The Relevance of Marxism Today¶
Core Argument¶
The collapse of the Stalinist regimes and the fall of the Berlin Wall were mistakenly celebrated as the death of socialism and the triumph of the free market. Yet Stalinism and socialism are fundamentally opposed; as Trotsky explained, a nationalised planned economy without democracy inevitably seizes up. The subsequent transition to capitalism in the former Soviet Union and Eastern Europe produced social catastrophe: Russian industrial output fell by 40-45 per cent, investment collapsed, and male life expectancy dropped to 59 years. Far from vindicating capitalism, these events exposed its deepening crisis.
The post-war capitalist boom of 1948-74 was driven by an unprecedented expansion of world trade, not Keynesian intervention. Its end with the 1973-4 recession marked the beginning of a long-term structural decline. The 1982-90 boom was built on credit expansion and US deficit spending, leaving massive consumer indebtedness. The resulting recession has been the longest and most severe since World War Two. Mass unemployment, now affecting 35 million in the OECD, is not cyclical but structural: the system can no longer absorb workers even during booms. In Japan, full-time jobs grew by just 0.1 per cent in the year to October 1993, while the workforce expanded by 0.5 per cent. Industrial robots have slashed workforces while raising productivity; French car manufacturers cut 200,000 jobs over twelve years while increasing output by 12 per cent.
Marx’s analysis of capitalism’s contradictions remains devastatingly accurate. Machinery lengthens the working day because it creates no new value and must run continuously to yield returns. The tendency of the rate of profit to fall is counteracted by increased exploitation, but long-term data show the US profit rate declining from 22 per cent in 1899 to 10 per cent in 1983. Real wages in the US have stagnated for twenty years; British manufacturing shed two million workers while maintaining output. Capital concentration accelerates: in the US, nine-tenths of the economy is controlled by the top 500 companies, while in Britain the largest 100 manufacturing firms’ share rose from 16 per cent in 1909 to 46 per cent in 1970. Speculative capital now dominates productive investment, with daily foreign exchange turnover reaching $1,000 billion, only 5-7 per cent of which represents real production.
The capitalist offensive is eroding past working-class gains. In Britain, the poorest 20 per cent saw real income fall by 3 per cent between 1979 and 1990-91, while the richest 20 per cent gained 49 per cent. Union membership fell from 58 to 40 per cent. In the Third World, the gap with rich countries has doubled in thirty years; the richest 20 per cent now hold 82.7 per cent of global product. Debt repayments force cuts to health and education, with UNICEF reporting hundreds of thousands of children dying to service national debts.
Bourgeois governments have tried Keynesianism and monetarism, both of which failed. Budget deficits have risen inexorably; the OECD average deficit reached 4.2 per cent of GDP in 1993, up from 1 per cent in 1989. Governments are trapped: deficit financing provokes inflation, while cutting deficits worsens the crisis. With war between major powers blocked by nuclear weapons, these contradictions will express themselves in sharper class conflict. The working class will eventually take power, as in Russia 1917, laying the basis for world socialism.