40 the proletariat.

We are far from such a situation today. That portion of the proletariat that has borne the full brunt of capitalism’s assault—the unemployed, the precarious, the “excluded”—although they number in the millions, do not yet constitute more than a minority in relation to the entire wage earning class. For this reason, the bourgeois class has a sufficient margin of maneuver to contain the serious social disturbances that might suddenly break out: by distributing some crumbs (unemployment subsidies, special long-term unemployment subsidies, make work projects, etc.), it neutralizes this fraction of the proletariat. The situation of the latter also plays the role of a negative, dissuasive example for the rest of the wage workers: the latter still feel, for the time being, relatively safe, and refuse to take action out of fear of losing everything and thus coming to share the fate of the “excluded”. Finally, a subjective factor must be taken into account, which affects society as a whole. By its very ongoing development, capitalism has moulded the world and, consequently, the men who find themselves under its rule, in its own image.

The latter, conditioned and structured by capitalism, have ceased to belong to themselves and become instead, objects. Their thoughts and their actions have been transformed into those of capital, their master, the master of all. With the arrival of what Marx called “the real domination of capital”, alienation has never been so all-encompassing and modern societies have assumed the aspect of a vast system of material and spiritual slavery. The victorious cries of the current apologists for capitalism who are bragging about the triumph of “the market economy” are nothing but the noisy echoes of this alienation of men to capital. Even when they are abandoned and excluded by capital, they feel frustrated because they are disappointed that they no longer belong to it.

From this point on, we should not be at all surprised if capitalism’s entry into its final historical cycle is hardly even noticed. It will be seen as nothing but another “crisis”, that is, a passing misfortune that we have to get through while we wait for the system to recover its strength and once again vigorously continue its forward progress. In order to overcome this apathy and the mental blindness that dominates our epoch, it is obvious that capitalism will have to proceed yet further in its demonstration of its economic and social bankruptcy, and will have to strike down even more numerous masses of humans.

In the meantime, we shall observe nonetheless that the belief in a better future within the framework of capitalism will dissipate (this is demonstrated by the decline of ideologies and reformist organizations), that the faith in the ballot as a means to change the situation is eroding (which can be verified by the increasing level of abstention in elections) and that the myth of the social consensus is beginning to collapse to the point where one sees some bourgeois politicians raise the alarm (“the antagonistic classes have been reconstituted, whereas everyone, for decades, had agreed to dismantle them, declared Philippe Séguin in the last presidential elections. We can see that a great machine to reproduce and even aggravate social inequalities has once again arisen before our eyes”).

These are signs that ideological conformism and social apathy are not destined to last forever. “The passing of an illusion”, which a historian like François Furet41 believes to have diagnosed in communism (which he identifies with Stalinism!) could very well be, in a more or less not-so-distant future, applicable to capitalism itself.

  • 1Karl Marx, Capital, Vol. I, International Publishers, New York, 1967, p. 149.
  • 2Ibid.
  • 3Karl Marx, Theories of Surplus Value, Part II, Progress Publishers, Moscow, 1968, p. 528.
  • 4Karl Marx, Capital, Vol. I, International Publishers, New York, 1967, p. 153.
  • 5Ibid., p. 152.
  • 6Ibid., p. 153.
  • 7Ibid., p. 592.
  • 8Ibid.
  • 9Ibid., p. 593.
  • 10Ibid., p. 594.
  • 11Ibid., p. 595.
  • 12Ibid.
  • 13Ibid.
  • 14Karl Marx, Theories of Surplus Value, Part II, Progress Publishers, Moscow, 1968, pp. 534-535.
  • 15Karl Marx, Capital, Vol. I, International Publishers, New York, 1967, p. 453.
  • 16Karl Marx, Grundrisse. Foundations of the Critique of Political Economy, Penguin Books, Baltimore, 1973, p. 750.
  • 17Karl Marx, Capital, Vol. III, International Publishers, New York, 1967, p. 259.
  • 18Ibid., p. 250.
  • 19Karl Marx, Grundrisse. Foundations of the Critique of Political Economy. Penguin Books, Baltimore, 1973, p. 704.
  • 20Karl Marx, Capital, Vol. I, International Publishers, New York, 1967, p. 623.
  • 21Ibid., p. 614.
  • 22Karl Marx, Capital, Vol. III, International Publishers, New York, 1967, p. 263.
  • 23Ibid., pp. 212-213.
  • 24Ibid., p. 232.
  • 25Ibid., p. 238.
  • 26Quoted by André Gorz in Paths to Paradise: On the Liberation from Work, Pluto Press.
  • 27Karl Marx, Capital, Vol. I, International Publishers, New York, 1967, p. 446.
  • 28Pierre Souyri, La dynamique du capitalisme au XXe siècle, Payot, Paris, 1983.
  • 29Karl Marx, Capital, Vol. I, International Publishers, New York, 1967, p. 578.
  • 30F. Chesnais, The Globalization of Capital, Paris: Syros Editions, 1994 (first edition) and 1997 (revised edition).
  • 31André Gorz, Les chemins du paradis: L’agonie du Capital, Éditions Galilée, 1983. English edition: Paths to Paradise: On the Liberation from Work, Pluto Press, 1985.
  • 32Pierre Souyri, La Dynamique Du Capitalisme Au XXe Siecle, Payot, Paris, 1983.
  • 33Karl Marx, Grundrisse. Foundations of the Critique of Political Economy, Penguin Books, Baltimore, 1973, p. 750.
  • 34Karl Marx, Capital, Vol. I, International Publishers, New York, 1967, p. 637.
  • 35Paul Mattick, Economic Crisis and Crisis Theory, M. E. Sharpe, White Plains, 1981, p. 139.
  • 36Karl Marx, Capital, Vol. III, International Publishers, New York, 1967, p. 244.
  • 37Ibid., p. 484.
  • 38Karl Marx, Capital, Vol. I, International Publishers, New York, 1967, p. 766.
  • 39Ibid., p. 763.
  • 40Karl Marx and Frederick Engels, Manifesto of the Communist Party, in The Marx-Engels Reader, Second Edition, Robert C. Tucker, ed., W. W. Norton & Company, New York, 1978, p. 483.
  • 41F. Furet, The Passing of an Illusion: The Idea of Communism in the Twentieth Century, The University of Chicago Press, Chicago, 1999.