A Political Revolution

In the system known as capitalism there is a class struggle between workers and capitalists and the reason is not difficult to understand. The means of production today are privately owned. A small section of society own all the factories, mines, mills, workshops and through that ownership they are able to live a life of ease and luxury. The other section owning nothing are forced to sell themselves as workers to the owners of property in order that they get food, clothing, shelter for themselves and their wives and children. The mode of production being commodity production for profit, the return to the worker takes the form of a money wage. This wage is the money expression of the value of the particular worker’s labour power. A navvy and an engineer received different amounts of money as wages but both of these workers received the value of his particular labour-power. This value was determined by how much it cost to produce his kind of labour power.

All commodities, labour-power included, had their values determined in the same way, by the amount of socially necessary labour embodied in them. In the process of production the worker produced a surplus over what as returned to them in the form of wages. This was the reason the capitalist employed them and was the sole aim of the capitalist system. The worker found through experience that their wage enabled them to purchase only the cheapest necessities of life and to maintain even this they had to continually struggle with their employer. To assist them in their struggles workers formed trade unions but still their lives are stories of poverty, degradation and misery.

Many political parties claim to exist only for the purpose of assisting the working class and have drawn up programmes of social reforms which they all guaranteed would, if the workers would only trust them and vote for them; solve all the ills which afflicted the working class. The Socialist Party of Great Britain has no reforms on its programme and is opposed to all parties who asked the workers to support a reformist policy. Reform of capitalism would still leave workers in their slave position. Reforms, apart from the fact that in many cases they had proven worse than the evil which they set out to remedy, were but the normal features of capitalism. Capitalism and their representatives had been busy reforming the capitalist system since it had been established but in spite of all their reforms the condition of the working class was worse today than ever it was in its history. Defenders of capitalism boast reform is the antidote to revolution.The parties of the Left with their ever-changing lists of reforms should be an example to the workers of the futility of wasting valuable time and energy attempting to reform a system which could not be reformed in the interests of the working class.

Social reform being no solution to the ills suffered by the workers the Socialist Party pointed out that all the evils could be traced to the one cause and to this one cause only – private property. Take a look around and see the signs “Private Property” or “No admittance except on business ”. To the socialist these were advertisements of the cause of poverty, slums, disease, crime, prostitution, war and all the other curses of the human race. Having found the one cause for all our troubles we find the remedy almost automatically - socialism. Abolish private property with production for profit and establish a new system of society based on common ownership with production for use. This is what socialism means.

This is something worthwhile fighting for and the way to achieve such a new system of society was by the workers first of all getting to understand their enslaved position in present day capitalism, to organise with others, in order to take revolutionary political action to control the State machine in order to transform society from the basis up. This meant the action of a class conscious majority of the workers. Minorities are of no use. We have a class conscious minority today yet it is helpless. That minority have to go on broadcasting the principles of socialism until the majority accepted them.

For the capitalist class mere ownership of wealth is not enough. They require a means to protect that ownership. These means are the police and the armed forces which are under the control of whichever political party having a majority of representatives in Parliament. Whoever had control of these forces are the masters of the situation. History has much to say on this point which disproves the idea that mere ownership in some miraculous manner confers power on the owners. In England, from the 11th to the 14th century, the woollen merchants were the most economically important class, with all their wealth they were helpless and were fleeced right and left by those who had political power – the feudal aristocracy. The history of every country has been the same in this respect. The capitalist class, under feudalism in spite of all their wealth were helpless until they wrested political power from the then dominant class in society. If we study the issues raised at a general election in modern times we see, plainly, the struggle between sections of the capitalist class to get political power in order that their particular interests may be served. “Economic power” is another of the dangerous illusions that the workers must get out of their minds before they can win their emancipation. In the 1926 General Strike we had an example of the masters using their political control to smash discontent among the workers. History as a matter of fact was full of such examples. So long as the workers leave this weapon in the hands of their masters they were helpless. Syndicalism, street fighting and other methods of force are doomed to failure and only lead to another bloodbath to those workers who would enough to attempt them. Class conscious political action to get control of the State machine is the only viable method open today. The SPGB. advocates that the workers must organise on the political and economic field on class lines before they can abolish capitalism. Political action is necessary to end the system, and the act of revolution is political. The state will not commence to “wither away” until it is in the hands of the revolutionary workers who will slowly but surely build up the new order of society thus abolishing the State functions. The state is a necessary evil, as Marx shows, which is transmitted to the workers through revolution. Will we merely put a cross on our ballot papers in order to get socialism, and the kind capitalists will then hand over? No. when the workers understand Socialism and take the action necessary to obtain it, the capitalists will not be asked to “hand over”. The workers will take over and the bosses’ opinions on the matter won’t matter in the slightest. Marx and Engels made it quite clear that political action meant that action which had for its object the control of the governmental powers which controlled the armed forces of the state. Engels pointed out that the workers would have to be in a majority, and thoroughly understanding the necessity for such action before they could establish socialism.  Engels described universal suffrage as being one of the sharpest weapons of the working class had. Once the workers have that knowledge, and not until they have it, then the business of emancipation will be a relatively simple matter.

The pessimism of our Leftist opponents that we will never get a class conscious majority is ably answered by Frederick Engels when he writes “When it comes to a matter of the complete overthrow, the masses must participate, must know what is at stake”. All through the later writings of Marx and Engels we find the position put quite plainly that a class conscious majority of workers, in order to establish Socialism, must get control of the State machine. Political power is the power to rule. The capitalist class have that power to-day and the working class give them that power at every election. When the workers understand and desire socialism they will organise in the socialist party in order to raise themselves to the position of ruling class, by capturing political power. With that power in their possession they will set about the task of building a new order of society which will conform to the interests of all."

The SPGB did not concern itself with petty reforms. We want the whole world, everything in it and on it, to be the common property of all mankind regardless of colour or sex; all people would take according to their needs and give according to their ability. Capitalism had fulfilled its historic role in solving the problem of production. Now that an abundance of wealth was capable of being produced the only meaningful struggle was for the overthrow of capitalism, which would result in the major problems being solved. The real task to organise and agitate amongst fellow workers for the overthrow of capitalism by the majority of the world’s population using democratic processes if available. “Peacefully if possible, violently if necessary “ was the SPGB’s viewpoint. Instead of fighting for such reforms one should remember Marx when he said “away with the conservative motto, a fair days work for a fair days wage and inscribe on your banner the revolutionary watchword ABOLITION OF THE WAGES SYSTEM”

Marx and socialism

In an age where the internet provides us with unlimited access to the direct sources there appears to be no limits to the misunderstanding and distortion of Marx. In books and articles there is continuous reference to Marx, attacking him from all sides for claims that he never made. How can it be that the ideas of Marx can be so completely misunderstood and distorted? One reason is that Lenin and the Bolsheviks appropriated Marx's theory and tried to convince the world that their practice and theory follow his ideas that instead of the role of worker being abolished, it is extended to all men. Selectively quoted and out of context parts of Marx serve as the official ideology of the regime. Also the reformist social democrats, believed they were the enemies of capitalism but for them, socialism is not a society fundamentally different from capitalism, but rather, just a form of capitalism in which the working class has achieved a higher status. iI is, as Engels described it, "the present-day society without its defects."  They genuinely do believe in a better world – but they believe it can be achieved by a kinder, gentler capitalism and that profits can be used to  promote environmental, anti-poverty, and certain other noble causes. But they don’t dare to ask – or to admit – where these very profits come from: the unpaid labor of the entire working class. The compassionate capitalists believe that applying market principles to philanthropy, charity, and government will help lift the world out of poverty, cure all famine and disease. However, they fail to recognise that the exploitation at the core of capitalism is what engenders the very poverty, famine, and disease that their philanthropic and charitable efforts are attempting to relieve. They think that those who are “privileged” to enjoy great wealth should take up the responsibility of sharing a tiny slice of it with poor people – and don’t recognise that the wealth/poverty divide was created by capitalism itself. Marx and Engels explain in the Communist Manifesto: "The Socialistic bourgeois want all the advantages of modern social conditions without the struggles and dangers necessarily resulting therefrom. They desire the existing state of society, minus its revolutionary and disintegrating elements. They wish for a bourgeoisie without a proletariat.The bourgeoisie naturally conceives the world in which it is supreme to be the best… [It requires] in reality that the proletariat should remain within the bounds of existing society, but should cast away all its hateful ideas concerning the bourgeoisie… It is summed up in the phrase: the bourgeois is a bourgeois—for the benefit of the working class."

There is no greater misrepresentation of Marx than that which is to be found in the thought of the state-capitalists, the reformists, and the avowedly capitalist opponents of socialism alike, all of whom assume that Marx wanted only the economic improvement of the working class, and that he wanted to abolish private property so that the worker would own what the capitalist now has. The truth is that for Marx the situation of a worker in a Russian "socialist" factory, a British state-owned factory, or an American factory such as General Motors, would appear essentially the same. Marx's concept of socialism is not a society of regimented, automatized individuals, regardless of whether there is equality of income or not, and regardless of whether they are well fed and well clad. It is not a society in which the individual is subordinated to the state, to the machine, to the bureaucracy. Even if the state as an "abstract capitalist" were the employer, even if "the entire social capital were united in the hands either of a single capitalist or a single capitalist corporation," this would not be socialism. Socialism, for Marx, is a society which serves the needs of man. Socialism for Marx, meant neither the mere abolition of poverty nor the  abstract idea of fairness which he rejected so scathingly in his Critique of the Gotha Programme. Least of all did Marx see socialism in which “representative” power and authority replaced individual power and authority over men.

It should be clear the popular idea of the nature of historical materialism is erroneous. Marx's "materialistic" or "economic" interpretation of history has nothing whatsoever to do with an alleged "materialistic" or "economic" striving as the most fundamental drive in man. Marx has  been criticised for presenting politics, culture, religion, etc. as simple effects of a one-way economic cause.  The popular view assumes that in Marx's opinion the strongest psychological motive in man is to gain money and to have more material comfort; if this is the main force within man, so continues this "interpretation" of historical materialism, the key to the understanding of history is the material desires of men; hence, the key to the explanation of history is man's belly, and his greed for material satisfaction. It is the understanding of history based on the fact that men are "the authors and actors of their history." Marx saw that political force cannot produce anything for which there has been no preparation in the social and political process. Hence that force, if at all necessary, can give, so to speak, only the last push to a development which has virtually already taken place, but it can never produce anything truly new. "Force," he said, "is the midwife of every old society pregnant with a new one."

Marx did not believe that there is no such thing as the nature of man; that man at birth is like a blank sheet of paper, on which the culture writes its text. Nor was Marx ever tempted to assume that "human nature" was identical with that particular expression of human nature prevalent in his own society. For Marx the aim of socialism was the emancipation of man, and the emancipation of man was the same as his self-realisation and development of the individual personality.

Capitalism has obviously changed in the hundred years since Marx and Engels wrote yet in the basic relations and structures which distinguish capitalism from feudalism and socialism, however, it has changed very little, and these are the main features of capitalism addressed in Marx's theories. The workers' relationship to their labour, products and capitalists are basically unchanged from Marx's day. Workers, for example, may earn more money now than they did in the last century, but so do the capitalists. Consequently, the wealth and income gaps between the two classes is as great or greater than ever.

Marx wrote no “Utopia” of the kind that earlier writers had produced – writings based only on the general idea of a society from which the more obvious evils of the society in which they lived had been removed. But from the general laws of social development Marx was able to outline the features of the new society and the way in which it would develop.

The capitalist class would love for class struggle to just be considered an old-fashioned notion from the past but the class struggle -- the conflict between the capitalists and the workers -- is at the very heart of the capitalist system. The majority of people would love to live in a world free of poverty, unemployment, racism and war. This kind of world is only possible under socialism. Most workers today would readily agree that this is the kind of world they would want for themselves and future generations. But they think it’s a pipedream yet it is the task of the working class to turn this vision into a reality. By learning the lessons of the class struggles that went before us and by applying our power workers develop revolutionary class consciousness. Our socialist perspective in no way means that we do not defend against the immediate attacks today. On the contrary, it is absolutely necessary, and socialists make good fighters for today’s struggle. But in order to fight most effectively, workers also have to understand that there can be no lasting concessions from the capitalist system. To achieve abundance for all, the working class will have to organise and build a genuine socialist revolution.

Deterministic - not us

The term “economic determinism” and the interpretation of Marx’s Materialist Conception of History as economic determinism is found in a mixed collection of opponents of Marx. Those who did hold that view were necessarily committed to the automatic “collapse of capitalism” concept. Some said rather mechanically  that all we had to do was to sit back with folded arms and watch it happen. The S.P.G.B. never subscribed to the belief which was popular among so many social democrats before the First World War that ‘history’ would bring capitalism to a point where it would be forced to collapse.

Marx of course did not hold such a view, as his summary statement of the Materialist Conception of History in his Introduction to his “Critique of Political Economy” makes quite clear. He did indeed hold that “The mode of production of the material means of existence conditions the whole process of social, political and intellectual life” and that “with the change in the economic foundations the whole vast superstructure is more or less rapidly transformed”, and that there are in history “progressive epochs in the economic system of society” (the Asiatic, the ancient, the feudal and the modern bourgeois), and that “bourgeois productive relationships are the last antagonistic form of the social process of production”, and “with this social system, therefore, the prehistory of human society comes to a close”. But vital to the whole conception for Marx was that it proceeds through periods of social revolution in which” men become conscious of this conflict and fight it out”.  In the “Communist Manifesto” it was put in the phrase that history “is the history of class struggles”.

In the Socialist Standard (August 1910) Fitzgerald in debate with a Tory is reported as follows:-
“his opponent still persisted in saying that Marx stated that the economic was the only factor, and that man was determined by his surroundings, and in view of that he would read Marx’s own words which were: “The sum total of these relations of production constitutes the economic structure of society – the real foundation upon which rests the legal and political superstructure. Marx also said ‘Man makes his own history, but he does not make it out of the whole cloth”.

There were many articles in the Socialist Standard on the Materialist Conception of History and none put the view attributed to the S.P.G.B. an economic determiinist .

“Karl Marx in Current Criticism” by Adolph Kohn Socialist Standard, March 1913 went over the whole of Marx’s contribution to Socialist thought, including the M. C. of  H. That part reads like a paraphrase of Marx’s summary in the “Critique”. It did not put the ” automatic process” “economic determinist” point of view but instead, as Marx did, on the vital element of class struggle. Among the statements made by Kohn are:
“History since the passing of Primitive Communism had been a history of class struggles”. This class struggle is the cardinal principle of the socialist party”. So for Kohn a decisive factor was the class struggle. 
“Marx rescued Socialism from the hands of the Utopians and placed it upon a foundation of scientific fact. Not moral appeals but organised political action was the way to fight the capitalists. Society, said Marx, moved not because of changing morals, but under the pressure of growing economic forces making a change in social forms inevitable”.

How completely the S.P.G.B. rejected “economic determinism” is shown in the pamphlet “Why capitalism will not collapse” (1932), as for example in the passage:-

“The lesson to be learned is that there is no simple way out of capitalism by leaving the system to collapse on its own accord. Until a sufficient number of workers are prepared to organise politically for the conscious purpose of ending capitalism, that system will stagger on indefinitely from one crisis to another”.

Determinism

Marx’s motto was to “Doubt everything”.

Many critiques basically accuses Marx of a economic determinism which makes men puppets in the hands of economic forces.

 Marx’s approach to history is better read in what is known as the Preface to a Contribution to the Critique of Political Economy but receives a rather better exposition in the Communist Manifesto. Marx’s scientific method was to proceed by simplifying concrete and complex manifestations into an abstraction, which becomes less and less complex until reaching the simplest conception. Then, by systematically adding complicating factors there is a return journey towards empirical reality. Marx was a believer in abstraction, systematic analysis, and successive approximations to a reality too complex to grasp directly. “Scientific socialism” was not so much the argument itself but the means by which the argument was first thought out and the habitual mode of thinking of the individual which was both open-minded and sceptical, willing to embrace or drop an idea depending on the evidence, willing to change the theory if the evidence demands it.

People makes their own history. Nobody has everything predetermined for him or her. That is not Marxism. The Material Conception of History does not deny the influence of ideas and it sets out to explain where ideas come from, as against those idealists who say that ideas have an independent existence, and are the primary cause of social change. Marx presented a theory of social change that locates the ultimate causes of change within the material and economic conditions of life that we have to examine the underlying economic factors. This does not commit Marx to a form of economic determinism which falsely argues that only the economics is of significance, nor does it mean that he denied the importance of ideas in social change but it does mean to understand the complexity of any society, to understand the complex pattern of development of that society, then an understanding of its economic development is crucial to an understanding of its politics, its culture and its social development.

From the Preface to the Critique : “In the social production of their life, men enter into definite relations that are indispensable and independent of their will, relations of production which correspond to a definite stage of development of their material productive forces”.
Engels was asked a question in 1894 about the “relations of production”, and he answered it on 25th January, 1894 by listing what constituted “the relations of production”. First, the entire technique of production and transport. Second, the geographical basis in which they operate. Third, the survivals of earlier stages of economic development. Fourth, the external environment which surrounds this form of society. Engels was saying that economic relations must not be interpreted narrowly, that they go into a whole field, that they take in not merely the technique of production, but a number of other things as well. In the same letter, Engels emphasised the point that whilst it is the economic conditions which ultimately condition historical development, it should not be overlooked that all the derivative factors, political, juridical, philosophical, religious and artistic, not only interact with each other but also “react upon the economic basis”. Engels is saying that it should be recognised that there is an economic basis and that it produces a superstructure corresponding to it, but these various aspects of the superstructure interact with each other, and all of them react on the economic basis itself, so things are not simply in a watertight compartment like economic basis and the rest, nor should it be thought that the rest is simply the result of the economic basis.

Engels wrote in 1890 “We make our history ourselves, but in the first place under very definite assumptions and conditions. Among these, the economic ones are ultimately decisive, but the political etc., ones and even the traditions that haunt men’s minds also play a part, though not the decisive one…In the second place, however, history is made in such a way that the final result always arises from conflict between many individual wills of which each in turn has been made what it is by a host of particular conditions of life…Marx and I are ourselves partly to blame for the fact that the younger people sometimes lay more stress on the economic side than is due to it. We had to emphasise the main principle vis-à-vis our adversaries who denied it, and we had not always the time or the opportunity to give their due to the other elements involved in the interaction.” It is obvious that Engels is far from being a determinist.

Nor did Marx ever made the assumption that capitalists and their governments always understand what policies are really in their best interests. The situation facing the capitalist class is obviously confused and certain sections come into conflict, for example, protectionists and free traders. The Material Conception of History explains how basic ideas develop, and that once the ideas have been developed, the individual who has accepted them can take on family, group or class ideas which may lead them to act against their own material interest. In the Communist Manifesto it is pointed out that in every revolutionary period, some sections of the old ruling class come over to the side of the revolution. Marx and Engels also argued that individuals in the capitalist class who have raised themselves to the level of comprehending theoretically the historical movement as a whole, can go over to the socialist movement. These people can hardly be said to have been acting out of their own personal individual interest such as Engels the factory owner. During the Spanish Civil War a call went out for an International Brigade, and workers from all over the world set out for Spain. To suggest that they were doing this out of monetary interest is, or course, absurd. But it presents no problem for the MCH. They had developed an idea of working class solidarity against oppression.

Marx says “the tradition of all past generations weighs like an incubus upon the brain of the living”, meaning, of course, that the ideas of the last social system persist into the new social system. Marx gave examples of the way in which old ideas carry on into the minds of new generations, and he dealt particularly with the way revolutionaries themselves do it. When a revolutionary comes forward, aiming to revolutionise society, the first thing he has to do is win the support of the masses of the population, peasants, workers or others. Revolutionaries, whether they think this out clearly or not, invariably hark back to some previous revolutionary situation. The point being that ideas, once they have been developed, attain a semi-independent existence of their own, and persist in their influence for quite a long time. As Marx always emphasised, you cannot judge a movement by its slogans and banners. In the course of economic development, ideas are brought forward and when these have developed, people can hold them quite passionately apart from their economic basis.

Marx and Engels looked at the development of capitalism. Looked at what was going on and attempted to say where it would lead. They laid down a general proposition.

Plague on both houses

The Left-wing have just not been interested any criticism of what has become a dogma in their circles: that Socialists are duty-bound to support struggles for "national liberation". The "revolutionary" Left simply "trot" out the old anti-imperialism position of supporting the weaker country against imperialist aggression which refuses any real class analysis of war.

Lenin wrote a pamphlet which he entitled Imperialism, the Highest Stage of Capitalism. In it he argued that, through a process which had been completed by the turn of the century, capitalism had changed its character. Industrial capital and bank capital had merged into finance capital, and competitive capitalism had given way to monopoly capitalism in which trusts, cartels and other monopolistic arrangements had come to dominate production. Faced with falling profits from investments at home, these monopolies were under economic pressure to export capital and invest it in the economically backward parts of the world where higher than normal profits could be made. Hence, Lenin went on, the struggle by the most advanced industrial countries to secure colonies where such "super-profits" could be made. When, after 1917, Lenin became the head of the Bolshevik regime in Russia the theory was expanded to argue that the imperialist countries were exploiting the whole population of the backward areas they controlled and that even a section of the working class in the imperialist countries benefited from the super—profits made from the imperialist exploitation of these countries in the form of social reforms and higher wages, Lenin argued that imperialism was in part a conscious strategy to buy off the working classes in the imperialist countries. His evidence consists of one quote from arch-imperialist Cecil Rhodes , and one from Engels to the effect that the workers of England "merrily share the feast" of its colonies.
Firstly his analysis is out of date when applied to the current situation. Perhaps more importantly Lenin's theory of imperialism Lenin's theory of imperialism pitted the working class of undeveloped countries against that of the developed ones. It led to upholding national interest against class interest. Lenin's position was not a mistake. The Labour Aristocracy theory had the political purpose of enabling the Bolsheviks to argue for the workers in the colonies to form united fronts with their local ruling classes against Imperialism. This in turn had the aim of dividing the working class internationally, and turning it into cannon fodder for capitalist war. Lenin's expanded theory made the struggle in the world not one between an international working class and an international capitalist class, but between imperialist and anti—imperialist states. The international class struggle which socialism preached was replaced by a doctrine which preached an international struggle between states.

The whole thrust of Marx's own analysis of capitalism was that the workers movement would first triumph in the economically advanced parts of the world, not in a relatively backward economic area like Russia. Lenin explained away this contradiction by arguing that Marx had been describing the situation in the pre—imperialist stage of capitalism whereas, in the imperialist stage which had evolved after his death, the capitalist state had become so strong that the breakthrough would not take place in an advanced capitalist country but in the weakest imperialist state. Tsarist Russia had been the weakest link in the chain of imperialist countries and this explained why it was there that the first "workers revolution" had taken place. This was tantamount to saying that the Russian revolution was the first "anti—imperialist" revolution, and in a sense it was. Russia was the first country to escape from the domination of the Western capitalist countries and to follow a path of economic development that depended on using the state to accumulate capital internally instead of relying on the export of capital from other countries.

In the early days of the Bolshevik regime, when Russia was faced with a civil war and outside intervention by the Western capitalist powers, Lenin realised that this was a card he could play to try to save his regime. Playing the anti -imperialist card meant appealing to the "toiling masses" of Asia not to establish socialism but to carry out their own anti-imperialist revolutions. The 'super-exploited" countries were to be encouraged to seek independence as this would weaken the imperialist states, who were putting pressure on Bolshevik Russia. This strategy was presented to the workers movement in the West as a way of provoking the socialist revolution in their countries. Deprived of their super— profits, the ruling class in the imperialist countries would no longer be able to bribe their workers with social reforms and higher wages; the workers would therefore turn away from reformism and embrace revolution.

After Lenin's death in 1924, this strategy of building up an "anti-imperialist" front against the West was continued by his successors. Because it taught that all the people of a colonial or a dominated country had a common interest in obtaining independence, i.e. a state of their own, it was very attractive to nationalist ideologists and politicians in these countries. They called on all the inhabitants of the country they sought to rule to unite behind them in a common struggle to achieve independence. As a result, in these countries "socialism" became associated with militant nationalism rather than with the working-class internationalism it had originally been. The political struggle there came to be seen as a struggle, not between the working class and the capitalist class, hut as a struggle of all patriotic elements— workers, peasants and capitalists together—against a handful of traitorous, unpatriotic elements who would have sold out to foreign imperialists. They called on all the inhabitants of the country they sought to rule to unite behind them in a common struggle to achieve independence. As a result, in these countries "socialism" became associated with militant nationalism rather than with the working—class internationalism it had originally been. The political struggle there came to be seen as a struggle, not between the working class and the capitalist class, hut as a struggle of all patriotic elements— workers, peasants and capitalists together—against a handful of traitorous, unpatriotic elements who would have sold out to foreign imperialists.

Marx and Engels had little to say on the subject of imperialism. Their remarks on colonialism and foreign trade, particularly the section on counter-tendencies to the tendency of the Falling Rate of Profit, have been used to give authority to other theories and blown up out of proportion (Capital Volume 3 ) These three pages were used to justify anti-imperialism, but all they basically say is that a national capital tries to avoid the crisis caused by the Falling Rate of Profit, which in turn is caused by the increase in the ratio of constant to variable capital, of machinery to workers, by investing in foreign countries. Briefly, The Falling Rate of Profit is explained by the fact that capitalists are forced by competition to produce cheaper goods by increasing the ratio of machinery to workers. Because labour is the only source of value, the rate of profit is given by dividing the proportion of living labour in the product by the proportion of dead labour, or machinery. This rate must fall as the proportion of machinery rises. Capital invested "at home", in production for foreign trade, can also yield a higher rate of profit
"because it competes with commodities produced by other countries with less developed production facilities, so that the more advanced country sells its goods above their value". This enables the more advanced country to dominate the less advanced, by making more profit. Capital invested directly in production in the colonies also produces more profit: "the reason why this can yield higher rates of profit is that the profit rate is generally higher there on account of the lower degree of development, and so too is the exploitation of labour, through the use of slaves and coolies, etc." What this passage means is that a higher rate of profit is obtainable in countries where exploitation is less developed, where more variable capital (labour) is required to turn out a given quantum of value from a given unit of constant capital (machinery).

Marx doesn't make too much of this counter-tendency to the Falling Rate of Profit. He adds that though the more advanced country "receives more labour in exchange for less", it is all "pocketed by a particular class, just as in the exchange between labour and capital in general". Both foreign trade and capital export are just particular examples of capitalism in general. They are not qualitatively different from what capital does within its "home" country. The "super-profits" of anti-Imperialist theory are, in other words, simply larger quantities of ordinary profits. Taking over competitors with less developed production facilities by destroying them by selling cheaper goods, and taking advantage of these less developed facilities to make more profit, is part of capital's daily life. Moralistic protest about the unfairness of imperialism, as opposed to ordinary capitalism, is an attempt to confuse us about the nature of the beast. (The enslavement of Africans was qualitatively worse than the forced deportations of the English, Scots and Irish poor, but if a capitalist power is more savage and parasitic abroad than it is at home, that is only because the class struggle at home has restrained it. If "First World" workers have been "bribed", that is because they have forced the bosses to bribe them.)

Marxian economics does not measure the level of exploitation by how high or low wages are but by reference to the amount of surplus value produced as compared with the amount of wages paid, whether high or low. By this measure the workers of the advanced countries were more exploited than those of the colonies, despite their higher wages, because they produced more profits per worker. Lenin failed to understand why different rates of wages prevail in different countries. According to him, wages are higher in imperialist countries because the capitalists there bribe their workers out of the superprofits which they earn from exploiting the subjugated countries. Marx's explanation as to why wages were higher in these countries. Both productivity and the rate of exploitation (ratio of paid to unpaid labour) were higher there:
"The more productive one country is relative to another in the world market, the higher will be its wages compared with the other. In England, not only nominal wages but (also) real wages are higher than on the continent. The worker eats more meat, he satisfies more needs. This, however, only applies to the industrial worker and not the agricultural labourer. But in proportion to the productivity of the English workers their wages are not higher (than the wages paid in other countries)" (Theories of Surplus Value).
A lower rate of wages does not make any one country any less capitalist than another: The ruling class in all countries pay workers as much as they think they have to, calculated from:
a) the need for workers to stay alive and, to a greater or lesser degree, healthy,
b) the shortage or otherwise of workers capable of doing the job, and
c) the class struggle
(Where does a wage rise gained by struggle end and a bribe begin? Lenin's position implies that British workers should deduce what proportion of their pay checks are the proceeds of the exploitation of the colonies, and hand that proportion back to their employers, declaring their refusal to be bribed.)

"The different states of the different civilised countries, in spite of their motley diversity of form, all have this in common, they are based on modern bourgeois society, only one more or less capitalistically developed" (Critique of the Gotha Programme, 1875).
A country may be highly industrialised or a developed agricultural one or the chief supplier of raw materials for industry or whatever. This happens due to the division of labour amongst the various capitalist countries.

Another member of the Bolshevik party, Nikolai Bukharin, presented a different theory of imperialism which paid lip-service to the labour aristocracy position, but placed more emphasis on the necessity for revolution. The reasoning behind Bukharin's theory was if it could be shown that capitalism was inevitably divided into war-mongering states, that hence the horrors of the first world war were going to be repeated until capitalism was overthrown, this would constitute a convincing case for revolution. Bukharin tried to show a contradiction between nation states and international capitalism. Capitalism has created the world economy, the material basis of communism, but "national economies" and "state capitalist trusts" contradict this, leading to imperialism and war. Nation states were the "forms" which helped develop the "forces of production", but now they are "fetters" on their further development. His book Imperialism and World Economy was intended to show that imperialism is an inevitable stage of capitalism, in order to refute the possibility of a peaceful solution to the first world war. This was in turn necessary in order to oppose the "centrists" among social democracy, who were trying to sit on the fence on the question of the necessity of a proletarian revolution to end the war.

Lenin and Bukharin both claimed that Kautsky had completely abandoned Marxism, and now believed that capitalism could reform itself, eliminating its nasty bits, and evolve into a peaceful new world order. Kautsky actually said "What Marx said of capitalism can also be applied to imperialism: monopoly creates competition and competition monopoly. The frantic competition of giant firms, giant banks and multi-millionaires obliged the great financial groups, who were absorbing the small ones, to think up the notion of the cartel. In the same way, the result of the World War between the great imperialist powers may be a federation of the strongest, who renounce their arms race. Hence from the purely economic standpoint it is not impossible that capitalism may still live through another phase, the translation of cartellization into foreign policy: a phase of ultra-imperialism, which of course we must struggle against as energetically as we do against imperialism ."
Of the two theories, imperialism and Kautsky's concept of ultra-imperialism which has best stood the test of time? Capitalism has proved itself more flexible than many of its critics realised. Is there any reason why single capitalist firms should be tied to one state? It is possible for capitalism to dissolve particular national states and replace them with larger entities, such as the European Community?

Rosa Luxemburg's contribution to the debate on imperialism was her opposition to the idea that imperialism could be opposed by supporting national liberation struggles. Luxemburg's arguments, based on the experience of the Polish working class in its struggle against "its" poor oppressed national bourgeoisie, have been largely forgotten yet a significant section of the Bolsheviks supported her views against Lenin's "right of nations to self-determination". Rosa Luxemburg accused Lenin as having "thrown the greatest confusion into the ranks of socialism," and goes on to state: "The Bolsheviks have supplied the ideology which has masked the campaign of counter-revolution; they have strengthened the position of the bourgeoisie and weakened that of the proletariat ... With the phrase about the self-determination of nations the Bolsheviks furnished water for the mills of counter-revolution and thus furnished an ideology not only for the strangling of the Russian Revolution itself, but for the planned counter-revolutionary liquidation of the entire World War." She describes how during the course of the Russian Revolution "Contrary to what the Bolsheviks expected, one after another the liberated "nations" took advantage of the freshly granted freedom to take a position of deadly enmity to the Russian Revolution, combining against it with German Imperialism... of course it is not the 'nations' by whom that reactionary policy is carried on, but only the bourgeois and petty-bourgeois classes ... who have converted the national right of self-determination into an instrument of their counterrevolutionary class policy."

But eventually Lenin's views won the day, and the Communist International supported national liberation movements and thus the defeat of the working class in China, Germany, etc. The most obvious reason for the success of Lenin's views was the power of the Bolshevik state. It had both the means and very good reasons for supporting national liberation struggles. The self-determination of countries national policy of Lenin did not prove fatal to Bolshevik rule although it was true that large areas remained separate from Russia and become reactionary States, but the power of the Bolshevik state proved stronger than ever. Bolshevik Russia existed not as what it was at the beginning, not as the starting point of the world revolution, but as a bulwark against it. Lenin's theory of imperialism had contained the seeds of such a shameful outcome from the start as it made the most significant struggle at world level not the class struggle but the struggle between states, between so-called anti— imperialist and progressive states and so— called imperialist and reactionary states. This was a dangerous diversion from the class struggle and led to workers supporting the killing in wars of other workers in the interest of one or other state and its ruling class.

Anti-imperialism is the slogan of local elites. Anti-imperialism is a doctrine long used by capitalists in relatively weak countries to try and pursue their own ends. We reject nationalism as anti-working class because it has always tied the proletariat to its class enemy and divided it amongst itself: the workers have no country.
Anti-imperialist nationalism is the ideology of an actual or aspirant capitalist class that seeks the way to its own independent state blocked by imperialism and therefore must mobilize the masses to help break down this obstacle.The logic of such movements is to subordinate the interests of workers to those of the bourgeois leadership and that such movements can tie their movement to presently supportive states that may well be prepared to use it as a bargaining chip in their pursuit of their own geopolitical interests.Different regimes that may now present themselves as anti-imperialist have a history of collaborating with imperialism. It is of the essence of bourgeois nationalists that, when imperialism prevents them for building their own independent capitalist state, they may lead struggles against it, but they are striving to carve out a place for themselves within the existing system, not to overthrow it. This means that, sooner or later, they will come to terms with imperialism. Successful anti-imperialism becomes imperialism. This is well illustrated by the example of Germany. The Communist International actually offered some support to the Nazis in the early twenties on the grounds that they were a national liberation struggle. Germany was an oppressed nation, occupied and looted by French and British imperialism. The Nazis fought the occupying troops, so the Comintern supported the former, militarily and politically. A decade later, this anti-imperialist movement had become German Imperialism. Israel was founded in a national struggle against the British Empire and resulted in the forced removal of Palestinians and the occupation of the Palestine . Indonesia does not remotely correspond to any precolonial domain, and possesses an enormous variety of peoples, cultures, languages and religions.The people at one end have far more in common with their neighbours across the national frontier than with their fellow "Indonesians", its shape was determined by the last Dutch conquests. We witnessed the result in East Timor. The bourgeoisie is a global class. Nations mostly emerged after capitalism. Consciously or not, and there are numerous examples of conscious strategy, capitalism created nations. A key feature of global capitalism is that the world is organized into a system of states in which a few – the imperialist powers – dominate the rest economically, politically, and militarily." and this poses the question "...what stance Marxists should take when states fight each other ? "

Either - since the conflicting parties are all capitalist states the left should, as a matter of principle, take no interest in who wins.
Or - to follow Marx , Engels , Lenin and Trotsky and support wars that are judged to advance the interests of the international working class and support the country whose victory would be the least harmful to the interests of the international working class .

Yes, Marx and Engels did support certain nationalist movements and some wars - TO BRING CAPITALISM TO FEUDAL STATES, to usher the capitalist class into political power so they could create the pre-requisites of socialism; an actual working class within an industrialised society. Prussia against the Slavs. Britain and France against Tsarist Russia. Even Prussia against France so as to strengthen unification of Germany . But can anyone seriously think that such a policy is required in to-days world where capitalism is now the predominant system and its the working class thats the decisive class not the capitalists . What may have been right in the 19thCentury for Marx and Engels , may not now be the right choice in the 20th Century under changed circumstances . What was perhaps provident for backward Russia in the eyes of Lenin or Trotsky need not be applicable or advisable for the rest of us .

Almost every country is more powerful than another, and tries to dominate it, (apparently ignorant of Marx's advice that a nation which oppresses another can never itself be free.) Even the smallest countries harbour designs on bits of their neighbours' territory. The tendency of nations to dominate others leads to the view that they are all imperialist, which renders the term anti-imperialism meaningless.

Wage Slavery

Workers sell their labour power to capitalist enterprises for a wage as stated above in earlier post . As a commodity, labour power has an exchange value and a use value, like all other commodities. Its exchange value is equal to the sum total of the exchange values of all those commodities necessary to produce and reproduce the labour power of the worker and his or her family. The use value of labour power is its value creating capacity which capitalist enterprises buy and put to work as labour. However, labour power is unlike other commodities in that it creates value. During a given period it can produce more than is needed to maintain the worker during the same period. The surplus value produced is the difference between the exchange value of labour power and the use value of the labour extracted by the capitalists. In capitalism, however,the wage-worker is a “free” agent. No master holds him as a chattel, nor feudal lord as serf. This modern worker is free and independent: he has choices. He can dispose of his services to this or that capitalist owner, or he can withhold them. But this freedom is ephemeral. He must sell his working ability to some one or other employer or face starvation. In a capitalist society workers have the option of finding a job or facing abject poverty and/or starvation. Little wonder, then, that people “voluntarily” sell their labour and “consent” to authoritarian structures! They have little option to do otherwise. So, within the labour market workers can and do seek out the best working conditions possible, but that does not mean that the final contract agreed is “freely” accepted and not due to the force of circumstances, that both parties have equal bargaining power when drawing up the contract or that the freedom of both parties is ensured. His slavery is cloaked under the guise of wage-labour.

When the worker has found an employer he receives in return for his labour a price known as wages which represents on the average what is necessary for his sustenance so that he can reproduce the energy to go on working, and also produce progeny to replace him when his working days are over. During the working-day the worker produces wealth equivalent to that for which he is paid wages, but this does not require all the time of the working day. In providing for his own keep he has also produced a surplus and this surplus belongs to the employer. This may eventually be split into profit to the manufacturer, rent to the landlord, and interest on capital invested by a financier. As capitalism develops the time in which the worker produces his own keep decreases while the surplus accruing to the capitalist increases. During this development the productivity of labor increases at an accelerating tempo: The worker continually produces more with less.

So when a man sells his labour power a number of hours for a certain wage, the amount of necessaries to produce his wages is always smaller than the amount of labour which the employer receives from him, the difference between what the worker receives as wages and what his labour power produces during his working time, constitutes the sole source of unearned income, i.e., capitalist profits. So profits exist because the worker sells themselves to the capitalist, who then owns their activity and, therefore, tries to control them like a machine.

Wage levels will vary with “the respective power of the combatants” as Marx puts it and in the long run this will determine the value of labour-power and the necessaries of life. From the point of view of wage-labour , wage levels and the value of labour-power depends on the balance of class forces, on what workers can actually get from their employers. As wages are also regulated by the relation of supply and demand, a surplus of labour power (the unemployed) is necessary to prevent wages swallowing up all profit. Therefore the unemployed army is a vital necessity to capitalist production, and there can be no solution under capitalism.

It would be wrong to confuse exploitation with low wages. It does not matter if real wages do go up or not. The absolute level of those wages is irrelevant to the creation and appropriation of value and surplus-value. Labour is exploited because labour produces the whole of the value created in any process of production but gets only part of it back. On average workers sell their labour-power at a “fair” market price and still exploitation occurs. As sellers of a commodity (labour-power) they do not receive its full worth i.e. what they actually produce. Nor do they have a say in how the surplus value produced by their labour gets used.

Capitalism is a market economy, but not a simple market economy. A key difference of course is that under capitalism production is not carried out by self-employed producers but wage and salary workers employed by business enterprises. In other words, by profits we mean income that flows to the owner of a workplace or land who hires others to do the work. In other words, under capitalism, the producers have become separated from the means of production. This makes all the difference.
Marx explained the difference when he said that what happens in a simple market economy is that the producers brought to market a product of a certain value which they sell for money in order to buy another product or products of equal value. The economic circuit is commodity-money-commodity (C-M-C), the aim being to end up with a basket of useful things. Under capitalism the economic circuit is different. A capitalist sets out with a sum of money which they use to buy commodities (factory buildings, raw materials, working skills) that can be used to produce other commodities with the aim of ending up, after these other commodities have been sold, with more money than they started off with. So the circuit is now money-commodities-more money (M-C-M+).

But the picture of capitalism is still not complete.

Capitalist investors want to end up with more money than they started out with, but why? Is it just to live in luxury and consume? It is possible to envisage such an economy on paper. Marx did, and called it “simple reproduction”, but only as a stage in the development of his argument. By “simple reproduction” he meant that the stock of means of production was simply reproduced from year to year at its previously existing level; all of the profits (all of M+ less M) would be used to maintain a privileged, exploiting class in luxury . As a result the M in M-C-M+ would always remain the same and the circuit keep on repeating itself unchanged. This of course is not how capitalism operates. Profits are capitalised, i.e. reinvested in production, so that production, the stock of means of production, and the amount of capital, all tend to increase over time . The economic circuit is thus money-commodities-more money-more commodities, even more money (M-C-M+-C+-M++). In order to make more money, money must be transformed into capital.

This is not the conscious choice of the capitalists. It is something that is imposed on them as a condition for not losing their original investment. Competition with other capitalists forces them to reinvest as much of their profits as they can afford to in keeping their means and methods of production up to date. They cannot act contrary to the inner nature of capitalism which requires the constant accumulation of capital and the opening of new markets throughout the world. And it cannot avoid that increasing productivity of labor which means more production for less expenditure of labour.

The worker goes into the labour market as an article of merchandise, and his wages, that is, his price, is determined like that of any other article of merchandise, by the cost of production (i.e. the social labour necessary), and this in the case of the worker is represented by the cost of subsistence. The price of labour power fluctuates by the operation of supply and demand. There are generally more workers in the market than are actually required by the employers, and this fact serves to keep wages from rising for any length of time above the cost of subsistence. Moreover, machinery and scientific applications are ever tending to render labourers superfluous, with a consequent overstocking of the labour market, decrease of wages, and an increase in the number of the unemployed. Under these conditions reelative poverty is necessarily the lot of the working-class.

We have the worker entirely dispossessed of the means of getting a living except by selling himself as an article of merchandise to the owners of the means of living. This is wage-slavery. While capitalists are as a class against the workers as regards the ownership of the wealth produced by the working-class, they, the capitalists, are also antagonistic to one another in the endeavour to get the larger share of the markets. It wasn’t just Marx but also Fourier who pointed long ago that this competition could only end in monopoly, and we do see concentration going on in every branch of industry.

Profits

Profit at its most basic is the difference between the money a business obtains from the sale of its products and the money it has to spend on producing them.

One of Marx’s crucial discoveries in the field of political economy was that the working class of wage and salary earners gets paid less than the value of the goods it creates, the difference being a surplus value which accrues to the owning class in the form of ground rent, interest and profit. Capitalism turned human labour power into a commodity – something bought and sold. When capitalists buy a worker’s labour they buy the worker’s capacity to work for a full day. Wages are set, however, like every other commodity, by the value of labour-power needed to reproduce them, which in the case of labour is the value of food, clothing, etc. needed to keep the worker in a fit condition to work. But the value of ‘labour power’ is different from the value created by the worker’s labour and this difference, called surplus value, belongs to the capitalist. The working day under capitalism therefore divides into two parts; ‘necessary labour’ when the workers actually earns what they are paid in wages, and ‘surplus labour’ which is the time spent producing ‘surplus value’ for the capitalist employer. The aim of capitalist production is the production of surplus value.The new value added by labour in the process of production to the previously existing value of the raw and other materials is divided into wages and surplus value, which goes to the capitalist employer and is the source of profit. Profits are made in the sphere of production but only “realised” in the market. What is so vital about profit that makes this necessary? It is the source of the capitalist’s capital. The more capital they can accumulate out of the profits accruing to them the more effectively can they compete–by investing in more productive technologies to undercut their competitors–and thus claim a larger share of the market for themselves. If they did not do this then their competitors would, and could knock them out of business. Economic competition between enterprises fuels the drive towards capital accumulation. This in turn necessitates profit maximisation which expresses itself as a continuous downward pressure on wages (reinforced by competition between workers on the labour market.)

We’re the ones who build things, make things, provide services, make things work, provide the ideas. But though we build the world around us, it does not belong to us. Everything that has been built around us is the result of our work and yet we don’t work for ourselves. We produce not for ourselves, but at the behest’s and whims of others. The worker is compelled to labour for the purpose of producing something to satisfy the wants of others who, holding the things necessary for his life, thereby control him. He is, therefore, still a slave.We are the ones who are told what to produce, how to produce it, how much, and how fast.We are the ones who receive a paycheque, be it high or low, not for selling what we produce but for selling our power to work. With that paycheque we try to buy back what we make. The source of someone else’s profits comes from our work.

Speculation is the use of money-capital, not to invest in the production of new wealth and new surplus value, but unproductively to try and swindle other capitalists’ out of their past profits. It’s a zero-sum game in which the total amount of profits remains the same but merely gets redistributed differently amongst capitalists depending on their speculative skills.

Individualists or Libertarians attack socialism because you fear the whole of the wealth of society shall be owned by a number of persons incorporated into a State or a bureaucracy, instead of being, as at present, owned by private individuals. They maintain that the right of the individual is supreme, and condemns any action on the part of a State or collection of individuals, that interferes with your desires. But socialists are not statists, that if the working class was compelled to work for a State instead of for individual employers then wage-slavery is not abolished, but is intensified. The worker to-day, while compelled to work for an employer, still has some sort of a choice among those masters, but with the State as the only employer he is compelled to work for that employer and under all of that employer’s conditions, or take the only other alternative – starvation. State-capitalism ( or as some like to call it State-Socialism) would intensify slavery, but state- capitalism is not socialism.

Greedy Bankers Or Capitialism

Recessions are inherent in the boom bust cycle of capital. "Greedy bankers" are a scapegoat distracting from the fact that this will happen again and again and again. Blaming them implies you could have a nicer capitalism with good bankers. Pinning the blame on greedy bankers lets the real culprits off the hook. This is not just a financial crisis, but a crisis of the whole capitalist economy in which the whole business and political class are fully implicated.

If a few get rich while millions lose out big style, then this is capitalism working as it only can work. If there is recession followed by boom followed by recession, then capitalism is working healthily. Capitalism is working perfectly well. It works the only way it can work - in an anarchic and chaotic manner, negligent and oblivious to the misery and suffering it creates. As usual it is the working class that suffers the cutbacks, the reduced standard of living, and the vicious and right-wing reform programmes that every such crisis engenders.

That capitalism is chaotic is evident. Its frequent booms and slumps— its unavoidable features— become global. The disasters get bigger, and nastier. Those who pointed to the relatively rapid rate of capital accumulation to deny the socialist contention that world capitalism has been in a depressive state since the end of the post-war boom in the early 1970s have had their come-uppance. Marx was right. They were wrong. There can be no such thing as a permanent boom. Marx, the first person to provide a convincing analysis of how the capitalist economic system worked.Capital accumulation proceeds by fits and starts, periods of relatively rapid growth being followed by periods of contraction and stagnation. The graph of long-term growth under capitalism is not a straight line moving up from left to right but a jagged line with peaks and troughs, with each peak normally higher than the previous one. Marx argued that this cyclical pattern of growth was not just accidental but was inevitable under capitalism-it was the way capitalism functioned and developed, its "law of motion" as he put it-with each period of rapid growth ending in a slump and each slump preparing the conditions for the next round of growth.Capitalism is driven, not by consumer demand, but by the drive to make and accumulate profits as further capital and that this is by no means a smooth process.

In order to maintain or increase their share of the market and realise the surplus value embodied in their products, capitalist firms are compelled by competition to reduce their costs by improving their productivity, in particular by the introduction of more productive machines. This leads to an increase in overall productive capacity. During the period of recovery that follows a slump this poses no problem as the market is beginning to recover and expand again. However, as the competitive pressures to increase productive capacity continue, the point is eventually reached when productive capacity in a key industry or group of industries comes to outstrip the market demand for its products. At this point a crisis of overproduction breaks out. As profits fall, production is cut back, workers are laid off and, through the knock-on effect on other industries, the market shrinks, so inaugurating the period of slump. During the slump, the least productive machines are taken out of production and capital is depreciated or simply written off. This purge of under-productive machinery and over-valued capital eventually creates the conditions which allow capitalist growth to recommence, so beginning the boom-slump cycle again. This is how capitalism has developed and continues to develop.

A key factor in this is that capitalism's financial apparatus is largely built on confidence that transactions will be smooth and payments will be met. When this confidence in the efficiency of trade and commerce starts to ebb then things can take spectacular and serious turns for the worse. The erosion of financial confidence is one of the ways in which a downturn in one sector or country can spread to others.

The financial crisis is a reflection of the fact that stock exchange and foreign currency gamblers have realised that countries have expanded their productive capacities beyond market demand. One consequence of this period of slow growth was that significant amounts of profits were not being reinvested in production but, instead, being held in liquid form and invested in financial assets with the aim of making as large a short-term profit in as short a time as possible. All the multinational corporations had treasury departments engaged in financial speculation of one form or another whether on the stock exchange, the bond market, currency transactions, commodity markets or dodgy hedges such as derivatives.

This extra demand for financial assets, deriving from non-reinvested profits, has driven up their price, so creating the anomalous situation of a stock exchange boom in what is essentially a depressed economy. Most of the financial transactions that took place were not investments of productive capital- not used to set up factories or to buy machinery, equipment or raw materials-but are to buy and sell shares or bonds or foreign currencies or commodity futures or property or failing companies to asset strip them. Such purely financial transactions are utterly unproductive, even from a capitalist point of view. Not only do they not result in the production of a single extra item of wealth but they don't even increase the amount of surplus value available for sharing amongst the various sections of the capitalist class. It's a zero-sum game. As socialists have always maintained, stock exchanges are places where capitalists gamble and try to cheat each other with a view to acquiring as large a mass as possible of the surplus value that has already been produced by and robbed from the workforce.

The bankers are not wicked finance capitalists against whom the anger of workers should particularly be directed, just capitalists with their capital invested in a particular line of business, no more nor less reprehensible than the rest of the blood sucking parasitic capitalist class.

trotsky

When the split in the Russian Social-Democratic Party took place at a conference in London in 1903, Trotsky took an individual stand. It is not true that he was a Menshevik, for, although he, like the Mensheviks, opposed Lenin's plan for an organisation of revolutionary conspirators to be controlled by a dictatorship in the centre, his fundamental views differed from both factions. Trotsky himself made it clear that he did not consider the controversy important enough to warrant a split, and continued to work with both groups in an attempt to re-establish unity. whereas both factions were agreed that the coming Russian Revolution would be essentially capitalist and that Russia would consequently have to pass through an era of capitalist democracy, Trotsky was alone in proclaiming that the overthrow of Czardom could be accomplished by the Russian movement alone, which could maintain itself in power and so cut out completely the period of capitalist transition. This point of view he elaborated into a theory called "Permanent Revolution".Trotsky took up a position, arguing that if the working class were to come to power in the course of the coming bourgeois revolution in Russia it was unreasonable to expect them to hand over power to the bourgeoisie; they would, and should according to Trotsky, take steps to transform society in a socialist direction. The basic points of this theory rest on the assumption that power could be held by socialists in Russia long enough to enable the workers of the more advanced Western countries, helped, of course, by their Russian comrades, to introduce Socialism. Then the material backwardness of Russia could be overcome through the united efforts of a Socialist Europe. It was adopted by Lenin himself in April 1917 when he returned to Russia from exile in Switzerland. As a result Trotsky himself then rallied to the Bolsheviks.

When hopes for a socialist revolution in the West had been frustrated, Trotsky blamed this on bad and treacherous leadership. The debates between Trotskyists and Stalinists always revolved around such questions of leadership – if only the leaders had acted in such-and-such a way, things would have turned out better. Tactics, said Trotsky, should have been framed so as to win workers over from their Social Democratic leaders, under the command of the Communist Party: “We must understand how to tear the workers away from their leaders”. Trotskyists continue to attach themselves to larger movements in the hope of providing alternative leaderships and of being at the heart of the struggle.

Trotsky defended Russian state-capitalism on the grounds that the Russian economic system, i.e., state control, was essentially working-class, and apparently required only a change in its political administration to perfect it for working-class needs.This error is bound up with Trotsky's confusion between State-capitalism and Socialism, evidence of which can be found in his writings. Trotsky fell from power because his theory of Permanent Revolution and his consequent insistence on continued revolutionary agitation abroad would have cut off all technical aid from the Western world, and so made any attempt at industrial development more difficult in Russia. In exile Trotsky played the role of "loyal opposition" to the Stalin regime in Russia. He was very critical of the various political aspects of this regime but to his dying day he defended the view that the Russian revolution had established a "Workers State" in Russia and that this represented a gain for the working class both of Russia and of the whole world. Russia under Stalin was a Workers State, not a perfect one, certainly, but a Workers State nevertheless. Trotsky was only able to sustain his point of view by making the completely un-Marxist assumption that capitalist distribution relations (the privileges of the Stalinist bureaucracy) could exist on the basis of socialist production relations. Marx concluded that the mode of distribution was entirely determined by the mode of production. Thus the existence of privileged distribution relations in Russia should itself have been sufficient proof that Russia was not socialist. Trotsky rejected the view that Russia was state capitalist on the of grounds of the absence of a private capitalist class, of private shareholders and bondholders who could inherit and bequeath their property.

Rosa and breakdowns

Some political groups argue that capitalism since the first world war is in a state of economic collapse due to its inability to find new markets on which to sell its products at a profit. The basic theoretical assumption is that by 1914 capitalism had become “decadent” as an economic system in the sense that it had become unable to develop the forces of production any further. This view is based on Rosa Luxemburg's The Accumulation of Capital.

Luxemburg admitted her theory conflicted with Marx at the end of Volume II of Capital which implied that long-term growth (accumulation) was possible under "pure" capitalism. She therefore tried to show where Marx had gone wrong, that there was a flaw in Marx’s Capital, in that he had failed to recognise that a lack of purchasing power was built-in to capitalism and that therefore it had to rely on external markets to expand and once these had been exhausted then capitalism would enter a period of economic stagnation and breakdown.

According to her, under "pure" capitalism (an economy where there are only capitalists and wage workers) market demand was determined by consumption (what the workers spend on consumer goods plus what the capitalists spend on consumer goods). If the capitalists were to consume all their surplus value, so her argument ran, there would be no problem, but as soon as they re-invest a part of it – which, the accumulation of capital, is after all the purpose of production under capitalism – market demand is no longer equal to what has been produced. For, the consumption of the capitalists having been reduced, so, according to Luxemburg, has market demand. The result, she concluded, was that there was nobody to buy the products in which the re-invested profits were embodied (new machinery, raw materials and consumer goods for the extra workers taken on). As she wrote: “as capital approaches the point where humanity only consists of capitalists and proletarians, further accumulation will become impossible”.

This argument makes accumulation impossible under "pure" capitalism. It led to her conclusion that for capital accumulation to take place there must be non-capitalist areas to buy the part of the surplus product not consumed by the capitalists. It followed then that capitalism would collapse at the point when there were no more non-capitalist areas left in the world. On this theory, the crisis of capitalism is a permanent one and is reflected in a global saturation of markets that can only be temporarily broken through world war and the reconstruction that would follow such a war.

Luxemburg made the mistake of assuming that the level of market demand was determined exclusively by consumption (the spending of workers and capitalists on consumer goods) whereas in fact it is determined by consumption plus investment (capitalist spending on new means of production). Thus, when a part of the surplus value is re-invested rather than consumed, market demand is not reduced; it is merely re-arranged: what the capitalists formerly spent on consumer goods they now spend on means of production. Marx had made no mistake. Her argument was based on a complete misreading of Marx's reproduction schemas for both "simple" and "extended" reproduction. Marx himself furnished the theoretical disproof of this view that growth in "pure" capitalism would be impossible, in Chapter 49 of Volume Three of Capital. Capitalism is not, as Luxemburg intended, simply determined by the combined consumption of the workers and capitalists. Overall demand is not determined by the consumption of the workers and capitalists but by this plus the investment of the capitalists (what they spend on new means of production rather than on consumer goods for themselves).

External markets did play a key role in the birth and early growth of capitalism and to say that there is no permanent underconsumption built-in to the capitalist system is not to say that there is therefore always a smooth crisis-free accumulation of capital. Accumulation under capitalism proceeds by fits and starts, but these crises are caused by other reasons than underconsumption: by disproportions between the different branches of production leading to a fall in the rate of profit or, at times, to a temporary retraction of the market demand for consumer goods.

Those who have accepted Luxemburg put the view that capitalism became a world system around the start of the First World War and that ever since it has struggled to find markets in which the surplus product can be realised in the ever-diminishing non-capitalist periphery of the world. However, fundamentally the disproof of this theory is practical rather than just theoretical, based on the actuality of capitalist development this century. If growth in "pure" capitalism or at least something near to "pure" capitalism is impossible, the system just wouldn't have been able to expand the forces of production in the way that it has been doing. If capitalism has been in a state of market saturation for decades ( as far back as 1914) its long-term growth in the years since would have been impossible. And, although its rate of expansion has slowed in recent years, it has still continued to enjoy considerable long-term growth ever since Luxemburg wrote--and without selling sizeable quantities of commodities to undeveloped non-capitalist areas of the planet .

The Myth of the Transitional Society

Critique has recently published the translation of an article by Ernest Mandel, in which he develops his now familiar theme that, in the course of social evolution, there intervenes – and must intervene – between capitalism and socialism a transitional "society" with its own social base, relations of production, etc.[i] This is a point of view worth discussing but, despite the Marxist terminology in which it is expressed, it is in fact not a view held by Marx himself. As the present article will try to demonstrate, Marx did indeed speak of a "political transition period" between capitalism and socialism but never of a "transitional society". What, then, did Marx mean when he spoke of this "transition period"? Contrary to what is generally supposed (largely as a result of decades of Stalinist and Trotskyist propaganda), for Marx this period was not that between the establishment of the common ownership of the means of production and the time when the principle "from each according to his abilities, to each according to his needs" could be implemented. Rather it is the period during which the working class would be using state power to bring the means of production into common ownership.

In other words, the transition period is a political form between the capture of political power by the working class within capitalist society and the eventual establishment of socialism, a period during which the working class has replaced the capitalist class as the ruling class, i.e. as the controller of state power. The end of this transition period is the establishment of a classless society based on the common ownership and democratic control by the whole of society of the means of production, with the consequent disappearance of the coercive state, of the system of working for wages, of the production of goods for sale on a market with a view to profit, indeed, of buying and selling, money and the market altogether. That for Marx the "transition period" was the period after the capture of political power by the working class and before the actual establishment of the common ownership of the means of production is clear both from his early and his later writings. In 1852 he wrote to his friend Weydemeyer in America that one of the things he had proved was that "the dictatorship of the proletariat" (as he called the period of working class control of state power [ii]) "only constitutes the transition to the abolition of all classes and to a classless society"[iii](emphasis added).
Engels summarizes his own and Marx's view in 1873 as follows:

"The views of German scientific socialism on the necessity of political action by the proletariat and of its dictatorship as the transition to the abolition of classes and with them of the state. . ."[iv] (emphasis added).

The transition period, then, is the period up to the establishment of the common ownership of the means of production. Again, in 1875 in his private notes on the Gotha Programme adopted by the unity congress of the German Social Democrats Marx wrote:

"Between capitalist and communist society lies the period of the revolutionary transformation of the one into the other. Corresponding to this is also a political transition period in which the state can be nothing but the revolutionary dictatorship of the proletariat."[v]

Marx, we can note here, used the words "socialist" and "communist" interchangeably to refer to future classless society (if anything, he preferred the word "communist", but we shall follow Engels' later usage and employ the word "socialism" to describe future classless society based on the common ownership and democratic control of the means of production). The idea that "socialism" and "communism" were two successive phases of post-capitalist society is not to be found in Marx, but derives from Lenin. Thus, when Marx writes, in the above quote, of "communist society", he means precisely the same as when he wrote of "classless society" in 1852.

It is true that Marx realised that, had socialism been established in his day, it would not have proved possible to implement immediately, or even for some years, the principle "from each according to his ability, to each according to his needs", i.e. free access for all to consumer goods and services according to individual need. In the early years of socialism, established at this time, there would inevitably have had to have been some restrictions on access to consumer goods and services, some form of, if you like, "rationing" (if this word's association with the war- time and post-war ration cards is forgotten, for although full free access according to need would not have been possible in 1875, the amount allocated for consumption could have been considerably higher than the workers were then getting under capitalism). Marx suggested as one such possible method so-called labour-time vouchers. It is important to realise that this was only a suggestion and, moreover, one open to serious objections. But Marx's point was that, for some period of time, some method of rationing consumption would be necessary. He referred to the period of socialism during which this would be so, as "the first phase of communist society", as compared with a "higher phase" in which free access to consumer goods and services could be implemented. Note that Marx is talking of different phases of the same society, society "based on the common ownership of the means of production"[vi], i.e. a classless, stateless society with no wages or monetary system (Marx made it clear that the "labour-time vouchers" were not money, "no more `money' than a ticket for the theatre" as he put it in Capital [vii]). No doubt one could speak of a transitions from the "first" to a "higher" phase of socialism, but the fact remains that Marx did not employ the concept of "transition period" in this sense. For him, as we have explained, it was the transition from capitalism to socialism and not from one phase of socialism to another.

How long did Marx expect this political transition period to last?
His opinion on this question changed over the period of his political life. In 1848, he clearly felt it would have to last quite some years. Thirty years later, he and Engels thought it could be considerably shorter, as a result of the tremendous development of modern industry in the intervening period.
The Communist Manifesto of 1848 speaks of the working class capturing political power and using "its political supremacy to wrest, by degrees, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the state, i.e. of the proletariat organised as the ruling class; and to increase the total of productive forces as rapidly as possible" (emphasis added).

Marx and Engels go on to list various immediate measures which they and the other members of the Communist League felt the working class should take on coming to power, in order to make "despotic inroads on the rights of property".

They conclude:

"When, in the course of development, class distinctions have disappeared, and all production has been concentrated in the hands of a vast association of the whole nation, the public power will lose its political character".[viii] (emphasis added)

Clearly, in 1848, Marx and Engels expected the transition period to the establishment of common ownership and the consequent abolition of classes and the state to be fairly long. Engels, in his draft for the manifesto which was not used but was later published under the title Principles of Communism {and which is always a useful gloss on the Manifesto), stated this explicitly. Answering the question, "Will it be possible for private property to be abolished at one stroke?", he wrote:

"No, no more than existing forces of production can at one stroke be multiplied to the extent necessary for the creation of a communal society. In all probability, the proletarian revolution will transform existing society gradually and will be able to abolish private property only when the means of production are available in sufficient quantity".[ix]

It was not until later, after the wave of revolutionary enthusiasm of 1848 had ebbed, that Marx and Engels worked out the full implications of this. They had been saying, in effect, that the establishment of socialism was not possible in 1848. Engels, in 1895, in an introduction to some articles Marx had written, in 1850, on French politics, openly stated this:

"History has proved us, and all who thought like us, wrong. It has made it clear that the state of economic development at that time was not, by a long way, ripe for the elimination of capitalist production."[x]

Engels was clearly correct on this point. Capitalism, as Fritz Sternberg has pointed out, was then dominant only in one country:

"When Karl Marx and Friedrich Engels wrote `The Manifesto of the Communist Party', – that is to say, about the middle of the nineteenth century – capitalism was dominant only in England; the United States was still a colonial country, in which the agricultural population far outnumbered the industrial; in Europe, the beginnings of capitalism were confined to the west – in Germany, for instance, pre-capitalist forms of production were still dominant; Russia and Japan were still feudal states; and there were relatively few points on the Asiatic coastline which were in contact with those occidental countries in which capitalist development had begun.
To say that, at that time, perhaps 10 per cent of the world's population were engaged in capitalist production is probably an optimistic estimate."[xi]

If socialism wasn't possible in 1848, this raises the interesting question (clearly relevant for later attempts to establish "socialism" in a single, backward country):
What would the working class, or rather a determined group of Communists, have been able to do in the unlikely event of them having gained control of political power at that time? Surely, only to develop capitalism. In fact, the measures listed at the end of Section II ("Proletarians and Communists") of the Manifesto, and referred to above, could accurately be described as being of a state-capitalist nature. Many of them have since been implemented in openly capitalist countries (progressive income tax, state bank, nationalisation of railways, free education, prohibition of child labour, etc.), thus indicating that there was nothing inherently anti-capitalist about them. Neither Marx nor Engels went quite so far as to repudiate these measures, or to state that the Communists of 1848 were wrong to have imagined that they could even capture political power, let alone establish socialism at that time. But this is what Engels wrote in 1872 of these measures:

". . . no special stress is laid on the revolutionary measures proposed at the end of Section II. That passage would, in many respects, be very differently worded today. . . this programme has in some details become antiquated."[xii]

Also, writing in 1850, Engels discussed the fate of Thomas Munzer, as the leader of a communistic party coming to power before conditions were ripe for establishment of a communistic society. This passage is worth quoting extensively:

"The worst thing that can befall a leader of an extreme party is to be compelled to take over a government at a time when society is not yet ripe for the domination of the class he represents and for the measures which that domination implies. What he can do depends not upon his will but upon the degree of antagonism between the various classes, and upon the level of development of the material means of existence, of the conditions of production and commerce upon which class contradictions always repose. What he ought to do, what his party demands of him, again depends not upon him or the stage of development of the class struggle and its conditions. He is bound to the doctrines and demands hitherto propounded which, again, do not proceed, from the class relations of the moment, or from the more or less accidental level of production and commerce, but from his more or less penetrating insight into the general result of the social and political movement. Thus, he necessarily finds himself in a unsolvable dilemma. What he can do contradicts all his previous actions and principles, and the immediate interests of his party and what he ought to do cannot be done. In a word, he is compelled to represent not his party or his class, but the class for whose domination the movement is then ripe. In the interest of the movement he is compelled to advance the interests of an alien class, and to feed his own class with talk and promises, and with the assertion that the interests of that alien class are their own interests. He who is put into this awkward position is irrevocably lost."[xiii]

Marx himself had written something similar in October 1847 (a few months before he and Engels wrote the Manifesto) :

"If the proletariat destroys the political rule of the bourgeoisie, that will only be a temporary victory, only an element in the service of the bourgeois revolution itself, as in 1794, so long as in the course of history, in its `movement', the material conditions are not yet created which make necessary the abolition of the bourgeois mode of production and thus the definitive overthrow of bourgeois political rule."[xiv] (Marx's emphasis)

Is it too much to say that, had Marx and Engels and the others in the Communist League come to control political power in 1848, that, not being able to establish socialism, they would have been "irrevocably lost", in that they would have had no alternative but to develop capitalism (even if in the form of a state capitalism)?

In any event, this situation never arose, nor was it even a remote possibility. In exile in London, Marx and Engels soon realised the futility of communists plotting to seize political power in the immediate future, and turned to concentrating on the long, hard task of preparing the working class to organise itself to capture political power. After 1848, modern industry made great advances. In 1847, Engels had written of the means of production not being available in sufficient quantity to permit the immediate, or even rapid, establishment of socialism. A quarter of a century later, in 1872, he was writing :

"...it is precisely this industrial revolution which has raised the productive power of human labour to such a high level that – for the first time in the history of mankind – the possibility exists, given a rational division of labour among all, of producing not only enough for the plentiful consumption of all members of society and for an abundant reserve fund, but also of leaving each individual sufficient leisure so that what is really worth preserving in historically inherited culture – science, art, forms of intercourse – may not only be preserved but converted from a monopoly of the ruling class into the common property of the whole of society, and may be further developed."[xv]

And six years later, in that part of Anti-Dühring later published as the immensely popular pamphlet Socialism, Utopian and Scientific :

"The possibility of securing for every member of society, by means of socialized production, an existence not only fully sufficient materially, and becoming day by day more full, but an existence guaranteeing to all the free development and exercise of their physical and mental faculties – this possibility is now for the first time here, but it is here." [xvi](Engels' emphasis)

In other words, it was Engels' opinion that by the 1870's, contrary to the situation in 1848, "the state of economic development was . . . ripe for the elimination of capitalist production". While he might not have answered the question, "Will it be possible for private property to be abolished at one stroke?" with a `yes', he would certainly have answered that it could be abolished (i.e. common ownership, and a classless society established) fairly rapidly. The principle is clear here: for Marx and Engels, the higher the level of development of the means of production, the shorter the political transition period needed to make them the common property of society as a whole.
Engels was exaggerating when he wrote in 1872 that the means of production could then have provided "enough for the plentiful consumption of all members of society and for an abundant reserve fund". Certainly, they could have provided enough to completely eliminate material poverty and to raise the consumption of all well above the level they had to endure under capitalism, but it would not really have been possible to implement the principle of "from each according to his abilities, to each according to his needs". Engels, or course, recognised this, and it was precisely Marx's point as well in his notes on the Gotha Programme about the inevitability of some limitations on free consumption in the "first phase" of socialism.

Having discussed the question of how long Marx and Engels expected the political transition period between capitalism and socialism to last, we can now ask, how long did they think the transition (as one might want to call it) between the "first" and "higher" phases of socialism itself would take. This is something they don't seem to have discussed, but it is clear that the same principle applies: the higher the level of development of the means of production, the shorter the period.
One thing is clear, though, that the development of the means of production during this period would be on the basis of the common ownership and democratic control of the means of production, and the consequent abolition of the market, money, buying and selling, wages, profits, etc, The "first phase of communist society", like the higher phase, would be a non-market society in which production would be consciously planned to satisfy human needs. What would be produced would be useful things, for direct allocation to democratically-decided social uses (individual consumption, collective consumption, expansion of productive resources, reserves, etc.). What Marx called "commodity-production", the production of goods for sale on a market, would not exist; indeed could not exist without the society ceasing to be socialist.
Marx repeatedly made it clear that socialism, in both its phases, was a non-market, production-solely-and-directly-for-use society. The Communist Manifesto specifically speaks of "the Communistic abolition of buying and selling", and of the abolition not only of capital (wealth used to produce other wealth with a view to profit), but of wage labour, too.[xvii]
In Volume I of Capital Marx speaks of "directly associated labour, a form of production that is entirely inconsistent with the production of commodities ...", [xviii] and, in Volume II, of things being different "if production were collective and no longer possessed the form of commodity production. ..". Also, in Volume II, Marx, in comparing how socialism and capitalism would deal with a particular problem, twice states that there would be no money to complicate matters in socialism: "If we conceive society as being not capitalistic but communistic, there would be no money-capital at all in the first place. ..", and, "in the case of socialized production the money- capital is eliminated".[xix] In other words, in socialism the production and distribution of wealth is solely a question of organisation and planning.

It is precisely Mandel who is the most influential and able opponent of Marx (and the others who have agreed with him, notably Bordiga) on this point about the entirely non-market nature of the "first" phase of socialism. In his essay Economics of the Transition Period, Mandel notes that:

"Immediately following the victory of the October Revolution, and especially in the period of War Communism, the Communist theoreticians saw the construction of a socialist economy primarily in terms of an immediate and general disappearance of the market and monetary economy."

Significantly, he does not question why this should have been, since this would have led him to have to admit that, on this point, the Bolshevik thinkers were in the Marxist tradition.
Mandel goes on to state that in Russia it soon appeared that "maintaining money and market relations was best suited to maximising economic growth and to the best defense of the interests of the workers as consumers" and to conclude by formulating the following general law:

"The survival of market and monetary categories thus proves inevitable during the period of transition from capitalism to socialism."[xx]

(Actually, what the experience of Russia under so-called "War Communism" proved was that isolated Russia was ripe at that time only for some form of capitalism – with its "market and monetary categories" – and not for socialism). Mandel accepts socialism as a world-wide, classless, stateless, moneyless, wageless society (to define it somewhat negatively). As he wrote in The Inconsistencies of State Capitalism :

"Socialism means a classless society. It therefore presupposes not only the suppression of private property of the means of production, henceforth managed in a planned way by the associated producers themselves, but it also calls for a level of development of the productive forces which makes possible the withering away of commodity production, of money, and of the state."

and,

"The working class ... is not capable of building a socialist society in a single country, not even the USA (not to speak of Britain or Western Europe)."

All that can be established in the immediate future, says Mandel, is a third society neither capitalist nor socialist, which will have the aim of developing the means of production to the level where world socialism becomes possible as a society of abundance: a "transitional society" between capitalism and socialism, with its own social structure and economic laws different from those both of capitalism and of socialism. Mandel describes this so-called transitional society of his as follows:

"nationalisation of all the means of production under workers' control, democratically planned economy, but still with commodity production of consumer goods, with the survival of money, with foreign trade, and with a workers' army as long as the threat of strong bourgeois states subsists."[xxi]

This "transitional society", like capitalism but unlike socialism, can be established on a national scale. In fact, says Mandel, it should be the immediate aim of each national working class (thus rejecting the Marxist view that the working class of all countries should be aiming at a more or less simultaneous world socialist revolution).

If Marx had really subscribed to this view, that there was another system of society –lasting for a whole "epoch" – between capitalism and socialism, it is curious, to say the least, that he never mentioned it. Nowhere, in fact, does Marx speak of any "transitional society" in between capitalism and socialism, or, to use some of the phrases employed by Mandel, "the epoch of transition from capitalism to socialism", "a transitional-economy", "the society in transition
from capitalism to socialism". He certainly spoke of a "political transition period" and of "a period of revolutionary transformation" between capitalism and socialism but, as we have seen, this was merely the period during which the working class would use its control of state power to establish the common ownership of the means of production, a relatively short political transition period, which would be shorter the higher the development of the means of production was at the time the working class won control of political power, and certainly not lasting an "epoch".
Mandel tries to justify his position by identifying his "transitional society" with Marx's "first phase of communist society" (despite the fact that the phrase "first phase of communist society" obviously means what is says: the first phase of communist, not some other, different, society).

Marx, we have seen, did recognise the inevitability of some limitations on free consumption in the early stages of socialism (had it been established in the 1870's), and did mention "labour-time vouchers" as one possible method of doing this. Mandel claims that whether these labour-time vouchers or money is used in these circumstances, is just a matter of choice. Money, he argues, is better because it allows workers, as consumers, more freedom of choice than would labour-time vouchers, or some system of physical rationing. But, this is based on a complete misunderstanding of the Marxian theory of money. For Marx money was not a thing but a social relation, an economic category which existed on the basis of certain social relations between the producers, specifically, an exchange economy, reflecting the fact that production was not yet socialised but carried out by isolated individual producers – and later the fact that, despite socialized production, there was still private or sectional appropriation. He pointed out that "labour-time vouchers" were not money; they were simply pieces of paper entitling a person to draw so much from the stock of goods set aside for individual consumption. They did not circulate, nor did they reflect a relationship of private property. As Marx put it, in a passage in his notes on the Gotha Programme, – a passage incidentally quoted by Mandel in the Critique article – "within the co-operative society based on the common ownership of the means of production, the producers do not exchange their products."[xxii]

We do not want to defend the "labour-time voucher" system. Even for Marx's day, it was inappropriate, suffering from numerous anomalies, only some of which Marx himself recognised. We would subscribe to the view that Marx's criticism of schemes to introduce "labour- money" under capitalism, applies to some extent also to the scheme for "labour-time vouchers" in the early stages of socialism.[xxiii] But it is clear that Marx did not regard the use of money (a commodity that has come to be universally exchangeable with all other commodities) as an alternative form of rationing in the "first phase of communist society". In fact, he would have regarded this as an absurd, contradictory proposal. We can imagine him lambasting Mandel in the same terms as he lambasted Proudhon for similar inanities!

Let us now return to the question of how long, after the establishment of socialism, some restrictions on free consumption would have to continue. Today, looking back, we can say that, had world socialism been established in the 1870's, it might have taken about a generation before full free access to consumer goods and services, according to individual needs, could have been implemented. This estimate is based on the fact that it was by around 1900 that the effects of the so-called second industrial revolution – the application to production of the electric motor and the internal combustion engine – were beginning to be felt. Marx and Engels, remember, were judging the possibilities of socialism on the basis only of the first industrial revolution (the application to production of the steam engine). Marx, who died in 1883, never saw either an electric motor or an internal combustion engine. But of course every advance in technology made his case for socialism even more relevant.
By about 1900, thanks to this second industrial revolution,capitalism became the predominant world system. By "predominant" we don't mean that capitalism existed all over the world, but merely that all the people of the world, even if they lived under pre-capitalist conditions, were decisively affected by the workings of world capitalism, 1900 marks, if you like, capitalism becoming a world system – a fact which some Marxist writers have described as its becoming "imperialist". 1914, with the outbreak of the first world war in the history of mankind, was a bloody confirmation of this. To quote Sternberg again:

"Capitalist development had taken several hundred years to arrive at a stage at which perhaps 10 per cent of the world's population produced along capitalist lines, but within the two-thirds of a century which followed – approximately from the middle of the nineteenth century up to the outbreak of the first world war – capitalism became the dominant form of production not merely in one country, England, but all over the world, until perhaps between 25 and 30 per cent of the world's population were producing along capitalist lines, whilst in Great Britain, the United States, Germany and Western Europe in general, capitalism held practically a monopoly of production. At the same time capitalist development had made considerable progress in Russia and Japan, although the remnants of feudalism still existed, whilst in the other Asiatic countries the pre-capitalist forms of production had been definitely undermined."[xxiv]

We can, in fact, place the end of capitalism's role in history – to create the material basis for a world socialist society of abundance – at this time. By 1900, capitalism had completely outlived its usefulness. From then on only the immediate establishment of world socialism has been "progressive". From then on, in fact, world socialism – given, of course, the development of a majority socialist movement amongst the working class in the industrialised parts of the world – could have been established "at one stroke" by a more or less world socialist revolution.

Since 1900, the working class has still, it is true, needed to organise itself to capture political power in all the various states of the world, and, in this sense, a "political transition period" during which the working class uses state power to establish the common ownership of the means of production, is still necessary. However, since this period would be so short as to be negligible, the concept of a transition period has become outdated.

Similarly, though in the first few years of socialism, as the mess left by capitalism is cleared up, some restrictions on full free consumption may still be necessary, world socialist society could now move rapidly (i.e. in well under a decade at the most) to implementing free access to consumer goods and services according to individual need as the principle of distribution. To sum up, the concept of a "transition period", lasting some years, between capitalism and socialism is today an obsolete 19th century concept, while the ideal of a "transitional society" between capitalism and socialism, as proposed by Mandel, was never to be found in Marx in the first place.
Adam Buick , Critique 5, 1975

[i] Ernest Mandel, `Ten Theses on the Social and Economic Laws Governing the Society Transitional between Capitalism and Socialism', Critique 3.
[ii] As is clearly shown by Hal Draper in his detailed study of the occasions Marx and Engels used this, and similar, phrases. See Draper's "Marx and the Dictatorship of the Proletariat", New
Politics, Vol. I, No.4, Summer 1962.
[iii] Marx to J. Weydemeyer, March 5,1852. Marx and Engels, Selected Works, Vol. II, Foreign Languages Publishing House, Moscow, 1958.p.452
[iv] F. Engels, "The Housing Question", in Marx and Engels, Selected Works, Vol. I; FLPH, Moscow, 1958, p.613.
[v] Karl Marx, Critique of the Gotha Programme. Progress Publishers, Moscow, 1971, p.26.
[vi] Ibid, p.16.
[vii] Karl Marx, Capital Vol I. I, FLPH, Moscow, 1961, p.94.
[viii] Marx and Engels, Manifesto of the Communist Party, FLPH, Moscow, 1954, pp.80-81.
[ix] F. Engels, Principles of Communism, Pluto Press, London, n.d., p.13. [x] F. Engels, "Introduction" to "The Class Struggles in France 1848 to 1850", Selected Works, Vol. I, p.125.
[xi] Fritz Sternberg, Capitalism and Socialism on Trial, Gollancz, London, 1951, p.19.
[xii] F. Engels. "Preface" to the German Edition of 1872 of Manifesto of the Communist Party, p.10.
[xiii] F. Engels, The Peasant War in Germany, Lawrence and Wishart, 1969, p.115.
[xiv] Karl Marx, "The Moralizing Critique and the Critical Moral", quoted in Karl Marx: Selected Writings in Sociology and Social Philosophy, Ed. T. B. Bottomore and Maximilien Rubel, Penguin Books, 1963, p.244.
[xv] F. Engels, "The Housing Question", in Marx and Engels, Selected Works, Vol. 1, pp.564-565.
[xvi] F. Engels, Anti-Dühring, FLPH, Moscow, 1959, pp. 389-390.
[xvii] Marx and Engels, The Manifesto of the Communist Party, pp.72-73.
[xviii] Karl Marx, Capital, Vol. I, p .94.
[xix] Karl Marx, Capital, Vol. II, FLPH, Moscow, 1957, p.451, p.315 and p.358.
[xx] Ernest Mandel, "Economics of the Transition Period", in Key Problems of the Transition Period, Pathfinder Press, New York, 1970, pp.38-40. Originally published in Fifty Years of World Revolution (1917-1967): An International Symposium, ed. by Ernest Mandel, Merit
Publishers, New York, 1968.
[xxi] The Inconsistencies of State Capitalism, International Marxist Group. London, 1969, pp.17-18.
[xxii] Karl Marx, Critique of the Gotha Programme, quoted by Mandel in a footnote on p.13 of Critique 3.
[xxiii] See "La Période de Transition (deuxième partie)", Révolution lnternationale 8, Paris, March-April 1974. See also "Labour-Time Vouchers", Socialist Standard, London, May, 1971, and "Marx's Conception of Socialism", Socialist Standard, December. 1973.
[xxiv] Fritz Sternberg, op. cit., p. 19.