World Perspectives 1979

Marxist Perspectives · 1979-08-16

Core Argument

Ted Grant's central thesis is that the world capitalist economy has entered a qualitatively new phase — the "twilight" or "death agony" of capitalism — characterised by a rapid succession of shallow booms and shallow slumps, rather than the long upswing that followed the Second World War. The 1979 recession, coming only three to four years after the recession of 1975, marks the definitive end of the post-war boom and the beginning of a cycle in which capitalism can no longer deliver sustained growth, full employment, or rising living standards. Grant argues that this structural impasse creates the objective conditions for socialist revolution across the advanced capitalist world, but that the subjective factor — the leadership of the working class — remains decisive. The article simultaneously extends this analysis to the Stalinist bureaucracies of the East, arguing that they have become an absolute fetter on the development of the productive forces, and to the underdeveloped world, where the end of the upswing will bear down most harshly on the colonial and semi-colonial masses.

Theoretical Grounding

The analysis is grounded in the Marxist theory of capitalist crisis, drawing explicitly on the tendency of the rate of profit to fall and the concept of the fetter on productive forces. Grant deploys the distinction between capitalism as a relative fetter — which it was during the post-war upswing, when it could still develop the productive forces — and an absolute fetter, which it has now become. This is a direct application of the preface to Marx's Contribution to the Critique of Political Economy, where the contradiction between the forces and relations of production is the motor of social revolution.

The article also draws on Trotsky's analysis of the relationship between economic cycles and political consciousness. Grant explicitly cites Trotsky's observation that constant economic change produces uncertainty, which in turn has a political effect on the masses, opening up periods of political explosion. The concept of the "subjective factor" — the role of revolutionary leadership and organisation — is central to the argument, reflecting the Marxist tradition's insistence that objective conditions are necessary but not sufficient for revolution.

Grant's treatment of the Stalinist states applies the theory of the degenerated workers' state and the need for political revolution, as developed by Trotsky in The Revolution Betrayed. The bureaucracy is analysed as a parasitic caste that has become an absolute fetter on the productive forces, requiring a political revolution to restore workers' democracy. The analysis of the underdeveloped world draws on the Marxist theory of imperialism, particularly the super-exploitation of the colonial and semi-colonial peoples through unequal exchange and the collective exploitation organised by the advanced capitalist powers.

Conjunctural Relevance

The article was written in August 1979, at a specific conjuncture that Grant reads as decisive. The recession of 1975 had been the first simultaneous world slump since the war, but had only involved a 0.5 per cent fall in production across the OECD. Grant argues that the new recession, coming so quickly, confirms that the system has entered a qualitatively different phase. He cites specific data: gold had risen from $34 an ounce to over $300; the United States faced 12-15 per cent inflation alongside stagnation; no capitalist country was using more than 80 per cent of productive capacity; unemployment stood at 16-20 million in the OECD.

The article identifies specific political consequences already visible: the collapse of the dollar, the perplexity of the American ruling class, the disgust of American workers with both the Democrats and Republicans, and the wave of strikes in previously "placid" countries like Denmark, Australia, Canada, and New Zealand. Grant predicts that the American workers could rapidly draw revolutionary conclusions, arguing that "the tempo of American life is different from that in Europe" and that they could achieve in seven years what took British workers seventy.

On the Eastern side, Grant notes the fall in Soviet growth rates to around 3 per cent, lower than Japan's reduced rates, and interprets the new Soviet constitution's emphasis on participation in the world market as a defeat for the autarkic wing of the bureaucracy. He identifies Poland's mass demonstrations in support of the Pope as an expression of discontent beneath the official mask, and predicts that "new Hungarian revolutions are inevitable." The war between China and Vietnam and the plight of the Vietnamese boat people are cited as evidence of the horrors of Stalinist rule.

Where the Argument Continues

This article is a classic statement of the "unbroken thread" perspective that runs through the work of Ted Grant and the tradition that became the Revolutionary Communist International. The argument about the rapid succession of booms and slumps is developed further in subsequent World Perspectives documents, particularly those from 1981, 1985, and the early 1990s, which track the actual trajectory of the cycle. The prediction of a "small recession" in 1979-80 is followed by analysis of the 1980-82 recession, which proved deeper than Grant anticipated, and the subsequent "shaky boom" of the mid-1980s.

The analysis of the American working class and the possibility of a mass party of labour connects to later articles on the rise of the Labour Party in Britain and the question of the Labour Party's relationship to the trade unions. The argument about the Stalinist bureaucracies becoming an absolute fetter is developed in later IDOM articles on the collapse of the Soviet Union and Eastern Europe, where the tradition argued that the bureaucracy's inability to develop the productive forces was a key factor in the crisis of the late 1980s.

The analysis of the underdeveloped world, particularly the prediction of explosions in Brazil, Argentina, Indonesia, Nigeria, and India, connects to later articles on the debt crisis of the 1980s, the rise of the Zapatistas, and the anti-imperialist movements of the 1990s and 2000s. The argument about the "Balkanisation" of India is revisited in later analyses of the rise of Hindu nationalism and the fragmentation of the Indian polity.

Connections

This article should be read alongside Trotsky's The Death Agony of Capitalism and the Tasks of the Fourth International (the Transitional Programme), which provides the theoretical framework for the argument about the epoch of social revolution. It also connects to Trotsky's The Revolution Betrayed for the analysis of the Stalinist bureaucracy, and to his writings on the colonial question, particularly the Draft Programme of the Communist International.

Within the IDOM corpus, the article connects to Ted Grant's The Unbroken Thread (the collection in which this article appears), to the subsequent World Perspectives documents, and to the theoretical articles on the tendency of the rate of profit to fall and the theory of capitalist crisis. It also connects to the tradition's analyses of specific conjunctures, such as the 1968 French events, the Portuguese Revolution, and the Iranian Revolution of 1979.

For the analysis of the underdeveloped world, connections include the writings of the Fourth International on the colonial question, particularly the work of Michel Pablo and Pierre Frank, and the later IDOM articles on the rise of the BRICS and the changing nature of imperialism.

Key Quotes

1. "A new world recession is developing at the present time. This marks the definitive end of the world economic upswing. It expresses the twilight of world capitalism and shows that the economic system internationally has reached an impasse."

2. "We are in a cycle of booms and slumps moving far faster than at any other time in the history of capitalism. It means that we are now in the epoch of the death agony of capitalism."

3. "The economy, in reality, has developed beyond the limits provided by the capitalist system. That is why we are in the twilight of world capitalism — an epoch of revolutions and of minor 'secondary wars'."

4. "Capitalism has changed from being a relative fetter holding up the development of productive forces into being an absolute fetter. As Marxism teaches us, this is the epoch of social revolution."

5. "In Eastern Europe and Russia, from being a relative fetter the bureaucracy is becoming an absolute fetter on the development of the forces of production."

6. "It is still a race as to which will come first, a social revolution in the West, or the political revolution in the East. Either would have a tremendous social effect on the other."