1920s >> 1927 >> no-272-april-1927

Will capitalism collapse?

Five years ago in these columns (Feb., 1922) the present writer criticised the doctrine of the “Collapse of Capitalism.” During the same month a leading member of the Communist Party admitted that the plans of the Communists for world-revolution were bound up with the acceptance of this catastrophic view of social development, and agreed, in answer to a question, that ten years would prove or disprove the soundness of their view of events. Ten years would show the Communist movement within striking distance of final victory in this country, or it would show Communist policy to be false and the Communist Party would be deservedly dead and damned. Another Communist, Mr. Palme Dutt, likened capitalism to a house in imminent danger of collapse. It was beyond repair—reforms could no longer prop it up—and there was no time to organise and educate the majority of the workers to a recognition of the need for deliberate steps to take over power from the ruling class and set about reconstituting society from the bottom upwards. The “psychological moment” had arrived, capitalism was in ruins, we must get out or go under. (I wonder what has happened of recent years to our old Communist friend, “Psychological Moment ? Did she die of overwork and hope deferred, like “Soviets for Britain” and the “United Front”?)

Half of the allotted time has passed, and many Communists themselves have now come to see either that the theory of collapse was radically unsound, or that the nearness of that happy event was grossly exaggerated. We would be pleased to see the Communist Party approaching a more realistic view of the working-class position, but unfortunately, in driving out the false conception of social revolution, the lessons of experience have in many cases driven out also the desire for revolution itself, and large numbers of disappointed ex-Communists have followed Ellen Wilkinson, Philips Price and Walton Newbold into the ranks of the anti-revolutionary Labour Party, or have altogether lost their interest in politics. The Communist Party in this country, judged by results, and especially in view of the enormous sums of money spent on advertisement and propaganda, has not been a success, and its want of success can be ascribed to this erroneous theory more than to any other single factor. If that theory were correct, it would be sound to attach far greater importance to getting the attention and sympathy of politically backward workers, than to educating them. It would be wise to try to develop “mass organisation” of the unemployed and manoeuvre Communists into official position in the Trade Unions and the Labour Party. But the theory was all wrong, and the abundant enthusiasm of Communist members has brought no good to their party or to Socialism. Where, now, are the unemployed organisations? What is there to show for the energy devoted to supporting Labour candidates and trying to get into the Labour Party? After fluctuating violently and falling as low as 3,000, the membership of the Communist Party has during 1926 leapt up again and is now, apparently, about the same as in 1920. Is this progress? It is certainly not the success they looked for. Communism in the eyes of the mass of workers has come to be associated not with the real and unassailable Marxian position, but with a press-distorted version of the policy of the C.P.G.B., and the ability of the press to misrepresent is largely due to the foolish actions and erratic changes of policy on the part of Communists themselves.

What, then, is this theory which has, in our view, done so much to give a wrong direction to the efforts of many workers? In its most general form it is a belief that friction and the contradictions which result from the basic structure of capitalism will inevitably produce an economic crisis such that the system itself will cease to function. The War, by increasing productive powers and at the same time blocking so many of the normal channels of capitalist trade, aggravated the problems of the capitalist class to a degree which would make collapse certain and imminent. Declining trade, industrial depression, growing armies of workless, stupendous burdens of war debts and taxation, a more than ever infuriated struggle for markets and raw materials— these were the bombing party who were going to blow capitalism into the air.

Where is this conception at fault? In the first place, let us make it clear that it is not Marxian. A system of society is not a pack of cards, or a house, or a piece of mechanism; it is a complex organisation of human beings. The organisational machinery of capitalism, like actual machinery, has no power or purpose of its own; it is governed and, if necessary, changed, by the class who are in control of society. Capitalism might conceivably be rent asunder and destroyed in a long-drawn-out struggle for mastery between contending classes, but, barring the failure of the natural physical basis of human life, it cannot fall and cannot be revolutionised except by the actions of the men and women who compose it. That capitalism contains within itself the germ of its own destruction is not inconsistent with Marx’s words, “Man makes his own history.” The development of capitalism has brought with it a deepening of the cleavage between wage-earners and property-owners, and has relegated the latter more and more to the position of a passive parasitic class simultaneously with an undreamed-of growth in their individual wealth and their power over the lives of the workers. The interests of the workers more and more obviously conflict with those of the capitalistic owners of the means of wealth production. “From forms of development of the forces of production these (property) relations turn into their fetters” (Marx, “Critique of Political Economy,” Kerr, 1911, page 12). In this process lies the germ of the destruction of capitalism. The production and distribution of wealth on capitalist lines do not become impossible; the system does not cease to function, but it becomes visibly an anachronism and therefore detestable to the workers. A period of revolution begins, not because life has become physically impossible, but because growing numbers of workers have their eyes suddenly opened to the fact that problems which they hitherto accepted as part of man’s unavoidable heritage have become capable of solution. Life need not have become worse than before—it may have become better—but it becomes intolerable from the moment of realising that only the interests and institutions of the ruling class prevent it from being better still. From that moment the workers forget the consolations of religion and the innumerable conventional barriers in the way of action, and concentrate their energies on attacking the privileges of the capitalist class. Mere suffering, whether through unemployment or a declining standard of living, will not automatically produce such a result. It will not do so if the material conditions are not ripe for solving the problem, or if the victims lack knowledge of the solution or lack confidence to act. Famine in India produces apathy, not revolution. Unemployment in England may do the same.

In other respects, too, those who held the theory of the collapse of capitalism were mistaken. They produced evidence, but their “facts” were one-sided, and their conclusions did not logically follow.

They selected the British Empire, and particularly Great Britain, as their example. The staple industries, they said—iron, coal, and cotton—were in a bad way. Competitors were stealing the pre-war markets of British producers, production in these lines was declining, and exports generally. Unemployment was great and growing, new producing and exporting countries were coming into the field, and pre-war competitors were rapidly recovering or surpassing their pre-war levels of production. On this evidence the outlook appeared to be gloomy and hopeless for the capitalist class ; but was the picture a complete one? It would take too long to deal with each industry, but it should suffice to mention some general conditions which were, and still are, ignored and which upset the assumptions behind that argument. First of all, it must be remembered that technical advance is always accompanied by the scrapping of old and the quick growth of new processes and new industries, and the country which has, like Great Britain, concentrated largely on a few main industries is naturally most affected either by world disturbances of trade or by the exploitation of new processes. But, however difficult the transition might be, was there ever any warrant for the belief that British capitalists would prove less willing or less able to adapt themselves than others? And does the bankruptcy of an old industry accompanied by the prosperity of a new one spell ruin for the capitalist class as a whole? Cotton might be depressed, but artificial silk has been taking its place. Coal might be in difficulties (as it was all over the world) but oil and electricity have been going forward by leaps and bounds. The amount of capital sunk in all branches of the very prosperous British electrical industry is estimated at no less than £768,000,000, and Sir John Snell predicts that the number of units of electricity generated will be trebled within 15 years (Daily Telegraph, Jan. 3). The development of the chemical industry has been crowned last year by the formation of the £65,000,000 Mond Combine. What has misled some observers is the quite natural desire of the capitalists in declining industries to howl their woes from the housetops, and the equally natural reticence of those in other industries who were making enormous profits.

Again, allowance should have been made for the familiar recurring depression which is a century old feature of the system. Such a depression affecting almost all the world in 1921, no more justified the prophecy of ruin and collapse for British capitalism than depression did in pre-war days. Since 1921 unemployment in this country has been almost halved, currency problems in most European countries have been from a capitalist standpoint satisfactorily solved and no one now supposes that the war debts present any special difficulty. To say that pre-war capitalism had its problems, too, and that a return to approximately pre-war conditions does not signify undisturbed stability, is true, but the essence of the case for the collapse of capitalism is that the war marked a turning point and the beginning of a new and troubled era from which there could be no return to the piping days of peace as it was known before 1914. Incidentally it must not be forgotten that even then the prototypes of the communists of to-day went on generation after generation making similar rash forecasts of collapse.

Much use has been made of figures showing a decline in exports, but rarely do the figures justify the use which is made of them. Although Great Britain depends largely on exports in certain industries, by far the greater part of production in this country is for the home market. The volume of production as a whole can and during the past few years undoubtedly has been increasing, while exports have been decreasing. Profits have since 1922 continually grown in this country, but declared profits again give only a partial indication of the magnitude of the proportion of wealth retained by the employing class. For years it may be the deliberate policy of expanding industries to devote to new plant the surplus which would otherwise appeal as dividends.

It is not suggested that the real position of the British capitalists is easily estimated. Our present purpose is merely to show that hasty answers based on a few declining industries are inadequate and certainly exaggerated, if not wholly wrong. It is by no means incompatible with the evidence presented that the nature of capitalist industry in this country is changing. The transition may be difficult and may disclose features which do not fit into current popular methods of measurement, but difficulties do not mean collapse, and it is always worth considering whether the standards of measurement may not themselves be inapplicable.

But even if British capitalism were doomed to lose its place in the front rank, does that signify a collapse of capitalism? If America ousts Britain is the system itself any weaker? If Europe and England become financial dependencies of the United States banks is it any less necessary for the workers to overthrow capitalism? Just as the decline of the cotton industry implies no necessary weakening of British capitalism, so the transfer of the supremacy from Europe to America may well be a cause of strength to the capitalist system; it is certainly not evidence of a collapse. Similarly the difficulties of the British Empire occasioned by the revolt of dependent countries, like India and Egypt, etc., only shows how virile capitalism yet can be.

India and Egypt, China and Mexico, are going through the painful birth processes of capitalism. British capitalist interests may suffer, but capitalism is not being undermined. In passing it is as well to repeat that in our view the danger to British capitalism from these quarters has been generally misunderstood and largely overestimated.

Let us face the facts. Capitalism is strong, and the capitalists are growing wealthier. They have forgotten their post-war panic and are confident of the stability of their system. The machinery of capitalist organisation, the banks, foreign trade, etc., may bring their problems, but it is absurd to suppose that the capitalists will in the long run allow unprogressive members of their own class to imperil the system by persisting in methods, such as unrestricted competition, which have become more dangerous than useful. The confidence of the capitalists in the stability of capitalism rests on the docility of the working class. Capitalism continues because the workers unthinkingly accept it. To devise means of prolonging this convenient condition of the workers’ minds is the chief and potentially fatal problem of the capitalist class. Capitalism will not collapse. It will end when the workers organise to bring it to an end. To educate and organise the workers for that purpose is the only problem with which Socialists should concern themselves.


(Socialist Standard, April 1927)

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