November 2012        

Understanding the crisis, and putting the system on trial

Part 2

■ The first part of this article was published in the October issue. The third and final part will be published in December.

The general crisis of capitalism is often misrepresented or misunderstood as meaning that the socialist world was on the brink of victory over capitalism and that consequently, since the victory of the counter-revolution in some socialist countries, the theory is no longer relevant or valid. Indeed many of the critiques of the general crisis of capitalism suggest that since socialism (or “state capitalism,” as they call it) was abolished, this disproves the GCC theory.

      Certainly theorists in the Soviet Union emphasised the interrelated internal contradictions of capitalism and the development and growing support for socialism globally a number of decades ago. However, the general crisis categorisation is fundamentally based on an analysis of the internal contradictions within monopoly capitalism; and therefore, if these contradictions still exist (which I believe recent articles in Socialist Voice have shown they do), it remains as valid today as when it was first suggested, although as time has passed and circumstances have developed and changed, certain features of the general crisis theory will need to reflect the changed reality.
      As the communist philosopher Hanz Heinz Holz put it,
we must therefore steer clear of the idea that the General Crisis of Capitalism is to be defined by the correlation to the socialist system. The determining characteristics of the crisis must be sought in the essence of the capitalist social processes and—in the final analysis—in the sharpening of the basic contradictions of capitalism, between capital and labour.
      Holz explains that the general crisis of capitalism is a historical categorisation of the system in its late phase, when the internal contradictions can no longer be kept in check. Where previously the development of productive forces within the system managed to keep these contradictions under control, now in its highly monopolised stage it exposes humanity to them to the point of threatening the conditions of existence for humanity.
. . . If a system is no longer able to function according to its own structural laws, and instead has to have conflicting functional elements fitted into it, then it is clearly unstable—and it keeps the appearance of stability only by immediately creating new contradictions . . . However in the final analysis it maintains itself always only by shifting onto the weaker members of society the costs caused by the balance of the contradictions . . .
      Capitalism, in its late and fully developed monopoly stage, cannot permanently absorb or control its contradictions and conflicts and so passes them on, brutally, to ordinary people. Whether it is war, unemployment, environmental catastrophe, or “austerity,” they must all be seen in the context of the limitations of the system and the generalised nature of the crisis within the system.
      Each cyclical crisis brings a renewed assault on the people. The system cannot absorb the downturn and recover: it must now pass that crisis on to society.
      To maximise profits, companies increase the exploitation of labour and invest in increased technology; but this has the negative effect of ultimately reducing the rate of profit, as an increased share of capital is invested in technology and not in human labour—the source of surplus value. With capital increasingly monopolised, companies buy out their failing competitors cheaply, which temporarily restores profit but ultimately increases monopolisation and exacerbates over-production and the concentration of capital and power.
      During the upturn we do not see a recovery of labour’s share of value, and we do not see a massive growth in employment; nor do we see a rebalancing of the tax system. Each crisis further reduces labour’s share of global wealth. These contradictions make the crisis general at this stage of the economic system’s historical development. It is general in the sense that it permeates society in many ways. Democracy is attacked and hollowed out. Increasingly, capital must resort to authoritarian or “technocratic” forms of management both to control dissent and to try to control the system so as to secure profit-creating opportunities. The state is increasingly used to transfer wealth to the rich through taxes and subsidies and ensure profit-creating opportunities through privatisation and state contracts.
      The coercive nature of the state in protecting wealth is increasingly clear. Health services cannot provide even basic health care. Monopoly corporations deny drugs to millions globally and permit people to die from curable diseases. Farmers are paid subsidies for not growing food, while millions starve. Unemployment is constant and grows globally.
      Culture is increasingly commodified and reduced to the vulgar sale of sex. Sport is increasingly a business and operates as part of the accumulation system, with the result that cheating is endemic, and tolerated.
      Holz suggested that there are eight aspects of the crisis that permeate all aspects of life and thus make it general. These are the economic crisis, the political crisis of democracy, the political crisis of states leading to war, the social crisis, the crisis of direction (no unifying coherent philosophical direction), the educational and cultural crisis, the crisis of technical resources, and the environmental crisis.

Home page  >  Publications  >  Socialist Voice  >  November 2012  >  Understanding the crisis, and putting the system on trial—Part 2
Baile  >  Foilseacháin  >  Socialist Voice  >  Samhain 2012  >  Understanding the crisis, and putting the system on trial—Part 2