Marxism in the age of capitalist crisis

AUTHOR(S)

William Briggs

PUBLICATION DATE

01-11-2017

HANDLE

10536/DRO/DU:30105434

Downloaded from Deakin University’s Figshare repository

Deakin University CRICOS Provider Code: 00113B

by

William Briggs
MA (International Relations)

Submitted in fulfilment of the requirements for the degree of

Doctor of Philosophy

Deakin University

November 2017
Signature Redacted by Library
Signature Redacted by Library
 Acknowledgements

It is sobering to stop and consider those to whom I am indebted. Certain people stand out.

Without their guidance, the ideas that follow would not have seen the light of day. My

principal supervisor, David Hundt, has been an inspiration and has taught me far more than

he might ever imagine. His patience, his support, his generosity of time and spirit are values

worthy of modelling. I offer him my special thanks.

Andrew Vandenberg’s gentle probing and quiet insistence that I explore other perspectives

has been invaluable. I have greatly benefited from Geoffrey Robinson’s theoretical expertise,

Dean Coldicott’s professional perspective and Danielle Chubb’s careful and astute appraisal.

My supervisory team’s input has made my task, if not easier, then more thorough and

complete. It has been a privilege to have undertaken this PhD journey. To all Deakin staff,

who have guided my progress since 2013 when I commenced my Master’s program until

today, I simply say thank you.

Acknowledging those who have assisted in bringing this thesis to a conclusion is more than a

list of names, as important as that is. It also promotes reflection. The physical task of

completing such a project obviously occurs within a specific time frame. The thoughts

represented in the study are the product of a much longer period and are the result of an

evolution of ideas and the development of a worldview that has been a lifetime in the making.
I would, therefore, like to acknowledge a great many people who have, in various ways,

influenced my thinking over the years. These people’s lives and actions have been informed

by Marxist thinkers and activists. They read and accepted the clarity, the truth, the logic of

Marxism and have, across generations, given this worldview its humanity and its optimism.

Some 45 years ago I first, probably injudiciously, declared myself to be a Marxist. It was a

declaration based on little more than a wish for a world that was fair, equitable, and just. The

subsequent decades have reaffirmed that desire. Today I have a better understanding of what

Marxism is all about. I still call myself a Marxist and possibly have some small right to so

label myself. I owe Marxism and all those Marxists who helped me to understand, a debt of

gratitude.

Completing this thesis would have been unthinkable had it not been for the insistence and

assistance of Rose. Her ideas, her support and her refusal not to believe that the outcome

would be positive first motivated me and allowed me to maintain the focus required to

complete this task. Her first demand was that I return, after a very long absence, to formal

study and to see where the road would lead. She never wavered in her belief that that road

would end up with a PhD thesis. It is to Rose that this work is dedicated.
 Abstract

Analyses of capitalism, whether statist or neo-liberal, downplay or understate crisis as a key

factor in its development. Such a shortcoming is inevitably linked to an ideological

perspective that promotes the rule of capitalism and class division. It is within Marxist theory

that crisis is best addressed and is a pivot around which this thesis revolves. Crisis, as both

threat and motivating influence, remains central to capitalist development. The cycle of crisis

and stabilisation assume an almost ‘natural’ rhythm. Capitalism, riven by crisis, appears

resilient and adaptive. It is a paradox that has been problematic for Marxism. The 20 th century

did not see the collapse of capitalism but instead exposed growing problems in Marxism as it

became increasingly reactive to capitalism’s continued globalisation. Crisis remains,

inequality has grown, and yet capitalism is unthreatened. This thesis contends that Marxism’s

perceived weakness has allowed capitalism to go unchallenged.

The project isolates fractures that have occurred in Marxism and promotes a theory and

practice that would overcome those differences. An historical and dialectical materialist

approach is offered, to better understand the world, and promote a reasoned consideration of

forward movement of ideas and practices that allows for the building of a theory for the

present and future. From the formation of the Frankfurt School to the development of post-

Marxist theory, Marxists have reacted and responded to issues flowing from both the

Stalinisation of the Marxist movement and the stabilisation of capitalism in the post-war

period. Attempts to ‘rescue’ Marxism, however, progressively limited its potential to promote

fundamental change. There has been a continuing shift in focus away from the working class

as the central force in combatting capitalism and towards identity politics and social
movement activism, which, the thesis argues, represents a crisis in Marxist theory and

practice, but a crisis that can be overcome.

A dialectical relationship exists between the crises in capitalism and Marxism. The thesis,

offers a theoretical and practical response to these two issues, reaffirming Marxism’s

relevance, not only in its explanatory form, but as a means of building independent political

and organisational structures that will challenge the rule of capitalism. This emphasis on the

practice and purpose of Marxism expands the focus of current debates within Marxism, while

offering resolution to internecine conflicts that have called Marxism’s relevance into

question.
 TABLE OF CONTENTS

INTRODUCTION – Making Marxism relevant in the age of capitalist crisis 1

1 Aims, objectives and focus of the thesis 1

2 Research problems and questions 3

3 Proposed outcomes of the project 6

4 Relevance of the study 7

5 Research plan, methodology and scope of the project 11

6 Structure of the thesis 13

CHAPTER 1 Capitalist crisis and the relevance of Marxism: 16

a review of the literature

1.1 The state and its relationship with capitalism 18

1.2 Capitalism and crisis 22

1.3 Responding to capitalist globalisation 29

1.4 The crisis in Marxism 34

CHAPTER 2 Learning from Marxism’s historical crisis 44

2.1 An optimistic view of the world 45

2.2 The seeds of crisis: reform or revolution 48

2.3 A deepening crisis: the period between the wars 53

2.4 The ‘golden age’ of capitalism and beyond 59

2.5 Can there be resolution? 63

2.6 Conclusion 69

Chapter 3 Marxism and it analytical approach 71

3.1 Elements of Marxist analysis 73

3.2 Historical materialism and the scientific approach 78

3.3 A materialist reading of the ‘weakness’ in Marxism 81

3.4 A materialist reading of capitalist crisis 87

3.5 Conclusion 92

Chapter 4 The development of the capitalist state 94

4.1 Constructing the capitalist paradigm 95

4.3 Cycles of crisis 104

4.4 Capitalism – resilient or simply unchallenged? 108

4.5 The use of ideology to maintain social stability 112

4.6 The inability to resolve inherent contradictions 117

4.7 Conclusion 120

Chapter 5 Qualitative change in capitalism and its implications 122

5.1 The motivations behind capitalist globalisation 124

5.2 Measuring qualitative change in capitalism 129

5.3 Changes in capitalism: implications for the nation-state 136

5.4 Changes in capitalism: implications for the working class 142

5.5 What is to be done? 148

5.6 Conclusion 154

Chapter 6 Responding to capitalist globalisation 156

6.1 Identifying the real enemy 158

6.2 The working class and opposition to capitalism 162

6.3 Identity politics and anti-capitalist mobilisation 168

6.4 Social movement politics and anti-capitalist mobilisation 175

6.5 Strengths, weaknesses and the tendency toward dissipation 180

6.7 Conclusion 191

Chapter 7 The promise of Marxism 193

7.1 Marxism and 21st century capitalism? 195

7.2 An effective theory for the 21st century 200

7.3 Resolving the crisis in Marxism 206

7.4 New organisational structures and overcoming the crisis of leadership 212

7.5 Reinterpreting class and social identity 217

7.6 Marxism’s purpose and future 222

7.7 Conclusion 227

Chapter 8 Conclusion 229

8.1 Reflections on the research 231

8.2 Implications and limitations of the project 235

8.3 Recommendations for future research 239

8.4 Conclusion 244

Bibliography 246
 Marxism in the age of capitalist crisis

Introduction

1 Aims, objectives and focus of the thesis

Economic crisis is the pivot around which this study revolves. Capitalism, as the enduring

paradigm in both economics and politics, has from its very inception, been framed by cycles

of stabilisation and crisis. This has been a motivating factor for capitalism’s growth and has

been the engine for its expansion. Its apparent resilience has proven to be troublesome for

critics of capitalism and especially for Marxism. Marxist analysis has sought to adapt to suit

new and changing conditions. The 20th century did not see the collapse of capitalism but it

did herald deep and on-going problems in Marxist thought and practice. The thesis argues

that these problems, that constitute a crisis in Marxism, have allowed capitalism to remain

unchallenged. The Global Financial Crisis (GFC) and the rise of economic nationalism show

that the contradiction between capitalist globalisation and the nation-state is becoming ever

more acute. Marxist responses to an intensifying crisis in capitalism have, however, been

largely inadequate.

The crisis that has engulfed capitalism in recent decades has encouraged a re-examination

and critique of capitalism. Scholars, economists, political economists and political activists

from Marxist and non-Marxist backgrounds have either questioned the future of capitalism or

offered possible solutions to its problems. These deeply-rooted problems in contemporary

1
capitalism also encourage a re-examination of Marxist theory as a means of understanding,

interpreting and combatting capitalism. The thesis uses a Marxist analytical framework in

order to explain the growth of inequality, the constrained and limited position of both the

working class and middle class within a capitalist economy and state, and the objective

necessity to overcome the limitations that are evident in interpreting Marxist ideology.

Three interconnected elements of Marxist theory become significant. The first is that the

working class by its labour produce and reproduce capitalist production and class relations.

The second is that it remains an objective fact that the needs of opposing classes remain

intensely contradictory. The third is that the working class has become an increasingly

globalised class as capitalism itself has become a globalised economic structure. Recognition

of these three facts becomes pivotal when considering the prospects for Marxist renewal.

These contradictory elements are further compounded by the overarching contradiction

between a globalising capitalism and the continued role of the nation-state.

The nation-state has long been the political foundation upon which capitalism has been based.

A contradiction is evident between this nation-based political structure and a rapidly

globalising economic system. The latter part of the 20 th century was marked by

intensification of crisis within capitalism and the subsequent growth of globalisation. The

rapidity of economic globalisation, from the 1970s onward, points to a qualitative change

emerging in capitalism. Critics of globalisation and of capitalism have sought to understand

the processes that are underway and to intervene in order to alter the course of globalisation.

They have also tried to promote the interests of the working class, and of all those whose

2
lives are negatively impacted upon by globalised capital. Marxism, from its first articulation,

called for emancipation and for fundamental change to the class relations that are such a part

of capitalism. The thesis argues that there is a dialectical relationship between the

fragmentation and perceived weaknesses within Marxism and the capacity for capitalism to

maintain its paradigmatic position of strength. In other words, an ideologically weakened

Marxism has allowed capitalism to function without serious challenge.

The changes evident in global capitalism demand new ways of advancing that call for

emancipation. Marxism remains the most appropriate vehicle by which to understand and

address rapidly changing economic structures. However, Marxism needs to be reappraised if

it is to better respond to the objective conditions and realities presented by the changes within

globalised capitalist relations. This is necessary if capitalism in the 21st century is not simply

to be understood but to be challenged.

2 Research problems and questions

Marx’s analytical approach begins with class alignments and moves ultimately to global

systems. Such an analytical framework provides answers to questions of Marxism’s on-going

‘crisis’ and which motivate this study:

• why did Marxism fragment in the face of capitalist re-stabilisation; and

• why, under conditions of deepening capitalist crisis, does Marxism appear seemingly

incapable of repositioning itself as a global movement for emancipation?

Responding to these questions, in turn, helps to resolve the central research question that

underpins the thesis:

3
 • how can Marxism affirm its relevance in an age of capitalist crisis?

Subsidiary, but interconnected questions are also addressed:

• how can an ideologically fragmented Marxism combat capitalism in the 21 st century;

and

• how can peoples’ movements, whether based on class or other factors respond to the

intensification of capitalist crisis?

The relationship between capital and labour has traditionally been antagonistic. At various

stages in the development of the capitalist state this relationship has been more or less acute

but overt class hostility was minimised by an adaptive state mechanism. The 20 th century was

a time of crisis within the Marxist movement, whose task it was to offer ideological

leadership to counter capitalism. Marxism has long dwelled within a contested and

conflictual terrain. The ideological conflict that engulfed Marxism and continues to do so was

reflected in differences in method. Neither the 1917 Russian Revolution, World War I, nor

the Depression led to capitalist collapse. As a consequence, Marxist theorists began to

question the Marxist historical and dialectical materialist approach, regarding it as

insufficient to address new realities that arose from what appeared to be failures in theory and

practice. Neo-Marxists sought, among other things, to replace the class essence of Marxist

method with one that focused on social conflicts. The classical Marxist proposition of class as

the predominant feature of societal and economic development and therefore a pivot around

which capitalist development revolves was similarly called into question.

Marxism is best understood as an interplay of two complementary aspects – a theory of

interpretation and an activist practice. Glaser (2007) explains Marxism as being a theory that

promotes both mobilisation and action – as a vehicle for interpretation and as an agent for

4
action. Marxist theorists sought to react and respond to problematic issues that flowed from

both the Stalinisation of the Marxist movement and the stabilisation of capitalism in the post-

war period. Attempts to ‘rescue’ Marxism, however, served to weaken the theory, initially as

interpreter of and consequently limited its potential as an agent for fundamental change.

Femia (2007: 96), for example, argues that ‘Western’ Marxism saw its mission as chiefly a

cause of saving the theory from the distortions of Stalinism. Korsch (1931) regarded Marxism

as being enmeshed in an historical and theoretical crisis. He was writing in 1931 at the height

of the Stalinisation of the European Marxist movement. Neither Korsch nor any of the

subsequent reformers within Marxism regarded the essence of the theory to be at issue but

ultimately, as Anderson (1976: 42) contends, the rescuers were a product of defeat. Lukacs,

Gramsci, Marcuse, Althusser, Poulantzas, among other theorists and philosophers, including

those within the more recent schools of Regulation theory and post-Marxist theory have both

addressed and contributed to the on-going discontent in Marxism (see Chapter 2). Theoretical

realignments and attempts to ‘reform’ Marxism saw Marxist theory progressively turn its

focus from the working class and from its call for emancipation in favour of a philosophical

position promoting individual human freedom. Marxist theory became less connected to

political economy and more to human psychology. A core element of Marxist theory – that

economics drive political responses – was disregarded. The conception of the working class

as revolutionary subject was at first downplayed and later discounted. Femia remarks that

“Western Marxism involved combinations of Marxism plus ‘something else’. Nowadays

radical thinkers seem more interested in developing the something else” (2007: 116).

By the 1970s capitalism was entering a new phase as its internal contradictions became more

pronounced. The rapidity of globalisation and its effects on states and their inhabitants began

to be felt more and more acutely. Social inequality rose and continues to rise and alienation

5
and disintegration of societies became more readily identifiable. Economies were restructured

to suit the new requirements of capital. Reactions to this took many forms and came from

many quarters – Marxist and non-Marxist alike. What became especially evident was an

apparent ideological weakness and disconnect in Marxist and other critical responses to these

changed conditions. This had its beginnings decades earlier when capitalism, faced with

existential threats from war, revolutionary upsurges, and economic depression, did not

collapse but stabilised. Marxism became fragmented and increasingly ineffectual and

impotent as an actor to effect change, while still being a valuable tool by which to understand

the processes at work in political economy. Any re-positioning of Marxist theory to suit the

realities of the 21st century remains difficult but the crisis of capitalism requires that the crisis

in Marxism be overcome.

3 Proposed outcomes of the project

The thesis contends that the on-going discontents that have been so apparent in Marxism for

the better part of a century have acted to keep the rule of capitalism secure. Capitalist

economic relationships, nationally and globally, have been riven by contradiction and crisis

and yet its rule has never seriously been threatened. Capitalism’s resilience and its capacity to

adapt to crisis does not denote any particular strength. This study maintains that it is

Marxism’s ‘weakness’ rather than capitalism’s ‘strength’ that is a significant factor.

In highlighting this problem, the project isolates the fractures that have occurred in Marxist

theory and practice. The role of Stalinism is, perhaps, the dominant factor in the crisis that

has engulfed and continues to engulf Marxism. Stemming from the Stalinisation of Marxist

thought and practice came reactions and responses within Marxism and, as has already been

6
indicated, a shift in focus away from the working class as the dominant force in combatting

capitalism.

At the same time, capitalism has not been able to overcome its inherent contradictions or its

potential for crisis. From the 1970s on, this tendency to crisis has become even more acute.

Globalisation of capitalist relations and production has become ever more pronounced as a

qualitative change in capitalism becomes evident.

The thesis, in arguing that a direct relationship exists between the twin crises of capitalism

and Marxism, operates within a clearly defined framework of dialectical and historical

materialism. The study consciously seeks to develop a theoretical response to these two

contradictory but linked phenomena. In doing so the study achieves the proposed outcome of

illuminating the interconnectedness of crisis in both capitalism and Marxism in the 21 st

century. It also re-asserts the relevance of Marxism, not only in its explanatory form,

important as this is, but as a means of promoting organisational structures that will challenge

the rule of capitalism and offer a realisable path to fundamental political and economic

change. By consciously adopting such a course, the project contributes to debates within

contemporary Marxism, making Marxism relevant in an age of capitalist crisis.

4 Relevance of the study

The contradiction between globalised economic realities and nationally based political

authority is becoming more acute as the crisis of capitalism intensifies. The world is

experiencing far-reaching changes and pressures. Social inequality is rising, and while there

7
is wide-spread discontent, and while large numbers are being drawn into protest and dissent,

there appears to be no direct challenge to capitalism. While Marxist theory offers valuable

analysis, there is a crisis of leadership that has seriously limited opposition.

An expanding literature indicates that the crisis affecting capitalism is becoming more acute

(Piketty 2014, Posner 2009, Berberoglu 2012, McDonough, Reich & Kotz, 2010). What is

being increasingly recognised is a structural change occurring within capitalism and a

growing incapacity for globalised capital to restore stability and equilibrium. This has re-

focused attention to oppositional theories and particularly to Marxism as a rational means of

explaining and understanding the challenges that globalisation and capitalist crisis present

(Eagleton 2011, Lebowitz 2004, Uchida 2004, Musto 2012).

This study maintains that the development of capitalism and of globalisation is best reflected

and observed in an examination of the class nature of society and the economic relations that

drive capitalist development. It further maintains that such an examination needs to be based

on historical materialism as an integrating and unifying theoretical tool. The thesis recognises

that divergence, fragmentation and contestation have seriously limited the oppositional

ideology envisaged by Marx. Marxism still provides a thorough analysis of capitalism but

capitalism remains unthreatened. The world has not been changed.

The strength of Marxist analysis lies in its integrated historical and materialist approach. The

fact that capitalist globalisation has been occurring at such a rapid pace is both logical and

explicable if viewed from such a materialistic outlook. Marx and Engels recognised that “the

bourgeoisie cannot exist without constantly revolutionising the instruments of production,

8
and therefore the relations of production, and with them the whole relations of society”

(1977: 38-39). Consequently, as Solomon & Rupert assert, historical materialism

“approaches the question of globalization not with puzzlement over dramatic changes in

forms of accumulation, but fully expecting them (2002: 284). Lukacs declared that:

historical materialism eclipses all the methods that went before it, on the one hand,

inasmuch as it conceives reality as a historical process, and on the other hand,

inasmuch as it is in a position to understand the starting point of knowledge at any one

time. Knowledge itself is understood to be just as much a product of the objective

process of history (2000: 105).

The thesis, consciously adopts a process of theory building based firmly on such an analytical

approach. This methodological approach offers an understanding of capitalist development,

globalisation and crisis, and also of the problems and ideological weaknesses that have

afflicted Marxism. The dialectical connection between the twin crises of capitalism and of

Marxism’s apparent inability to challenge capitalism is central to this theory building process.

By analysing how and why Marxism became so mired in discontent, the thesis is able to

enrich Marxist theory. It aims to discard that which is unnecessary in favour of integrating

new insights into a working theory.

Given that the thesis is seeking to build a theory that both explains developments of

capitalism and Marxism, I have consciously chosen a Marxist theoretical approach that

presents these arguments and dialectical connections. Two immediate options present

themselves. The first is to take a theoretical route based on a dialectical and historical

materialist approach. The second involves empirical analysis and a case-study model of

research. Without downplaying the importance of the latter approach, the goals of the thesis,

9
which include an analysis of the twin crises of capitalism and Marxism, the separation of

theory from practice, and Marxism’s discontents, which have acted as a buffer against

capitalism’s potential for existential crisis, are well suited to a dialectical form of analysis.

There is a close dialectical unity that can be observed that has resulted in a critical lack of

leadership within the working class movement.

The project has particular relevance, especially when set against a backdrop of growing

globalisation and capitalist instability. The Marxist analytical approach that is offered not

only allows for an appreciation and understanding of the changes affecting the world, but also

identifies that which contemporary scholarship either understates or ignores. What is lacking

is the capacity, within Marxism and its variants, to resolve an ideological crisis that has

weakened its ability to offer a serious critique of late capitalism.

A re-appraisal of Marxism is therefore required. In presenting such an appraisal the thesis

highlights strengths and weaknesses within contemporary Marxism. Its aim is to promote

debate among those opposed to capitalism, globalisation and neo-liberal theory. Such an

approach is provocative, but a critical analysis of ‘anti-capitalist’ theories and an equally

critical engagement with much of contemporary Marxism is required if capitalism is to be

seriously challenged. The contradictions within capitalist relations are more intense than at

any time in its history. Critical ideologies, however, remain ineffective, and are framed by the

crisis that affected Marxist theory that can be traced to the first decades of the 20th century.

New perspectives are required if the new conditions that drive capitalism are to be effectively

understood and combatted.

10
5 Research plan, methodology and scope of the project

The methodology employed in this project is Marxist. This methodological approach is

outlined in detail in Chapter 3, which discusses Marxist analysis and how it is used, in the

thesis, to explore the twin crises of capitalism and Marxism. This process allows the thesis to

observe and review the evolution of Marxism alongside the evolution of capitalism. The

focus of the study is essentially theoretical in nature and consciously engages in a process of

theory building as previously stated. Specifically, the thesis seeks to establish a more

satisfactory account of the dialectical relationship between problems that appear to be almost

endemic to contemporary Marxism, and to the on-going and irresolvable crisis within

capitalism. The study raises questions of the place of Marxism in the 21st century and whether

a fragmented ideology can resolve differences in order to challenge capitalism. The term

ideology can be problematic. Eagleton (1991) outlines 16 different possible definitions. Jones

in the Oxford Concise Dictionary of Politics (1996) describes ideology as “any

comprehensive and mutually consistent set of ideas by which a social group makes sense of

the world”. For the purpose of this study, Marx’s description of ideology as representing the

“production of ideas, conceptions and consciousness … what men say, imagine, conceive”

(Marx & Engels 1964: 37) situates ideology within a materialist framework. Ideology, as

expressed in Marxist theory as the world view of the dominant class in society, is further

discussed in Chapter 4.

Historically, Marxists faced enormous problems in building a theory that could stand in

opposition to the dominant ideological paradigm of the early 20 th century. The rapid growth

of Marxism, particularly in Germany and of its virtual capitulation as World War I dawned

showed the difficulty of ‘proclaiming’ a change in ideological perspective and effecting a

11
lasting world view. These problems were repeated in the post-World War II period, when the

old Marxist verities were called into question. What is required is a set of organisational,

theoretical, and practical initiatives that can offer a fundamental challenge to capitalism into

the future.

The project, as stated above, revolves around a pivot of crisis. The study argues that crisis, so

evident in capitalism and in particular as it is expressed through globalisation, is reflected in a

debilitating crisis within Marxism. It is further argued that the seeming inability of Marxism

to overcome theoretical division and paralysis has meant that capitalism has been able to

avoid serious challenge, even as its irreconcilable contradictions become more acute.

Despite the degree of contention and dispute within Marxist theory, the thesis maintains that

Marxism still offers the most appropriate analytical tool by which to understand the

development of capitalism in an historical and economic setting, of the inevitability of

capitalist globalisation and the strain this places upon the political organisation of capitalism

(the nation-state).

The study argues that Marxism’s perceived weakness has allowed capitalism to remain

effectively unimpeded, despite the growing inability of capitalism to respond to its internal

contradictions. This ‘weakness’ is expressed in Marxism’s isolation and difficulty in

developing a theoretical perspective that can be transformed into political action for

emancipation. Beginning in the aftermath of the rise of Stalinism in the USSR, and

continuing, throughout the better part of a century, Marxism sought to respond to capitalism’s

‘resilience’ and apparent capacity to renew itself in the face of often seemingly existential

12
crises. In so doing Marxist theory tended towards dislocation and reaction to perceived

changes in capitalism rather than interpreting events and acting as an engine for change. The

era of globalisation, characterised as a new phase of capitalist development, requires a theory

that offers analysis, interpretation, and predictive capacity as a means to promote and effect

fundamental change.

6 Structure of the thesis

The project is comprised of two distinct parts.

Section One establishes a theoretical framework by which the thesis actively engages in a

process of theory building which affirms Marxism’s relevance for the 21 st century. Later

chapters that deal more specifically with contemporary issues build on this framework as a

part of that theory building activity. As an example, crisis, as an almost defining feature of

capitalist development, is the focus of Chapters 3 and 4. Capitalism’s apparent resilience is

analysed in Chapter 4.4 and Marxism’s perceived failure to confront capitalism is discussed

in detail in Chapters 1 and 3. This section includes a review of the relevant literature in

Chapter 1 that involves a broad analysis of the major schools of thought as they relate to the

issues addressed in this study and introduces the overarching research question: How can

Marxism affirm its relevance in an age of capitalist crisis? This literature review analyses the

current literature relating to the capitalist state and its response to capitalist crisis, the effects

of globalisation, the ideological problems within Marxism and outlines what is either

unstated or ignored in the literature. It establishes a framework upon which the central

arguments of the thesis rest.

13
Chapter 2 presents Marxism as the most effective mechanism by which to explain the growth

and development of capitalism, globalisation and the tendency toward crisis that is an

inherent feature of capitalist development. It also isolates the weakness, fragmentation and

discord that exists within Marxism. These weaknesses occur because of historical and

economic factors including the crisis in Marxism that emerged in the period between the wars

and the economic prosperity and stability in the post-war decades. Chapter 3 introduces the

methodology that underpins the thesis. The chapter outlines how a Marxist analytical

approach both explains the contradictions that plague capitalism, but is equally effective in

defining and seeking resolution to the crisis within Marxist theory and practice. A Marxist

method of inquiry allows not only for an analysis of problems that are so evident in

capitalism but also within Marxism itself. The chapter, in describing the methodological

background of the study explicitly argues in support of Marxism’s claim to be a science, that

provides descriptions of the overarching economic system, while drawing social implications

from those economic structures.

Section Two – the body of the project – includes a series of discrete but inter-related chapters

outlining the inherent crisis in capitalism, the crisis in Marxism, the necessity for capitalism’s

tendency to globalise, critical responses to capitalist globalisation and confirms Marxism’s

relevance for the 21st century. It also relates to issues of theory and practice that have, in the

past century, plagued Marxist debates. These chapters are directly linked to the theoretical

framework provided in the first section of the thesis as they focus on Marxism’s evolution

alongside that of capitalism. These chapters outline how capitalism has survived, not from

any innate sense of resilience but, in large part, as a result of Marxism’s inability to offer an

effective alternative to the rule of capital.

14
Chapter 4 uses a Marxist approach to analyse the development of capitalism. It thereby

illustrates the tendency of capitalism to fall into crisis and of how crisis has been managed as

a means of promoting capitalist development. Chapter 5 raises the question of whether there

has been a qualitative change in capitalism. In arguing that this is the case, the chapter

analyses issues within capitalist development and in particular to the intensification of crisis

as a motivating factor behind the rapidity of globalisation in recent decades. A qualitative

change in capitalist relations is indicated and is reflected in the rise of social inequality and

corresponding rise in social discontent. Chapter 6 addresses questions that arise from

capitalist globalisation and the range of dissenting responses to globalisation. The chapter

clarifies the issue of whether globalisation is necessarily the problem, arguing rather that

globalisation is a developmental process of capitalism. It also focuses on mobilisation – both

class-based and non-class mobilisation – and particularly on identity politics of gender, race,

ethnicity and environment and of why capitalism has remained largely without effective

challenge. In achieving this, the chapter identifies the strengths and weaknesses that exist in

social movement politics and the limitations to effecting fundamental change that become

evident when issues of ideological leadership become diffused. Chapter 7 again addresses

issues arising from an ideologically divided Marxism. It asks what, if any, potential there

might be to forge a principled unity in order to challenge capital. At the heart of this chapter

is the issue of Marxism’s role in the 21st century. It argues that divisive issues of class and

social identity need to be re-examined in the face of on-going and intensifying capitalist

crisis. The chapter promotes the view that there exists a crisis of leadership within ‘anti-

capitalist’ opposition movements and that a re-invigorated Marxism offers the best means for

challenging capitalism. Chapter 8 concludes the study, revisits the theoretical premises that

have been presented and offers a resolution to the research questions that the thesis raises.

15
Chapter 1 Capitalist crisis and the relevance of Marxism: a review of the literature

Marxism’s oft-stated purpose is to combat capitalism, an economic system that has always

existed under conditions of crisis. Crisis, however, has been a motivating factor for

capitalism’s growth and an engine for its expansion. Critics of Marxism have pointed to

capitalism’s ‘resilience’ and ‘adaptability’ as a testimony to Marxism’s failure as an

ideology. Capitalism has not collapsed, but remains the dominant economic paradigm.

Marxists sought, over time, to redefine their theory and to adapt to new circumstances. What

resulted was increasing divergence, dissent, isolation, and what appeared to many to be

irrelevance in the face of capitalist rule and ideology.

On-going economic crisis, accompanied by an intensification of globalisation, has prompted

a re-examination of capitalism. Critiques from Marxist and non-Marxist scholars have

encouraged a re-assessment of the ability of Marxist theory to interpret capitalism and of its

relevance in the 21 st century.

This thesis argues that capitalism has entered a qualitative new stage of development and one

marked by deepening crisis. The cycle of crisis and stabilisation that has framed the

development of capitalism has become more acute. Capitalist globalisation is an expression

of a crisis that is increasingly enveloping economic and political structures and is less able to

be either contained or resolved. The study also focuses directly on the crisis that has affected

Marxism. By linking these two interconnected elements, the study analyses the irresolvable

contradictions that exist within capitalist globalisation, as well as the apparent incapacity of a

fragmented and divergent Marxism to effectively challenge capitalism. It also offers a

16
theoretical response to this weakness and so, asserts the relevance of Marxism for the 21 st

century.

Most analyses of capitalist globalisation have one of three starting points: statism, neo-

liberalism, or various schools of Marxist thought. Crisis, as a defining feature of

globalisation, occupies a limited place in statism and neo-liberalism. It is within Marxist

theory that this issue is best addressed, although its resolution and the promotion of an

ideological framework that would fundamentally challenge capitalism, is often either

downplayed or ignored. A central task of the thesis is to identify the gaps that exist within the

literature and to propose a new and innovative approach, an exercise in theory building that

will provoke debate and reinforce the relevance of Marxism within those debates.

The study seeks first to clarify key terms and concepts; namely the state, globalisation, the

interactions between the nation-state and globalisation and of crisis as a motivating factor

within capitalism. It also discusses those ideological perspectives that trace their beginnings

to Marxism and of the ideological disputation and divergence that has affected Marxism for

much of the last century and into the 21st century. Section 1.1, therefore, presents an

overview of state development from contending perspectives and of the state’s relationship

with capitalism. It describes the interconnectedness of state and capital and of how the state

acts to support and maintain the economic structures of capitalism. This assumes even more

significance as crisis and contradiction within capitalism becomes more acute. Section 1.2

explores crisis as an integral and motivating feature of capitalism and as a motivating factor

for its rapid globalisation. Capitalist globalisation has prompted critical reactions ranging

from attempts to reverse the process of globalisation, to promoting global responses. Section

17
1.3 analyses these responses to capitalist globalisation. The diverse reactions to globalisation

highlight the fragmented and divergent ideological perspectives that exist within Marxism.

Section 1.4 describes the ‘crisis’ in Marxism, and how it is treated in the literature. The

chapter asserts the relevance of Marxism, both as an analytical tool and a strategy to effect

fundamental change. Finally, in Section 1.5, the chapter focuses on what the literature often

leaves unstated or ignored.

1.1 The state and its relationship with capitalism

Perceptions of the state are largely determined by the ideological perspective of the observer.

The state has been defined in a number of ways, including being an organisation offering

protection in exchange for revenue (Gilpin 1981:15). The state has been described as a

specific “form of macro-political organization with a specific type of political orientation”

(Jessop 1990: 34). Poggi (1990: 3-8) begins his discourse on the state with the concept of

power, and especially social power and its components of coercion, command and

legitimacy, before engaging with concepts of sovereignty and autonomy and the capacity to

successfully produce one’s own rules as being a fundamental component of the structure of

the state (Poggi 1990: 21-22). Tilly’s (1975: 70) perspective is that the state is an organisation

controlling a population within a definite territory and which is differentiated from other

organisations and autonomous. As de Jasay (1985:15) characterises it, the state emerges

through conquest and quickly becomes a rational organisation through a form of social

contract. Ideological perspectives may differ, but there is a certain degree of consensus about

notions of power, coercion, and a sense of legitimising control.

18
Just as definitions of the state vary, so do conceptions of it. The pluralist, elitist and Marxist

conceptions of the state illustrate how ideological interpretations and world views differ.

Hirst (1993) in re-presenting pluralism draws on Cole, Figgis and Laski, to outline the

essential characteristics of the pluralist conception of the state which sees liberty as the most

important political value within society while state sovereignty is an ‘ideal’ through which

society is regulated. Dahl’s (1967: 325) desired state is one where no single organised

political group or interest group exercises control but negotiation and dialogue between all

potentially conflictual parties is the norm.

In contrast, elite theory, as described by Michels, (1962) argues that the state inevitably

becomes controlled by a small and powerful group of actors. For elite theorists (Evans 2006:

39) there are a set of essential features that characterise societies – rulers are a socially

cohesive group and remain territorially based. The rulers remain apart from those they rule

and the members of the elite are chosen, by virtue of economic, political and ideological

factors. Mills (1963: 167-169) depicts the executive branch of government, major capitalist

interests and representatives of the military establishment jointly exercising power.

Marxist interpretations, maintain that the state is ultimately about power and class interests.

An important aspect of this study, therefore, is to examine some of the views within Marxism

as a means of discerning the essence of Marxist state theory. Colin Hay (1999:153-155)

identifies four separate ‘Marxist’ interpretations of the state – the state as the repressive arm

of the bourgeoisie, the state as an instrument of the ruling class, the state as the ideal

collective capitalist and the state as a factor of social cohesion.

19
Carnoy (1984: 50) asserts that the core representation of Marxist theory rests in the concept

of the state as the ‘repressive arm of the bourgeoisie’. Such a view is immediately apparent in

the writing of classical Marxists and especially in Lenin’s (1977a: 243-244) oft-repeated

reference to “special bodies of armed men” and in Engels’ (1986: 566) description of the

various arms of the repressive state. The second interpretation, the ‘instrumentalist’ theory

(Sweezy 1949: 243) sees the state as an instrument in the hands of the ruling class that

guarantees the stability of the class structure of society. In a similar vein, Milliband (1969:

23) describes the use of the state as an instrument for the domination of society.

The third interpretation, the state as the ‘ideal capitalist’, adopting Engels’ (1959) description

of the modern state as a ‘capitalist machine’ and a ‘personification of national capital’ has

lent weight to the idea of the state as the ‘ideal capitalist’ (Offe 1974: 40). The final

interpretation, the state as a ‘factor for social cohesion’ is promoted by Poulantzas (1975: 24-

25) and Gramsci (1971: 244), among others, and draws on the description of the state as

“seemingly standing above society” (Engels1986: 576) as a means of maintaining a sense of

order and stability.

The state, however, as Marx and Engels (1964: 36) made clear, evolves in a contingent

manner depending upon social, political and economic necessities. Jessop (1990: 39) echoes

such a view when he speaks of shifts in forms of intervention depending upon historical and

economic necessities. It might be argued that much of the ‘theoretical’ work concerning the

state by various interpretations of Marx are simply differing shades of the same colour. The

state advantages class interests and depending upon historical and economic conditions can

present in any of the above formulations.

20
The role of the state in capitalist development has long been a focus within the literature and

especially as it relates to Marxist literature. Harman (1991) offers a useful critique of the

relationship between state and capital, or more precisely the role of the state in assisting the

development of capitalism. This relationship between state and capital became transparent

and acutely important during the period of the GFC and in its immediate aftermath. Choi,

Berger & Kim (2010: 834) highlight state responses to the potential collapse of significant

banks in the US. What is significant is that the relationship between state and capital works to

secure the present and future for capitalism.

Capitalism retains a position of security regardless of the depth of problems and crisis within

the economic structure itself. This capacity for capitalism to maintain itself is due, in large

part, to the ideological expertise of the state. Lebowitz (2004) argues that capitalism relies on

exploitation, but that this became less obvious as the relationship between labour and capital

became deliberately obscured. Engels (2000), in his letter to Mehring, offered the view that

ideological processes can and often are used to effectively mask what is the real class nature

of society. What Marx and Engels described as ‘false consciousness’ was adapted by Gramsci

as ‘cultural hegemony’. Cox (1993: 51) articulated this as a situation arising from the ruling

class seeming to offer concessions in a bargain for both acquiescence and ultimately

acceptance of state power. Lebowitz (2004) reflects that if the ‘left’ does not actively seek to

both explain capitalism and to advocate for change then it is part of the reason that capitalism

survives. This is especially the case when considered against the framework of intensifying

capitalist crisis.

21
1.2 Capitalism and crisis

Marx and Engels in The Manifesto of the Communist Party (1977: 35-49) contended that

crisis was an essential and inescapable aspect of capitalism. The following overview of

‘crisis’ is expanded in an analysis of contemporary capitalist crisis in Chapter 4. Harvey

(2010a: 171) isolates seven ‘activity spheres’ within the evolutionary process of global

capitalism as it continues to search for profit. These include technologies, social relations,

administrative arrangements, production and labour processes, relations to nature,

reproduction of daily life and mental conceptions of the world. Harvey asserts that:

Capital cannot circulate or accumulate without touching upon each and all of these

activity spheres in some way. When capital encounters barriers or limits within a

sphere or between spheres, then ways have to be found to circumvent or transcend the

difficulty. If the difficulties are serious, then here too we find a source of crises

(2010a: 172).

The period from the 1970s has witnessed a rapid globalisation of capitalist relations, and is

reflected in the literature and especially in globalisation theory. According to Held, McGrew,

Goldblatt and Perraton (1999) there are three contending schools of thought in globalisation

theory, which they describe as sceptical, transformational and hyper-globalist. Each of these

three schools can be observed and are reflected in the works of authors broadly operating

within a Marxist framework. While accepting the interconnectedness and unity that links

capitalism and globalisation each arrive at different conclusions.

The first of these are the highly sceptical propositions of Hirst and Thompson (1999). They

argue that the move towards economic globalisation is not in any real sense unprecedented.

22
The level of economic integration in the world is, in their view, no higher than it was in 1914,

the political structures of governance of the international economy were in place for the

greater part of the 20th century, and, while accepting that economic integration continues,

capitalist globalisation is almost an artificial construct. It is a perspective that gained

considerable support but one that actively seeks to minimise the extent and impact of

capitalist integration and its effect on perceptions of nation-state autonomy.

Wood (2004) presented a more transformationalist view when she argued that the nation-

state remains a vital element in world capitalist organisational structures and as a key actor

within capitalist globalisation. Hers was a perspective that acknowledged the objective reality

of the nation-state as administrator for capitalism but which maintains a national perspective

for struggle against globalised capitalism.

Diametrically opposed to these views are hyper-globalists such as Robinson (2004) who

argue vigorously that capitalism has entered a new, fourth epoch. He maintains that these

epochs include that of primitive accumulation, competitive capitalism and monopoly

capitalism. We are, according to this view, witnessing the beginnings of globalisation and

with it the birth of a transnational ruling class and consequently the end of the nation-state

system. This view, while correctly assessing qualitative changes in capitalism, fails to

acknowledge the political reality of the nation-state. This wide and discordant range in the

way Marxist thinkers have recently addressed the relationship between globalisation and

capitalism offers another illustration of my thesis that a deeply fractured Marxism cannot

effectively oppose the dominance of capitalist ideology.

23
Globalisation is an expression of capitalist development. Its drive to seek resolution to more

destructive elements of its own contradictions becomes an engine for dispossession and

inequality. Marx’s observation in Capital Volume 1 (1986a: 604) that wealth can only be

accumulated at one end of the spectrum if misery is similarly accumulated at the other is

echoed in the work of Dallmayr (2002: 144). Martins (2011:12) likens the inequality that runs

parallel to the globalisation of capital with that which accompanied the industrial revolution.

Green & Griffith (2002: 58) raise the issues of farmers in developing countries who have

become the victims of trade liberalisation policies, while Robbins (2011: 156) draws attention

to the fact that three billion people still live on less than $2 a day.

Globalisation is integral to the development of capitalism. It inevitably alters both the way

nation-states operate, and affects interactions between states. Strange (1997a: 4-6) expressed

a sense of unease with what she regarded as the breadth in scope of the very term

globalisation. She argued that state power is waning and that this is a response to the

enveloping power of the growing world economy. Such an interpretation of globalisation is

explored by Hardt and Negri (2000). They maintain that the shift that has occurred in

capitalist relations stemming from the development of globalisation is constructing a source

of supranational political and economic power. These analyses accurately reflect a general

movement within capitalist development which is in accord with a classical Marxist view.

However, while this tendency exists, it would be incorrect to regard such development as

seamless. Capitalism is globalising and will continue to do so. At the same time a

contradiction exists between globalised capitalism and the nation-state as political

administrator. National capital is still a significant force, as attested to by a renewal of

economic nationalism. Capitalism, whether in global or national form, is fundamentally

bound by this contradiction.

24
Much attention has been paid to crisis as an integral and motivating factor within capitalist

development. While crisis and its analysis has assumed acute importance in the most recent

period, Clarke maintains that the “distinctive feature of the capitalist system is not the market

economy, but a system of production in which production of things is subordinated to the

production, appropriation and accumulation of surplus value”. Crisis “arises when capitalists

face a fall in their realised profit” (1994: 284).

Crisis is a term that inevitably carries a degree of concern if not fearfulness. Definitions often

refer to it as denoting either a turning point for better or worse in a medical sense, a

dangerous situation requiring serious attention, or an unstable situation that carries a very real

possibility of an undesirable result. Gamble argues that the feeling at the end of the

Depression of the 1930s was that:

crisis gradually paved the way for a new regime, a new growth model and a new

world order, which eventually resolved the crisis, and it was not long before the

claims, that capitalism no longer had to worry about the spectre of crisis coming back,

began again. There continued to be many small crises, but none of them seemed to

pose dangers for the system as a whole, and were successfully confined to national or

to regional level (2009: 42-43).

There is an expanding literature that seeks to analyse, describe and isolate factors underlying

the current and irresolvable dilemmas facing capitalism. Responses vary. Reich (2015)

argues that there is no such thing as a free market and that capitalism is the primary driver of

inequality. While critical of how capitalism might be managed, he is, at the same time,

25
seeking ways by which it can be ‘saved’, because it is still regarded as the best possible

option for the globe. At the opposite end of the spectrum is the work of Robinson (2014). His

appraisal of the situation is that we are witnessing a systematic crisis in capitalism. Wealth is

being voraciously redistributed away from the poor, social inequality is rising at a dangerous

rate, and a crisis of legitimacy could potentially lead to a global police state.

The literature engages, sometimes eclectically, with aspects of the crisis of capitalism. Sharpe

(2010) catalogues the steps toward economic crisis in the USA with a view to reversing the

trend. Posner (2009) also addresses the symptoms that affected global capitalism’s malaise,

especially that of US capitalism in the early 2000s. He argues that the banks should be re-

regulated. Bresser-Pereiro (2010) focuses on the financialisation of capital and suggests that a

democratic capitalism will emerge. Another response to the GFC of 2008 is to massively

promote socially useful spending and democratise the ownership of production (Foster &

Magdoff 2009). Situating such ‘demands’ in a time of acute economic discord and austerity

can be best regarded as utopian. It is in such an eclectic mix of responses that many of the

weaknesses existing in contemporary theory, broadly critical of 21 st century capitalism, are

exposed. There is consensus that there are major problems in the structure of capitalist

relations but finding the means to resolve these problems and to offer a viable alternative is

quite another issue.

In examining the contradictions of capitalism and globalisation some authors consciously

vindicate Marxist analysis. Amin (2011), Jellissen & Gottheil (2009), Kliman (2011),

Harman (2010), all focus on the tendency for profit to fall as a dominating feature of

capitalist crisis and for the drive to globalisation. This feature, the theory of the falling rate of

26
profit, is something of a weather-vane in relation to interpreting both capitalism and

Marxism. The decades following World War II and the relative stability within capitalism

saw the theory become discredited in the eyes of many, but conditions of acute and prolonged

crisis have re-focused attention on this central element in understanding capitalism.

Marxist theory identifies a range of specific features that underpin the general crisis of

capitalism. These are: the tendency of the rate of profit to fall, the concentration of capital,

the growth of the working class, a tendency toward under-consumption (or conversely, over-

production) and the development and influence of finance capitalism.

These features are often addressed in isolation from each other. Maito (2014) argues that

there has been a general global reduction in the overall rate of profit. There are few more

telling statistics than those offered by recent Oxfam reports (2014, 2016) showing the

concentration of capital into increasingly fewer hands. The issue of a growing working class,

assumes an intensely global character. The global working class at the end of the 20th century

was estimated to amount to two billion people with the same number again occupied in

closely related areas (Harman 1999: 615). Today 60 per cent of the working class are to be

found outside the industrialised world (Harman 2010: 337). Silver’s (2006) work describing

the link between capital flows and the growth of the working class into developing nations

becomes particularly relevant.

Studies have also been undertaken regarding the growth of the middle class in developing

economies. Chun (2010) and Banerjee & Duflo (2008) among others, point to the dramatic

growth of the middle class. At the same time the developed world is experiencing a

27
phenomenon being labelled as the shrinking middle class (Foster & Wolfson 2010, Pressman

2007, Dallinger 2013).

Lapavitsas (2009: 142-146) focuses on finance capitalism, as another contributing factor in

describing possible crisis points in capitalism. He describes the significance of

financialisation in tracing the trajectory of the current crisis of capitalism. A feature of

contemporary capitalist globalisation has been the influence that dominant states have been

able to exert (Amin 2011). Peet outlines the significance of finance capitalism in the 21 st

century, arguing that:

The main difference between Hilferding’s finance capital and today’s global finance

capitalism is a greater abstraction of capital from its original productive base, the

faster speed at which money moves across wider spaces into more places, the level,

intensity and frequency of crises that take financial rather than productive forms, and

the spread of speculation and gambling into every sphere of life (2009: 245).

What is increasingly evident is that the rapidity of capitalist globalisation is a response to a

growing and insoluble crisis within capitalism. Crisis itself is an integral component of

capitalism but from the period of the 1970s onward this crisis and capital’s response has led

to qualitative changes in capitalist relations, nationally and internationally.

The literature acknowledges the existence of crisis within capitalism. The period from the

1970s (and especially after the 2008 GFC) heralded a new stage in that crisis and one that is

increasingly difficult for capitalism to resolve. However, much of this critical literature

28
remains tightly focused on individual aspects of crisis. There is a wide-spread disinclination

to engage with the dialectical unity of those component parts. This is a problem that exists

within Marxism itself and describes the crisis that exists and has existed for the better part of

a century in Marxism. This, in turn, has had a significant effect on responses and reactions to

capitalism and globalisation.

1.3 Responding to capitalist globalisation

Reaction and opposition to capitalist globalisation has become both a theoretical and practical

exercise in recent decades. Reflected in this phenomenon is a growing literature that has, as

its broad focus, opposition to capitalism and often more specifically to globalisation. While

this assumes a variety of forms, the starting point invariably is that globalisation must elicit a

response and that the response needs to be from a critical perspective. Among a range of

responses to globalisation is the proposition that the working class can best react to a

globalised capitalism through a globalised or transnational union movement. Another

response is to advance social movement politics, or identity politics, as a means of fostering

resistance to globalisation. Similar propositions can be found in the project to reinvigorate

social democracy through the third way movement. Perspectives that effectively call for

reversing globalisation are also prominent in the literature.

Bello (2004, 2013) for instance, argues forcefully that globalisation is in disarray and that

‘deglobalisation’ is becoming a very real option. It is a view that promotes an ideal of

revitalising national economies. Other writers, including Rodrik (1997), describe what they

perceive to be a backlash against the more destructive consequences of globalisation.

Burgoon (2013) contends that the rise in social inequality that accompanies globalisation can

29
move political parties to effective anti-globalist action. The anti-globalisation movement as

described by Eschle (2005) is marked by agreement on the need to oppose neoliberalism, but

such agreement has elicited diverse and often dislocated responses. Such a dislocated

movement appears at odds with Lloyd’s (2001) perspective that the anti-globalisation

movement challenges social democracy.

Globalisation, however, is a process and a continuation of capitalist relations that have been

developing since capitalism emerged as the dominant economic formation. The process of

capitalist globalisation is an irreversible one. While many activists might wish to reverse this

process, they risk being characterised, as Marx & Engels (1977: 63-64) characterised petty-

bourgeois socialism’s desire to hold back the historical processes, as being at best, utopian.

A feature, commonly observed in the literature regarding the working class and its response

to globalisation, is to present a pessimistic balance sheet of the negative effects that capitalist

globalisation has had on the organisations of the working class. This is followed by an

optimistic presentation of working class responses. Beynon (2003) reflects on the setbacks to

the workers’ movement, as a consequence of capitalist globalisation, but concludes his

analysis by expressing the view that in the 21st century the union movement might be able to

respond effectively to such challenges. Stevis & Boswell (2008) echo this sentiment while

seeing the future as a mixture of regional and national union movements becoming an

important part of the institutions of global governance. Gordon & Turner (2000) describe a

situation whereby trade unions can promote the interests of labour in a global sphere.

Waterman (1998b) reviews the literature and similarly finds optimism for the future and of a

revival of interest in labour issues in the face of capitalist globalisation. Munck urges that

30
now “is perhaps the time when an incipient global labour movement rediscovers some of its

original characteristics of combination, a common moral economy and an instinctive

internationalism” (2010: 232). Levesque, Fairbrother & Hennebert (2013) write of workers’

growing insecurity stemming from neoliberal and globalised capitalist relations and of how

this is making union organisation a more desirable prospect. They describe union responses

as often being defensive in nature but also speak of situations where defensive tactics give

way to offensive struggles by workers and their unions.

Waterman (1993) and Moody (1997) seek to broaden the reach of traditional trade union

political activities into wider, often non-class or supra-class actions. Fairbrother, in discussing

social movement unionism, argues that “trade unionism is and will remain a core dimension

of the challenge to the state and capital … It has the potential to be core to alternative social

movements” (2008: 219).

Social movement and identity politics is a theoretical construct that has won considerable

support within the broad anti-capitalist and anti-globalisation movement. Its advocates have

variously argued that protest movement politics have the capacity to bring changes to

institutions (Moore 1999), that protest politics can effect changes in democratic perceptions

(della Porta 1999) and that the peace movements in the USA and Europe resulted in the end

of the Cold War (Meyer 1999). In this regard Castells’ definition of social movements as

being “purposive collective actions whose outcome, in victory as in defeat, transforms the

values and institutions of society” (2004: 3) is worth noting. Aronowitz (1992) argues that

class-based politics have acted to the exclusion of ethnicity, racial and gender issues. Post-

Marxist scholars (Laclau and Mouffe 2001) adapt identity politics to present the case for a

31
movement that separates itself from class-based political strategies. Social movement and

identity politics are similarly promoted by Castells (2004: 145-148) as he draws on the ‘anti-

globalisation’ protests against the WTO meeting in Seattle to describe the broad nature of the

protests and of how labour unions were prominent. Social movement scholars have brought

much to debates concerning globalisation and the idea of resistance, but in doing so relegate

class issues and the primacy of the working class as an agent for change, to a position of

insignificance.

Davidson (2000: 116-117), while effectively declaring the traditional working class to have

little relevance, also states that the effectiveness of social movement politics, while having

the capacity to engage disparate groups and to involve significant numbers, has been less

effective in forging long-lasting coalitions. Thanim (2011: 104-110) describes how identity

politics has an immediate appeal and offers apparent possibilities for oppressed minority

groups. He then outlines the essence of Marxist criticism of identity politics as undermining

“any joint large-scale resistance against the capitalist political economy and its logic of

exploitation” (2011: 108).

Debates about capitalist globalisation and critical responses to it focus on whether the

processes of globalisation are politically driven or the result of economic forces. Castells

(2004: 145) maintains that globalisation is and has been essentially a political decision while

still accepting the term capitalist globalisation. This thesis, on the contrary, argues that

globalisation is a process of expansionary capitalism – an economically driven process rather

than a political one.

32
Castells is by no means alone when he lays specific emphasis on political responses and

reactions as a means of confronting globalisation. An example of this tendency can be

immediately seen in the work of influential theorists who promote a ‘third way’ that might sit

between the ‘old left’ and the ‘new right’. While Driver and Martell (2000) acknowledge that

the terminology of left and right remains important they also assert that there might well be

space for other ‘variants’ between the two traditional ideological poles. Former British Prime

Minister, Tony Blair, famously championed the cause of third way politics as he sought to re-

position British social democracy. Giddens, (1998) however, remains the principal

ideological force behind what is an attempt to revitalise social democracy in the face of rising

neoliberalist theory and the decline of the welfare state. He argues that social democracy

essentially developed as a social movement, only to be outflanked by new social movements

and a devalued sense of government that has grown with the burgeoning of neoliberalism. He

regards social democracy, through the context of the third way, as the best option for the

future. Hamilton (2001), however, raises criticisms of such a theory when he describes its

failure to critically analyse modern capitalism.

The relationship between Marxism and social democracy has, since the collapse of the

Second International and the beginning of World War I, been marked by contention. Social

democracy, and its call to ameliorate the worst excesses of capitalism, remain at odds with

Marxism’s goal of removing and replacing capitalism.

Issues of social democracy and its future, set against the backdrop of capitalist globalisation,

remain central elements for debate. This is especially so when considered in the context of

the working class, whose future has been inextricably linked with the political structures of

33
social democracy. What remains, however, is that social democracy itself is inherently a

product of the nation-state and it is this relationship that is potentially threatened by

globalised economic processes.

The inevitable rise of capitalist globalisation has seen responses that ostensibly provide the

working class with the means to defend itself. These include transnational unionism, re-

interpreting social democracy and in promoting social movement and identity politics as

broad supra-class and non-class expressions of resistance. There is a strong current within the

literature that examines the capacity of resistance to globalisation with some going so far as

to promote the idea that globalisation might be reversed. Responses to globalisation and

capitalism ultimately reflect a divergence of ideological perspective. Such dislocation does

little to promote a practice that will challenge capitalism. Marxism can only be regarded as

relevant if it offers coherent theory and practice. There has been a dislocation between these

two elements that has been increasingly evident throughout the past century – a dislocation

characterised as a crisis in Marxism.

1.4 The crisis in Marxism

The trajectory of Marxist theory and its path to ‘crisis’ begins with classical Marxism, based

as it is on historical materialism as a way of understanding and interpreting the world (Lenin

1977b, Boucher, 2012, Rees 1998, Renton 2002). Classical Marxism, as espoused by Marx,

Engels, Lenin, Luxemburg, and Trotsky, among others, maintained that there would be an

inevitable clash of classes whose interests were impossible to reconcile and this class

antagonism would result in a new economic and social order. A fundamental concept of

classical Marxism was that socialism would inevitably be constructed as a world system and

34
not confined within national borders (Marx 1974, Trotsky 2010). The Russian Revolution

followed. The development of a world revolution was, however, not to be, and after Lenin’s

death Marxist theory was conscripted into the service of Stalinism.

The Stalinisation of Marxism gave rise to a wave of theoretical responses in the period

between the two world wars. The Frankfurt School arose as the fore-runner of Western

Marxism, and the overarching label of Neo-Marxism. The work of the Frankfurt School has

been outlined and described by many scholars (Jay 1996, Bernstein 1994, Tarr 2011). Its

theorists included Lukacs (1976), whose political life was set against the Stalinisation of

Marxism. Bloch (2015), represented a trend in critical thought that promoted utopian

perspectives. While consciously advocating his views within the Marxist tradition, Bloch’s

utopianism stood starkly in contradiction to Marx and Engels’ criticisms of utopian socialism.

Marcuse (1972a), in attempting a synthesis of Marxist philosophy with the work of Freud and

his promotion of national liberation movements (1972b), saw him situated as a theoretician of

the ‘New Left’ of the 1960s.

Developments in Marxist theory and practice assumed new forms in the years following

World War II. This ‘Golden Age’ of capitalist stability and prosperity (Glynn, Hughes,

Lipieltz & Singh 1990) presented new and troubling challenges for Marxist theorists. The

theory had been predicated on the idea of capitalist collapse. The apparent ‘resilience of

capitalism and its capacity to overcome what seemed to be moments of existential crisis

were, for many, an indication of a flaw in Marxist theory. The old verities of economic

determinants, of the importance of class and of the revolutionary potential of the working

class were more and more called into question. The theoretical responses were in many

35
respects an echo of theoretical disputations that had led to the split in Marxism in the lead up

to World War I. A significant and damaging aspect was a further distance between theory and

practice which has long plagued Marxism.

Marcuse’s (1972c) One Dimensional Man is a pivotal work in some respects. It focuses on a

decline in the capacity and potential for revolutionary change that was deemed to be evident

in capitalist society and that ‘individuals’ were being drawn into a system of production and

consumption. It had an appeal and especially in a period when the immediate aspirations of

the working class were being met by welfare statist governments and a profitable and

seemingly benign capitalism. The relative affluence of the working class in capitalist states in

this period propelled many within the neo-Marxist movement to further distance themselves

from the core premises of Marx and the class nature of society. This New Left ideological

perspective, responding to the changing conditions within capitalist society, rests heavily on

the significance that culture plays as a transformative tool. It was also deeply influenced by

third world radicalism and anti-colonial struggles. This adaptation to an anti-colonial, anti-

imperialist perspective had little to do with core Marxist values but was regarded as a means

of re-affirming a sense of relevance and to build constituencies among a radicalising youth

culture that was growing in Europe.

This shift in focus from Europe to third world and anti-colonial movements found a

responsive audience. Farred (2000) describes how these issues rallied and radicalised student

activism in the West. What was seen as a failure on the part of the ‘old left’ with its focus on

class and particularly working class models of struggle led to the embrace of new forms of

struggle and new arenas for activism. Piven (1995) argues that it was identity politics that

36
provided the most fertile ground to oppose capitalism. Deutscher (1973: 68-72), however,

pointed out that no society has effected change while relying on groups of minorities and

maintained that a stable class, rather than more transitory non-class alignments, is the only

effective basis for a movement for social change. Smith (2008) is similarly critical of such

non-class and supra-class approaches maintaining that identity politics is unable to

encompass the emancipatory needs of the oppressed.

The growing divergence in Marxist thought from its original focus on class and working class

emancipation, indicates that achieving common ground is becoming ever more difficult, if

not unlikely. Post-Marxism emerged in the late 1960s but the work of Therborn as well as

Laclau and Mouffe in later decades gave prominence to this latest adaptation of Marxist

theory. The post-Marxists relegate issues of class and class struggle further into the

background. Therborn (2008), in arguing the case for post-Marxist theory, returns to issues

that have become central to Marxist debates – the issue of the Russian Revolution and the

effect of the collapse of the Soviet Union. This becomes important in any appraisal of

Marxism and in asserting its continued relevance. This relevance, in the final analysis, can

only be gauged by its capacity to unite a coherent theory with a practice that can confront and

combat capitalism. The crisis in Marxism begins with the Soviet Union but would not seem

to be about to end with its demise. The conditions that informed Marxist theory a century ago

remain unchanged. How Marxists respond to those conditions and the crisis of capitalism

remains the essential question. Therborn (2012) discusses the passing of the ‘working class

century’ and argues that a new era with new relationships mixing class, nation and ideology

will become the focus of challenge to capitalism. Laclau and Mouffe are quite definitive in

their conceptions of the future of Marxist thought:

37
 Only if we renounce any epistemological prerogative based upon the ontological

privileged position of a ‘universal class’, will it be possible to discuss the present day

degree of validity of the Marxist categories … It is no longer possible to maintain the

conception of subjectivity and classes elaborated by Marxism, nor its vision of the

historical course of capitalist development (2001: 2-4).

Laclau and Mouffe’s renunciation of class and of Marxism’s vision of the historical

development of capitalism, is the product of a decades-long divergence in Marxist thought. It

represents a sense of demoralisation and defeatism. Marxism’s central arguments are, in

Laclau and Mouffe’s opinion, irrelevant. Capitalism’s crisis, however, has become sharper.

The relevance of Marxism for the 21st century has frequently been called into question. This

is due largely to the divergent and fragmented nature of Marxism during the past century.

Wallerstein (1986) described the emergence of a ‘thousand Marxisms’ and particularly in the

post-World War II period. Marxist theory and analysis, however, remains pertinent and

relevant. Such a proposition is based, in part, on the growing crisis in capitalism. None of the

internal contradictions of capitalism have been resolved. Core features of Marxist theory,

including the primacy of economic issues and the class nature of society, allow for renewal of

a theory that is connected to practice. Marxism developed through an interchange of ideas

and through often intense polemics. The thesis engages with contending Marxist perspectives

in order to trace the trajectory of Marxist thought and to assert Marxism’s relevance.

Boucher argues: “The emancipatory social movements of the future will draw their

inspiration from Marx, and Marxism, among others. This is because Marxism is a politics of

mass struggle and popular mobilization in the name of a social alternative to the profit

38
system, and this is likely to remain a feature of political life in the future” (2012: 2).

Boucher’s remark encapsulates much that is positive regarding the relevance of Marxism

while (possibly unconsciously) exposing problems within contemporary Marxism. Boucher’s

work, like that of Bidet and Kouvelakis (2008), among others, is valuable in outlining

variants of Marxist thought and illuminating some of the disputes and philosophical discord

that has been so problematic for Marxism. Boucher takes care not to become ‘partisan’ and it

is here that some of the problems lie. Marxism first developed as a means of challenging

capitalism and changing the world. Contemporary Marxist theory has come to focus less on

Marxism as an activist ideology and more as an intellectual movement divorced from its

activist roots. Despite, or possibly as a result of a century of contention within Marxist

theory, capitalism, while riven by irresolvable contradictions remains unchallenged. The

ideological discord and confusion in Marxism has allowed for capitalism’s on-going survival.

The cycle of crisis and stabilisation that is central to capitalist development is reflected in a

general decline in Marxism’s influence. The growth of ‘official’ Soviet Marxism from the

1920s also played a prominent role. Korsch (1931) in coining the phrase ‘the crisis of

Marxism’ declared Marxism to be in an historical and theoretical crisis. While he correctly

identified the problems within Marxism in the 1920s and 1930s, he failed to offer a consistent

approach to counter this ‘crisis’. Declarations of the demise of Marxism have frequently been

articulated. The 20th century heard a range of pessimistic and optimistic voices. Lowenthal

(1964) was by no means the first or last to write of the terminal crisis of Marxism.

Lowenthal’s arguments, based as they were on the divisions and disputation between

‘communist’ regimes, ultimately highlighted the theoretical weakness in Stalinism rather than

any inherent weakness in Marxism. Burawoy (1990) was among those in latter decades to

defend the basic premise upon which Marxism rests. He regards the collapse of the Soviet

39
Union as a liberating moment for Marxism. In more recent times the relevance of Marxism

has been reasserted (Bidet & Kouvelakis 2008: xiv). Bidet and Kouvelakis regard Marxism as

inherently adaptive while recognising that elemental issues of class, exploitation and political

domination remain central to Marxism and of its relevance. The problems in re-invigorating

Marxist practice however, are real and the dislocation in theory has effectively mirrored the

growing crisis of capitalism.

The range of responses to capitalist development advanced by Marxist theorists over the past

century reflect the highly contested state that has long existed in Marxism. The literature

exposes this often-heated contestation and significantly shapes the many paths that Marxist

theory has traversed. Each adaptation to the challenges that capitalism and global political

and economic realities present have served to remove the theory from a practice that aims not

simply to understand but to change the world. Marxist theory became increasingly isolated

and removed from class-based economics and politics even as conditions of capitalist crisis

visibly deepened.

1.5 What the literature leaves unsaid

To suggest that there might be anything resembling momentum for a serious convergence of

ideas within the increasingly contested arena that is Marxism would be naïve. At the same

time, Marxist theory offers a framework that enables a serious study and understanding of

capitalist development. The core elements of Marxist theory also provide a bridge between

theory and practice. It is in the practice that Marxism has appeared weakest in the most recent

past. The literature that traces this heritage and its trajectory does many things well. It offers a

rich understanding of elements of state development and of the relationship between state and

40
capital. The literature regarding the developments within Marxist thought is equally

thorough. The crisis of capitalism has been widely reported and analysed from differing

ideological perspectives. There exists a broad range of theoretical responses to the rapidity of

globalisation and how to respond. There remain, however, serious omissions and limitations

in this expanding literature.

The areas outlined above are invariably discussed in isolation from each other, although there

are inevitable links and connections between them. This is especially so when considering the

crisis in Marxism. The literature has, over time, variously proclaimed the malaise, death and

resurrection of Marxism but it is a literature that all but ignores the issue that there exists a

direct and dialectical link between capitalism’s capacity to survive in the face of growing and

irresolvable contradictions and crises and Marxism’s seeming inability to present an effective

theoretical and practical opposition to capitalism. Capitalism survives because it has no

credible opposition. It is an area that the literature overlooks, downplays and ignores. This

study, by developing such an argument, not only exposes the limitations that exist in the

literature but provides a platform upon which new theoretical research can build.

The thesis, in providing such a theoretical platform, consciously adopts a methodological

format that is firmly based in Marxism. It is an analysis rooted both in an historical

materialist perspective and the concept that economics drive political outcomes.

Fragmentation and divergence has been the hallmark of Marxist theory for the past century.

The thesis describes and discusses a range of factors that have influenced the crisis in

Marxism and provides an analysis that isolates the individual components that have led to the

crisis in theory.

41
These components are then synthesised as a means of explaining how Marxist theory has

been regarded as irrelevant. Non-Marxist theorists point to the negative experience of

Stalinism as a means of ‘proving’ the irrelevance of Marxism. Some claim that Stalinism was

the direct continuation of Marxism (Kotkin 2014). Marxist scholars and analysts from the late

1920s and 1930s sought to ‘save’ the theory. Femia (2007) describes this as variously a

rescue mission against Stalinism, or from an intellectual movement away from western

Europe, or as a response to lost opportunities after the Russian Revolution. Anderson (1976)

argues that ultimately these ‘rescuers’ reflected a sense of defeatism. In any event, these

moves distanced successive theorists, not only from the sterile terrain of Stalinism, but from

the essential component of class. The stabilisation of capitalism after World War II saw

Marxism move further from the working class as a force for change. Each of these isolated

occurrences must be regarded in their entirety and in their historical context.

Such an analytical process isolates contributions to theory that are both positive and negative.

This is done not as a vehicle, as described by Burris (1988: 20), to polemicise and separate

ideas from their analytical and scientific context, although the study is critical of much within

contemporary Marxism. The process, at the same time, looks at the prospect of a fusion, if

such a potential exists, of perceived positive elements and a recommitment to the core values

of Marxism. This would allow for a strengthening of Marxist theory as it seeks to confront

the crisis of globalised capitalism.

Such a hope, after more than a century of ideological shifts and division, might appear to be

unrealistic. Marxism’s development has been one of departure from core assumptions that

42
framed the theory. Reconstructing a theory that can challenge capitalism and change the

world, however, will affirm Marxism’s claim to relevance. That journey of reconstruction

begins with appreciating and understanding the underpinnings of Marxism’s ‘decline’ in the

20th century in order to reaffirm its claim to relevance in the 21 st century

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Chapter 2 Learning from Marxism’s historical crisis

Capitalism is subject to irreconcilable crisis and contradiction. Marxism, too, it has been

shown, is riven by crisis and contention. This study argues that Marxism remains, not merely

relevant, but central to combatting and replacing capitalism. The previous chapter described

the essential foundations of the theory and offered a chronological outline of Marxism’s

trajectory and its road to ‘crisis’. This thesis is an exercise in theory building, and this

chapter, takes a first step towards making a case for the relevance of Marxism in the 21 st

century. It does so by acknowledging the problems that have plagued the development of

Marxist theory and exposing the dilemma that this has posed for Marxism.

Section 2.1 draws on a classical interpretation of Marxist theory which is an essentially

optimistic view of the world and of its economic and political future. It points to Marxism’s

critique of capitalism as an expanding, globalising system. It focuses on the historically

combative nature of Marxism and of its goal to challenge and displace capitalism. An

historical lens allows for an appreciation of how ideological dislocation developed in Marxist

thought throughout the 20th century and how such discontent drew into question the relevance

of Marxism as a means of opposing capitalism.

The chapter, in Section 2.2, reflects on the development of Marxist crisis from an

examination of early attempts to ‘improve’ or ‘revise’ Marxist theory. Much of the later

disputation and conflict within Marxism are echoes of these early polemics – the question of

whether a reformist or revolutionary path ought to be followed. Section 2.3 follows the

rapidly developing theoretical shifts that occurred between the wars when Marxism appeared

to be in serious retreat.

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Section 2.4 focuses on the post-war period – the ‘golden age’ of capitalism and the responses

that were elicited in a Marxism that had increasingly shifted its attention away from the

working class and fundamental issues of class and economy. The chapter concludes in

Section 2.5 by responding to an issue that is central to the thesis, affirming that the on-going

crisis that has bedevilled Marxism for more than a century can be resolved and that

consequently Marxism has a direct and increasing relevance in the 21 st century.

2.1 An optimistic view of the world

As has already been described, the materialist conception of history is the foundation upon

which Marxism is built. As such it is ultimately an optimistic worldview, arguing that the

movement of history is predicated upon a dialectical clash of opposing forces. These

opposing forces are represented by the existence of classes and the class nature of society.

The interests of these opposing forces cannot be reconciled without fundamental changes to

the political and economic structures of society. Marx argued that these antagonisms must

inevitably translate into class struggle that, in turn, would result in a new economic and social

order.

In his Contribution to the Critique of Political Economy, Marx (1918: 11-12) contended that

social existence determines consciousness and that through social production people enter

into sets of relationships that are independent of their own will. In so arguing, Marx described

the processes by which class relations and society operate. These class antagonisms are, in

Marx’s view, transitory. He maintained that economic formations and society advanced in

accordance with the materialist conception of history. The capitalist mode of production and

45
its inherent contradictions and antagonisms are an integral part of this process, because, “the

productive forces developing in the womb of bourgeois society create the material conditions

for the solution of that antagonism” (Marx 1918: 13).

Marx summarised his contribution to the development of political ideas in three succinct

points. These were, that social classes were simply stages in historical development, that the

class struggle necessarily leads to the ‘dictatorship of the proletariat’ and that this, too is a

transitional stage towards the creation of a communist society that would promote the free

development of the individual (Carver 1991: 10) Marxist philosophy and economic theory

emphasise the interaction between social classes, changes in material conditions, how society

is organised, and of the primacy of economic factors over political ones as engines for

change.

Boucher, describing Marxist theory, states that:

on the basis of scientific analyses of the contradictions of capitalism’s political

economy, Marx predicted that the system was headed for deep crisis and long-term

stagnation. He maintained that capitalism would be overthrown by the exploited class

of that system, the working class … in a socialist revolution that would lay the

foundation for a radically new form of society … the social scientific side of Marxism

is concerned with the revision and correction of these hypotheses and predictions, in

light of economic developments, political history and sociological data (2012: 4-5).

Marx viewed the world from a highly partisan perspective. It was a position framed by an

understanding of the class nature of society and of the inequality that such divisions breed

(Marx & Engels 1977: 48). Capitalism, for Marx, was an engine of growth that both

46
revolutionised productive forces while simultaneously driving millions into poverty. Renton

(2005: 23-24) describes Marx’s vision that the machinery of capitalism would be taken and

used for the needs of humanity and not for private wealth.

Marx and Engels understood capitalism to be a globalising force. Renton (2005: 9-10) draws

a connection between their work and modern globalisation theorists, recognising that states

and regions were being affected by developments in the global economy. Marx and Engels

wrote of the disorder and crisis that capitalism engenders and of the contradictions that lead

to economic crisis. Capitalism and the bourgeoisie, in seeking to manage these critical

moments, react and respond by engaging in:

on the one hand enforced destruction of a mass of productive forces; on the other, by

the conquest of new markets, and by the more thorough exploitation of the old ones.

That is to say, by paving the way for more extensive and more destructive crises, and

by diminishing the means whereby crises are prevented (1977: 42).

Central to the approach of classical Marxism was the belief that socialism would be

constructed as a world system and not be confined within national borders. Such a

foundational premise was based on the knowledge that capitalism was already moving

beyond the limitations of nation states. Capitalism was impelled towards globalisation

precisely as a result of its very ‘nature’ and because of its internal contradictions. Marx and

Engels famously stated that “the need of a constantly expanding market for its products

chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle

everywhere, establish connexions everywhere” (1977: 39). Burchill (2010: 74),

acknowledges that the world owes an intellectual debt to Marx for his account of the

tendency of capitalism to globalise.

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Marxist theory was predicated on the eruption of class struggle, the breakdown of capitalist

economics and the replacement of capitalism with socialism. An international movement was

built upon these foundations and there was an expectation that Marx and Engels’ theories

would, in a relatively short time, come to fruition. It was a theory that was intimately

connected with practice and in this context was fraught with potential difficulties. It was,

after all, an ideological perspective that existed in the real world and in real time.

Capitalism’s continued existence seemed to question the validity of elements of Marxism.

The developing and on-going polemics and disputes among Marxists was hardly surprising.

This is especially obvious as those same adherents of Marxist ideas lived and worked in an

atmosphere infused with bourgeois ideology that was exacerbated by disappointment and

missed opportunities.

2.2 The seeds of crisis: reform or revolution

Capitalism’s survival and re-stabilisation has been and remains for many Marxists – theorists

and practitioners alike – disturbing and disheartening. The Russian Revolution failed to

signal a world revolution. Revolutionary moments had come and had been defeated. Marxism

was in retreat. The working class movement in Europe was more and more dominated by

nationalist sentiment. Social democratic political parties maintained the support of the

majority of the working class. For many there appeared to be something fundamentally

wrong in Marxism’s optimistic view of the future. While created to expose the crisis in

capitalism and to offer the necessary leadership to overthrow capitalism, Marxism itself was

increasingly exposed to crisis. Despite its confident estimation that capitalism was producing

its own grave-diggers (Marx & Engels 1977: 48) capitalism maintained its position of

48
dominance and Marxism appeared unwilling or unable to present any real challenge. Nothing

much would appear to have changed in the decades since.

Engels famously quoted Marx in relation to some of the divergent Marxist views of his time:

“All I know is that I am not a Marxist” (Engels 1890). The polemics that enlivened Marxism

from these early days until the outbreak of World War I represented, in part, the strivings of

Marxists to engage with theory in order to best promote revolutionary struggle. It was also a

struggle to combat ideas that were diverting the theory from its proclaimed goal of effecting

revolutionary change. This reflected a divergence within Marxist thinking that centred on

questions of reformist or revolutionary paths to emancipation, and arose from Marxism’s

growth, and particularly in Germany. This stemmed in part from Germany’s relatively late

development of a capitalist economy, the subsequent rise of an industrialised working class

and to the rapid growth of social democracy. A prolonged argument ensued, as to whether

revolution was the means of defeating capitalism and building socialism, or whether the path

could be traversed by a series of reforms. The debate pitted the merits of revolutionary or

evolutionary socialism against one another. In the 1920s Luxemburg (1988) defined it as

‘reform or revolution’.

Bernstein published what Renton describes as “the nearest thing available to a Communist

Manifesto of reformism” (2002: 76). First published in 1907, Bernstein’s Evolutionary

Socialism (1975), engaged with both Marxist strategy and philosophy as well as criticising

the essential internationalism that had underpinned Marxism. He argued that the working

people were increasingly becoming ‘citizens’ of individual nation-states with allegiances

more closely aligned to the nation than to class. Bernstein’s principal objective was to

49
correct what he deemed to be problems with Marxist theory and philosophy. He sought to

‘revise’ Marxism. The concept of revisionism has become a pejorative term in the lexicon of

Marxism. Lenin railed against the development of revisionist theories stating that “there is a

well-known saying that if geometrical axioms affected human interests, attempts would

certainly be made to refute them … no wonder, therefore, that the Marxian doctrine, has had

to fight for every step forward in the course of its life” (1977d: 49). The criticisms that came

from many Marxist theorists focused particularly on a phrase that Bernstein used to situate

his philosophical position. “To me that which is generally called the ultimate aim of

socialism is nothing, but the movement is everything” (1975: 202).

Bernstein’s work also divided Marxist thought around the question of whether or not

Marxism is a science. At the turn of the 20th century Bernstein promoted the idea that

socialism could not be regarded as scientific. It was a debate that has continued (see Chapter

1) and echoes across the last century. Science, in Bernstein’s estimation, was based on

experience, while socialism’s focus was on a future social system which, by definition, could

not have an experiential basis. It is a view that was rigorously contested by Plekhanov (1976:

33) who, in the first years of the 20th century, asserted that it was eminently realistic to

suppose that a scientific study of the present allows an opportunity to ‘foresee’, with some

degree of accuracy, what is likely to occur in the future. This, he maintained, was not the

province of prophecy, or of arbitrary declarations, but on the basis of experience and the

accumulation of knowledge.

However, it was the economic analyses of Bernstein that proved to be the most controversial.

The argument centred on the question of whether capitalism was a self-regulating system or

50
prone to economic breakdown. Luxemburg (1988: 10-11) remained one of the more vocal

critics of Bernstein. She referred specifically to Bernstein’s premise that capitalism was

unlikely to move into a general decline due to its capacity to adapt to changing conditions.

This presented a major departure from Marxist orthodoxy and would, over time, come to

differentiate Marxist from social-democratic theories of social change. Bernstein sought to:

demonstrate the possibility of the 'self-regulation' of capitalism. Cartels, credit, the

improved system of communications, the rise of the working class, insofar as they act

to eliminate or at least mitigate the internal contradictions of the capitalist economy,

hindering their development and aggravation, ensure for the system the possibility of

unlimited survival (Colletti 1974: 54).

It was a contention that Luxemburg rigorously rejected. She argued that Bernstein was

presenting an idealist perspective whereby the, “objective necessity of socialism, as the result

of the material development of society, falls to the ground” (1988: 13). Capitalism’s real or

perceived capacity for self-regulation, and for reform to render revolutionary paths to

socialism obsolete, became an axis around which Marxist and social-democrat polemics

would rage.

This divergence in theoretical trajectory also underpins on-going disputes within Marxism.

Capitalism appears to be remarkably resilient and adaptable. It was and is clearly beset by

cycles of crisis and stability and yet its status as economic and socio-political paradigm has

remained unassailed. This has been an on-going source of challenge for Marxists.

One feature of capitalist cycles of crisis and development that has featured in Marxist thought

has been the work of the Soviet economist Kondratiev (1984) and his articulation of the ‘long

51
wave’ theory of capitalist cyclical development in the 1920s. Kondratiev argued that the

‘normal’ business cycles of capitalism are driven by the dynamics of capitalist production

and that there were no fundamental differences between these and the ‘major’ or

extraordinary cycles. It was a theory that did not differentiate between long and short periods

of cyclic upheaval. Capitalism, can, as a consequence, be seen as a self- perpetuating, self-

regulating system. The ‘long wave’ theory came to occupy a dominant position in economic

theory.

Many Marxist economists and notably Mandel (1978) sought to bring Krondatiev’s theory

and classical Marxism into a position of accord and in particular, an accord between Trotsky

and Krondatiev (Day 1976). Trotsky (1986: 276-277), however, had argued that the major, or

extraordinary, turning points in capitalist development are ultimately unpredictable in

character. These significant moments defied, and denied, the automatic sense of periodicity

that was the basis of Krondatiev’s theory. Marxism’s attempts to maintain relevance in the

face of a still dominant capitalist ideology and economy inevitably led to divergence of

views. Some Marxists maintained that they were renewing, revising and adapting Marxism to

suit new and ever changing realities. Their detractors decried such ideological departures as

‘opportunist’ or ‘revisionist’.

The decades leading to the collapse of the Second International and World War I, were also a

time of development of Marxist theory itself. Gamble (1999a: 3-4) argues that from the

beginning there was never a single ‘monolithic’ Marxism but, rather, a rich and diverse

political movement. While this is true, the essence of Marxism, encapsulated in the classical

tradition, was that irreconcilable contradictions exist between labour and capital. The

52
significance of Marx’s contribution (Smith 2014: 261) was his view that the working class

must organise itself as an independent force in order to achieve emancipation and, therefore,

the resolution of that same contradiction. The essential combative component of Marxism;

the search to develop theory and strategy as a means of advancing the interests of the working

class, has, over time, diminished. The crisis in Marxism that developed almost from the

publication of the Communist Manifesto, has revolved around that very question. As the 20th

century unfolded, the crisis in both capitalism and in Marxism deepened. The period between

the two world wars exposed this crisis as Marxists strove to maintain a sense of relevance.

2.3 A deepening crisis: the period between the wars

The years following World War I brought, not the end of capitalism, but rather, a

continuation of crisis for Marxism. The Second International had collapsed and an

irretrievable rift between social-democracy and Marxism dominated theoretical discourse.

The Russian Revolution and the beginning of the Third International gave an impetus for

Marxism, but the attendant optimism quickly dissipated. Marxist thought and practice needed

to be re-evaluated due to the defeat of the revolutionary upsurge in Europe, the rise of

Stalinism and with it the stultification of Marxist thought, the promotion of the theory of

socialism in one country, and the subsuming of the international Marxist movement into the

service of Stalinist policies.

Jay (1996: 3-4) describes one consequence of the Russian Revolution that would come to

play a significant role in the development of Western Marxism. The Revolution moved the

political centre of gravity eastward. He argues that the Marxist intelligentsia, and particularly

in Germany, saw three possible responses. These were either to support Moscow’s leadership

53
and that of the Third International, back the non-revolutionary socialist movement in

Germany, or pursue a complete re-examination of Marxist theory in order to prepare for

future actions. It was the latter path that the fore-runners of Western Marxism chose to

follow. Jay argues that:

The split that divided the working class movement in Weimar between a bolshevized

Communist Party (KPD) and a non-revolutionary Socialist Party (SPD) was a sorry

spectacle to those who still maintained the purity of Marxist theory. Some attempted a

rapprochement with one faction or another. But as demonstrated by the story of Georg

Lukács, who was forced to repudiate his most imaginative book, History and Class

Consciousness, shortly after its appearance in 1923, this often meant sacrificing

intellectual integrity on the altar of party solidarity (1996: 4).

The dilemma that these Marxists faced was complicated by the disintegration of the Marxist

movement in Europe that came with the failure of revolutionary moments immediately after

the Russian Revolution and World War I. The apparent victory of nationalism over

internationalism that the Second International’s collapse signalled is reflected in the

development of Western Marxism. Anderson (1979: 94) asserts that Western Marxism was

ultimately more ‘Western’ than Marxist. Anderson argues that Historical Materialism, as the

base upon which Marxist theory is built, is only fully valid and able to exercise its full powers

if “it is free from parochialism, of any kind. It has yet to recover them” (1979: 94).

Callinicos (1983: 80) describes the reality of defeat and stagnation as well as the growing

acquiescence of the European working class. Understandably, Marxists such as Korsch

(1931) sought to wage a struggle against what they saw as a degeneration of Marxist theory

and practice. It was Korsch who first introduced the idea of there being a crisis in Marxism.

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Korsch was critical of the German Communist Party’s perceived ideological weakness that

played a significant role in the failure of the German revolution. His position drifted over

time from an alliance with Trotsky’s ‘Left Opposition’ as a means of reviving Marxism’s

fortunes, to his later theses arguing that:

today, all attempts to re-establish the Marxist doctrine as a whole in its original

function as a theory of the working classes social revolution are reactionary utopias

… Marx is today only one among the numerous precursors, founders and developers

of the socialist movement of the working class. No less important are the so-called

Utopian Socialists from Thomas More to the present (1950).

Such a trajectory, during the turbulent years between the wars, was not uncommon. Anderson

(1979: 24) refers to a mutation of ideas that came to be known as Western Marxism in which

an ‘altered universe’ within Marxist theory became more and more apparent. Anderson

(1979: 28) points to the concerted move to shift the centre of Marxist thought away from

Eastern and Central Europe and back to Germany, France and Italy. He argues that the

ramifications of this shift have been considerable. In particular, a separation of theory from

practice became apparent, as the working class in Europe had become more closely identified

with the politics and economics of social democracy.

There is a certain irony here, given that three of Western Marxism’s most prominent thinkers

(Korsch, Lukacs and Gramsci), were leading figures of the revolutionary upsurge after World

War I. What transpired was the beginning of a movement that sought, consciously, to

separate itself from the dialectical materialism of Engels, Kautsky and Plekhanov (Femia

2007: 96). Callinicos contends that “the Frankfurt theorists refused to consider theories as

55
merely expressions of class world-views, insisting that theoretical discourse cannot be

reduced to its social conditions of production” (1983: 82).

The Frankfurt School sought to reconfigure Marxist theory to suit the new realities of the

post-war period. The defeats of the European working class and its growing accommodation

to social-democracy led to a shift in focus away from the working class as the axis around

which change would turn. Wiggerhaus argues that the leaders of the Frankfurt School did not

“put any hopes in the working class…Adorno expressly denied that the working class had

any progressive role to play” (1994: 123). Another feature of Western Marxism was the

removal of the classical Marxist construction that argues that the superstructure of society,

political and institutional, rests upon an economic base and it is this economic base that is

primary. By inverting this relationship, Western Marxism changed the emphasis and

trajectory of Marxism.

In the 1930s, Horkheimer (1982) further clarified the ideology of Western Marxism in his

development of the concept of Critical Theory. Critical Theory, for Horkheimer, was a term

that could be used to replace Marxism. He contended that Critical Theory (Marxism) was, in

essence, a movement to abolish social injustice. It was within this theoretical framework that

Bloch (2015), writing twenty years later, developed his neo-utopian vision within Marxism.

Bloch’s call for a return to utopian perceptions was a major departure from Marxist theory.

Lenin commented on Marxism’s perspective stating that Marx “studied the birth of a new

society out of the old, and the forms of the transition from the latter to the former” (1977c:

272, emphasis in the original). The utopian construct, by contrast, maintained that the “true

genesis is not at the beginning, but at the end” (Bloch 2015).

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Hudson (1982: 33) outlines Bloch’s contention that the emphasis on science, so elemental to

Marxism, was a limiting feature, as was the emphasis that Marx placed on the primacy of

economic factors. Popper in the 1950s famously argued that Marxism is not science. He

accepted that Marxism identifies trends and tendencies that occur in social change and that

these trends cannot be questioned or denied. Popper argued that ‘trends’ are not ‘laws’, in

language that strongly echoed Bernstein’s. Laws after all are timeless. Popper further stated

that a trend, even if consistent “for hundreds or thousands of years may change within a

decade, or even more rapidly than that” (2002: 106). More recent criticisms of scientific

socialism are found in the tendency towards neo-utopianism. Pantich & Gindin (2000) call

for ‘imaginative’ thought in the face of the collapse of communism and the failures of third

way social democracy. They describe a movement that begins with pre-Marxist utopian ideas

and seek to re-introduce such a philosophy that is in direct contrast to Marxism’s appeal to

scientific analysis.

Critical Theory and the Frankfurt School dominated the thinking of radical and New Left

activism after World War II. Bronner (2011) outlines how Critical Theory has ‘enriched’ an

understanding of family, sexuality and repression, teaching practice, genocide, entertainment,

and literary analysis. He also states that it has added to an understanding of power

imbalances, the state and global activity. This ‘enrichment’ in Anderson’s view was in fact a

reflection of a broader political defeat that had resulted in:

A remarkable range of reflections on different aspects of the culture of modern

capitalism. But these were never integrated into a consistent theory of its economic

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 development, typically remaining at a somewhat detached and specialised angle to the

broader movement of society (1998: 72).

Anderson (1979: 25) argues that Critical Theory, as an expression of Western Marxism,

displaced the traditions upon which Marxism had been constructed. The focus of Marxism, as

outlined in Critical Theory, shifted away from the working class and class consciousness and

“in the direction of philosophy and literature rather than empirical and historical research”

(Little 2007: 238). Lubasz notes that Adorno and Horkheimer actively replaced the concept

of class conflict for a theory based upon the idea of universal domination and the conflict

between man and nature. “The term ‘class’ vanishes from the terminology of Critical Theory”

(Lubasz 1984: 80). What is particularly evident is that the crisis in Marxism that Korsch first

identified diverted and distorted Marxist theory. What was, at first, a reaction to

disappointments and set-backs began a move away from classical, orthodox Marxism. The

raison d’etre of Marxism had been to both explain capitalism and to consciously act to

replace it. Marxism was formed as a revolutionary movement. Lenin famously observed that

“without revolutionary theory, there can be no revolutionary movement” (1977c: 109). The

years after World War I saw a flowering of theory but it was a theory that was becoming

divorced from practice. Nationalism, defeats, and missed opportunities, all demanded that

‘old’ ideas needed to be re-examined. Developing a theory for a ‘new’ period, however, led

to the effective abandonment of core elements upon which Marxism had been built. Marxist

theory, from the perspective of classical Marxism was in disarray. However, the period

between the wars was marked by an intensity of questioning and debate as to the way

forward. Capitalism had survived. Further strains would soon press upon Marxism with the

end of World War II, capitalism’s renewed strength and the dawn of a new era of capitalist

prosperity.

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2.4 The ‘golden age’ of capitalism and beyond

The end of World War II coincided with capitalism’s ‘golden age’. It was a period marked by

economic stability and growth, an apparently contented, or at least acquiescent working class,

and a burgeoning welfare state. Cold War politics and the experience of Stalinist regimes in

Eastern Europe saw Marxism further relegated, in the eyes of many, to a position of

obscurity. Thoughts of a Marxist renewal, as a force to fundamentally change the economic

order, appeared to be fantasy. A ‘golden age’ for capitalism was for many Marxists the

beginning of a new ‘dark age’. Marxism in this period again proved to be reacting to events

rather than attempting to influence events. The theory became more defensive and remote

from its core values of developing a theory to promote practice and from its objectives of

emancipation.

Two events in the mid-1950s shaped the development of Marxism in Europe. The Soviet

Union’s crushing of the Hungarian Revolution of 1956, coincided with the development of

the New Left. Blackledge (2006) argues that the New Left reformulated a democratic vision

of socialism. At the same time, the New Left movement had no agreed political or theoretical

agenda. Thompson provided the intellectual basis for the New Left. He sought to differentiate

himself from the Marxism that had been so badly served by Stalinism. In his vision of a

humanistic socialism, Thompson (1957) criticised Marx’s base/superstructure model, arguing

that it was a theoretical construct used by Stalin. Thompson was, unconsciously, drawing an

almost genealogical line between Marx and Stalin.

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Marcuse (see chapter 1) elaborated what was to become the basis of New Left ideology. He

argued that rather than focusing on the industrialised working class, Marxists should seek to

rally the broadly ‘dispossessed’, minority groups, unemployed, and those who were yet to be

integrated into the capitalist state. Capitalist development, in the post-war period, posed a

dilemma for Marxism that such analysis seemed to resolve. The relative affluence of the

working class in capitalist states led many within the Marxist movement to further distance

themselves from the core premises of Marx and the class nature of society. The New Left

further adapted Marxist theory and came to focus more consciously on the ‘transformative’

role of culture. The development of the New Left also coincided with the anti-colonialist

movements and third-world radicalism. Change, it was argued, was to come, not from a class

conscious workers’ movement, but from spontaneous actions of minority groups. What

emerged was the growth of identity and social movement politics.

As the old verities were being called into question, philosophical endeavours led to what has

been labelled ‘postmodernism’. Its largely sceptical approach to the world and ideas had an

impact on political thought and on Marxism in the latter part of the century. Callinicos (1990)

regards postmodernism as a reflection of political frustration that stems from the

disappointments of the radicalisation of the later 1960s. Central to the arguments of the

postmodernists (Foucault, Derrida, Lyotard and others) is a reaction against arguments of

science and reason that grew from the Enlightenment. Jenkins, in describing postmodernism,

claims that “there never has been, and there never will be, any such thing as a past which is

expressive of some sort of essence” (2005: 7-8). Postmodernism is the antithesis of Marxism

in this respect. Lyotard’s (1984) construction that the concept of the ‘grand narrative’ had lost

its function and its goal was further clarified by Gorz (1997) when he proclaimed that seeking

to find a basis of Marx’s theory of the proletariat was essentially a waste of time. Marxism

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maintains that history is a law-governed process and largely governed by economic factors. It

also is marked by the ‘grand narrative’ and particularly in relation to the working class and its

role. The debate surrounding postmodernism is significant because post-Marxism’s

theoretical premise is so closely aligned with postmodernist theory.

Central to post-Marxist ideology is the dismissal of the ‘old’ politics of classical Marxism. In

keeping with the intellectual scope of postmodernism, as well as the movement away from

class-related political analysis, it is an appeal to the revolutionary potential of identity politics

and broad, non-class social movements. Critchley (1997) argues, however, that socialist

renewal is certainly possible by using Marx’s analysis without discarding class forms of

struggle. Critchley regards the development of post-Marxism in terms of a paralysis of the

will that is required to change the world. Sim argues that post-Marxism is “as much a

symptom of a problem as a solution to the left’s ills; the problem being that radical politics

has become very dispersed in the last few decades” (2011: 20).

While radical politics became ‘dispersed’ in the post-war period, the quest to understand

capitalist political economy within a Marxist framework continued. In this sense, Regulation

theory assumes a significant position. Regulation theory examines the interrelation between

the economy and socio-political issues. It maintains that the economy is self-regulating and is

part of an integrated system incorporating social and political elements. In so doing, the

theory advances the position that capitalism and its development is propelled by the social

structure of society. It actively seeks to overcome what neo-Marxists held to be a central

problem in classical Marxism; the base-superstructure view of societal development.

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Regulation theorists such as Boyer (2002), Aglietta (1998) and Jessop (2001a) maintain that

it is possible to overcome more ‘mechanistic’ explanations of capitalist development. Central

to Regulation theory’s thesis is that an explanation of capitalism’s tendency to crisis and

stabilisation lies in capitalism’s requirement of a degree of regulation. Capitalism operates,

according to the theory, through cyclical, self-regulating crises. These crises further

exacerbate the contradictions within the system. The ‘mode’ of development, as described by

the theory, reproduces itself through these cyclical crises and leads, over time, to a structural

crisis. This in turn creates an unregulated system which must be resolved and a new regulated

capitalist mode is constructed. Husson cites Lipietz’s commentary that “one is a regulationist

as soon as one asks why there are relatively stable structures when, given that they are

contradictory, logically they should disintegrate” (2008: 178). Such observations echo earlier

debates within Marxism and especially between Bernstein and Luxemburg regarding the

capacity for capitalism to adapt or to break down.

Aglietta (1979) argues that capitalist accumulation in the post-war period is markedly

different from that during the Great Depression and that in different periods of accumulation

different forms of regulation of capitalism emerge. These were broken into three distinct

periods or ‘modes’:19th century competitive capitalism, early 20th century intensive

accumulation and post-war monopoly modes of regulation (Brenner & Glick 1991). In the

21st century, capitalism has entered a period of intractable crisis and instability. How

Regulation theory has responded becomes particularly relevant.

Hirst & Zeitlin maintain that the regulationists, in rejecting classical Marxist analysis of

capitalist breakdown, are seeking a ‘middle’ way between revolutionary socialism and

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reformist social democracy. “Regulation theory remains concerned with capitalism as a

global system and it seeks policies for the international economy that will promote stability

and growth” (1992: 93). Husson (2008: 187-188) contends that Regulation theory has, in

recent years, moved further from its Marxist roots, and it now argues, amongst other things,

for new forms of wage earning through worker share-holdings and a range of profit-sharing

compromises with employers. Husson laments what he sees as missed opportunities, arguing

that “elements of analysis and useful literature surveys can still be found in regulationist

texts, but they contain few developed suggestions for those who want to understand the world

and change it” (2008: 188).

The 20th century dawned amid capitalist crisis and unresolved contradictions. It was a century

that saw wide divergences and developments in Marxist theory but with capitalism still

secure. Marxism remains divided. Marxism was formed with the objective of fundamentally

changing society. Its focus was the class nature of that society. Many ‘Marxisms’ evolved in

the last century. Each of these divergent trends have built and extended theoretical positions,

but with each new representation, the importance of class and working class struggle has

diminished. Wallerstein (1986: 1295) wrote of a ‘thousand Marxisms’. How can Marxism be

considered relevant when it is in such disarray? Can there be a resolution to the crisis within

Marxist thought that has disrupted Marxist practice for so long?

2.5 Can there be resolution?

Chodos (2007: 190-193) argues that the movement for socialism, in the 21st century must

avoid the linking of economic and political relationships. Chodos maintains that a key ‘flaw’

in Marxist analysis is its insistence that socialism represents the assumption of power by the

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working class. The question of the working class remains problematic for contemporary

Marxism. For many theorists the working class became, not a force for change, but an

obstacle in the path to change. Gorz (1980) articulated this antipathy for the working class.

He elaborated a theory of labour and the working class that increasingly regarded the working

class as either impotent in the face of the structures of capitalism, or as representative of a

privileged minority. He regarded the working class as a shrinking force that was incapable of

playing a conscious role against capitalism. He argued that the unemployed and

underemployed in society possessed the capacity to become the basis upon which an

emancipatory project might develop. Such a pessimistic construction can only limit a renewal

of Marxism, either as interpreter, or as agency for changing the world. Marxism expresses the

consciousness of the proletariat and its central task is to illuminate that which is hidden by

bourgeois reality (Lukacs 1970). The issue of the working class and its role in the

transformation of society has been at the centre of Marxist theory and practice. It has also

been at the centre of dislocation within Marxism.

Debates as to Marxism’s utility continue. Callinicos (1991) optimistically declares Marxism

to be a powerful, historically oriented social theory. Singer (1999) argues that radical

movements will not disappear while there is exploitation. He specifically draws attention to

the broad, anti-globalisation protest movements and argues for a ‘realistic’ utopian future. For

some, Marxism’s combative future is beyond question. Disappointment and disillusionment

colours the thinking of others. The radical, non-class appeal to a spontaneous movement, sits

between the two camps. All schools of thought are consciously or unconsciously drawn into

the overarching question of the role of the working class. For the optimists, the working class

remains central. For the pessimists, the perceived weakness of working class consciousness

becomes a critical issue. For the radical social movement activists, the working class is

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simply another element. Shandro discusses the issue of spontaneity in terms of an

accommodation “to bourgeois hegemony … not through a failure of proletarian commitment

to the struggle for socialism … but through failure to mount a political project of proletarian

hegemony” (2007: 17).

Recent debates within Marxism have focused less on economics and more on philosophical

questions. Marx began his professional life as a philosopher and moved resolutely to the field

of economics. Western Marxism consciously developed its theory and ideological base on the

philosophy of Marxism rather than its economic propositions. It has been a process that has

seen Marxism’s focus shift inexorably away from the working class and has diffused the

classical Marxist position that economics and economic struggle between classes is the

dominant and motivating force. To arbitrarily separate the component parts of economics and

philosophy can only weaken Marxist theory. Similarly, theory and practice act as an

integrated whole. To separate one from the other leads to a theory that is baseless. Gramsci

described it as the “result of a dialectical process in which the spontaneous movement of the

revolutionary masses and the organizing and directing will of the centre converge” (Forgacs

2000: 129). Colletti (1969) enlivened debates within Western Marxism that promoted the

philosophy of Marx ahead of economics, Just a few years later he stated that “the only way in

which Marxism can be revived is if no more books like Marxism and Hegel are published,

and instead books like Hilferding’s Finance Capital and Luxemburg’s Accumulation of

Capital – or even Lenin’s Imperialism … are once again written” (1977: 350).

In seeking to renew its claim to relevance, Marxism more and more diverged from its

fundamental premise of class and class struggle as a means of combatting capitalism. If

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Marxism is to make a serious claim to relevance, then the unity of theory and practice needs

to be more obviously integrated. It is thus appropriate to re-visit some of the theoretical

observations of Marxism and particularly in relation to issues of class and class

consciousness.

Class, as a defining element in capitalist society, has long been a central component of

Marxist analysis. Anderson (1974: 49) explains Marx’s concept of class-in-itself as opposed

to the state of class-for-itself which denotes a conscious and independent movement to pursue

its own interests. Such a position is difficult to attain but the failure to reach such a position

has serious consequences for the working class. The essence of class consciousness, and its

possibly elusive character, is further articulated by Anderson (1974: 60-61). Two components

– a radicalised intelligentsia offering an ideological leadership and a motivated working class

– provide a framework within which consistent class consciousness might develop. Such a

view is based on Marx’s (1956: 195-197) conception of the development of class relations

whereby the working class seek to consciously promote, and struggle, for its own interests.

The working class, no matter how militant it may be, remains limited in its potential if it has

to act within the constraints of the capitalist state from which it seeks emancipation.

An essential component of class consciousness is not simply a militant approach to perceived

enemies, but a leadership either from within the working class or acting with the working

class to advance its perceived interests. Lenin’s (1977c: 113-114) comments – that mass

strike behaviour without effective and conscious leadership is but an embryonic form of class

consciousness –remains pertinent. Such energy must be channelled or it is energy too easily

spent. Trotsky, describing the necessity of political leadership, remarked that “without a

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guiding organisation the energy of the masses would dissipate like steam not enclosed in a

piston box” (Trotsky 1965:17).

Political leadership, and the role of the working class, remain central to Marxism’s claim to

relevance. This understanding is fundamentally linked to the question of Marxism’s purpose.

Marxism emerged to describe and offer a critique of capitalism. This has remained its

strength. Integrated with this, however, is the purpose of Marxism: to organise and offer

leadership to the working class in its quest for emancipation. The role of the working class

and the combative nature of Marxism, however, became less central to Marxist thinking in

the 20th century. The working class remains numerically strong and globally visible (Harman

2010: 331). McCarney (1990: 192) sums up much of the left’s problems with the role and

perception of the working class when he differentiates between ‘third world’ workers and

those in advanced capitalist countries. In capitalist countries, the working class has been

criticised for failing to act as a revolutionary force.

Marxists have worked to develop a theory that would answer the questions posed by

contemporary life. These questions were framed against the realities of stable capitalist

relationships and the perceived acquiescence of a more secure and affluent working class

after World War II. Marxists also sought, and often successfully, to analyse the developing

capitalist crisis, while frequently overlooking the effect this is having on the working class.

There are other, fundamental propositions that have also been less well considered. These

relate to the ultimate purpose of Marxism, of the need to re-engage with class issues, and of

how Marxists respond to the question of leadership as a means of advancing an emancipatory

program. It is a question of re-integrating theory and practice. Whether there can be a

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rapprochement between the divergent manifestations of Marxist thought is unclear. North,

paraphrasing Marx, argues that “we live and fight in the world of ‘objective conditions’,

which is both the source of our present-day troubles and their ultimate solution. Whatever

shall emerge in the future shall be the product of conditions that exist today” (North 2015:

132). Such a proposition serves to reinforce Marxism’s on-going claims to relevance.

Marxism, as an economic, philosophic, and social worldview, has a history that has been

plagued by disputation and division. Today there are many ‘Marxisms’ and yet all stem from

the one intellectual and theoretical base: the analysis of Marx and Engels, who presented a

deep critique of capitalism and of its evolution. The purpose of this critique was not simply to

analyse and to appreciate the development of capitalism, but to provide a theoretical base that

would be used to combat capitalism and to replace it. Burawoy and Wright claim that

Marxism is “a comprehensive worldview for understanding the social world. It provides the

theoretical weapons needed to attack the mystifications of capitalism and the vision needed to

mobilise the masses for struggle” (2006: 462). Marxism, however, despite providing these

‘weapons’ has not been able to mobilise the ‘masses for struggle’.

Marxism remains relevant only if it answers fundamental questions that confront the working

class. These questions are inextricably linked to the potential and capacity for the working

class and its allies to develop an independent consciousness that both responds to and

combats capitalism and the state. As Marx famously declared, “philosophers have only

interpreted the world, in various ways; the point is to change it” (Marx & Engels 1964: 647).

The world, or more specifically the economic and political structures of capitalism, has not

been changed.

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2.6 Conclusion

Marxist theory, at the beginning of the 20th century, was focused on the nature of capitalism

and how to respond to imperialism as a globalising force. Prominent among the debates were

questions of revolution or reform – of whether capitalism was to be understood by breakdown

theory or whether it was a self-regulating system. In the 21st century the nature of capitalism

as a globalising force is again being debated and the regulatory nature of capitalism is once

again being discussed and disputed.

The theoretical shifts in Marxism have a common thread. In seeking to maintain relevance in

a changing world, contemporary Marxism has become a reactive force. There was a

perception among many Marxists that the ‘revolutionary potential’ of the working class had

dissipated. The class nature of society had been a cornerstone of Marxist theory. This shift in

emphasis evolved over decades. Marxist theory sought to adapt to new perceptions and new

challenges. Western Marxism, in the period between the wars, reacted to a political and

geographical shift eastward that followed the Stalinisation of Marxist theory. It was also

responding to the gathering strength of social democracy and a working class that exhibited a

weakened sense of consciousness. Capitalist stabilisation after World War II and a more

acquiescent working class led many Marxists to pursue new, alternative paths in a quest for

relevance. New Left activists and postmodernist, post-Marxist theorists argued new ways of

engaging in struggle were required.

Marxism, despite theoretical disputation and divergence, remains a valuable vehicle for

analysing and understanding of capitalism and capitalist globalisation. This chapter, however,

argued that this, of itself, does not make Marxism relevant in an era of capitalist crisis.

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Marxism was created to provide analysis and critique of capitalism. Inseparable to this was

its role of offering guidance and leadership in the course of combatting capitalism and of

fundamentally changing economic and societal structures. How Marxism responds to the

latter historical component will frame its future, its relevance and the future of capitalism.

Gamble asks what sort of future does Marxism have? “It might linger on like mediaeval

scholasticism … with no observable connection to anything in the real world” (Gamble:

1999a: 4). He hopes that this is not the future because “there is an intellectual core to

Marxism which is worth preserving and which is capable of further development (1999a: 4).

Another question remains but is often unasked. Can Marxism not only answer the questions

that modern capitalism poses, but also act as a catalyst for fundamental change?

The future of Marxism and its capacity to answer these questions is ultimately tied to

Marxism’s analytical approach. The following chapter offers an overview of the key elements

of this approach and how it can be used, not merely to understand the crisis that plagues

capitalism but also how Marxism became mired in discord and crisis.

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Chapter 3 Marxism and its analytical approach

Marxist thought has influenced a range of disciplines as diverse as art history, cultural

studies, philosophy and the social sciences (Little 2007: 230). The recurrent themes of

alienation, labour theory, class conflict, modes and relations of production, have become the

focus for different approaches to Marxist analysis. Little points out that “there are many areas

where Marxist methods have been employed, and there are many strands within Marx’s

thought that have given rise to these various approaches” (2007: 230).

Maguire (2010), while outlining a range of contemporary perspectives within Marxism,

argues that whether a school of thought is regarded as neo-Marxist or post-Marxist is of little

consequence. What is important, for Maguire, is how Marxism deals with what he describes

as practical problems (2010: 155). What emerges is a tendency towards relativism. For more

than a century Marxism has attempted to deal with ‘practical’ problems as they have arisen.

Bernstein’s (1975) attempts to ‘revise’ Marxist theory was an initial point of departure that

ultimately led to Laclau and Mouffe’s claim that “it is no longer possible to maintain the

conception of subjectivity and classes elaborated by Marxism, nor its vision of the historical

course of capitalist development” (2001: 2-4). This thesis contends that there has been and

remains a crisis within Marxist theory and that this has played a role in the ability of

capitalism to withstand its own crises. Consequently, the methodology that the study adopts

is aligned with Lukacs’ defence of ‘orthodox’ Marxism and his conviction that “all attempts

to surpass or ‘improve’ it has led and must lead to over-simplification, triviality and

eclecticism” (1976: 1). Marx’s method of analysis was a response to society as it existed. His

approach involved a “willingness to make those assumptions he felt were necessary in order

to make sense of things that he, unwaveringly and unchangingly, felt had to be accounted

71
for” (Rosen 1996: 7). Marxism, necessarily seeks first to understand capitalism and then to

challenge it.

The nature of capitalism and its expansionary character, the inevitability of capitalist

globalisation, the contradictions between the nation-state as an organisational construction

and a globalised economic structure are central to understanding the crisis of capitalism. A

range of perspectives provide valuable insights into how capitalist relations are managed

within the nation-state system and how capitalism interacts with an increasingly globalised

economy (see Chapter 2). At the same time, the role of the working class and the class nature

of economic structures is often either denied or ignored.

The chapter outlines how Marxist analysis operates. Section 1.1 explains how that analytical

process draws together the component parts that constitute capitalist relations – a synthesis –

beginning with the role that labour plays in the process that is capitalism and concluding with

the development of capitalist globalisation. Section 1.2 briefly addresses the core element of

a Marxist analysis – Historical Materialism – and defends it as a scientific approach to

analysing and understanding the world. It illustrates that Marxism can be regarded as

‘scientific’ despite claims from critics to the contrary. The thesis argues that Marxism is of

continuing and deepening relevance because it provides empirically based descriptions of the

overarching economic system, and it draws social implications from those economic

structures. Marx also offered historical understandings of the processes by which these

structures came into existence.

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Capitalism’s capacity to withstand often existential moments of crisis, however, resulted in a

crisis in Marxism. Section 1.3 focuses on the nature of this ‘crisis’. While it was Korsch

(1931) who first coined the phrase, in the period after the Stalinisation of Marxism, the roots

of crisis go much deeper. Marxism famously split at the time of World War I, around the

issue of nationalism. It left a deep cleavage between Western European social democracy,

that fed into later disputes. After this examination of what was first designated a ‘crisis’ a

century ago, Section 1.4 analyses the problems in Marxism and argues that the disputation

and divergence within Marxism has inadvertently assisted capitalism’s ability to remain the

economic paradigm. In seeking to re-define Marxist theory, Marxism has been unable to offer

a viable theoretical and practical leadership to combat the persistence of capitalist ideology.

The chapter, then, offers a brief exposition of what constitutes Marxist analysis. This includes

a short introduction to the materialist conception of history and the use of dialectics as a

means of explaining social and economic developments as an integrated unity. It is shown

that this materialist and dialectical approach can be used to explain the development of

capitalism and of its tendency toward crisis. It is further shown that the crisis in Marxism can

equally be described from a materialist construction.

3.1 Elements of Marxist analysis

How can Marxism affirm its claim to relevance in an age of capitalist crisis? Marxism, for all

its difficulties, remains the best vehicle to offer a framework to understand and analyse issues

of the state, globalisation, relations between state and capital and the place and role of the

working class. A unified theory encapsulating economic, political and social factors, I argue,

is essential for understanding and resolving the contradiction between the growth of global

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capitalism as an economic focus, and the nation-state as a vehicle for political organisation.

Marxism provides such an approach.

Little (2007) encapsulates the essence of Marxist analysis as a process by which the

researcher will:

1. examine material institutions;

2. look at class, power, exploitation, domination;

3. not be blinded to effects that violate the materialist dicta;

4. be mindful of ‘contradictions’ that work themselves through historical

contingencies;

5. look for underlying causes and structures (2007:242)

In discussing Marx’s method, Little focuses on what he describes as its distinctive

metaphysical and ontological characteristic. He traces a number of assumptions or pre-

suppositions that denote a Marxist methodology. These begin with assumptions about

societies and historical processes:

the social world is a causal order, that social structures have properties and causal

characteristics, that individuals constitute social structures through their actions and

choices, that ‘social formations’ fall under the categories of ‘modes of production,’

that modes of production consist of sets of forces and relations of production, and that

classes exist (2007: 235).

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Little’s description of Marx’s method closely accords with Marx’s own. Marx (1974) argued

that what was essential was to make observations that move from the simple to the complex

and that show the inter-relationship of all component parts:

simple conceptions such as labour, division of labour, demand, exchange value, and

conclude with state, international exchange and world market … The concrete is

concrete because it is a combination of many determinations, i.e. a unity of diverse

elements. In our thought it therefore appears as a process of synthesis, as a result, and

not as a starting point, although it is the real starting point and, therefore, also the

starting point of observation and conception (1974: 100-101).

Little identifies nine separate themes that are evident in Capital Volume 1:

1. A description of the property system of capitalism.

2. A description of the purpose of production within capitalism.

3. A developed treatment of the labour theory of value.

4. An abstract model of the capitalist mode of production.

5. A description of the workings of the competitive market.

6. An analysis of the economic and social implications of these features.

7. A sociological account of how property relations of capitalism are reproduced.

8. An historical account of how these property relations were established in pre-

capitalist society.

9. A description of the life and conditions of the working class (1986: 18).

The connectivity of these themes remains an essential element of Marxist analysis and

method – Marxism synthesises the components of capitalist relations, beginning with the role

of labour and concluding with the development of globalisation.

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“The relations of production of every society form a whole” (Marx 1956: 123). The

connectedness of these relations is pivotal for Marxism. Mandel stated that “when the

dialectical method is applied to the study of economic problems, economic phenomena are

not viewed separately from each other, by bits and pieces, but in their inner connection as an

integrated totality, structured around, and by, a basic predominant mode of production”

(1976: 18). Marx’s method is simply defined as “materialistic, because it proceeds from

existence to consciousness, not the other way around. Marx’s method is dialectic, because it

regards nature and society as they evolve, and evolution itself as the constant struggle of

conflicting forces” (Trotsky 2006: 4). The strength of Marxism lies in such a formulation,

marked by an understanding of the interconnectedness of often contradictory elements.

Contradiction was central to Marx’s understanding of capitalist development. It is a concept

that denotes many of the differences between materialist and non-Marxist interpretations and

methodologies:

The apologetic phrases used to deny crises are important in so far as they always

prove the opposite of what they are meant to prove. In order to deny crises, they assert

unity where there is conflict and contradiction. They are therefore important in so far

as one can say they prove that there would be no crises if the contradictions which

they have erased in their imagination, did not exist in fact. But in reality crises exist

because these contradictions exist. Every reason which they put forward against crisis

is an exorcised contradiction, and, therefore, a real contradiction, which can cause

crises. The desire to convince oneself of the non-existence of contradictions, is at the

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 same time the expression of a pious wish that the contradictions, which are really

present, should not exist (Marx 1968: 518, emphasis in the original).

Marxist theory specifies the features of what is characterised as the crisis of capitalism. These

are: the tendency for the rate of profit to fall, the concentration of capital, the growth of the

working class, a tendency toward under-consumption (or more significantly over-production)

and the development and influence of finance capitalism. Analysis of these features and of

their inter-relationships, allows for a rational response to the contradictions in capitalist

globalisation. At the very centre of these analytical tools is Historical Materialism.

Consequently, Solomon & Rupert assert that historical materialism “approaches the question

of globalization not with puzzlement over dramatic changes in forms of accumulation, but

fully expecting them (2002: 284) is worth repeating.

Marxist philosophy and theory emphasises the interaction between social classes, changes in

material conditions, how society is organised, and of the primacy of economic factors over

political ones as engines for change. Marx famously interpreted how society, class relations

and economic questions manifest themselves:

In the social production which men carry on they enter into definite relations, that are

indispensable and independent of their will; these relations of production correspond

to a definite stage of development of their material powers of production … It is not

the consciousness of men that determines their existence, but, on the contrary, their

social existence determines their consciousness (1918: 11-12).

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A Marxist methodology unites the elements of historical materialism, economic theory and

the class nature of society. Such a synthesis serves as an analytical tool to explain and

interpret capitalist relations. It can similarly be used to explain and interpret Marxism and the

dissension that has so long accompanied it. This materialist approach provides the basis of

what Marxists declared to be a scientific analytical outlook.

3.2 Historical Materialism and the scientific approach

Lenin (1977b) described Marx’s contributions to the study of historical materialism, his

economic theories and the issues surrounding classes in society. These interrelated

components form the basis of Marxist theory and its claim to the status of science. Primary

among these is the concept of historical materialism. Intimately related to this is the

fundamental premise that class and class conflict remain central to understanding societal

developments and that economic issues drive political and societal responses. A materialist

construction understands historical processes as being impelled by antagonistic relationships

between classes, explains how social structures are shaped by economic factors, and sees

class struggle as being framed by the labour process (Boucher 2012: 5).

Historical Materialism has been traditionally presented as vindicating the claim that Marxism

constitutes a scientific method of analysis. Whitefield, in the Oxford Concise Dictionary of

Politics (1996) outlines the concept whereby “social structures derive from economic

structures, and that these structures are changed through class struggles … that human history

develops as the result of contradictions, mainly among social cases”.

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In outlining the essential propositions that designate historical materialism and its claim to be

a scientifically valid means of interpreting the world, Engels argued that:

The materialist conception of history starts from the proposition that the production of

the means to support human life and, next to production, the exchange of things

produced, is the basis of all social structure; that in every society that has appeared in

history, the manner in which wealth is distributed and society divided into classes or

orders is dependent upon what is produced, how it is produced, and how the products

are exchanged. From this point of view, the final causes of all social changes and

political revolutions are to be sought, not in men’s brains, not in men’s better insights

into eternal truth and justice, but in changes in the modes of production and exchange

(1966: 50).

It was a construction that framed Marxist theory and one which has evoked wide disputation.

Popper stridently criticised what he termed historicism as being “an approach to the social

sciences which assumes that historical prediction is their principal aim, and which assumes

that this aim is attainable by discovering the ‘rhythms’ or the ‘patterns,’ the ‘laws’ or the

‘trends’ that underlie the evolution of history” (1985: 290 emphasis in the original).

Historical materialism, however, seeks to explain social transformation by identifying the

dialectical interactions between productive forces and the essentially social relationship that

exists in that production. The often misleading term ‘predictability’ has come to represent a

form of ‘prophecy’ rather than a conscious act of political perspective that can interpret

events in a multi-faceted manner in order to make justifiable propositions. It is an analytical

tool that both embraces the wide sweep of historical developments while examining the unity

of the component parts that constitute the whole.

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Central to an appreciation of the Marxist method of analysis, and an acceptance of its

relevance, is the vexed question of whether Marxism can be designated a science or, as

Popper (2002: xi-xii) put it, a pseudo-science. The determination of Marxism as scientific

came from Engels in what was essentially a critique of ‘utopian socialism’. Nature, as Engels

asserted:

is the proof of dialectics, and it must be said for modern science that it has furnished

this proof with very rich materials increasing daily, and thus has shown that, in the

last resort, Nature works dialectically and not metaphysically; that she does not move

in the eternal oneness of a perpetually recurring circle, but goes through a real

historical evolution (1966: 45).

Grant and Woods (2002: 45) offer a simple example of such a dialectical process, whereby

opposites interact, with a resultant qualitative change occurring. They describe the change

from water to steam by the interaction with heat. Such an example, both simple and obvious,

serves to illustrate the basis of dialectics. Engels (1976) described dialectics as the unity and

conflict of opposites and that by their interaction, quantitative changes develop into

qualitative changes.

Carver (1991: 109-110) remarks how Marx believed that science was far more than merely a

collation of facts but by necessity involved the development and propagation of theories.

These theories are related to causal agents that act upon the world: entities, relations and

processes. It is in the process of these theories acting upon the world that Marxism unites

philosophical inquiry with economic analysis. The materialist conception of history stresses

the overarching importance of economics as a driver of political and societal development.

This does not preclude Marxist theory from an immersion in philosophical enquiry. To

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arbitrarily separate the two seriously limits the theoretical underpinnings of Marxism itself.

Engels (1976: 42) argued that investigative science and theory inevitably come together and

that theory and philosophical endeavours are intertwined. In a similar vein Weisbord (1937)

argued that scientific socialism originated as a method of analysis, as well as a body of

conclusions, later becoming a combination of theory and practice. It becomes all but

impossible to separate economic and political issues from that of philosophical

considerations. In other words, ideas, like economics, exist and co-exist in historical time and

space.

This co-existence of philosophy and economics in Marxist theory is best articulated when

considered in relation to the core elements of class and class-based society. The class nature

of society, the issue of class consciousness and the combative essence that imbued Marxism

from its inception remain core elements of Marxist theory and of the method that Marx

developed. They also remain among the most contested issues in Marxist debates.

As capitalist crisis deepens, Marxism assumes even more importance as a means of analysis.

What remains significant, and Marxists, despite all manner of differences would agree, is that

“two great discoveries, the materialistic conception of history and the revelation of the secret

of capitalistic production through surplus value, we owe to Marx” (Engels 1966: 49-50).

These ‘discoveries’ identified Marxism as scientific but remain mired in dispute and

controversy. “The next thing, was to work out all its details and relations” (1966: 50).

3.3 A materialist reading of the ‘weakness’ of Marxism

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The ‘discoveries’ that Engels spoke of, and Marx’s analytical approach, are well suited to

analyse capitalist development. Those same analytical tools equally valuable in discerning

and understanding the problems in Marxism. In discussing the character of Marxist analysis,

Dobb (2001) draws attention to Marx’s view of “the essential character of a system of society

in the pattern of its relationships, moreover in the tension or conflict inherent in them, rather

than in a simple summation of its discrete elements or an analysis of its various aspects in

separate departments” (2001: 40).

This view of relationships between elements of a system of society can equally apply as a

view of relationships between elements of an ideology. The divergent trends within Marxism

represent such a pattern of relationships. They may be analysed as an integrated whole and

from the perspective of their constituent parts. The differences within Marxism often stem

from capitalism’s capacity for re-stabilisation which many Marxists regarded as signalling

structural problems in Marxism. The seeming sterility in theory that the rise of Stalinism

promoted, the failure of post-1917 revolutionary movements, the capacity of capitalism to

survive economic depression and war, the post-war resurgence of capitalism and the relative

growth in prosperity of the working class, the growth of the middle class, all became factors

that questioned the relevance of Marxism. Scholars tended to explore these factors in

isolation, but in doing so ignored core components of Marxism and the analytical basis upon

which that theory rests.

Marxist theory has been weakened and distracted in the past 100 years by a range of factors.

Anderson (1983: 15) identifies three interconnected issues that arose in the mid-1920s that

significantly affected the development of Marxist thought. These were the consolidation of

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Stalinism in the USSR, a retreat from revolutionary challenge by the working class in the

most advanced capitalist states, and a crisis in leadership that resulted in the defeat of

working class radicalisation occurring in developing European economies. Anderson isolates

these three elements as a means of highlighting the geographical as well as intellectual

territory that ‘Western Marxism’ came to inhabit. Scholars have identified these factors either

as cause of the crisis in Marxism, or alternatively as a springboard for a renewal of Marxist

theory, but simply tracing a set of connecting points along an historical timeline is to do a

disservice to Marxist analysis. The timeline can be traced back to any given point. Each of

these individual issues point towards the present and from that present to the future. They are

all, in turn, connected to one root problem. In short, Marxist thought emerged in a period that

was dominated by bourgeois ideology.

Marxism, as a political, economic and philosophical expression, developed quickly in the

latter half of the 19th century and into the early decades of the 20th century. Its growth was

especially significant in Germany, where a strong intellectual presence was linked to mass

influence among the working class. Despite this, the roots of a Marxist worldview remained

relatively shallow. Trotsky, in 1905, all but predicted the later capitulation of German Social

Democracy (Trotsky 1971a: 210). Marxist thought, in this period, was dominated by internal

polemics and disputation. It was an essential and inevitable part of its development. The ‘old’

bourgeois ideology came into conflict with its opposite in the form of Marxist ideology. To

‘proclaim’ a change is, however, very different from effecting lasting change.

Marxism was confronted with ideological dilemmas from its beginnings. The construction of

a theory capable of withstanding the all-encompassing presence of bourgeois thought proved

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to be a formidable task. Marxism was created with internationalism as fundamental to its

worldview. The rise of nationalism immediately before World War I was a telling moment

for Marxism. Engels (cited in Lenin 1918), argued that any future European war would be

global in nature. By implication, how the working class would respond would be pivotal.

When war did loom, and Engels’ propositions were being proven, most Marxist parties and

theoreticians retreated into a position of nationalism and support for ‘their’ nation states. The

Zimmerwald Conference in 1915 formalised a break with the Second International. By the

end of the war the Russian Revolution had revived Marxism’s fortunes. What followed,

however, was the ensuing and well documented list of defeats and lost opportunities. These

included the collapse of the Second International, the rise of Stalinism, capitalism’s survival

in the face of depression and war, fascism, the post-war period of stabilisation and relative

prosperity.

Each of those interconnected dilemmas played its part in Marxist theory’s shift away from

core elements of class and economics. The role of the working class has, as a result, been

progressively relegated to a position of insignificance in much of contemporary Marxist

theory. The historic conception of the working class as a revolutionary subject appeared to be

out of place as capitalism stabilised after war and economic depression. There was a

presumption, based on what proved to be a limited period of prosperity, that these core

Marxist perceptions were no longer valid. Marx and Engels, however, were clear in their

assessment that the working class, and its leadership, must react and respond to capitalism in

its entirety and not as a set of separate component parts or elements. “It is not a question of

what this or that proletarian, or even the whole proletariat, at the moment regards as its aim.

It is a question of what the proletariat is, and what in accordance with this being (Sein), it

will historically be compelled to do” (Marx & Engels 1975a: 44 emphasis in original).

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The perception that is common in much contemporary Marxist literature, that the working

class is no longer a revolutionary subject, is reinforced by what appears to be an acquiescence

on its part and by a lack of consistent leadership. Marxists live and work in the ‘real’ world

which is dominated by capitalist economics, philosophy and politics. In this sense, it is by no

means a ‘level playing field’. Marx and Engels (1964: 60) famously wrote of class and of

how the ideas of a ruling class in any society are intrinsically ruling ideas. Plekhanov (1976)

described the essential principle of historical materialism as a means of explaining history.

He argued that the thinking of people is conditioned by their being. This meant that, in the

sense of an historical process, the development of ideas is essentially a product of developing

economic relations. The development of Marxism reflects such a degree of conditioning.

Engels (2000) offered the view that ideological processes are often used to effectively mask

the real class nature of society. This came to be known as ‘false-consciousness’. Similarly,

this conditioning was identified by Gramsci as cultural hegemony. Lukacs (1976: 51-55)

further developed this argument as a way of explaining how the working class and the

political organisations formed to promote its interests can be convinced that these interests

are virtually synonymous with those of the ruling class. Such a situation, whereby the

working class becomes not only economically dependent upon the capitalist state, but

identifies, ideologically, with the ruling class is problematic for Marxism and its aim of

emancipation of the working class and for the development of class-consciousness. It has also

proven to be an issue of concern for Marxist theorists as they face what has appeared to many

to be an impregnable ideological opponent.

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This disillusionment has contributed to the ongoing crisis within Marxism. It was difficult to

maintain an intellectual framework that could withstand bourgeois ideology. Trotsky wrote of

this dilemma in describing how many, “when thrown against great events … are easily lost

and relapse again into petty-bourgeois ways of thinking” (1971b: 59). Korsch analysed the

developing problems in Marxist theory. He described his approach as:

the application of the materialist conception of history to the materialist conception of

history itself …. It concerns the successive phases of development through which

Marxism has passed from its original conception up to the situation today, where it is

split into different historical versions. It also involves the relationship of these

different phases to each other and their significance for the general historical

development of theory in the modern working-class movement (1970: 93 emphasis in

original).

He explained that the process required a re-examination of Marxist philosophy, as a means of

recapturing the essence of Marxist theory, and linked such a theoretical task to one of

practice:

The scientific theory of Marxism must become again what it was for the authors of

the Communist Manifesto – not as a simple return but as a dialectical development: a

theory of social revolution that comprises all areas of society as a totality. Therefore

we must solve in a dialectically materialist fashion not only ‘the question of the

relationship of the State to social revolution and of social revolution to the State’

(Lenin), but also the ‘question of the relationship of ideology to social revolution and

of social revolution to ideology (Korsch 1970: 63 emphasis in original).

The twin elements of Marxist method – the historical perspective and dialectically driven

forward development – that Korsch elucidated are perhaps even more relevant today. Marxist

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theory can only profit from retrospection in order to move forward. The Marxists of the early

Frankfurt School, as described by McCarney (1990: 166), were conscious of both where they

had come from and where they wished to go. McCarney argues, however, that this became a

rare feature in later Western Marxist analysis.

A rift between theory and practice has long been evident and has long plagued Marxism.

Marx argued that “it is not enough that thought should seek to actualize itself; actuality must

also strive towards thought” (1977: 138). Lukacs paraphrased this, stating that only when

“consciousness stands in such a relation to reality can theory and practice be united” (1976:

2).

Marxist theorists need “a return to the classical sources, with the intention of carrying

through their unfinished programme. The task is in part one of Marxist philosophy, a matter

of completing the foundations of the materialist historical dialectic” (McCarney1990: 186-

187). McCarney does not imagine that this is an easy task (1990: 193-194). What, almost

inevitably surfaces when contemplating the discord within Marxism, are debates around

theory and practice, about method and about the label of ‘scientific socialism’ that has been

used to both support and denigrate Marxism. The unfinished program that McCarney speaks

of can only be achieved by a re-uniting of the dialectical unity between theory with practice.

Marxism’s task is to combat capitalism and so seek to change the world. Recognising and

analysing capitalist crisis is one important step along that path.

3.4 A materialist reading of capitalist crisis

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It has become almost axiomatic to speak of the ‘crisis of capitalism’. Marx (1986b: 266)

identified three primary elements of capitalism: the concentration of the means of production

into relatively few hands, the social nature of labour and the development of a world market.

These elements necessarily act in contradiction to one another and in the 21st century,

globalisation, as an expression of the ‘world market’, is especially relevant. Crisis, for Marx,

was an inescapable component of capitalism. Harvey argues that “crises are moments of

transformation in which capital typically reinvents itself … but crises are also moments of

danger when the reproduction of capital is threatened by underlying contradictions” (2015:

4).

Marxism, with its materialist view of economics and history, is uniquely positioned to

analyse this concept of contradiction. Contradiction can, of course, simply indicate a set of

contrasting ideas or statements. Crocker presents a definition within a Marxist framework

where “A and B are contradictory if and only if (1) A and B are both processes (2) A and B

have natural paths of development (3) The natural path of development of A and the natural

path of development of B cannot be jointly realized” (1980: 560). Marx argued that “what

constitutes dialectical movement is the co-existence of two contradictory sides, their conflict

and their fusion into a new category” (1956: 126). Marx’s primary use of the term was

connected with his analysis of the historical process of capitalism, the private ownership of

productive forces and the social character of production. In this sense contradiction is

necessarily antagonistic.

For Rees (1998: 1-3) a set of contradictory factors coexist in society. These range from the

growth of poverty amid expanding wealth, the rise in life expectancy as a result of medical

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and scientific advances alongside high infant mortality rates and since the cold war, a near

constant state of civil war in various parts of the world. It echoes Marx’s comments on

contradiction:

In our days, everything seems pregnant with its contrary: Machinery, gifted with the

wonderful power of shortening and fructifying human labour, we behold starving and

overworking it; the newfangled sources of wealth, by some strange weird spell, are

turned into sources of want; the victories of art seem bought by the loss of character

(Marx & Engels 1969: 500).

Those remarks, delivered in 1856, reflected an objective reality. They were based on

observations of how capitalist society was developing and how it had to develop. Those same

objective realities still exist today. It is in the observation and the linking of these

contradictions that historical materialism is granted its capacity to generate propositions, or

‘predict’ outcomes, with a degree of accuracy.

Historical processes inform Marxist analysis. It considers, on the one hand, the sweep of

history and on the other, the integral component parts that constitute society at any point in

time. For some this is an indication of a degree of determinism with economics as base,

relentlessly driving a social and political superstructure. However, as Tosh (2010: 226)

argues, the reality is closer to a perspective that sees the economic structure setting limits

rather than simply determining outcomes. As Engels stated:

According to the materialist conception of history, the ultimately determining element

in history is the production and reproduction of real life. Other than this neither Marx

nor I have ever asserted. Hence if somebody twists this into saying that the economic

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 element is the only determining one, he transforms that proposition into a

meaningless, abstract, senseless phrase (1999 emphasis in the original).

This interaction with ‘real life’ is fundamental to appreciating Marxist analysis and

particularly as it pertains to contemporary economic realities. To fully come to grips with this

‘reality’ is to explore the abstractions that are evident and to propose possible outcomes. The

Marxist method shows that “even the most abstract categories, despite their validity –

precisely because of their abstractness – for all epochs, are nevertheless, in the specific

character of this abstraction, themselves likewise a product of historic relations, and possess

their full validity only for and within these relations” (Marx 1974: 105).

Overbeek (2004) argues that an understanding of the world is necessarily bound up with an

understanding of how production and reproduction of material life have been organised. Such

a construction allows for an appreciation, not simply of capitalist production processes since

its inception, but of its inevitable progression towards a globalised present and the crisis with

which it is riven. Central to an understanding of the world is an appreciation that crisis in

capitalism is inevitable. Capitalism, as Trotsky (1953: 61-62) observed, lives by crises and

booms. He likened the cycle to the inward and outward breath of a human being. His remarks

were made in the 1920s. They are still relevant although the period between crisis points or

between ‘breaths’ is increasingly becoming shorter as the crisis deepens. That there exists a

crisis in capitalism is no secret. Economists, scholars and analysts – Marxist and non-Marxist

alike – concur. In late 2015 former US Treasury Secretary Summers wrote of “the specter of

a global vicious cycle in which slow growth in industrial countries hurts emerging markets,

thereby slowing Western growth further. Industrialized economies that are barely running

above stall speed can ill afford a negative global shock” (The Washington Post 17 October

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2015). The IMF (2016a) continued to downgrade its global growth forecast acknowledging

that global growth could be derailed if key factors including China’s economic downturn

were not resolved. The crisis afflicting capitalism is increasingly deep.

The rapidity of capitalist globalisation, as a reaction to intensifying contradictions and an

increasing inability to resolve these contradictions, has led many to question the future of

capitalism and to re-examine Marxism. Rupert & Smith (2002: 1) ask whether historical

materialism remains significant in the age of globalisation. They argue that a materialist

perspective is needed to “analyse the sites of political and social struggle where

transformative practices and processes can be observed” (Rupert & Smith 2002: 12). Such

analysis is necessary to explain the inevitability of capitalist globalisation and of its

trajectory. This has direct implications, both for a constrained working class in developed

capitalist centres, and for a dramatically expanding global working class that capitalism,

through globalisation, is creating. It is in such an observation that a theory and practice can be

constructed for the 21st century.

Capitalism has been an expanding, globalising force for all of its history. The rapidity of

capitalist globalisation in recent decades has been a conscious determination by capitalist

ruling classes and states, to circumvent a growing crisis within capitalism. Understanding the

causes and connectivity of issues leading to crisis becomes ever more significant, but

confusion is often apparent, as expressed by influential Financial Times columnist Martin

Wolf:

It is impossible at such a turning point to know where we are going … What will

happen now depends on choices unmade and shocks unknown. Yet the combination

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 of a financial collapse with a huge recession, if not something worse, will surely

change the world. The legitimacy of the market will weaken. The credibility of the US

will be damaged. The authority of China will rise. Globalisation itself may founder.

This is a time of upheaval (2009).

Marxism has a proven capacity to comprehend and analyse capitalism and its inherent crises.

Despite the intensity of its crises, however, capitalism remains unthreatened. The dissonance

within Marxist thought has played a role in the persistence of capitalism.

3.5 Conclusion

The chapter outlined an analytical approach based upon a Marxist understanding of political

economy in both an historical and contemporary setting. In so doing the thesis advanced its

fundamental proposition that Marxism is increasingly relevant in an age of capitalist crisis. It

also exposed the twin crises: of capitalism, and of Marxist theory, and how the problems

within Marxism have unconsciously assisted capitalism to survive continued crisis by failing

to offer a coherent theory and practice to challenge capital’s rule.

The chapter demonstrated the importance of historical materialism to Marxist analysis. The

Marxist analytical method indicates a progression from existence to consciousness and

considers the manner in which society evolves as a consequence of a continual struggle

between conflicting forces. The chapter developed this idea by describing the nature of

capitalist crisis and of its inevitability. The globalisation of capitalist relations has failed to

resolve the most dramatic of its contradictions. On one hand, capitalism must expand beyond

the confines of national borders. On the other hand, the nation state remains the political

structure that legitimises capitalist rule.

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Marxism has been mired in both disputation and accommodation to capitalist ideology. The

chapter identified the litany of defeats and disappointments that Marxism faced and showed

that these have stemmed from the ideological power that the capitalist state has been able to

maintain and exert.

Marxism is not only relevant but is necessary to an understanding of the world. A brief

defence of Marxism as ‘science’ was undertaken to show the validity of such an assertion.

The approach of Marx and Engels which is supported by this thesis, allows for a reasoned

analysis of developments affecting both capitalism and Marxism in the 21st century. These

include the evolving capitalist crisis, the changes that are evident within capitalism on a

national and global level, the range of critical responses to globalisation, the relevance and

future of Marxism and its oft-stated task of not only explaining but changing the world.

Capitalist crisis and a corresponding crisis in Marxism have been isolated and the importance

of a Marxist analytical method has been shown.

From such a position, a reasoned analysis of capitalism and Marxist responses can be offered.

However, a fundamental question remains. This question, of whether Marxism can act as a

catalyst for change is ultimately tied to capitalism’s capacity to withstand challenge. Is

capitalism inherently strong and resilient or has it withstood often existential crises because

there has been no consistent and substantive challenge? This becomes the substance of the

following chapter.

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Chapter 4 The development of the capitalist state

Capitalism has faced moments of crisis or even existential threats. Wars and revolutions,

economic depression, cold war politics, and the threat of impending ecological disaster have

failed to dislodge capitalism from its position of dominance. Such a balance sheet has led

many to believe that capitalism is innately resilient, that it is a system that will eternally

endure. Capitalism, however, has been able to maintain its pre-eminent position for two

interconnected reasons. First, the state exists to promote and advantage the broad interests of

capitalism. Through its encompassing ideology it has promoted an artificial sense of unity

between classes. Second, a viable theoretic and practical framework to counter capitalism’s

rule has been lacking. So long as it remains fragmented and divided, Marxism will continue

to fall short of its emancipatory objective of replacing the capitalist mode of production.

Section 4.1 of this chapter focuses on how capitalism acquired the dominant position that it

enjoys. It briefly traces the development of capitalism, its motivations, the inevitability of its

expansion and subsequent tendency toward globalisation. The chapter also examines what

appears to be a conundrum for Marxism. Section 4.2 argues that the 20th century presented

capitalism with a series of extraordinary threats: revolution and global war, economic

depression, the threat of nuclear conflagration, and potentially devastating ecological disaster.

Any of these threats, alongside the ‘day-to-day’ contradictions of private ownership and

socially-based production, ought to have proven calamitous for capitalism, and yet the

economic system survived.

The chapter then responds, in Section 4.3, to two conflicting theories that have long divided

Marxist theory. Capitalism exists under conditions of contradiction and crisis. The chapter

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explains the contending arguments of capitalism as a self-regulatory system as advanced by

Bernstein as opposed to the theory of capitalist breakdown, famously argued by Luxemburg.

Section 4.4, following this brief analysis, focuses on capitalism’s apparent ‘resilience’ in the

face of crisis and makes the observation that rather than being resilient, capitalism’s survival

has been assisted by a lack of substantial challenge. This argument is developed in Section

4.5 where the issue of ideology as a mechanism of political, social and economic control is

discussed. The working class, under such conditions, has become integrated into the state and

its organisations effectively co-opted by the institutions of the state.

The chapter argues that the underlying contradictions within capitalism have not been and

cannot be resolved. Section 4.6 draws attention to the interaction of these contradictions. In

particular, the intensification of capitalist globalisation can be linked to irresolvable

contradictions stemming, in part, from a tendency for profit rates to fall, which, in turn drives

capitalist expansion.

The chapter explains how capitalism has benefited from a lack of organised and effective

opposition. This is due, to a large extent, from dislocations, both theoretical and

programmatic within Marxism as well as the force and strength of the state and its capacity to

maintain a sense of ideological unity across classes. Capitalism survives, not from any innate

superiority, but from a lack of viable opposition and an on-going crisis of leadership.

4.1 Constructing the capitalist paradigm

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The rise of the modern state mirrors the development of capitalism. While assessments of the

relative autonomy of the state vary, the salient point remains that the state advantages the

interests of capitalism. At the same time contradictions between state and capital remain, with

the most fundamental being the contradiction between the global nature of capitalist

economics, and the political role that the nation-state system plays.

Marxism regards the state as a formation based in and on class rule. Marx and Engels (1977:

38) famously declared that the state becomes an executive committee for managing the

bourgeoisie’s affairs. Lenin’s (1977a: 243-244) characterisation of the state as a coercive

assemblage of armed men, while equally blunt, still sits, not altogether uncomfortably,

alongside Engels’ contention that this power “arisen out of society but placing itself above it,

and increasingly alienating itself from it, is the state” (Engels 1986: 576). Engels (1986: 577-

578) also argued that the state, as an historical institution, has acted to control society. In this

context, the capitalist state, as the modern representative state, becomes instrumental in the

process of exploitation of the working class by capital. From such an interpretation, it

becomes clear that for Marxists the state has a specific purpose and form. As Trotsky (1974:

144) described it, the state is not simply an idea, but a material apparatus.

Lenin expanded on this idea of the state being a material apparatus intimately connected to

capitalist growth:

For the complete victory of commodity production, the bourgeoisie must capture the

home market, and there must be politically united territories whose population speak a

single language … Therefore, the tendency of every national movement is towards the

formation of national states, under which these requirements of modern capitalism are

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 best satisfied. The most profound economic factors drive towards this goal, and,

therefore, for the whole of Western Europe, nay, for the entire civilised world, the

national state is typical and normal for the capitalist period (2000: 396 emphasis in the

original).

This was written at a time when capitalism was expanding but still dwelt largely within

national boundaries. The modern state is shaped, and to a very large extent formed, by

historical processes inextricably linked to the development and needs of capitalism (Harman

2010: 106). The material success of this arrangement has been profound.

Coming from a statist perspective, Gilpin (2000: 3) describes capitalism as the most

successful wealth-creating economic system the world has ever seen. He studies the

challenges that capitalism faces in the 21st century, especially as it assumes an ever more

encompassing global character. He calls for the United States to resume its leadership role

within global capitalism (Gilpin 2000: 357). Central to this analysis is an elemental

contradiction facing capitalism. It is the contradiction between the relentless tendency toward

globalisation and of the necessity of maintaining a sense of hegemony within the nation-state

system. What is assumed to be an underlying truth in Gilpin’s analysis is that capitalism is

the dominant economic, and by inference dominant political factor, and while challenges are

inevitable, there is no alternative to capitalism.

Capitalism has certainly been an effective wealth-creating economic system. As a socio-

political structure it has also been instrumental in revolutionising interactions between

cultures and states, while simultaneously developing clear delineations of class. Marx (1977:

38) characterised capitalism as a progressive formation. While such a characterisation can be

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defended, and particularly from an historical perspective, it is difficult to attach a progressive

label to late capitalism. Dunn points out that Marx “saw capitalism as a complex and

contradictory social system. It created enormous material advances, yet because it did so for

private profit, it did not necessarily produce any general social improvements” (2009: 76).

Dunn is echoing Marx’s assessment of the process of capitalist development. “Accumulation

of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil,

slavery, ignorance, brutality, mental degradation, at the opposite pole” (Marx 1986a: 604).

Robinson (2004: 4-5) argues that the evolution of capitalism can be divided into four distinct

periods. These are the post-feudal mercantilist era, the period of the industrial revolution

(often described as the classical period of capitalism), the rise of monopoly capitalism, and

the fourth (as yet in its infancy) being the transnational phase which sees the development of

a transnational ruling class. While this final stage remains contested, the path that capitalism

has travelled indicates both the success of this mode of production as well as its ultimate

limitations.

Capitalism has, from the beginning, been enmeshed in irresolvable contradictions. These

contradictions have at once promoted capitalism’s forward motion while, over time,

deepened the contradictions inherent in the system. Among these contradictions are: the

private ownership of the means of production and the social nature of the production process;

the drive to maximise profit by expanding the productive processes and surplus value, which

necessitates limiting real wages growth; the imperative to increase labour productivity

contributing to the tendency for profit rates to fall; and the drive to a globalised economy

while relying on the nation-state system to administer capitalist relations. At the same time,

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and as a response to the expansionary nature of capitalism, its progressive role, as described

by Marx in the 19th century, has dissipated. Its underlying motivation of survival has

remained unchanged.

Capitalism’s striving to overcome its internal contradictions has meant that it has remained

expansionary and outward-looking. Marx wrote of the political economy in a setting of a

growing capitalism that was still essentially national in character. Significantly, he saw that

capital, if it was not only to survive but to grow, was compelled to break from the confines of

this national boundary and expand into a global economy (Marx & Engels 1977: 39). Bina

and Davis (2015: 196-197) argue that the labour process, on a global scale, has undergone a

revolutionary overhaul. The motivation for this has been the drive to extract the highest

possible degree of surplus value. Globalisation, in such a context, is a “phenomenon that is

contingent upon reducing the value of labour power through revolutions in technology”

(2015: 197). Such a motivation inevitably means that the purchaser of labour power strives

to achieve the lowest possible price for that labour. The domination and subjugation of labour

to capital becomes ever more intense.

Capitalism, over time, assumed a position of dominance. This was achieved with the

assistance of a state structure that empowered capitalist relations and overlaid an ideological

framework that made dissent increasingly difficult. Miller describes Marx’s conception of the

power of ideology within society, stating that “the economically dominant class requires the

existence of false beliefs for its dominance and has resources for perpetuating beliefs that are

in its interests” (1991: 74). An economic and political structure that is riven by divergent and

antagonistic class interests cannot expect to survive by force alone. What Marx and Engels

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labelled ‘false consciousness’ has been remarkably successful. The 20 th century, for

capitalism, was both the best and worst of times. There were moments of crisis that were, in

effect, existential moments for capitalism. The century ended, however, with capitalism still

largely secure. The crises that capitalism experienced failed to result in the end of capitalism,

not because of any inherent strength of capitalism but in large part because of two inter-

related elements. One was the role of the capitalist state itself and the power of an

encompassing ideology that saw class conflict minimised. The other was a conflicted and

theoretically fragmented Marxist opposition. The inherent crisis and the contradictions that

capitalism brought with it into the 20th century remained unresolved as the 21st century

dawned.

4.2 Existential threats to capitalism and a troubled 20th century

Crisis, as both threat and motivating influence, remains central to capitalist development. The

cycle of crisis and stabilisation assume an almost ‘natural’ rhythm. At the same time there

have been exceptional moments, including some that denote deeper, more existential threats;

moments that appeared to presage a spiral from which capitalism ought not escape. It is

capitalism’s apparent tenacity, its seeming resilience in response to these extraordinary

moments, that has led many to conclude that capitalism is a natural order and that any

alternative is fantasy. The extraordinary elements of crisis that occurred in the 20th century –

world war, the Russian Revolution and subsequent revolutionary upheavals in Europe, the

Great Depression, the threat emanating from the Cold War, and finally the real and very

present danger of environmental disaster – have tested capitalism. Each of these elements are

linked and have their genesis in problems inherent within capitalism. A number of features

can be observed that have aided and abetted capitalism’s ‘miraculous’ survival. Among these

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are missed opportunities, a lack of leadership, the role that Stalinism played in the history of

the 20th century, and in the ideological problems that became acutely evident within

Marxism.

Much has been written about the causes and the inevitability, or otherwise, of World War I. A

Marxist perspective ascribes an important role to the development of capitalism to the point

that it could no longer be contained within national boundaries:

The national state, the present political form, is too narrow for the exploitation of

these productive forces. The natural tendency of our economic system, therefore, is to

seek to break through the state boundaries. The whole globe, the land and the sea, the

surface as well as the interior have become one economic workshop, the different

parts of which are inseparably connected with each other (Trotsky 1973: 20)

It was unrealistic, given such a framework of capitalist expansion, to believe that war could

be avoided. It provided, for capitalism, enormous challenges as well as risks that individual

capitalist states felt worth taking. A pre-condition for a successful prosecution of this war

rested on the ability of capitalist states to engender a sense of national unity. This was

achieved with remarkable success. The war, as described by Anderson (1979: 13), among

others, acted to not only sever any sense of unity between working class movements in

Europe but within Marxist theory itself.

Despite the split in Marxism that the war and the ‘logic’ of nationalism engendered,

revolutions did break out. The success of the Russian Revolution was the next extraordinary

moment that capitalism was to encounter. Marxist theory maintained that for socialism to

defeat capitalism, revolutions must spread. Socialism in one country could never be a realistic

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option (Marx & Engels 1977: 56, Engels 1999, Trotsky 1970: 72-73). Revolutions erupted

after 1917, with the declaration of the Munich Soviet Republic in 1918, the Hungarian

Revolution in 1919, and the establishment of the Persian Socialist Republic in 1920. All were

crushed and the continued existence of the Soviet state was endangered. The end of the war

brought revolution, but also a unity among the combatant states pledged, as they were, to

secure the status quo of capitalist rule. Marxist theory was quickly turned on its head with the

coming to power of Stalin and his theory of ‘socialism in one country’. By dint of state force

and a weakened opposition, capitalism survived the spate of post-war revolutions.

It was a relatively short respite for capitalism. Little more than a decade after the 1917

revolution came the Depression. This was more than a cyclical moment in capitalism.

Gamble (2009: 52) describes Marx’s depiction of capitalist crisis and of how the economic

system would inevitably lead to a systemic crisis because of its inherent instability. How

those exceptional moments of crisis were to be resolved would depend on political actions

and the responses of the class forces involved. Capitalism and state structures responded,

albeit in a dislocated fashion. Even today it is common for economists to remain perplexed.

The Bank of International Settlements’ Annual Report (2007) admits that no one saw the

Depression of the 1930s coming and nor did anyone predict the Asian Economic Crisis of the

1990s.

The seemingly inevitable slide into crisis that capitalism exhibited during those pre-war years

again failed to bring about any fundamental change. A few years earlier there had been war

and revolution. Capitalism was again displaying structural weakness and yet once more

capitalism survived. Fascism emerged in Europe and war once more loomed. World War II,

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from a Marxist viewpoint, was a reflection of unresolved conflicts between individual

capitalist states. The war, variously described as a struggle for democracy, or imperialist in

character, resulted in a strengthening of capitalism on a global scale and with it the dawning

of a ‘golden age’ of capitalism. Global war did not spell the end of capitalism, despite the

continued and strengthened presence of the USSR. What the end of the war did herald, was

the beginning of a war of ideology: the Cold War.

The US emerged from World War II as the indisputable capitalist hegemon. The Cold War

was a response by US capitalism to a range of ideological dilemmas that it faced, both

domestically and internationally. The Cold War was, in this sense, a pre-emptive rather than

reactive response to impending crisis. Hardt & Negri (2000: 176) argue that the US, in

response to rising class antagonisms, invoked a feeling of hostility toward communism to

best suit its domestic agenda. Anti-communism became national policy and working class

movements in the US became targets of this policy. The Cold War’s formative moments,

however, were not in the aftermath of World War II, but in the period immediately following

the Russian Revolution which the Western powers sought, by armed intervention, to crush.

The post-World War II period saw the rise of anti-colonial nationalist movements that were

seen as potential threats to capitalist equilibrium. Anti-communist rhetoric was effectively

used as an ideological counter to such movements.

The USSR remained as a constant reminder to capitalism of the threat of what might be. The

Cold War was used to discredit the USSR and, by implication, Marxism. The eventual

collapse of the Soviet Union and the formal restoration of capitalist relations removed the

USSR and its influence. A poorly judged and misplaced enthusiasm drove some (e.g.

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Fukuyama 1992) to declare that socio-economic formation had reached its zenith with

capitalism and liberal democracy. The Cold War ended. The Soviet Union was dissolved but

capitalist contradictions remain unresolved.

Soon a new crisis, of capitalism’s creation, emerged. Capitalism and its inherent

contradictions inevitably lead to crisis. Such a statement assumes greater significance when

placed alongside the crisis of climate change and ecological destruction that potentially

confronts the planet. Magdoff speaks of this “second fundamental form of contemporary

crisis that is also derived from the relentless pursuit of profits – namely, the rapid growth of

ecological degradation” (2002). How capitalism responds to such elemental problems

becomes especially significant. Those who support the notion of capitalism’s ability to

resolve problems point to a range of possibilities, including a move towards ‘ethical

capitalism’ (Lovins & Cohen 2011), to more circumspect analyses (Newell & Paterson 2010)

that recognise the potential for economic dislocation while still considering that capitalism

will survive. The current and unfolding environmental crisis is an existential one, for

capitalism and for the entire planet. Whether capitalism can survive such a crisis remains to

be seen. What is clear is that the contradictions of capitalism remain unresolved and that

extraordinary moments of crisis remain.

4.3 Cycles of crisis

Marxists and supporters of the capitalist mode of production agree on few things. However,

there is a broad acceptance that capitalism tends toward crisis. Clarke (1994) describes

optimistic attitudes among bourgeois economists who assert that the cycle of boom and crash

has been relegated to an historical past. He then points out that when economic booms come

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to an end, the same economists isolate specific causes behind the slump. They stress the

individualistic nature of each moment of crisis without dwelling on the fact that these crises

have been recurring for centuries. Clarke also notes that “the Marxist theory of crisis is

distinguished from bourgeois theories in the first instance in being concerned with the

necessity of crisis, in order to establish that the permanent stabilization of capitalism and

amelioration of the class struggle … is impossible” (1990: 442). When moments of crisis

emerge the state and its financial institutions intervene:

Capitalist economies everywhere display a recurring pattern of oscillation. Periods of

relatively limited state interventions in markets and private property repeatedly

encounter crises that they manage more or less well. Eventually, however, a crisis

arrives that exceeds their management capacities. Then, transition occurs to a period

with relatively more state economic interventions … Then a reverse transition

generates a period of relatively less state economic intervention (Wolff 2010: 133).

Capital and state both interrelate and interact in order to survive the cycles of crisis and

actively engage in the promotion of capitalist relations, nationally and globally. The cycles of

capitalist economic life remain problematic for both national governments and capital. To

have to adjust to economic downturns and to endure periodic recessions increases pressure on

state and capital alike. Gamble describes the preferred position for capitalism and national

governments as one which engenders optimism. He argues that prolonged periods of

economic boom and stability, however, leads to a situation whereby “calculations of risk

change. By degrees everyone comes to believe that the boom will last forever, and that,

finally, the secret of everlasting growth has been discovered” (2009: 37). Gamble also notes

that downturns can, in extreme situations, promote political as well as economic dislocation.

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Marxist perspectives of capitalism coalesce around the issue of crisis and of its inevitability.

At the same time Marxist theory is divided on the concept of capitalist breakdown (Grossman

1992, Luxemburg 1963). Central to polemical disputes within Marxism conducted a century

ago was the proposition that capitalism was able to provide remedies for its cyclical ills

(Bernstein 1975). Luxemburg (1963) argued strongly against such a thesis. She maintained

that any perceived ‘success’ of capitalism in alleviating its tendency toward crisis was simply

a postponement of an eventual breakdown of capitalism. A century later capitalism remains

intact, although the cycle of crisis and stabilisation is still evident. Patnaik (2016: 1) contends

that the end of the ‘golden age of capitalism’ in the 1970s heralds a period of crisis for

capitalism that is not merely a continuation of its previous history, but carries far more risk to

the economic system than has previously been noted.

Crises, in Harvey’s words, “are essential to the reproduction of capitalism” (2015: ix).

MacPherson (1989: 25) asserts that crisis suggests the threat of imminent breakdown of either

capitalism or democracy. While these two critiques are contradictory they serve to reveal the

nature of capitalism. Crisis at once propels capitalism forward while simultaneously exposing

the system to existential dangers. The two arguments, especially in an age of intensifying

globalisation, promote the view that capitalism has begun to enter a qualitatively new stage of

development.

Murray (2012: 198-199) outlines the argument for qualitative change in capitalism. She

describes processes of global circuits of accumulation that have transcended the reach of

individual nation states. Similarly, Robinson (2010) argues that a global, transnational ruling

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class is forming. Such a formation is the inevitable result of capitalism’s inability to resolve

its internal contradictions.

These depictions of late capitalism are reflections on the rise of finance capitalism (Krippner

2011). The change in capitalism’s trajectory that is evidenced by the intensification of

globalisation and the shift in accumulation processes is similarly addressed by Veltmeyer

(2013: 107-109). He acknowledges these changes and that capitalism is emerging into a new

phase which will exacerbate the contradictions that remain unresolved. At the same time, he

maintains that a feature of capitalism is its essential resilience, and that this alleged resilient

nature that capitalism enjoys will effectively safeguard its future.

Capitalism, as a globalising force, has exhibited all of the characteristics of crisis that are

depicted in Marxist theory. This has particular implications for capitalism and for its future.

The constituent elements of capitalist crisis, as noted above, include the tendency of the rate

of profit to fall, the concentration of capital, the growth of the working class, a tendency

toward under-consumption (or as some would argue, over-production) and the development

and influence of finance capitalism. These elements have long existed. The periodic crises of

capitalism, the booms and slumps that have accompanied capitalist development have come

and gone and have been an integral part of capitalism for centuries.

Spector (2013: 21-22) argues that the movement to capitalist globalisation that became so

obvious since the 1970s allowed for a short-term alleviation of some of the more pressing

contradictions in capitalism. As capitalist relations are replicated in developing economies,

the contradictions of capitalism begin to be played out on a global scale. The contradictions

that Spector describes consequently become more acute. The frequency of critical moments

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for capitalism has increased. The periods of stabilisation have shortened. The Global

Financial Crisis of 2008 exposed the limitations of economists and pro-capitalist theorists to

advance a satisfactory explanation of the tendency to crisis. McNally cites Merrill Lynch’s

chief economist in Moscow who states that “our world is broken – and I don’t know what is

going to replace it” (2011: 14).

Capitalism has endured the ‘normal’ cycles of crisis and stability. It appears to have defied

Marxist theory of breakdown and collapse. The extraordinary periods of upheaval have

shaken the system but still it stands. For many this is a testimony to an intrinsic quality of

resilience, adaptability and tenacity that capitalism embodies. Such was the optimistic

characterisation offered by Keynes (1932) at the height of the Great Depression. For many,

the possibility that capitalism might not prove to be eternal, is anathema. This is a position

that Wolf (2009) encapsulates when he asserts that there is no credible alternative to the

market. A polar divide exists between these appraisals and those of Marxism.

4.4 Capitalism – resilient or simply unchallenged?

Despite its disruptive history many still regard capitalism as the best imaginable system and

largely accept it as an almost immutable force. Forbes & Ames (2009) are particularly

forceful in their declarations that capitalism will not merely survive but will ‘save us’. They

assert that capitalism is a moral system, that it promotes democracy and democratic values, is

creative and that its most remarkable achievement lies in its ability to turn scarcity into

abundance. Kaletsky (2010) is another who confidently points to capitalism’s capacity to

reinvent and reinvigorate itself, especially by using the experience of crisis. Capitalism is also

said to be successful because it is self-correcting (Easterly 2008: 129). In the period since the

beginning of the Great Depression there have been 17 significant recessions and crises that

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have affected global capitalism. The International Monetary Fund (IMF) reports that from

1970 to 2011 there were 147 banking crises, 217 currency crises and 67 sovereign debt crises

(Claessens & Kose 2013: 27). While there is an understandable degree of overlap in these

figures, they show that capitalism’s self-correcting capacities have been largely ineffective.

Despite this, capitalism, according to its advocates, is marked by adaptation and resilience.

They assert that capitalism continually finds new ways to adapt after each and every crisis

that it has faced; and through individual ingenuity and sound corporate management has

proven Marx to be wrong. Such is the reasoning of Emmott (2009), former editor of the

Economist. Emmott’s arguments are echoed by British economist, Ormerod who claims that

“the distinguishing feature of capitalism is not its instability, but its resilience. Markets are

not perfect, but unemployment is usually low. Crises happen, but the system bounces back”

(2015). From such confident proclamations, capitalism would appear to have triumphed and

for all time. What unconsciously emerges from such analyses is that capitalism is a

mysterious entity with an independent existence, in much the same way that the ‘market’

assumes a special aura of inviolability and independence. Capitalism, however, does not

operate in an economic or political vacuum. Increasingly the state has acted to both promote

capital’s interests and to stabilise capitalism in moments of crisis. As Braudel remarks,

“capitalism only triumphs when it becomes identified with the state, when it is the state”

(1977: 64). The ‘resilience’ of capitalism is very much connected with the state and its

interventions.

Held (2008: 111) paraphrases Marx when he states that capitalism’s success has depended on

the rapid growth of the productive forces of society. While this initially represented

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capitalism’s progressive character, it was contradicted by the exploitative system of

productive relations. Herein lies the contradiction that Marx maintained would ultimately

bring capitalism to a point of destruction. Advocates of capitalist relations, as well as some

Marxists, point to what is regarded as the obvious fact that history has yet to prove Marx

correct. Using Australia as a case study, Hillier (2010: 74) describes state interventions that

acted to stabilise the economy in the face of the GFC. He also points to the globalised nature

of capitalist relations that enabled Australian capitalism to maintain equilibrium through its

reliance on the strength of Asian markets. In the immediate aftermath of the crisis, Australian

capitalism and the state appeared to be faring well. Resilience again appeared to be the motif

for capitalism.

The necessity of state structures to provide stability for capitalism becomes yet another focus

of contradiction. Wood (2002: 31-32) argued that capitalism, which is naturally anarchic,

must inevitably rely on political organisations. At times these appear as regulatory

organisations to safeguard capitalism or in the form of interventionist bodies whose task it is

to stabilise capitalist processes. The state, “no matter what its form, is essentially a capitalist

machine, the state of the capitalists” (Engels 1966: 63). The role of the state as intermediary

for capitalism (Patnaik 2016: 8-9), is especially important. State intervention coincided with

the post-World War II era of prosperity, but the crisis of the 1970s demanded a dismantling

of such interventionist policies.

Much has been made of capitalism’s recovery from the GFC. Patnaik (2016: 1-2) outlines

how the media has played a pivotal role in promoting the idea of rapid recovery. The World

Trade Organisation (2016), and the IMF (2016b) however, both report that world trade grew

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at less than three per cent for the fifth consecutive year. This is the slowest rate since the

1980s, indicating that rather than recovering from the GFC, the global economy is effectively

in a period of stagnation. A feature of the current stage of capitalist crisis is the rise in

inequality that can be observed, less obviously between states or regions, but rather, between

classes (Patnaik 2016: 10-11). Again, the paradoxical nature of capitalist-state relations

becomes apparent. The contradiction of a globalised, borderless capitalist economy and a

system of nation-states is evident. The state, however, still plays a significant role in the

ability of capitalism to successfully function and in maintaining a degree of stability.

Capitalism maintains its dominance, despite a growing tendency toward crisis and inherent

instability. The state certainly plays a substantial role herein. The contradiction between the

private nature of capitalism and the social nature of the production process remains. There is

also a constant need for capitalism to acquire greater returns on its investments as a counter to

a tendency for the rate of profit to fall. The irreconcilable contradictions of capitalism would

indicate that the system itself must proceed to a point of breakdown as portrayed in Marxist

theory. What Marxists refer to as the ‘objective conditions’ for such a breakdown already

exist. What is more difficult to assemble are the ‘subjective conditions’. The state and its

agencies play a crucial role in maintaining a situation whereby these subjective factors either

fail to materialise or remain in a weakened form. Capitalism maintains its dominance, not

through any inherent strengths it might possess. On the contrary capitalism and its tendency

toward crisis displays weakness. It is in the lack of effective challenge that capitalism has

managed to survive.

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The question of why such a challenge has not developed in the face of on-going and

intensifying capitalist crisis is at the heart of this study. The economic base upon which

capitalist society rests is framed by class antagonisms and yet the working class and its allies

remain largely acquiescent. The answer can be found in the manner in which the state has

acted, over time, to ameliorate overt expressions of class antagonisms. The state operates for

and in the interests of the ruling class. It is, as Engels pointed out when commenting on

apparent ruling class accommodation to the needs of the working class, for an objective

reason. “The fact that all these concessions to justice and philanthropy were nothing else but

means to accelerate the concentration of capital into the hands of the few” (Engels 1984: 27).

This, in turn, directly relates to the degree that organisations which have traditionally

represented the working class, in both a political as well as an economic sense, have become

incorporated into the structures of the state. For a class-based society to function in relative

harmony, there must be a degree of acceptance that the status quo represents the best interests

of all. Force and overt coercion cannot be a permanent feature of society. At the same time

the ruling class is permanently engaged in struggle, which in turn invites a reaction (Burnham

2002: 116-117). The tendency toward ‘struggle’ is less explosive, however, if the capacity for

class consciousness is dimmed. “For a class to be ripe for hegemony means that its interests

and consciousness enable it to organise the whole of society in accordance with those

interests” (Lukacs 1976: 52). While Lukacs was commenting on the potential for the working

class to actively promote its own interests, it is an apt description of how the ruling class has

managed class relations. This careful use of ideology by the state has been remarkably

effective, as will be explained further in the next section.

4.5 The use of ideology to maintain social stability

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The class nature of society and the crucial role that the state plays in this class-based society

is widely acknowledged. Capitalism and the state enjoy a mutually advantageous

relationship. There is also a close connection between class society with ideology being used

to foster a semblance of harmony within society. Marx & Engels (1964: 78-79) argued that

once the bourgeoisie assumed the ascendancy, it became imperative for the state to preserve

the existing balance and state of affairs, by force if necessary. At the same time the link

between the bourgeoisie and state is “more internal and essential than the contingent use of

control … the state, as such, is intrinsically a bourgeois form of social relationship” (Sayer

1985: 241). This relationship has advantaged capitalism while limiting the use of force to

maintain that status quo.

Capitalist society is framed by class relations and class interests that are ultimately opposed

to one another. In order to preserve a sense of harmony and accord, the state must therefore

limit any obvious manifestations of class antagonism. The use of ideology as a means of

legitimising the economic structures upon which society rests assumes on-going importance.

This task is made easier if the views of the working class can be aligned with those of the

ruling class. An effective integration of the working class and of its organisations occurs.

This integration into the structure of the state, serves to both reduce overt expressions of class

antagonism and to promote capitalist development. As capitalism globalises, the role of

securing the acquiescence of the working class acquires an even greater significance.

Workers are less able, under such conditions, to develop an independent political perspective.

As capitalism developed, the tendency toward limitation of class struggle became ever more

pronounced (Moore Jr 1978: 472-475). This is a theme that is revisited by Selwyn (2013: 50)

who regards the integration of labour into the capitalist state as a two-fold process, with

labour’s role and power being diminished due to the very real threat and prospect of the

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dispersal of production. In this sense, he is referring to the globalisation of capitalist relations.

It is a process that has long been in evidence.

In Marxist theory, ideology is essentially an expression of the world view of the dominant

class in society. Eagleton offers a definition of ideology as “processes whereby interests of a

certain kind become masked, rationalized, naturalized, universalized, legitimized in the name

of certain forms of political power” (Eagleton 1991: 202). While the term is closely

associated with the ideas of the ruling group in society, it also describes the views of specific

groups or classes pursuing political perspectives quite opposed to those of the ruling class.

Eagleton (1991: 44) observes that the terms ‘class consciousness’ and ‘socialist ideology’

become synonymous in describing anti-capitalist theory and practice. However, there is an

intrinsic link, in such a construction, between the notion of ideology as the legitimisation of

political power and the diminution of class consciousness. Marx described how the

development of capitalism acted to promote such a state of affairs:

The advance of capitalist production develops a working-class, which by education,

tradition, habit, looks upon the conditions of that mode of production as self-evident

laws of Nature. The organisation of the capitalist process of production, once fully

developed, breaks down all resistance (1986a: 689).

Lebowitz (2004: 21-23) argues that capitalism maintains its position of ideological power by

masking the exploitative nature of the economic system itself. The idea of labour power and

the extraction of surplus value are never explicitly divulged. Capitalism, therefore, is not

visibly exploitative which leads to a degree of ‘mystification’ of capital itself. Society,

according to Lebowitz’s argument, does not appear to depend on capital but rather gives the

impression of autonomy. Workers are not simply dependent on capital, but on particular

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sections of capital. As these sections are often in competition with each other then so too are

individual groups of workers in competition with other workers. This serves to intensify an

already dependent relationship on capital which, in turn, reduces still further the potential for

the development of class-consciousness.

This situation, whereby class antagonisms are masked, has been labelled false consciousness

(Engels 2000) and cultural hegemony (Gramsci 1971: 257-264). Ramos Jr., describes the

essence of Gramsci’s perspective:

In a given hegemonic system, therefore, a hegemonic class holds state power through

its economic supremacy and through its ability to have, among other things,

successfully articulated or expressed in a coherent, unified fashion the most essential

elements in the ideological discourses of the subordinate classes in civil society

(1982).

In other words, state power is maintained by a combination of economic power and control of

the broad machinery of state: the institutions of control. The effectiveness of state control and

of its ability to evoke a feeling, not merely of acceptance, but of willing acceptance on the

part of the working class has been extraordinarily successful.

Capitalism’s ability to limit overt expressions of class antagonism have been enhanced by its

success in integrating the organisations of the working class into the organisations of the

state. This integration has long been a reality (see for instance Enderwick 2006, Leisink 1999,

Stevis & Boswell 2008). Trade unions became legitimate and, in a similar way, political

expressions of working class ideology became an accepted and acceptable component of the

life of the capitalist state. Social-democratic parties became legitimised within the capitalist

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nation-state – legitimised, increasingly integrated into that state structure and actively

promoting the values and mores of the state, even if this meant acting against the interests of

the class they were formed to represent.

A consequence of this integration has been a diminution of working class independence. This

state of affairs – the inability of the ‘legitimate’ organisations of the working class to act

independently – is by no means a recent development in state and class relations. “Capitalism

is less and less willing to reconcile itself to the independence of trade unions. It demands of

the reformist bureaucracy … that they become transformed into its political police before the

eyes of the working class” (Trotsky 1972: 11). Such a formulation accords with the

observations of Mann where he argues that “to the extent that trade unions pursue economic

and job control issues separately and the latter defensively, and to the extent that they do not

pursue wider issues of work control, they operate to weaken workers’ class consciousness”

(1973: 25). While the experience of trade union organisations is a primary manifestation of

integration and incorporation of working class organisations into the structures of the state,

political organisations are similarly integrated.

The capitalist state has managed, through careful and calculated use of the ideological

armoury at its disposal, to maintain a semblance of harmony and class unity. It has been an

objective necessity for the stability of an inherently unstable mechanism to function. Such a

situation poses enormous difficulties for those seeking an independent movement for

emancipation. Smith (2014: 322-323) describes the crisis of leadership that exists and how

the degree of working-class consciousness remains entrenched within a framework of

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reformist and state-sponsored mechanisms. At the same time the contradictions that plague

capitalist development remain unresolved.

4.6 The inability to resolve inherent contradictions

For Marx, the periodic crises that beset capitalism were natural and inevitable. It was simply

the case that “constant revolutionising of production, uninterrupted disturbance of all social

conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all

earlier ones” (1977: 38-39). Marx, while acknowledging the role of capitalism in

revolutionising production, also identified what are ultimately irresolvable contradictions.

These contradictions begin with the fundamental issue of contradiction between the forces of

production remaining in private hands and the social relations of productive forces. Young

(1976: 197-198) cites both Althuser and Lukacs who, while occupying quite different Marxist

terrains, still spoke with one voice about this springboard of capitalist contradiction.

Flowing directly from such a proposition is Marx’s assessment of capitalism’s tendency

toward overproduction. Marx argued that “capital contains a particular restriction of

production – which contradicts its general tendency to drive beyond every barrier to

production – in order to have uncovered the foundation of overproduction, the fundamental

contradiction of developed capital” (1974: 415, emphasis in the original). The contradiction is

in capital’s requirement to produce more, thereby extracting a greater degree of surplus value,

while actively seeking to limit wage outcomes which inevitably suppresses potential

consumption (Lebowitz 2008: 148-149). This, in turn, fuels the source of contradictions and

crisis points for capitalist relations in the form of the potential and tendency for profit rates to

fall.

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Any acknowledgement of irresolvable contradictions that exist within capitalism inevitably

involves an appreciation of Marx’s theory of the tendency of the rate of profit to fall. Marx

was by no means the first to consider this tendency. Both Smith and Ricardo had written

extensively on the question (King 2013, Tsoulfidis & Paitaridis 2012). Marx’s proposition

was that capitalists seek to increase competitiveness by increasing productivity. The means of

production – machinery etc. – grows more rapidly than the labour force and so profitability

rises. However, the degree of investment required to meet the cost of the added means of

production also grows. Profit, Marx argued (1986b: 211-231) derives from the accumulation

of surplus value which can only come from labour. If less labour is used as a means of

reducing costs, then there is a downward pressure on profit. Capitalists must seek to redress

the problem of falling profits through a range of measures: intensifying the degree of

exploitation of workers through longer hours, reducing wages and increasing the use of

technology. A limited reprieve is possible before the cycle repeats. Central to Marx’s

argument is the idea that the rate of profit will fall if the rate of surplus value rises in an

inverse ratio to the growth in the organic composition of capital. The organic composition of

capital in this sense is the ratio of expenditure on materials associated with production or

‘constant’ capital to wages or ‘variable’ capital (Harman 2010: 38).

While Marx wrote about the tendency for the rate of profit to fall, he did not state that it

would be a seamless process. Among the influences that Marx identified as acting against the

tendency for profits to fall, is in the area described by Marx as ‘foreign trade’ and which

assumes significance when capitalist globalisation is considered. Capitalism is compelled,

both in its search for markets and in its struggle against the potential for a fall in profits, to

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globalise. Jellissen & Gottheil (2009) argue that it is the tendency for the rate of profit to fall

that has acted as a trigger mechanism for globalisation. Their argument is that innovative

capitalists, in seeking to eliminate the possibly negative consequences of a fall in profits,

have little alternative but to globalise. Embedded in this strategy, of realising greater profits

while simultaneously developing an industrial base, lies another important contradiction – on

the one hand destroying the economic and social bases of the less developed states whilst, on

the other hand, replicating the economic bases of the more developed. They share, with Marx,

the perspective that this is ultimately a positive outcome and, for Marx, an inevitable one.

“The country that is more developed industrially only shows, to the less developed, the image

of its own future” (Marx 1986a: 19).

Globalisation leaves capitalism with a final irresolvable contradiction. For capitalism to

maintain a sense of stability and continuity it is compelled to expand. At the same time the

nation-state remains the basis for political organisation. While capitalism has by nature been

a globalising force since its inception (Clarke 1989), the economic crisis of the 1970s denoted

a dramatic change in these processes, with capitalist relations assuming an increasingly rapid

globalising character which has widened and exposed the contradiction between an

increasingly borderless economic system and political institutions still limited by geography.

Capitalism’s quest to maintain profitability in the face of crisis and the ever-present spectre of

a falling rate of profit necessarily results in casualties.

For decades, labour’s share of income has lost ground to capital (ILO 2008). Inequality is

also growing steadily with wealth differentials between rich and poor at their highest in more

than 30 years. (OECD 2014). In 2015 as many as 75 per cent of all workers across the globe

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fell into the informal category – as temporary or short term employees (ILO 2015).

Capitalism has reached across the world and there is widespread discontent with

globalisation. Clarke observes the trajectory of capitalism:

the alternation of boom and slump, the coexistence of overwork and unemployment,

of staggering wealth alongside devastating poverty, of concentrations of power

alongside hopeless impotence is as much a feature of capitalism today as it was a

century and more ago. The sense of a world beyond human control, of a world driven

to destruction by alien forces, is stronger today than it has ever been. The gulf

between the bland assurances of the bourgeois economist and the reality of life for the

mass of the world’s population has never been wider (1994: 8).

Capitalism exists in a climate of crisis and contradiction that it is unable to resolve. The

implications for the working class have been dramatic. Despite this, capitalism remains the

dominant force. It does so, not from the strength that its economic structures provide, nor

from any sense of resilience or adaptability. On the contrary it remains a dominant force

because Marxism, as the logical oppositional force, has remained riven by crisis and unable

to provide the leadership that would bring about a fundamental change in society.

4.7 Conclusion

Capitalism is an economic system framed by cycles of crisis and contradiction. The chapter

has identified this feature of capitalist development, of the irresolvable contradictions that

have driven capitalist relations forward and which ultimately present insurmountable

obstacles to its viability. Capitalism has survived, despite its inability to resolve these

contradictions, and despite extraordinary moments of crisis that the 20th century placed in its

path. The state has proven to be crucial for the evolution of capitalism to a position of global

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ascendancy, and this relationship – between a globalised economy and a political process

defined by national borders – is a fundamental contradiction of capitalism.

The chapter outlined how the contradictions of capitalism are interwoven and how each pose

a growing threat to capitalism’s very survival and yet the political and economic structures

remain unchallenged. The successful use of ideological weapons has promoted a sense of

unity between people and classes where there is none, and that this has been pivotal for the

maintenance of a sense of stability within capitalism. The future of capitalism and of its

trajectory is significant. Capitalism’s tendency toward crisis, and the inevitability of capitalist

globalisation as an attempt to remediate that tendency, indicates a qualitative change in

capitalist relations. Marxism must, of necessity, address this change in capitalist relations.

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Chapter 5 Qualitative change in capitalism and its implications

The motivation for capitalist development has not changed. Its function and ‘nature’ remain

constant. Capitalism, as understood from a Marxist perspective, is in no sense a universal,

immutable social or economic system, but is a stage in the historical evolution of society and

economic relations. Consequently, capitalism is in a continual state of motion. Capitalism, in

seeking to overcome its inherent and intensifying contradictions, and faced with the threat of

economic breakdown, rapidly globalised. The 21st century has seen the contradiction between

globalised capitalism and national governments become increasingly acute. The chapter

argues that these developments are indications of capitalism entering a qualitatively new

stage in its history.

The chapter makes its case through four inter-related steps. First, Section 5.1 focuses on the

intensification of crisis as a motivating factor behind globalisation. The tendency toward

crisis has become more visible and more intense as evidenced by the dramatic increase in the

power of finance capital (the financialisation of capitalism), The changes in the productive

use of capital, and the growing integration of the global economy.

The second step is to explain how we measure and operationalise qualitative change in

capitalism. The quantifiable growth of Foreign Direct Investments (FDI), whereby greater

economic activity is transacted between Transnational Corporations (TNCs) and less between

states, the observable integration of global capitalist relations between TNCs, the speed by

which capital flows are recorded are all indicators that qualitative changes are evident.

Section 5.2 notes that the theory of qualitative change at first appears to be contradicted by

the continued strength of the nation-state and of a return to policies of economic nationalism

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that are increasingly evident in the developed capitalist economies. The dialectical interaction

between an increasingly transnational capitalism and the nation-state structure is the most

fundamental contradiction facing capitalism, Marxism, and the working class in the 21 st

century. Scott (2012) argues that capitalist markets cannot exist without an institutional

framework. Capitalist states thus play two distinct roles – as administrators and innovators. It

is as administrator that capitalist states have a significant role as capitalism seeks to adjust

and adapt to the contradictions that impel change.

The third step is to explore the implications of capitalist globalisation for the nation-state. In

Section 5.3 the chapter shows that while the role of the nation-state has been challenged it

continues to inhabit a powerful place, both in economic and political terms and in its capacity

to maintain a sense of ‘national unity’ among the working class. If capitalism has entered a

qualitatively new stage, reactions and responses from those most affected will reflect these

changes. Capitalist globalisation has intensified social inequality and social discontent.

Historically, capitalism has developed against just such a backdrop. The intensification of

these phenomena, and the response by individual states, are further indications of change.

Reactions to globalisation and an increased sense of discontent are being increasingly

expressed through left and right wing populism. States, as ‘administrators’ and as

‘innovators’ have sought to contain and channel this discontent.

The fourth step is to explore the implications of capitalist globalisation for the working class.

In Section 5.4 the chapter argues that the rise in nationalist sentiment and the return of

economic nationalism reflects the unresolved contradictions between globalisation and the

nation-state. There are implicit dangers posed by a resurgence of nationalism, both to

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capitalism and to the working class. These contradictions are evident in the co-existence of

global capitalism and nation-state structures.

Having diagnosed the qualitative change in capitalism, Section 5.5 explores possible means

of resolving the crisis in capitalism. Neither capitalist free trade nor protectionism can resolve

the problems facing the working class. What is lacking is an independent leadership. The

chapter concludes in Section 5.6 and finds that the most pressing contradiction of capitalism

is between a globalising economy and a continued reliance on a strong nation-state system.

This has manifested itself in a rise in nationalism, with the working class remaining locked

into a nationalist perspective. This further limits its capacity to act independently and as a

global force to combat capitalism.

5.1 The motivations behind capitalist globalisation

The driving force behind capitalism is its need to expand. To do otherwise is to court disaster.

Marx and Engels (1977: 39) famously observed that for capital, not simply to survive, but to

thrive, it was compelled to expand beyond the borders of the nation-state. They further noted

that, “the bourgeoisie has through its exploitation of the world market given a cosmopolitan

character to production and consumption in every country. To the great chagrin of

Reactionists, it has drawn from under the feet of industry the national ground on which it

stood” (1977: 39. Trotsky similarly described the growing tendency toward globalisation in

terms of “the future development of world economy … a ceaseless struggle for new and ever

new fields of capitalist exploitation” (1973: 22-23).

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Marx (1974: 539) also described how capital must not only eliminate spatial boundaries in

order to develop a world market, but that it also must seek to reduce time as a factor in this

development, thereby promoting the most expansive market possible. The underlying

motivation for this development of capitalism to become an increasingly global phenomenon

is the expansion of capital accumulation, the quest for profit and the ever-growing need to at

least maintain the level of profit. Scholte argues that this process of globalisation occurs

because “transworld connectivity enhances opportunities of profit making and surplus

accumulation” (2005: 129). The dynamism of such economic development across the globe

has both positive and negative implications, at once polarising wealth and poverty, while still

allowing for capital accumulation and the development of abundance (Dunn 2009: 158).

A key factor in the drive to globalisation lies in a fundamental argument of Marx; described

as the law of the falling rate of profit (Capital Vol. 3 1986b: 211-231). Among a range of

options that capital can employ to remove such an obstacle, or at least to postpone and

forestall the worst outcomes, is to continually expand and to internationalise its relations.

This means, in effect, a continual motion and an endless battle to survive. This inherent

contradiction between the need to expand and the tendency for falling rates of profit has been

and remains central to globalisation. Brenner (2006:14) directly addresses this issue when he

speaks of the long downturn in the economic results of industrial nations. He links the effects

of the oil crisis of the 1970s with the decline in ‘Fordism’ as an organisational principle. The

consequence was a protracted decrease in productivity.

Two related propositions of Marx, pertaining to the development of capitalist globalisation,

are worthy of note. The first is that merchant capital is inherently destructive to colonial

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economies while industrial capital constructs new economies (Marx 1969b: 107). The

second, that capitalism as an inevitably expansionary process, must destroy older, pre-

existing economic systems in order to create new ones (Marx 1975b: 200-201). These

arguments eloquently describe the effects of colonialism and imperialism in the 19 th and early

20th centuries. Imperialism, in Marxist thought, was regarded as the “penetration and spread

of the capitalist system into non-capitalist or primitive capitalist areas of the world” (Warren

1980: 3). Imperialism, in this context, can be regarded as a step towards industrialisation and

therefore the proletarianisation of the world. It is regarded as an inevitable feature of an

expanding capitalism that is at once both destructive as well as progressive.

Such arguments, under conditions of 21 st century capitalist globalisation, become a focus for

dispute. Petras & Veltmeyer (2000) argue that globalisation is far from a progressive factor of

economic reality, as it extends global power to imperialist states and subjugates less

developed economies. In contrast, Silver (2006: 3-23) describes the situation whereby global

capital flows serve to actively build new industrial working class movements, as capitalism

constructs new industrial bases across the world. Understanding the processes of capitalist

globalisation and the motivations for such a rapid rate of development in recent decades is

intimately connected to both Marx’s description of the unfolding of global capitalism and of

imperialism as a means for that development.

Rosenberg (1996) outlines the general thrust of capitalist development as anticipated by Marx

and Engels, whereby all societies would ultimately conform to the model of the then existing

capitalist states. He then argues that the reality has proven to be somewhat different. He cites

Trotsky (1965: 23-24) and his arguments surrounding the historical unevenness within social

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development among nations and that capitalism develops from very different starting points.

Late developing capitalist states need not necessarily follow the same path of capital

accumulation of their more advanced counterparts. The theory of uneven development has

been used to explain how newly developing capitalist states exhibit ‘different’ forms of

capitalism. However, it needs to be remembered, that the rapidity of capitalist globalisation,

even when operating under conditions of uneven development, essentially conform to Marx’s

conception of capitalism “creating a world in its own image” (Marx 1977: 71). Lenin (1977e:

678-679) commented on the inevitably uneven rate of development of capitalism across the

world but that the export of capital “influences and greatly accelerates the development of

capitalism in those countries to which it is exported” (1977e: 681). Capitalism it is argued:

“aims at economic expansion, at the penetration of new territories, the surmounting of

economic differences, the conversion of self-sufficient provincial and national

economies into a system of financial interrelationships. Thereby it brings about their

rapprochement and equalizes the economic and cultural levels of the most progressive

and the most backward countries” (Trotsky 1970: 19).

Capital flows, as described by Silver (2003), are elements of a constant drive to maintain a

high degree of profitability. The period since the economic crisis years of the 1970s is

portrayed as a period marked by stagnating profits, and a general decrease in wages across

states (Postone 2007: 70). Smith (2006:10) similarly describes the dynamic of globalising

capitalism, of the quest not simply for power but of the necessity to seek to maintain

profitability as a means of survival. The very raison d’etre of capitalism as an economic

formation is to expand.

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The rapid expansion of capitalist globalisation from the 1970s was accompanied by a

dramatic shift in manufacturing from industrialised countries to the developing world.

Western capitalism sought to ameliorate the growing crisis that had been presented by rapid

economic downturn and a reduction in profit levels. Berberoglu (2003: 97) describes how US

capital reacted to the crisis it was facing by transferring production overseas but that this had

the obvious effect of producing mass unemployment along with a general reduction in wages.

Martin and Schumann (1997: 7) similarly show how wages in the industrial world have

tended to fall. Capitalism, in its quest to maintain its growth-centred sense of equilibrium,

inevitably creates ‘winners’ and ‘losers’. This becomes apparent both in individual nation-

states and when outcomes between states are considered. Sutcliffe, cited in Pieterse (2002:

1027), shows, as an example, that relative inequality in the USA and the UK is greater than in

India.

As globalisation of the economic and political structures has quickened, so too has the role of

the developing global institutions been scrutinised. The neo-liberal economic agenda has

been facilitated, in the estimation of many writers, by the increased power of the International

Monetary Fund, the World Bank and significantly with the inception of the World Trade

Organisation (WTO). Chossudovsky (1998: 35) regards the WTO’s role as effectively

supervising national trade policies in the interests of the transnational corporations. An even

more strident accusation is that the WTO is “the archetypal transnational institution of the

new epoch” (Robinson 2004: 117). In somewhat softer tones is the appraisal that

multinational corporations and states work in tandem to promote common objectives (Nash

2000: 264).

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The continuing globalisation of capital and the political ramifications that this represents has

long been a feature of capitalist relations. Robinson (1998: 567) draws the conclusion that the

development of an interstate capitalist system was an historical inevitability and that those

relations are being superseded by a globalisation of capitalism. The changes in capitalist

relations that are evident are revolutionary in character. It is in the financialisation of capital

that changes in capitalism are best observed. Peet (2009: 245) describes the fundamental

logic of financialisation, as capital operating with a greater degree of abstraction from its

original productive base. Capital has increasingly been removed from production as well as

from any confining link to the national state. This continuing separation of capitalism from

the restrictions of state structures is but one indication of elemental changes in capitalist

relations. These relational changes are inescapable for capitalism as it seeks to overcome the

inherent contradictions and tendency toward crisis.

5.2 Measuring qualitative change in capitalism

Capitalism is changing and has changed. Wood (1997) argued that capitalism has

‘universalised’ through its incessant drive to globalisation. She viewed this as a sign of

inherent weakness in capitalism as well as a contradictory process that destroys even as it

builds and that as capitalism has enveloped the world, it has universalised social polarisation

and exploitation. Wood further contended that the working class can only effectively combat

this by activism within a national framework. Whether capitalism is essentially the same as it

ever was, or that it has undergone a qualitative change, or that the changes are simply part of

an evolutionary process within capitalist development, needs to be regarded in relation to the

question of the implications for the working class and its allies.

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Arguments for or against capitalist change are inevitably connected to perceptions of

capitalist globalisation. Capitalism has always had a globalising character. In this sense,

capitalist globalisation can be regarded as ‘evolutionary’ and an inescapable part of capitalist

development. To speak of capitalism undergoing a qualitative change, however, need not be

seen as contradictory. The processes by which capitalist globalisation occurred certainly

brought about the conditions by which such a qualitative change can be observed.

Liodakis (2010) proposes four criteria to ‘prove’ that qualitative changes are occurring. These

include technological developments that have had intense significance, a radical restructuring

of capitalism as a means of limiting or reducing the fall in profits and the internationalisation

and financialisation of capital. Liodakis’ fourth criterion links the preceding ones:

On the one hand, rising concentrations of economic and political power, the

exacerbating crisis and the deadlocks facing contemporary capitalism imply

authoritarian … political and social practices. On the other hand, the requirements of

transnational capitalism … have led to a radical differentiation and indeed

internationalization of states (2010: 25-26).

While there is broad acknowledgement of change in capitalism, the idea that capitalism has,

in any real sense entered a qualitatively new stage is less well regarded. Wood (1998) noted

that capitalism has been compelled to employ a new form of imperialism that becomes

evident through financial control, and the manipulation of markets and debt, but she

maintained that this does not denote any qualitative change in capitalism.

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Robinson and Harris (2004), argue that such qualitative changes are well established. They

regard these changes as heralding the arrival of a new global capitalist class. Murray

characterises this ‘new’ capitalism in terms of “the rise of transnationalised capital, the

hegemony of a transnational capitalist class, the emergence of a transnational apparatus, and

the appearance of new forms of power inequality” (2012: 199). Wood (1998) acknowledged

that dramatic changes have occurred in capitalism but argued that these changes are simply

part of the process of capitalist development that began with the birth of capitalism. The

point, for Wood, was that capitalism remains riven by contradictions that make it increasingly

unstable.

Wood stated that capitalist development is a process. Its development has, in large part been a

response to the contradictions that imperil its very survival. For Wood the processes under

way are ‘continuities’ between Marx’s world and our own. Capitalism exists by the constant

“revolutionising of production, uninterrupted disturbances of all social conditions, everlasting

uncertainty and agitation .... All fixed, fast-frozen relations ... are swept away, all new-formed

ones become antiquated before they can ossify. All that is solid melts into air” (Marx &

Engels 1977: 39). Ultimately these observations are not tied to an ‘epoch’ of capitalism but

are descriptors of capitalism itself. Wood (1997b) optimistically maintained that globalisation

opens up new possibilities for socialist politics but possibilities that remained nationally-

based. The reality is that the dislocation and atomisation of the working class and the

integration of its organisations into state structures are all elements of an intensification of

capitalist crisis and of the contradictions between globalised capitalism and its relationship

with the nation-state.

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Robinson asserts that we are entering a new ‘epoch’ in the development of capitalism. What

needs to be remembered is that capitalism is first and foremost an economic structure and that

the nation-state, as political ‘administrator’, acts to serve the interests of capital. For

Robinson, the nation-state has effectively been displaced by a globalised ruling class.

Objective reality would suggest that the nation-state maintains an intensely important place in

the administration of capitalism and that capitalism exists both in transnational as well as

national forms. It remains an important instrument for the maintenance of a sense of social

and class harmony. This assumes greater relevance when factors reflecting the changes in

capitalism are considered and, in particular, the financalisation of capitalism.

Foster (2007: 1-7) readily acknowledges that the financialisation of capitalism has changed

capitalist relations. He also stresses that monopoly-finance capital is a fundamentally

different phenomenon from that which Hilferding and others described in the early twentieth-

century as the age of ‘finance capital’ (2007: 7). At the same time, Foster argues that this

does not indicate a ‘new’ stage of capitalism.

Hilferding’s (1981) exposition of finance capital offered a valuable insight into how

globalisation was to play out. He showed how profit was increasingly being derived, less

from manufacture, and more from investment and trade in currencies. Brewer (2011: 51),

writing a century after Hilferding’s 1910 work on finance capital, speaks of an increasing

tendency within global capitalism toward capital accumulation. This is achieved through a

growth of finance capital at the expense of industrial capital. One ramification of this has

been the rise in inequality, and particularly as capital accumulation has become concentrated

into fewer and fewer hands. “Over the last thirty years, capital has abstracted upwards, from

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production to finance; its sphere of operations has expanded outwards, to every nook and

cranny of the globe; the speed of its movement has increased, to milliseconds; and its control

has extended to include ‘everything.’ We now live in the era of global finance capitalism”

(Peet 2011: 18). It is a tendency that late 19th and early 20th century Marxist writers had

foreshadowed. The Bank for International Settlements (2016) reported that in 2013, on an

average day, currency to the value of $5.3 trillion changed hands. A significant global

integration of capitalism has been taking place.

This integration of global capitalism is further highlighted when considered in relation to

growth of Foreign Direct Investment (FDI). Economic activity had traditionally been

conducted between individual states representing national forms of capitalism, but

increasingly this is taking place between transnational corporations. FDI outflows have

become the effective means for financing industrial production outside the industrialised

states. Brooks & Hill (2003) provide figures showing the growth of FDI outflows from $53.7

billion in 1980 to $1.2 trillion in 2000. They also state that FDI grew at a rate of 500 per cent

in the decade from 1990-2000, whereas total global trade grew at less than 200 per cent.

While the Global Financial Crisis resulted in a contraction in the rates of growth, the general

tendency remains unchanged. It is in the context of these dramatic changes that the argument

for a qualitative change in capitalism is strengthened.

Traditionally capitalist relations were framed by three interconnected uses of capital. Money

capital is employed as a base for production or productive capital, which in turn is transferred

into commodity capital in a continuously repeating cycle. Productive capital, even while

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capitalism was internationalising, remained based within the confines of a bordered state.

This has changed and with it the mobility of labour has been forced to change.

Marx, in Volume II of Capital (1986c), described capital in its three forms – money capital,

productive capital and commodity capital. He portrayed these forms as ‘circuits’ of capital.

These forms are dependent upon one another and operate as a cycle. Money capital creates

the foundation upon which productive capital can be developed. In short, goods are produced.

These goods are translated into commodity capital. This, in turn, produces an increase in

money capital. The centuries-old process of capitalist globalisation has seen this cycle

replicated, at first on a national and increasingly on a global scale. What is significant is that

even as capitalist relations were internationalising, productive capital remained essentially

bound by national borders. The expanding world market saw raw materials acquired globally,

and commodities exported globally. Productive capital, however, remained based in

individual nation-states. Profit, as understood within a Marxist framework, is derived from

surplus value (Engels 1959). If productive capital remained localised, then labour was

similarly localised. It was intrinsically connected with the process of the ‘sale’ of labour

power (Capital Vol. 1 1986a Chapter 25) Immigration and the portability of labour became a

more obvious factor as capitalism became a more internationalised system. Workers tended

to migrate to where productive capital resided. The reverse can now be observed as

productive capital moves to wherever it may derive the greatest financial benefit.

Economics operates as an engine for political movement. The changes that are apparent in

capitalism validate the base/superstructure argument of Marxist theory. These changes have

had dramatic consequences for states, and for the working class in those states. Studies of

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OECD states show the ramifications that intensified globalisation has had on the

manufacturing base of developed capitalist economies. The period since 1990 has seen

manufacturing industries in developed capitalist states continue to shrink. Bernard (2009)

focuses on job losses in manufacturing in selected OECD countries with jobs in the UK being

reduced by 29 per cent, the USA 25 per cent, Japan, 24 per cent, Sweden, 20 per cent and

France, 14 per cent. These figures underwrite Silver’s (2006) analysis that the quest for

profitability, and the consequent flow of capital, builds working class movements in

developing states. Pilat et al (2006), in describing the changing nature of manufacturing in

OECD economies, notes that manufacturing has become more clearly integrated at the global

level. Capitalism’s relentless globalisation and the dislocation that accompanies it is

intrinsically linked to its striving to maintain profitability in the face of constant threats of

falling rates of profit. Empirical evidence indicates a growing degree of inequality, alongside

a contraction of profit rates over time (Basu & Manolakos 2010). Maito (2014), in a study of

14 capitalist states, also offers statistical evidence that this is the case.

Capitalism has long sought to overcome its contradictions. However, the inherent

contradictions that have driven globalisation have not been eliminated. On the contrary, the

most acute contradiction between increasingly globalised economic structures and political

formations based on national governments are becoming more evident.

Capitalism has broken the bounds of the nation-state and that this has been a fact of economic

and political life for a very long time (Trotsky 1996). Productive capital no longer resides

within the confines of individual nation-states. At the same time, the nation-state, as an

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organisational structure, remains an objective reality and a reality that enjoys the emotional

support of the great majority of the world’s population.

Capitalism is caught in a web of contradictions. It requires stable governance that has been so

well delivered by the state system. Simultaneously, capitalism, as a globalising entity, needs

to break any fetters that such restrictive structures might present. This problem is further

compounded by the constant drive to counter and forestall the tendency for the rate of profit

to fall. It is in this context that a qualitatively new stage of capitalism can be observed. The

growing influence of finance capital in the face of the crisis of capitalism that erupted in the

1970s acted to develop a new global working class while destroying industrial activity in the

developed economies (Silver 2006). The contradictory relationship between individual state

structures and an increasingly borderless economic system has prompted some to question the

long-term viability of the nation-state and others to question globalisation itself.

5.3 Changes in capitalism: implications for the nation-state

The intensification of capitalist globalisation, is a visible reminder of both developmental and

structural changes in capitalism. This intensification has prompted discussion as to the future

and viability of the nation-state. Strange (1997a) argued that markets are now more powerful

than states. Ohmae (1995) contends that the nation-state has no real role in the global

economy. UK economist, Pettifor (2008) calls for the threatened state to be ‘upsized’ as a

means of reclaiming autonomy in the face of globalised capital. Herein lies a paradox. The

state must simultaneously facilitate the development of an increasingly borderless capitalism

while safeguarding political realities within national borders. As a consequence, the nation-

state is regarded by some as obsolete, while others call for its strengthening.

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Marxism maintains that a primary purpose of the state is to facilitate capitalist development.

While the role of the state has not fundamentally altered, capitalism’s development has

necessarily placed a strain on that relationship. This first became apparent as capitalism

quickly outgrew the nation-state and, more recently, has transformed itself into a globalised

entity. Marx’s view of the nation-state and of its future was clear. He maintained that the

development and expansion of capitalism would ultimately weaken any semblance of

independence for the state (Dunn 2009: 158, Renton 2005: 16-17).

The state increasingly plays a dual role. At once it must facilitate capitalism’s development

while simultaneously maintaining stability within its own borders. A range of inter-connected

problems arise. The crisis of capitalism has prompted changes in capitalist relations

(financialisation, changes in the productive use of capital, and an increased integration of

capitalism). This has led to an intensification of inequality and social disharmony which, in

turn has manifested itself in a broad, anti-capitalist, anti-globalisation sentiment. There has

been a reaction against austerity, growing poverty, and a general tendency toward diminution

of social and economic security. Populist movements have grown and the state has

increasingly been engaged in maintaining ‘order’ and legitimacy. A perceptible rise in

nationalist sentiment is the result. The state has fostered this sentiment, with the result that

the working class has remained locked into a nationalist framework, with leaderships that

maintain a national perspective.

The concept of a national state, in conjunction with national governance and national

economic organisation, is an entrenched one. This is despite the fact that it is a construction

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framed by and in an historical period of time. This needs to be kept in the forefront of debates

concerning globalisation and the state. Wood, for example, found “it hard to foresee the day

when capital will stop being organized on national principles” (2002: 29). Neither the nation-

state nor capitalism are immutable but exist in an historical context. What also needs to be

borne in mind is that the nation-state is ultimately a political formation and not a

geographical location.

The era of state-based autonomous economies has passed. Capitalism has become

increasingly integrated. Strange (1997a) famously wrote of the retreat of the state and the

decline of state authority in the face of globalisation. She argued that where “states were once

the masters of markets, now it is the markets which, on many critical issues, are the masters

over the governments of states” (1997a: 4). Strange contended that while individual firms

might be described as ‘American’ or ‘British’, this ought not obscure the fact of global

integration and that dramatic changes in financial structures clearly indicate changes in

capitalist production relations (Strange 1997b).

Jotia (2011) is among a number of writers who have sought to explain the political and

economic realities facing the nation-state. He argues that the nation-state operates largely to

arrange domestic issues as a means of facilitating the overarching needs of global capitalism

and that it has come to the point where “global change dictates terms under which the

national governments should function” (Jotia 2011: 246). Castells (2004: 312-314) describes

the effect of globalised capitalist relations on welfare state structures. He bases his analysis

on the contradictory nature of an integrated economy and the differences between individual

states. The potential dislocation for states is further highlighted by Tanzi argues that

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“globalization is forcing countries to abide more and more … by the rules of the market.

Countries that ignore these rules are now likely to pay a much greater price than they did

when economies were closer … national governments are likely to see their economic role

reduced (IMF 1998: 13).

The fact that globalisation is affecting the nation-state is obvious. What is less certain is the

intensity of this effect. Robinson’s argument, in respect of the implications of capitalist

globalisation as evidence of a qualitative change in capitalist relations, points to a future that

he perceives to be close at hand, whereby the nation-state and its effective role becomes

superseded by a transnational capitalist class (1998: 567). Hirst and Thompson (1999)

contend that there is nothing particularly special about capitalist globalisation. The fact

remains that globalisation of production equates to an increase in international and global

economic activity and especially when considered in the context of economic integration.

This inevitably has implications for the nation-state. Hirst and Thompson actively seek to

downplay the significance of the globalisation of capitalism. They are clear in their wish to

expose the ‘myth’ of globalisation as a means of persuading “reformers of the left and

conservatives who care for the fabric of their societies that we are not helpless before

uncontrollable global processes” (1999: 7). Neither of these conflicting views, between

hyperglobalists and globalisation sceptics, offer a satisfactory response to questions of paths

to emancipation for the working class, nor do they offer any resolution to the question of

Marxism’s relevance in an era of capitalist crisis. Robinson’s (2004) view that there needs to

be a movement towards a ‘global democratisation’ remains vague and ill-defined. Similarly,

to dismiss globalisation as a ‘myth’, limits working class response to capitalism to nationally-

based reactions to what are increasingly globalised issues (see Section 5.4).

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Regardless of these divergent perspectives, a number of issues are still to be resolved.

Capitalism remains framed by crisis. It is a crisis that has serious ramifications for a working

class that is at once increasingly globalised but still confined by nationalist sentiments and

symbols. The debates as to the health of the nation-state in the face of globalised capitalism

must, therefore, take into account questions of nationalism as an ideological response. Ever

since the rise of capitalism, the state has sought to engender a sense of unity aimed at

crossing class divides. It has been remarkably successful and, as previously noted, has been

widely observed in Marxist theory. Central to the arguments of classical Marxism is the idea

of ‘false consciousness’ and of the Gramscian concept of ‘cultural hegemony’. The class

composition of society has been diminished in the thinking of many and this is reflected in

the organisations of the working class. As globalisation assumed greater significance, so too

did the notion that an ‘anti-globalisation’ movement might halt the march. Globalisation was

effectively de-coupled from capitalism. It was as though the two existed in isolation.

Globalisation became the enemy and not the state or capitalism.

The question of nationalism again became an issue of concern in Marxist debate in the most

recent past. Calhoun (1997) prominently argues that nationalism is, in essence, a positive and

even progressive construct. Munck promotes the view that “nationalism continues to

articulate social discontent and is the source of new solidarities” (2010: 51). Hardt & Negri

offer a contrasting perspective. They argue that capitalist globalisation, or in their

terminology, ‘empire’, is unstoppable and “a step forward in order to do away with any

nostalgia for the power structures that preceded it” (2000: 43). Capitalism is undoubtedly a

globalising force, and is compelled to be such a force, but is still firmly connected with

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individual nation-states. This is seen first and foremost in the political role that the state plays

and in the class relations that are evident. The working class has grown dramatically in global

terms as capitalism has developed new centres of production. Nationalism has been used to

diffuse any sense of potential unity within the global working class. Workers are encouraged

to see commonalities with their own bourgeoisies and are pitted against each other. In this

sense there is very little to differentiate early 20th century expressions of nationalism with that

of early 21st century nationalist sentiments.

Another significant issue is the most recent shift towards economic nationalism. Former US

Treasury Secretary Summers (2016) recently indicated an unease regarding perceptions that

people have that ‘open’ economic policies in recent years are producing a political backlash.

The managing director of the IMF, Legarde, remarked that “I hope it is not a 1914 moment

and I hope that we can be informed by history to actually address the negative impact of

globalisation … because it has historically delivered massive benefits and it can continue to

do so” (2016). She was referring specifically to Britain’s decision to leave the European

Union. Equally significant in this context have been nationalist sentiments in relation to US-

Russia relations, US-China relations and the rise of nationalist political groupings across the

globe.

The nation-state, as a political institution, will either strengthen or adapt to globalisation and

the qualitative changes in capitalism. State structures will, however, be shaped both by

external influences stemming from the requirements of globalised capital and from internal

factors as individual states respond to the pressures linked to globalisation (Cox 1987: 253).

The effects of globalisation are being felt across all societies and states. Postone (2007: 7)

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argues that an almost endemic situation of stagnating and falling profits, a tendency toward

decreasing wages share and social and political fragmentation is affecting developed and

developing states alike. Inequality has risen sharply. Social cohesion has weakened. This is

less a result of political and economic policy and more a result of qualitative changes in

capitalist relations that have been determined by the growing crisis in capitalism.

5.4 Changes in capitalism: implications for the working class

A range of theoretical positions, broadly defined as sceptical, transformational and hyper-

globalist have been addressed in relation to changes that have taken place in capitalism.

These have been considered against the proposition that capitalism has entered a qualitative

new stage in its development. The issue of the nation-state and its relationship to a changed

capitalism has also been discussed. The contending schools of thought all recognise that

inequality and social disharmony are growing. There is a generally held consensus that things

are changing. What is frequently overlooked, however, is the connectedness between

capitalism’s qualitative shift and the dramatic rise in inequality, and of the inevitable social

discontent that accompanies inequality. Those most affected, the working class, remain

powerless in their quest for emancipation. They remain caught in entanglements of nationalist

rhetoric and a retreat into national responses to global crises.

Inequality and discontent are connected, and their growth has been linked to the rapidity of

capitalist globalisation. The steady rise in inequality can be observed in individual countries

and globally. The rise in social discontent has been manifested in both anti-globalisation

movements and more recently, in developed economies, in both left and right-leaning

political and nationalist movements. Globalised capitalist relations have particularly affected

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the working class as unemployment remains high, industrial and manufacturing production

continues to flow from the industrialised states, and welfare state structures have been

eroded. Ultimately, this crisis is a consequence of capitalist globalisation, which, in turn, is a

by-product of the qualitative changes that are apparent in world capitalism. The ramifications

are obvious.

Dallmayr (2002:144) cites the UN Human Development Report (1999) to show that just three

of the wealthiest families in the world enjoy an income equivalent to the poorest 600 million.

Pieterse (2002:1025) uses these same figures to indicate that there has been a steady and

significant growth in inequality since the Industrial Revolution from a situation in 1820

which saw a gap between the richest fifth of the world’s population and the poorest fifth

steadily grow from a ratio of 3:1 to 74:1 in 1997. This trajectory has been steadily

accelerating as the concentration of wealth into fewer hands has continued and especially

since the 1970s and the qualitative changes in capitalism that have been indicated. Oxfam

figures show that the world’s richest 62 individuals control the same wealth as the poorest 3.5

billion people (Oxfam 2016). Credit Suisse (2015) research reveals that nearly three quarters

of the world’s population have a per-capita wealth of less than $10,000. Conversely the

richest eight per cent of the population own 84.6 per cent of global wealth. Pieterse asks,

“what kind of world economy grows and yet sees poverty and global inequality rising

steeply?” (2002:1036). The answer to his question is not simply capitalism, but a

qualitatively changed capitalism that exists in conditions of irresolvable crisis.

International institutions, analysts and activists acknowledge that a fundamentally new stage

of crisis has emerged. A report issued by the IMF (2015) states that:

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 Widening income inequality is the defining challenge of our time. In advanced

economies, the gap between the rich and poor is at its highest level in decades.

Inequality trends have been more mixed in emerging markets and developing

countries (EMDCs), with some countries experiencing declining inequality, but

pervasive inequities in access to education, health care, and finance remain (Dabla et

al 2015: 4).

The OECD (2015) has similarly reported that inequality in OECD countries is at its highest

since records began. The same report indicates that the rise in inequality has been reflected in

a growth of part-time and casualised labour. Joint ILO/OECD (2015) research has shown that

for decades, labour’s share of income has lost ground to capital. OECD (Cingano 2014)

reports are also clear that inequality is growing steadily with wealth differentials between rich

and poor at their highest in more than thirty years.

Additional ILO (2015) statistics show that in 2015 as many as 75 per cent of all workers

across the globe fell into the informal category – either as temporary or short term employees.

The growth of capitalist globalisation is mirrored in the growth of the global working class.

Dobbs et al (2012) estimate that the global workforce will have reached 3.5 billion by 2030.

One factor that the working class in the OECD world and in the developing world have in

common is a growing sense of insecurity.

This sense of insecurity is exemplified in the relationship between capital and labour. In

responding to the tendency that exists for a fall in the rate of profits, capital has sought, as it

always has, to maximise the levels of surplus value at its disposal. What appear to be

‘changes’ in the very nature of work are observable as these qualitative changes in capitalism

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have developed. Traditional labour/capital relationships have been altered. There has been a

dramatic rise in the casualisation of labour, ‘flexible’ working arrangements have been

introduced, and workers are increasingly regarded as ‘sub-contractors’. Despite these

‘changes’, the reality of that essentially exploitative relationship between capital and labour

remains unchanged.

Bieler, Lindberg and Pillay (2008: 11) argue that the most important change that has occurred

in the last 15 years has been the weakening of the position of labour in relation to capital.

United Nations Development Program figures (2014) show the downward trend in labour’s

share of income over the past thirty years. The dilemma that faces the nation-state, as both

administrator of capitalism and simultaneously as competitor against other states and against

a transnational capital, is clear. The dilemma for the working class within these nation-states

is not always so clearly stated.

There is ample evidence to show a dramatic rise in inequality both within nation-states and

between states. Capitalism and inequality are inextricably linked. In Marx’s (1986d)

assessment inequality is a necessary component of the wages system. It is an argument that

goes to the very core of the relationship between capital and labour. Capitalism uses both

physical and intellectual labour as a commodity. In even more strident terms Marx declared

that “the cry for an equality of wages rests, therefore, upon a mistake, is an insane wish never

to be fulfilled … to clamour for equal or even equitable retribution on the basis of the wages

system is the same as to clamour for freedom on the basis of the slavery system” (1986d:

208-209 emphasis in the original). Peet (1975: 570) affirms this perspective, arguing that

social equality can be achieved only when the sources of inequality are replaced.

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The profound changes in capitalism, and in its quest to maintain profitability, has affected

how states operate. This is the case in both developed states and the developing economies.

Globalised markets have acted as a motivational force for investors to move capital from the

traditionally regulated economic centres to the less regulated (Hay 2007: 281). This initially

resulted in accelerated global economic growth but has resulted in increasing instability and

insecurity for the working class. What is particularly significant is that the rate of economic

growth appears to have stagnated or at least is growing at an unacceptably slow rate (IMF

2016b). While this reflects the underlying problems in capitalism as a crisis-prone system, the

fact remains that globalisation was, and is, an attempt to rapidly accelerate economic growth

to forestall and circumvent crisis stemming from falling profit rates.

Globalisation has also been accompanied by an unevenness in development. Martins (2011:

12) draws a parallel to the extent that inequality grew with the coming of the industrial

revolution. Globalisation has been described in terms of it being the ‘second’ great

transformation within capitalist development as it moves from national to global capitalism

and thereby assuming a qualitatively different character (Pieterse 2002: 1024). The first,

being the establishment of national capitalist relations. Such a characterisation echoes the

past with a growing divide between rich and poor.

Social disharmony and discord is evident, but effective challenges have not materialised.

There are a range of reasons why this is so and all remain centred around the key questions

that this study raises. The working class remains firmly attached to the physical and

psychological boundaries of the nation-state. While Marxism traditionally stressed that the

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working class, if it was to gain emancipation from capitalism, must accept its

internationalism (Marx & Engels 1977: 74), the strength of nationalism and nationalist

sentiment has remained. Bereciartu argues that “national sentiment in general and

nationalism in particular appears to be profoundly rooted in the consciousness of the

European working class … at present nationalism is expanding” (1994: 53). It is a view that

not only remains entrenched in the thinking of the working class but in the minds of many

whose stated perspective is the struggle against capitalism.

Theorists from the Marxist tradition frequently remain locked into a national response to

what is ultimately a global question. Capitalism occupies an international terrain. To wage a

primarily localised struggle has serious limitations. Class-based discontent has traditionally

been waged through trade union activities which become acutely limited by nationally based

responses to global problems. Moody (1997) and Berberoglu (2009) are representative of this

nationalist perspective. Yates (2003: 239) goes a step further, arguing that the Canadian Auto

Workers Union successfully built an identity around class and radical nationalism. Such a

proposition, that ‘identity’ can be developed by a unity of class and nationalism is dubious at

best. The issues that occupied European Marxism in the period immediately preceding World

War I clearly defined two separate responses. Marxists called for a class-based response but

nationalism and an identification with national bourgeoisies remained the dominant

perspective. Working class discontent, in the past decade, has shifted, with less emphasis on

overt anti-globalisation, anti-capitalist rhetoric to more pronounced nationalist expressions of

dissent. Such responses indicate a serious lack of effective leadership and of the nationalist

perspectives that still dominate the thinking of many and which are engendered and promoted

by the state.

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There is also a tendency among some activists and scholars to offer radical propositions but

to ultimately vacillate. Robinson (2004: 178), after building a theory to ‘explain’ the rise of a

transnational ruling class and the end of the nation-state as an organisational unit, concludes

his arguments by calling for a broad ‘democratisation’ of global society. Webster, Lambert

and Bezuidenhout (2008) suggest that there is a ‘necessity’ to engage in utopian thinking.

The central contradictions of capitalism, however, remain.

5.5 What is to be done?

This thesis has argued that historical disputation and dislocation in Marxism have,

unwittingly, assisted capitalism to withstand existential crisis. The underlying truth of this

assumption can be observed in capitalism’s journey through crisis, and to the qualitative

changes that have been wrought in capitalism in the decades of intensified globalisation.

Capitalism remains defined by crisis and, while inequality and social discontent have grown,

no tangible threat to capitalism has emerged.

The contradictions that at once threaten to tear capitalism apart have historically served to

drive it towards globalisation. They include the private nature of production and the social

nature of the process of production, the drive to maximise profit in the face of a tendency for

profit rates to fall, and, what is of particular significance, the drive to globalised capitalist

relations while maintaining and relying on the nation-state as a political mechanism. It is an

economic system marked by crisis. Marxist debates revolve around capitalism’s ability, or

lack of ability, to resolve potential crisis. None of these issues have been resolved. On the

contrary, they have become more acute. The changes that are observable in capitalism – the

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financialisation of capital, the change in the use of productive capital, the integration of

capitalism into a global market – have all failed to resolve these contradictions. Capitalism’s

relationship with the nation-state is its most acute and irresolvable contradiction. Harris

argues that the ‘dialectic of globalisation’, the “conflict between nationalism and

globalization contains the main economic, political and social division in today’s world”

(Harris 2006: 54). The ‘transnational period’ is not complete, and both transnational and

national forms of capitalism co-exist.

This contradiction, between the globalisation of capitalism and the continued importance and

strength of the nation-state, assumes special significance when considered alongside the

structural changes that have occurred in capitalism. The nation-state, as administrator of

capitalism has been required to ‘manage’ a reality marked by intensification, both in

inequality and in social discontent. The geographic construct that is the nation-state has

sought to address these problems. Nationalist symbols and sentiment have been promoted

with the view of building a sense of national unity in the face of growing economic and

political difficulties and dislocations. Such an exercise, as history has shown, is not without

danger.

Much discourse surrounds what is perceived as a ‘return’ to economic nationalism. Economic

nationalism is the antithesis of capitalist globalisation and yet it is growing in direct

proportion to capitalism’s qualitative changes and its globalisation. Pryke defines economic

nationalism as “the attempt to create, bolster and protect national economies in the context of

world markets” (2012: 290). There are clear indications that protectionist measures within

national economies are being actively promoted. The WTO points to a “relapse in G20

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economies’ efforts at containing protectionist pressures. Not only is the stockpile of trade-

restrictive measures continuing to increase, but also more new trade restrictions were

recorded” (WTO 2016: 4). A decade earlier, former Chairman of the US Federal Reserve,

Bernanke (2006) cautioned against such an economic shift and the negative consequences it

might have for the global economy.

Wolf (2004: 37) describes the attempt by capitalist states to reverse the trend toward

globalisation that occurred at the end of the 19th century. He contends that economic

nationalism led to militarism and imperialism. Free trade was stifled, and war was the

ultimate and inevitable result. The motivations behind national states to enter into such a

contradictory position is, in part, a response to economic downturn and also as a means of

accommodating and ameliorating the fears and concerns of domestic populations that are

increasingly facing difficult economic outcomes.

Nationalism has proven to be a most resilient phenomenon and one that has been carefully

and consciously engendered by capitalism. The use of emotive symbolism and the ethos of

nationalism is a deliberate act of social control in order to manipulate consciousness.

Hobsbawm noted that it is “highly relevant to that comparatively recent historical innovation,

the ‘nation’, with its associated phenomena: nationalism, the nation-state, national symbols,

histories and the rest. All these rest on exercises in social engineering” (2004: 13). Greenfeld

describes a structure that is:

inherently egalitarian, nationalism has as one of its central cultural consequences an

open – or class – system of stratification, which allows for social mobility, makes

labor free … and dramatically expands the sphere of operation of market forces …

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 Also, because of … investment in the dignity of the nation – that is, its prestige –

which is necessarily assessed in relation to the status of other nations, nationalism

implies international competition (2009: 23).

Nationalism, and in this context, economic nationalism, pits one nation against another and

by implication one worker against another There are implicit dangers for national economies

and for the working class in such a perspective. Using the case of the post-communist period

in Russia, Szakonyi (2007) describes the potential, in the exercising of economic nationalism,

to create both internal and external ‘enemies’ as a means of building a narrow national unity.

‘Competition’ in this sense becomes a vehicle for domination and subjection. The working

class, within nation-states, is similarly locked into a class-based economic and political

structure that is promoted as ‘mobility’.

The working class, under protectionist conditions, is encouraged to view the working class of

‘competing’ nations as rivals for jobs. This is often combined with appeals to freedom and

the danger of a loss of freedom. Marx (1956: 251) warned against the abstract use of the term

‘freedom’, reminding people that such a term, in a class society, ultimately refers to the

freedom that capital enjoyed in maintaining its position of dominance. The promotion of

nationalist perspectives echoes political and economic debates dating back a century when

free trade and protectionist debates flourished in the lead up to World War I. What is

fundamentally different in this 21 st century version of the debate is that protectionism and

economic nationalism are even less viable options. Capitalist globalisation will continue. To

seek an alternative vision evokes Marx and Engels’ response to utopianism and its call to an

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‘earlier’ political and economic foundation and to turning back clocks (Marx & Engels 1977,

Engels 1966).

While protectionism offers little prospect for benefit to the working class, the alternative call

to free trade has similarly provided few benefits and, in actuality, has promoted inequality.

Marxists have often struggled with these alternative paths. Marx famously declared that he

was a supporter of free trade because it hastened the social revolution. He also argued that

free trade was simply the freedom of capital. “It does not matter how favourable the

conditions under which the exchange of commodities takes place, there will always be a class

which will exploit and a class which will be exploited” (Marx 1956: 250). Marxist theory, as

a guide to emancipation for the working class, cannot therefore privilege one economic

theory, or policy, over another.

Many Marxists regarded the anti-globalisation movement as an appropriate vehicle to

confront capitalism. The anti-globalisation movement that briefly flourished at the time of the

1999 Seattle protests against the WTO drew together an eclectic mix of anarchists,

environmentalists, as well as a range of activists who broadly identified themselves as

Marxist. For some, the protests ‘transcended’ nationalism (Wainwright & Kim 2008). For

others, it was an indication that any contradictions that might divide groups were able to be

overcome and were displaced by anti-globalisation activism (Amin et al 2002: 5). The

optimism on the part of many within the anti-globalisation movement might be regarded as

utopian, as opposition to capitalism remains diffused and fragmented, and issues of relevance

and utility remain problematic.

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A state of confusion as to how best to promote an emancipatory agenda is apparent. As with

the Seattle protests, there was a sense of unanimity in response to, and protest at, the failed

Multilateral Agreement on Investment in the late 1990s. On one hand the ‘left’ seeks to

combat globalisation by promoting nationalism and on the other hand recognise and caution

against the dangers of nationalism. Gamble (2009: 149-150) argues that the ‘left’ had

traditionally encompassed protectionism in its various programs and that in recent years both

right and left have employed protectionist rhetoric. His analysis is correct. It essentially

supports the premise that the consciousness of the working class has been manipulated by the

state. It explains how nationalism has been so easily employed by the state, and especially in

limiting any sense of class consciousness. Nationalism, as a political manifestation to

maintain a sense of unity as an expression of economic response to crisis, has seriously

weakened the capacity for independent organisation of the working class. Capitalism remains

unchallenged.

While economic nationalism is resurgent, the capitalist economy remains globalised and

increasingly integrated. Shah (2011) shows that 1318 transnational corporations account for

60 per cent of global wealth with the most powerful 147 of these corporations controlling 40

per cent of the total global output and wealth. Fifty-one per cent of the biggest ‘economies’ in

the world are individual corporations and 41 per cent of these are based in the US. Capitalism

is globalised, integrated and qualitatively different and yet the power of the nation-state

remains. The renewal of nationalism, politically and economically, has serious implications.

The contradiction between globalised capitalism and a renewed sense of nationalism is

disturbingly apparent in the drift, by major economic powers, toward trade blocs and

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confrontation between ‘competitors’. The proposed construction of the Trans-Pacific

Partnership was a case in point. The bloc while professing to ‘unite’ numbers of regional

economies, would only have served to exacerbate tensions between China and the US (Palit

2014: 97). There are fears that, as the crisis of capitalism intensifies, the threat to global

stability will also intensify. Holmes, in the NATO Review, cites what he calls an ‘adage’ that

“if goods don’t cross frontiers, soldiers will” (2009). He sees a real possibility of a return to

the conditions that dominated thinking in the 1930s. Global trade has fallen and he fears a

return to protectionist policies. He lists a variety of ‘threats’ with China and Russia being

prominent on his list. What remains the most critical of contradictions facing capitalism

remains unresolved and is unable to be resolved. This is so because it is a contradiction of

capitalism and while capitalism remains then so too will the contradictions that plague it.

Herein lies a dilemma for Marxism and for the working class. Capitalism has undergone

qualitative change. It has globalised. It still requires a strong nation-state as political

administrator. Nation-states and residual national capitalism must vie with one another for

dominance. Leadership must develop that will have the capacity to combat and effectively

confront capitalism. It remains the only realistic means of resolving the contradictions of

globalised capitalism and the nation-state.

5.6 Conclusion

Capitalism is a globalising system. The history of capitalist relations has revolved around the

quest by capitalism to resolve what are a set of inherent contradictions. The most profound of

these, in the era of capitalist globalisation, is the contradiction between globalised economic

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processes and national governance. As the crisis in capitalism becomes more intense, so too

does this contradiction intensify.

A qualitative change in capitalist relations has been observed. This does not mean a change in

the ‘nature’ of capitalism or its quest to maintain profitability in the face of a tendency for

profits to fall. The change is evident in the reliance on the financialisation of capitalism as a

means of concentrating wealth and in the globalisation of productive capital away from

nation-based centres, in an increasingly integrated transnational form of capitalism. This

means, among other things that labour, rather than flowing to the centres of production in the

developed states, becomes a globalised working class.

The crisis of capitalism exacerbates the contradiction between globalised capitalism and the

nation-state. This becomes immediately apparent as social inequality and discontent becomes

more evident. This, in turn, is leading to a resurgence of economic nationalism and

protectionist policies. The working class has, through policies that foster a sense of national

unity rather than class unity, become less able to develop a capacity to act as an independent

force. There is a growing sense that globalisation, rather than capitalism, is at the core of the

problems facing the working class. As a consequence, movements against globalisation are

frequently non-class, or supra class movements that have, unconsciously served to further

weaken working class consciousness.

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Chapter 6 Responding to capitalist globalisation

The previous chapter argued that there has been a qualitative change in capitalism. One

expression of this change has been the intensification of globalisation. Dissent and reaction to

the effects of capitalist globalisation have inevitably resulted. Critical responses have been

predominantly aimed toward fostering campaigns against globalisation. This chapter analyses

these actions and the motivations behind them. Globalisation and capitalism are inseparable,

and yet there is often a conscious attempt to decouple globalisation from capitalism. As

Section 6.1 argues that globalisation in itself is not the problem. Rather capitalism was and

remains the underlying ‘enemy’. Globalisation is the inevitable result of capitalism’s

unsuccessful drive to resolve its inherent contradictions, despite some analysts (Colgan and

Keohane 2017) view that populist movements, representing national capitalism, have

‘hijacked globalisation’.

Central to the arguments raised in this chapter is the exploration of the potential foci for anti-

capitalist movements. Section 6.2 describes how the working class and its organisations have

been incorporated, integrated and legitimised within the nation-state. This is a point

frequently overlooked by many Marxists who maintain that the trade unions offer a viable

platform for struggle against capitalism and that globalised capital can be combatted by a

globalised union movement. The central role of the working class in anti-capitalist

movements has, similarly, been down-played by many Marxist theorists. This has been

particularly evident since the 1960s with the rise of identity politics and the development of

new forms of social movement activism. Marxist theory developed from the premise that the

working class is a potentially revolutionary force because of its central wealth-creating role

within capitalism. Marxist theory has shifted emphasis away from the role of the working

class and has turned its attention to the middle class as a force for change.

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Section 6.3 examines the rise of identity politics as a conscious attempt to oppose the

negative aspects of capitalism and of the limitations that are immediately apparent. The

limiting nature of such political manifestations, and the narrow focus that they unwittingly

engender, resulted in attempts to broaden these non-class political expressions of dissent.

Section 6.4 discusses these ‘new’ social movements. They have repeatedly shown a capacity

to mobilise large numbers, but also a tendency toward dissipation and retreat. This, the

chapter argues, is a consequence of a limited program, a lack of clarity in objectives, and an

on-going problem of leadership. An analysis of the strengths and weaknesses of these non-

class and supra-class social movements, is conducted in Section 6.5. I argue that these

movements often engage large numbers of people, but have a tendency to burn brightly, and

also briefly. This is primarily due to the lack of ideological clarity and scope of these

movements. Regardless of any potential success of non-class movements, no threats to the

rule of capitalism have emerged.

Section 6.6 therefore concludes the chapter by focusing on the relevance of Marxism. An

underlying proposition that runs through the thesis is that Marxism remains the most

appropriate vehicle to effect change. Capitalism remains unchallenged, despite the rise of

anti-capitalist movements, social movements and anti-globalisation activism. It is in a unity

of theory and practice, that a renewed Marxism can provide, that such challenge can be

perceived. Marxism’s continued relevance is reasserted and confirmed by its capacity to

project leadership that can and will confront and challenge capitalism.

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6.1 Identifying the real enemy

Capitalism and globalisation have always been synonymous. Changes to capitalism, as

outlined in the previous chapter, have made this tendency towards globalisation more

prominent and has directly led to conditions of heightened inequality. As a consequence,

globalisation has become a source of discontent and disquiet. Globalisation has been

accompanied by accumulation of wealth and an intensification of poverty. For many, activists

and scholars alike, the question is how best to resist globalisation, and how to promote an

anti-globalist or anti-capitalist agenda. For some it is a question of reversing the tendency of

capitalist globalisation: to ‘de-globalise’. For others, it is to present globalisation as a political

issue that can be separated from over-riding economic considerations. What needs to be

remembered is that there is an inseparable unity between economic globalisation and

capitalism. However, globalisation, in itself, is not the cause of the misery that anti-globalists

depict. It is capitalism that is the ultimate source of that misery.

Imperialism dominated Marxist thinking in the late nineteenth and early twentieth centuries.

Imperialist rivalry, capitalism, and its relationship to the nation-state, were all central themes

within Marxist debates at that time. Contemporary issues within international political

economy, regarding capitalist globalisation, the nation-state and the role of the working class,

find a resonance within those century-old debates.

Certain truths remain. Luxemburg’s (1971: 368-370) argument that capital grows by forcibly

developing pre-capitalist economies certainly describes aspects of capitalist globalisation.

Lenin’s (1977e: 726-727) analysis of imperialism, which saw capital becoming more

monopolistic, the rise of finance capital, the increasing importance of the export of capital

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and a division of the world between associations of capitalism also remains relevant.

Bukharin (2003: 130-132) viewed the state as acting in the interests of national capital and

that imperialism is, therefore, an expression of state power within an international context.

Trotsky (1996) asserted that capitalism had outgrown the restrictions of national boundaries

and that imperialism was the proof that this was the case. Later writers, including Berberoglu

(2003: 136) and Parenti (1995: 1), argue that imperialism in the modern era is influenced by

political and economic outcomes that do not ‘necessarily’ involve military power. The

practice of imperialism, as an expression of capitalist expansion, may have altered, according

to historical necessities, and may be seen less as a creative force and more an expression of

exploitation. It is, as Beasley (1989: 251) suggests, by no means a static phenomenon.

There are links that can be traced between the imperialist epoch as described in Marxist

literature, and that which can be observed in capitalist globalisation in the early 21 st century.

O’Brien outlines this connection when he states that imperialism refers to “a process of

capitalist expansion and dominance emanating from the advanced industrial states … it

captures the link to a dynamic capitalist process that involves state and non-state actors”

(2004: 53-54). Halliday (2002) describes five distinct themes that are pertinent to

imperialism and to the development of capitalist globalisation. These include capitalism’s

historical tendency toward expansion, the militaristic nature of capitalist states throughout the

20th century, the rise of global inequality, even as developing states acquire an industrial base,

the growth in importance of institutions of capitalist domination in the form of the IMF and

World Bank among others and finally, the seemingly irresistible rise of the world capitalist

market.

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Among the ‘dynamics’ or rather the dialectic of capitalist globalisation in the contemporary

era is the relationship between the nation-state and a globalising economic reality. Cammack

(2003) proposes a ‘new’ materialist approach relating to globalised capital in the 21 st century.

He considers the implications for an emerging single capitalist system. Individual

governments, he contends, share a collective interest in capital accumulation through an array

of multilateral institutions. At the same time, individual states exhibit a more traditional role

of seeking advantage over other states. Such a proposition highlights the contradiction of the

nation-state evolving into a component of globalised capital, while still maintaining elements

of national capitalism. This, while speaking most directly to the qualitative changes that have

taken place in capitalism, is also reminiscent of the era of imperialist rivalry when capitalism

broke out from the limitations of national boundaries and onto a global stage.

Among critics of capitalist globalisation are those who optimistically write of class conflict,

but who base such perceptions almost exclusively within the confines of the nation-state.

Berberoglu (2009: 47), for instance, sees capital in the US facing an imminent challenge from

the American working class. Such an appraisal imposes a serious limitation with action based

on a national response to an increasingly global question. Sklair (2002: 272-296) represents a

quite different current in theorising an anti-globalisation strategy. ‘Counter Movements’ that

include localising anti-globalisation struggles through protectionist policies, identity politics

and ecological politics are presented as a means of ‘challenging’ globalisation. “Slowly,

labour, environmental and other movements are being drawn into the non-violent fold”

(Sklair 2002: 296). Networks of social change are, in Castells’ (2004: 428) estimation, a

glimpse of a new society in an embryonic form. These views identify some of the difficulties

facing the working class and its relationship, both to the nation-state and to capitalist

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globalisation. Broad, supra-class and non-class theoretical propositions offer what appears to

be an enticing potential for activism and for expressing dissent, but have an equally strong

potential to be diverted.

Sklair (2000: 82-83) focuses on the crisis facing the working class. He acknowledges that a

resolution to that crisis can only come from opposing global capitalism and not simply

globalisation. Sklair’s perceptions of how such a struggle might unfold, based as it is on

social movement politics and an appeal to a broadly defined ‘democratisation’ of global

society, can be criticised from a Marxist perspective, as being utopian (Marx & Engels

1977:64). Many opponents of globalisation, and of capitalism, have pointed to the magnitude

of the global response to the excesses of capitalist globalisation. They argue that the protests

at the WTO meeting in Seattle in 1999, and the creation of the World Social Forum in 2001

are indicators of a global resistance movement that might challenge capitalist globalisation.

Robinson (2004: 168-172) describes the chronology of events, of the rise of this anti-globalist

movement and of a lack of strategy in the opposition movement that led to its failure. The

divergence of ideas and of proposed outcomes from such an amorphous grouping was, and

remains, an unavoidable obstacle. Dicken (2007: 527) is among those who similarly point to

the eclectic array of groups and programs evident in the protests, ranging from anarchists to

socialists, from broadly anti-capitalist activists, to democracy advocates, and green groups.

What united these disparate groupings was their belief that globalisation could be (or

potentially could be), either controlled and countered, or reversed. The tendency toward

spontaneity led to what was almost inevitably a downward trajectory within the anti-

globalisation movement.

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To suggest that globalisation, while undoubtedly linked to the rise in inequality in the world,

can still be regarded as having a progressive component, inevitably invites criticism.

However, such a perspective can be defended. Marx’s construction of an historical materialist

conception of history, as Jellissen & Gottheil (2009) contend, leaves little doubt that

globalisation is an inevitable process. Marx’s description (1975b: 195-201), of the

significance of the introduction of steam and of the railways in relation to the transformations

of India, has often been cited as an indication of an almost globalising ‘mission’ of

capitalism. At the same time Marx was implacably hostile to capitalism, as it represented an

intensely exploitative system. He famously stated that to “prevent any possible

misunderstanding, a word. I paint the capitalist and the landlord in no sense couleur de rose”

(1986a: 20). The vision of a globalised world economy was, in Marx’s estimation, a step

towards an economic and political formation that would replace capitalism. It would only be

replaced by recognising the class nature of society and consciously seeking to advance class

struggle. Marx, subsequent Marxists, and particularly classical Marxists, have sought to

develop that consciousness as an integral element in changing and challenging an ever-

globalising capitalism.

6.2 The working class and opposition to capitalism

Capitalist globalisation, as an expression of changes in capitalism, has direct implications for

the working class. The working class arose in conjunction with the development of national

capitalism. Working class organisation and concepts of emancipation from capitalism were

framed by this reality. The relationship between labour and capital is central to Marxist

theory. This relationship has traditionally been an antagonistic one, affected by irreconcilable

class interests.

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Any analysis of ‘anti-capitalist’ movements, or of potential challenges to capitalism, needs to

consider the working class and its organisations. To defend and strengthen their position,

workers historically organised themselves at the point of production. Economic and political

alliances of the working class were at first rigorously combatted by capital but, over time,

these manifestations of working class consciousness were increasingly incorporated into the

mechanisms and structures of the nation-state. Any analysis of ‘anti-capitalist’ movements, or

of potential challenges to capitalism, needs to consider the working class and its

organisations. To defend and strengthen their position, workers historically organised

themselves at the point of production. Economic and political alliances of the working class

were at first rigorously combatted by capital but, over time, these manifestations of working

class consciousness were increasingly incorporated into the mechanisms and structures of the

nation-state. (see chapter 4 for a description of this process of integration and incorporation).

A consequence of this integration appears to answer Luxemburg’s famous question of

whether the working class movement should adopt a ‘reform or revolution’ approach.

Marxist views of a revolutionary path to emancipation became a minority perspective.

Reformist ideology became dominant, but as the 21st century dawned, neither reform or

revolution appeared on the agenda of the leadership of working class organisations.

The primary organisations of the working class have long been social-democratic political

parties and the trade unions. However, it is the trade unions that are most frequently the

subject of discussion when considering working class responses to capitalist globalisation.

Marxist attitudes to the unions have shifted as the capitalist state has developed. Hyman

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(1975) identifies a range of Marxist interpretations, from the optimistic view of the early

writings of Marx, to the more pessimistic position adopted by Engels’ and Marx’s later work,

as well as those of Lenin and Trotsky. Marx’s earlier work (1956: 150-151) saw a real

potential for unions to play a decisive political role in the overthrow of capitalism. Engels

(1984) also regarded the union movement as a powerful force for change. At the same time

Marx (1986a: 226) warned the working class that it was confronting the effects of oppression

but not the cause, which was capitalism. Lenin (1977c) articulated the view, in his response

to the issue of ‘economism’ in the working class movement, that unions are not and cannot be

a threat to capitalist rule and that the unions had effectively been incorporated into the state.

Trotsky took this analysis a step further when he wrote of “the degeneration of modern trade

union organisations in the entire world … drawing closely to and growing together with the

state power” (1972: 5).

Classical Marxism has recognised this tendency towards a growing accommodation with the

state. Despite this, political activists and theoreticians, often from within the Marxist

tradition, maintain that trade union activity is an effective path toward resistance to

capitalism. Marxist orthodoxy, as presented through the lens of Soviet literature, portrayed

the role of the unions not only as organisations of revolutionary potential, but as active class

conscious organisations. The work of Lozovsky (1976) is illustrative of this tendency. The

unions become, in the thinking of many, a consciously radicalised and oppositional force.

Such an optimistic view is represented in the work of Fairbrother and Yates (2003),

Berberoglu (2003, 2009) and Gordon and Turner (2000). They acknowledge the fundamental

changes to political and economic realities that are being wrought by capitalist globalisation,

but still regard trade unions as the most appropriate vehicle for opposition.

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There is a strongly held view that the working class can best respond to capitalist

globalisation by developing trans-national union organisations. Hyman (2004) and Haworth

(2005) are representative of this perspective. Such views ascribe to working class

organisations an independence that is largely imaginary. Selwyn (2013: 50) introduces a less

optimistic outlook. He regards the integration of labour into the capitalist state as being a

two-fold process. Labour’s role and ‘power’ have been diminished due to the threat and

prospect of the dispersal of production. At the same time, global integration is seen to offer

labour new potential for growth. It is a proposition that echoes Silver (2006), who argues that

capital mobility weakens state sovereignty, while simultaneously promoting the growth of a

global working class. This globalised working class, however, remains confined,

geographically and politically, within the borders of the nation-state.

The capacity of the working class to develop an independent class consciousness is, in

Gramsci’s estimation, limited by the hegemony enjoyed by the ruling class. He described the

actions of the state as “the entire complex of practical and theoretical activities with which

the ruling class not only justifies and maintains its dominance but manages to win the active

consent of those over whom it rules” (Gramsci 1971: 244). Jessop (1982: 146) points out that

in Gramsci’s view the potential unification of the working class is disrupted by its integration

into a range of economic and social relationships. The ability to engage in defensive struggle,

let alone to promote an independent offensive against the capitalist state, has further

diminished since the intensification of capitalist globalisation from the 1970s. Leisink (1999:

19) cites ILO figures from the World Labour Report of 1997-98 to show a general decline in

union membership. Later statistical research from the ILO (2008, 2015 and OECD 2014)

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indicate that this tendency has not abated. A diverse range of opinions are offered as to why

this has occurred. Moody (1988: XVIII-XX) describes how the American union movement

has lost its way and has become increasingly bureaucratic, and undemocratic. Bannerjee &

Goldfield (2007) ascribe the decline in union strength to global neoliberalism. Piazza (2001)

argues that the breaking of the bargaining power of the unions and of the fall in union

density, is linked to the development of globalisation and a general weakening of ‘left’ and

social democratic parties. Strange (1997a: 59-60) maintained that there has been a

transference of management of labour relations and bargaining from state to larger

corporations that have developed within a global framework. She further argued that by the

1990s unions had become effectively powerless in the face of MNC organisational practices.

In a class-based society, opposition is inevitable. Jessop (1990: 224-230) in contrasting the

theoretical positions of Poulantzas and Foucault draws a connection between the existence of

classes, resistance and the significance of power. Against the backdrop of globalised

capitalist relationships, it is perhaps not surprising that scholars have highlighted the concept

of globalised resistance (Castells 2004: 72-74, Robinson 2004: 168-173, Solomon & Rupert

2002: 295-298). Other writers including Moody (1997) and Berberoglu (2009), while

focusing on the globalisation of capital as the primary threat to the working class, still see

resistance coming from a national base and place such resistance alongside a global response.

Resistance is the inevitable outcome of a class-based society and of capitalist state rule.

Leadership, or rather its absence, is a determining factor in the success or failure of that

resistance. Another factor is the end result to which such resistance aspires. For some (Yates

2003: 236-237) it becomes a matter of importance that trade union leaderships should

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respond, not merely to traditional structures and issues, but that they ‘adapt’ to accommodate

a diversity of needs within their unions. It is a view that is echoed by Schenk (2003: 253-

254). Gills & Gray (2012) describe what they regard as an upsurge of revolt in the form of

‘people power’ in the face of the assault of globalisation. Rocamora (2012) enthusiastically

promotes the view that what effectively remain largely spontaneous actions can achieve

lasting results and that uprisings are inevitable because capitalism continues to produce

victims. While a range of perspectives might be evident regarding questions of labour

leadership, it remains clear that with integration into the state, the working class has become

increasingly less well equipped to engage in independent struggle for emancipation. Moore Jr

(1978: 472-475) critically explores perspectives on working class responses to the growth of

capitalism. He describes a tendency toward acquiescence and integration leading to a

reduction in ideological struggle. He is at the same time equally critical of the Marxist

concept of developing class consciousness. Issues surrounding class consciousness are

inextricably linked to leadership and elements of confusion surrounding what is and is not

class consciousness.

Van der Pijl (2002: 142) writes that while every ruling class claims ‘universality’ for itself,

the reality is that social conflict is what marks out all class-based societies. Social conflict,

while an inevitable part of class society, should not, however, be confused with the

development of class consciousness. Koo (2000) notes that a sense of growing union identity,

and even a strengthening of union influence and militancy, does not necessarily indicate class

consciousness. Mann (1973) identifies a hierarchy of class consciousness ranging from

identification with the class, to recognition of capitalism as an antagonistic opponent, to

finally accepting a goal to be attained through struggle. Brooks (1994) writes of difficulties

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arising from a disconnectedness from political life that is a feature of working class

communities and especially in the USA.

Issues of leadership, of capacity, of vision, are all central to the over-riding question, not

merely of resistance to, but also eventual emancipation from capitalist state structures. While

Moore Jr (1978: 474) is able to paraphrase Marx’s critique of industrialisation and the theory

that this brings with it a potential revolutionary consciousness, the scope of the literature

tends to be limited when addressing the questions of leadership and its significance. Lenin’s

(1977c: 113-114) assessment that strike action is but an embryonic form of class

consciousness is worth noting in this context. The problems associated with spontaneity as

opposed to consciously constructed actions remains valid today.

6.3 Identity politics and anti-capitalist mobilisation

Marxism historically placed a particular stress on the centrality of the working class in

effecting economic, political and societal change. This emphasis, however, has become

increasingly muted as the crisis in Marxism has developed. The trajectory of Marxism in the

last eighty years has been away from the overarching importance of the working class and of

class struggle (Lubasz 1984, Laclau & Mouffe 2001). The growth of identity politics

highlights an important aspect of the ideological dilemma faced by Marxism since the 1960s

and the development of New Left politics.

Identity politics came to prominence in the 1970s. This followed the heightened radicalism of

the late 1960s. The ‘left’ and many in the divergent Marxist movement were seeking a route

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to relevance. The ‘revolutionary potential’ of the working class had been disputed and

apparently discredited. New forms of struggle were adopted. The politics of identity seemed

to offer a new hope. Wiadra (2016: 146) describes identity politics as a quest to belong.

Castells similarly remarks that “identity is people’s source of meaning and experience”

(2004: 6). To seek identity, to belong, in the face of an intensely alienating society is

understandable and especially so as capitalist globalisation is presented as destructive of

identity and autonomy. A deepening sense of alienation is observable. Marx in his Economic

and Philosophic Manuscripts of 1844 outlined this process of alienation that is so inherently a

part of capitalist relations:

What constitutes the alienation of labour? First, the fact that labour is external to the

worker, i.e., it does not belong to his essential being … The worker therefore only

feels himself outside his work, and in his work feels outside himself…His labour is

therefore not voluntary, but coerced; it is forced labour. It is therefore not the

satisfaction of a need; it is merely a means for satisfying needs external to it … the

external character of labour for the worker appears in the fact that it is not his own but

someone else’s …it is the loss of self (1969a: 110-111).

The working class under such conditions, is inevitably estranged, not just by capitalist

relations but from capitalist society and from the state itself. The middle class, too, is more

and more affected by this sense of alienation.

Castells (2004: 7-8), in addressing the theory of identity politics, outlines three connected

issues that are associated with ‘identity’. These are ‘legitimising’, ‘resistance’ and ‘project’

identity. It is in the area of resistance identity that the theory assumes special significance.

Resistance identity, in this framework, is generated “by those actors who are in

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positions/conditions devalued/stigmatized by the logic of domination, thus building trenches

of resistance and survival on the basis of principles different from, or opposed to, those

permeating the institutions of society” (Castells 2004: 8). Identity, therefore, is seen to

assume a political character and is portrayed as a means of rallying like-minded individuals,

as well as presenting a means of combatting the ‘institutions’ of society that form the basis of

oppression. Castells also argues (2000) that working class decline can be partially attributed

to the rise of identity politics in the 1960s and 1970s and that the working class can no longer

be regarded as the primary actor that will precipitate change.

The working class was no longer regarded as pivotal to change. Identity politics appeared to

offer itself as a suitable vehicle in seeking to construct a political framework that might

confront broadly defined institutions of ‘oppression’. It marked a shift in focus, described by

Bernstein (2005: 49), as a movement more closely concerned with culture than with

challenging class structures. Kauffman describes the process of identity politics as expressing

“the principle that identity – be it individual or collective – should be central to both the

vision and practice of radical politics … Identity politics also expresses the belief that identity

itself – its elaboration, expression, or affirmation – is and should be a fundamental focus of

political work” (2001: 23). The political identification with culture and identity was

significantly affected by the rise in capitalist globalisation and the perceived dislocations that

accompanied it from an economic, social and political perspective (Moran 2015: 118).

The politics of identity became more influential as the politics of class declined in the

theoretical perceptions of many within Marxism. The 1970s saw a dramatic rise in political

movements based on race, ethnicity, gender and sexuality. Piven (1995) argues that the

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expansion of capitalism and its globalising character has acted to weaken and destroy the

more traditional working class politics of resistance. He contends that globalisation was the

catalyst for the rise of racial, ethnic, religious and gender conflicts and that identity politics is

an inevitable consequence. Piven makes two contradictory claims. Identity politics at once

“makes people susceptible to the appeals of modern nationalism, to the bloody idea of loyalty

to state and flag, which is surely one of the more murderous ideas to beset humankind”

(1995: 105). He simultaneously describes the politics of identity as “a potentially liberating

and even equalizing development, especially among subordinate groups, and the more so in a

political culture already dominated by identity politics” (Piven 1995: 106). In other words,

identity politics is useful when identity politics already exists.

Feminist politics, and particularly the debates around patriarchy, have fuelled the growth in

identity politics. Pateman (1988) argues that patriarchy long pre-dates capitalist oppression,

and that the relationship of sexual domination is a separate oppressive structure to that of

capitalism. Dean (1992: 127) isolates an argument that Pateman employs that has direct

implications for Marxism. Pateman rejects the notion that individuals ‘freely’ engage in

property exchange or, more significantly, in the sale of labour power. This is true to an

extent. There is more coercion than freedom employed. Pateman’s view is that such a

conception is a ‘fiction’ that masks patriarchal domination. A more satisfactory argument is

that with the division of labour, and with the emergence of class-based societies, patriarchal

organisation dominated. Capitalism, as it developed, simply used that which was already the

norm (see Engels 1984 and 1986). Conscious attempts were made to unify Marxist analyses

of patriarchy with feminist critiques (Hartmann 1978). The results have not been a

resounding success. Patriarchy is deeply rooted in society and it is older than capitalism.

Whether it is ‘more fundamentally oppressive than capitalism’ as some maintain is a

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debatable issue. It is capitalism that remains the central issue and problem. Capitalism’s use

of ideology to promote illusions that patriarchy, or race, or ethnicity, are separate issues and

detached from capital itself allow it to maintain divisions among people.

This is equally true in relation to what is an issue of immediate importance – the issue of

environmental destruction and climate change. Naes (1973) advanced the concept of

‘ecophilosophy’ as an expression of ‘deep ecology’. He argued that both exploiter and

exploited are similarly unable to achieve self-realisation and that therefore an ‘anti-class’

posture is required to achieve an ecological egalitarianism (Naes 1973: 96-97). It was a

conception that separated class and people and ultimately failed to challenge capitalism as the

cause of environmental degradation. Weston (1986: 2-3) argues against portraying the people

as being a cause of the problems facing the environment rather than seeing them as victims of

destructive capitalist processes. In other words, capitalism, not the people the guilty parties.

Capitalism has brought the planet to the brink. It is not the people that are driven to return

increasing profits, or who must out-perform rivals, find bigger markets and newer ways of

extracting resources. Challenges to capitalism from such an ‘ecophilosophy’ are unlikely,

despite the claim that “with the decline of socialism, environmentalism becomes the major

vantage point of opposition to business-as-usual” (Hay 2002: 341).

The development of identity politics was at first criticised among Marxists whose

engagement was in the area of political activism. Smith (1994) argues that identity politics

fails to offer a realistic framework for those wishing to transform society. Mandle (no date)

argues that the politics of identity are zero-sum and ultimately the politics of despair with one

‘group’ advantaged at the expense of another. There is a degree of irony in this. Activist

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politics have developed a conscious focus on the politics of identity, despite having initially

decried the ideology. The programs and policy statements of virtually all political parties with

a Marxist orientation (Communist Party of Australia 2016, Socialist Alternative 2007,

Socialist Alliance 2015) all declare that they stand for the replacement of capitalism. These

political statements are reflected in the majority of parties proclaiming alignment to Marxism

around the world. At the same time, these parties strongly advocate for gender, sexual

orientation, racial and ethnic policies. While not seeking to diminish such advocacy, the

question as to how capitalism is challenged by waging campaigns around what are essentially

non-class issues remains unanswered.

Non-class political movements, in the form of identity politics, have built strong

constituencies. They have achieved concessions from state institutions, while not eroding

state power or capitalism. A consequence of the shift to identity politics has been the

realisation that identity, as a political focus, can and does limit the potential to present any

real challenge to the underlying conditions. It is intensely difficult for activists to conform to

the boundaries that identity politics appear to erect. Struggles are often arranged around

issues of colour, of ethnicity, of religion, of sexuality. Some of these have an immediate

sense of connectivity. Others do not. There are times when the separation and then integration

of differing identity foci verges on the absurd. Ignatow, for instance, describes the work of

the African-American Environmentalist Association (AAEA) whose goals are “to increase

African-American participation in the environmental movement, promote an African-

American point of view in American environmental policy …” (2007: 1). The way some

single-issue, identity movements are inescapably interconnected with other movements has

led to moves to link movements and to discover what unites movements.

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This realisation gave birth to the concept of intersectionality in radical political movements.

The concept of intersectionality is often attributed to Crenshaw. She argues that “the problem

with identity politics is not that it fails to transcend differences … but rather the opposite –

that it frequently conflates or ignores intragroup differences” (1991: 1242). She uses the

issues of race and gender as a case in point and seeks to broaden the argument to become

potentially more inclusive of differences in primary focus. While this theory does take

account of the limiting nature of identity politics it remains locked into a non-class approach

to understanding inequality. However, regardless of the web of interwoven identities, a

problem remains. Marx described the advent of a distribution of labour and the class nature of

society, whereby each person “has a particular, exclusive sphere of activity, which is forced

upon him and from which he cannot escape” (1964: 44). Marx wrote of the limiting nature of

workers being identified by trade or the ‘type’ of work undertaken. Identification within a

much greater group offers a greater capacity to effect change. In this case class identification

becomes immensely stronger than that of individual trades. A narrow political alignment

based on personal identification, like a designated role in the production process, limits the

potential for change and emancipation. The idea of intersectionality certainly goes some way

toward recognising this fact. At the same time, it is still a limited response to what are

broader issues of exploitation that stem, ultimately, from capitalism itself.

Political responses to capitalism, globalisation and the alienation that this generates are

inescapable. The position of the working class as a force for fundamental change has been

relegated, in the thinking of many, to a position of relative insignificance. Prominent Marxist

thinking, in the period from the 1960s, has turned more toward the role that social movement

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politics can play in the development of a broad anti-capitalist movement. Broad, non-class

and supra-class movements have mobilised huge numbers of people and have united diverse

sections of the population. For many, social movement politics offers a vehicle to

successfully confront capitalism. For others, the very supra-class nature and limitations of

program, inherent in such movements, become clearly defined.

6.4 Social movement politics and anti-capitalist mobilisation

As an extension of identity-based politics, social movement activism consciously seeks to

broaden the scope for resistance. While social movement politics have flourished in the

period of capitalist globalisation, they have a long and sometimes contentious history. Well

over a century ago, Small described social movement activism and activists as “a confusion

of fussy, fidgety folk, blocking each other and everybody else” (1897: 340). It was an

intentionally benign criticism. The general thrust of his argument was supportive. “The task

which society today imposes upon its members is direct and conscious effort so to organize

personal relations that the masses … may together realize their common humanity” (1897:

353-354). Social movement activism also seeks to build a sense of collective identity that is

perceived to be broader than class identity. Traditional expressions of these processes, based

as they were on class as a defining element, are described as ‘old’ social movements, which

most usually take the form of trade union activism. The ‘new’ forms have tended to move

away from any overt identification with the working class.

Social movement politics have, for many, replaced the centrality of the working class as a

force for change. “In a sense collective identity replaced class consciousness as the factor

that accounts for mobilization and individual attachments to new social movements” (Hunt &

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Benford 2007: 437). The capacity for social movements to mobilise large numbers is evident.

The civil rights movement in the US in the 1960s, the anti-Vietnam, anti-nuclear,

environment, the ‘occupy’, anti-globalisation and anti-capitalist movements, are all testimony

to the success that these broad movements have in building a constituency. Sustaining

constituencies becomes far more difficult. These movements often share things in common.

They are inevitably political, in the sense that they make demands upon the state (Rootes

1997: 71), and make conscious efforts at effecting social change (Giugni (1999: xxi). The

efficacy of these movements becomes an issue that is contested:

In their aim of changing the status quo, social movements face a fundamental

dilemma. If they ask for short-term policy changes, they have a greater chance that

such changes will occur, but they will not alter, in a fundamental way, existing

structures and practices. If instead, movements demand long-term institutional

changes, they will encounter more difficulties in realizing such changes … Social

movements rarely alter political institutions and only under very restricted conditions”

(Guigni 1999: xxiv).

Fundamental questions of political theory emerge. They are the questions that Marxists

debated a century ago. They are the questions of reformist or revolutionary paths to

emancipation.

Social movement theory refers both to reforming and revolutionary movements. Goodwin

and Jasper (2009: 4) differentiate between the two forms. They define a ‘revolutionary’

movement as a social movement that actively seeks to overthrow the state, while a broader

social movement, deemed to be a reforming instrument, “is a collective, organised, sustained,

and non-institutional challenge to authorities, powerholders, or cultural beliefs and practices”

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(2009: 4). There is a broadly accepted view that the purpose of social movements, and the

political agendas they pursue, are aimed at moving society and institutions within that society

to a less oppressive position. There is a distinct echo in such an ideological construct to

debates of more than a century ago between Marxist and social-democratic theorists.

Social movements are “natural self-evident successors of the labour movement” (Olofsson

1988: 16). Such a perspective has won wide support and particularly since the 1960s and

1970s and the rise of New Left and identity politics. Olofsson argues that the labour

movement, as a representation of ‘old’ class-based politics, is a symbol of social movements

whose time has passed. It is a logic that is very much in keeping with the move away from

class as a defining point in the social and economic relations of capitalism. Social movements

have become, as a consequence, non-class or supra-class organisations. This can be a strength

but is also a limiting factor. Diani describes these movements as “networks of informal

interactions between a plurality of individuals, groups and/or organizations, engaged in

political or cultural conflicts, on the basis of shared collective identities” (1992: 1).

Proponents of new social movement activism describe them as replacing older social

movement forms. Within this lies an inherent assumption that there has been a greater degree

of success with the new as opposed to the older ‘obsolete’ movements. It also presupposes a

fundamental difference in approach that is not always apparent.

The labour movement activism that the ‘new’ social movement advocates describe and

critique suffered from a process of integration into the capitalist state structure. Wheelwright

(1953) traced the trajectory of the trade union movement and of state responses to union

activism. He noted three phases in the relationship between the unions and the capitalist

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state. The first is one of hostility and attempts at suppression on the part of the state. The

second is a position of tolerance but sees the state offering little cooperation to the unions.

The third phase is one whereby the unions enter into a period of cooperation and partnership

with the capitalist state. This incorporation was noted by Trotsky who described the situation

in Europe in the 1920s whereby there “is a powerful international organisation of the trade

union bureaucracy. It is thanks to it that the whole structure of capitalism stands upright”

(1974: 247-248). Macionis (2007) in discussing newer forms of social movement activism

outlines four stages that constitute the ‘life-cycle’ of a social movement. These are success,

co-optation, repression, or establishment within the mainstream of society. There are striking

similarities between his description and that of Wheelwright. That there are clear points of

connection between ‘old’ and ‘new’ social movements indicate that problems associated with

program and intent remain unresolved. It raises significant questions as to the perceived

purpose of the ‘movement’. Bernstein’s (1975: 202) controversial claim that the eventual

destination (socialism) is of less importance than the ‘movement’ is once more played out.

Capitalist globalisation and the rise of social movement politics have evolved together. These

protests have been both national and international in scope. Some have adopted an ‘anti-

capitalist’ perspective. Others have focussed on war, poverty, or environmental issues.

Organisers have successfully been able to draw millions of people into protest and political

action. The World Social Forum and the ‘Occupy’ movement, among others, highlighted the

discontent that many people were and are feeling. These often supra-class or non-class

actions have assumed a growing significance as the globalisation of capitalism has

progressed. These movements are a reaction against globalisation (Giugni, McAdam & Tilly

1999, Castells 2004). Political responses, either at a state level or between actors at the sub-

state level, frequently share a view that economic actions and outcomes can be separated

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from the globalisation of capitalism – that capitalism and globalisation can be regarded as

separate entities. Anti-globalisation becomes, for some, a euphemism for ‘deglobalisation’.

This has become more apparent since the anti-World Trade Organisation protests in Seattle in

1999 (Smith 2001: 1-20, Ayres 2001: 55-68). Bello (2004) promotes the idea that

globalisation can be reversed and that the nation-state is the vehicle through which such a

reversal can be effected. Evans (2008) argues for a movement that will effectively

democratise and shift the hegemonic structure of globalisation. Sklair (2002: 273-277)

identifies a range of challenges to globalisation including protectionism, social movements

and the green movement. The result is a conscious promotion of nationalism in the face of

capitalist globalisation.

Sutcliffe (2002) identifies a problem that goes to the heart of the anti-globalisation, anti-

capitalist movement. Many critics of globalisation can see no way forward and therefore the

only path appears to be backwards, often to nationalist political forms:

If history is a straight line and we do not like the road ahead there is nowhere to go

but back … If the problem is identified as capitalism and not globalization and if

capitalism is global, then that suggests that anti-capitalism is the solution and that

anti-capitalism must also make itself global, producing counter proposals not to

globalization as such but to global capitalism and capitalist globalization (2002: 56).

The term anti-capitalist has a range of interpretations and has the potential to confuse and

diffuse ideas and arguments. For some, anti-capitalism can denote a movement that seeks to

transform society along socialist lines. For others, it might be a movement based upon

ecological principles that may, in turn, look to a pre-capitalist means of production. While

Sutcliffe’s broad interpretation of the term would indicate a forward movement beyond

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capitalism, the prospects for confusion remain. Harvey (2010b), for instance, outlines a range

of potential lines along which anti-capitalist movements might run, including anarchist and

autonomous movements, traditional labour/socialist political expressions, social movement

politics effectively promoting local issues, and identity politics including those of gender,

sexuality, ethnicity and race. Ultimately the issue of social movement politics, whether ‘old’

or ‘new’ becomes a question of purpose, of motive, of determining what result is either

desired or required.

The purpose and utility of social movement politics is fundamentally connected to the

relevance of Marxism in an era of capitalist crisis. It is a question of determining the most

appropriate way forward. This has been the central issue surrounding Marxist debates for a

century. Marxists argued as to the various merits of reform or revolution. The issues

surrounding identity politics and the broader social movements echo those debates. This is

not to suggest that social movement activists have not had spectacular successes in

mobilising millions of people. These mobilisations have cut across class lines and have drawn

attention to the inequalities inherent in capitalist globalisation. It is in analysing the relative

strengths and weaknesses of these movements, that the relevance of Marxism as an

organisational model can be tested.

6.5 Strengths, weaknesses and the tendency toward dissipation

The globalisation of capitalism has evoked a growing number of critical responses. The anti-

capitalist, anti-globalisation aspects of these responses are most obviously seen in the

development of social movement politics. Some within the Marxist movement have sought to

draw these movements into a broadly defined ideological perspective. Ultimately, however,

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the movements that oppose capitalist globalisation must ultimately contend with the issue that

Marxist and non-Marxist theoreticians have struggled with for more than a century. The point

of difference is whether a reforming or revolutionary practice provides the best course of

action. Social movements have been described as ‘old’ or ‘new’ and these differentiations

revolve around the issue of the working class and its role in effecting social change.

The primary ideology surrounding working class action in the face of capitalist globalisation

revolves around the trade unions. The unions remain the most obvious and elementary

organisations of the working class. There is a problem in such an interpretation. It largely

ignores the integration of working class organisations into the structure of the state. While

proposing a globalised union response to globalised capitalism, there is a tendency to rely on

national institutions and structures which fails to adequately present a challenge, either to

globalised capitalism or to individual capitalist nation-states.

Bieler, Lindberg and Pillay (2008: 264-269) isolate two challenges for contemporary labour

movements. The first of these is the globalised nature of capitalism and the tendency for

workers, based within national borders to become ‘competitors’ against workers elsewhere,

while the second relates to a growing global army of unemployed and an intensifying of the

informal or casual workforce in all countries. They acknowledge that union attempts to

minimise attacks on wages and conditions that stem from international ‘competitiveness’ is

less likely to succeed within a nationalist framework and similarly it is all but impossible to

act against the trend to an informal global workforce. Unions, in their analysis, act in a

defensive capacity at best. Bieler, Lindberg and Pillay (2008: 276) maintain that there needs

to be a greater degree of global solidarity between unions and the working class. They

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describe a need to build transnational links between the trade unions, to organise on behalf of

the ‘informal’ sector and to forge links between the unions and other social movements.

The proposition of building global links and uniting union struggles with social movement

politics has been widely supported. Wills (2004: 87) calls for unions at all levels to foster

democratic social movements. The call for social movement unionism is similarly proposed

by Haworth (2005: 195) who urges unions to move beyond the ‘economism’ of traditional

union activity. Such calls for unions to broaden their scope as a means of incorporating social

movement issues need to be considered in the context of a crisis of ‘relevance’ or at the least

in membership. Union density across OECD countries has been decreasing for decades. It has

been widely acknowledged that the unions have been successfully co-opted into the state. It is

unrealistic, in such a context, to suppose that the union movement is in any position to offer a

challenge to capitalist globalisation. The call for labour movements to actively engage in the

non-class and supra-class social movements would undoubtedly strengthen those social

movements, but it is unlikely that capitalism, or globalisation, would in any way be

threatened.

For the unions to accommodate the agenda of social movements is to take a further step away

from class identification. Moody (1989: 249-250) makes a point of difference between a

‘black’ and ‘white’ American working class. While he accepts that black and white workers

have class in common, the very point of referring to a separation between members of the

working class is a problem for Marxists. Moody argues that “in addition to the massive gap

between black and white, the working class in the United States is criss-crossed by social,

racial, national and sexual differences reflecting the distinct forms of oppression that affect

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these groups beyond the shared experience of working-class life” (1988: 271).

Accommodation to social movement ideology tends, in such analyses, to focus on specific

aspects of oppression, rather than acknowledging that capitalism is the common denominator

in an alienating society. What needs to be remembered is that capitalism is a class-based

system. Oppression is ultimately rooted in the class nature of society. To separate black from

white, or men from women, is to ignore this fact.

Capitalist globalisation from the 1970s has resulted in the retreat of the working class and its

allies. Struggles have been waged, but a feature of these struggles has been a lack of focus

and leadership. The amorphous nature of the anti-globalisation movement appeared to be a

strength, but both the anti-WTO campaign in Seattle in 1999 and the ‘Occupy’ movement of

2011 predictably ended in dissipation. The Seattle protests garnered widespread support. A

brief unity existed between human rights activists, students, environmentalists, unions,

anarchists, Marxists and protectionists. They agreed on what they did not want but little else.

Waterman (2001: viii-x) argues that Seattle was the formation of a movement that crossed

ideological boundaries. The fact remains that despite the capacity to mobilise large numbers

of people from a wide range of backgrounds, the protests were short-lived and had little

lasting impact.

The capacity for social movements to quickly grow and to quickly dissipate was abundantly

clear in the ‘Occupy Wall Street’ movement. Its ‘Declaration and Manifesto’ identifies a

broad range of issues including housing, health, race and sexual oppression, environmental,

animal rights, the rights of workers, legal, press freedom and militarisation. The declaration

then issues the following appeal:

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 To the people of the world,

We, the New York City General Assembly occupying Wall Street in Liberty Square,

urge you to assert your power.

Exercise your right to peaceably assemble; occupy public space; create a process to

address the problems we face, and generate solutions accessible to everyone.

To all communities that take action and form groups in the spirit of direct democracy,

we offer support, documentation, and all of the resources at our disposal.

Join us and make your voices heard! (Declaration 2011)

This was an appeal to protest and to mobilise but failed to advance a program beyond

mobilisation. Roberts reviews a range of literature relating to the Occupy movement. He

concludes that the authors were energised “by the spirit of the moment. Unfortunately, they

are also blinded by it. The prevailing theme of these books is that OWS has fundamentally

changed American politics. A more sober assessment is that OWS has exposed the limitations

on popular protest against the failures of the neoliberal project” (2012: 754).

The life cycle of social movement failure has already been discussed (Robinson 2004, Giugni

1999 and Macionis 2007). The successes of social movement politics in mobilising large

numbers are countered by disappointment when the status quo has not been seriously

challenged. An emphasis on finding ways to combat globalisation has also drawn social

movement activists, including Marxists, into campaigns that either seek to reject globalisation

or to ‘de-globalise’ (Scholte 2005). If the purpose of a social movement is to change the

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existing political or economic reality, but lacks clarity and program beyond that of mere

protest, then it has a very real potential to dissipate and to drift. Bernstein’s (1975) argument

that the movement is everything returns as an echo. It is a continuation of the disputation

between Marxist and non-Marxist theories of reform or revolution.

What does anti-globalisation mean and how does it equate with any move towards

emancipation? The campaigns against globalisation have frequently evolved into campaigns

that give tacit support for a resurgent nationalism. The US Presidential campaign of 2016

moved this a step further. Left and right populism, as expressions of nationalist responses to

globalisation, dominated the early stages of the campaign, as Sanders and Trump vied with

each other to promote economic nationalist ‘solutions’ to the crisis that American workers

were experiencing. By the time the election campaign concluded, Trump was able to harness

working class discontent and manoeuvre the hostility of the working class to serve his

particular agenda.

Bello argues that deglobalisation “is not about withdrawing from the international economy.

It is about reorienting economies from the emphasis on production for export to production

for the local market” (2004: 113). This is a direct appeal to economic nationalism. Populist

politics, and in Bello’s case left populist politics, argues for a position that seeks to promote

‘progressive’ ideology, opposition to the ‘elites’ and which acts as a voice for the ‘people’.

Muddle characterises populist political ideology as “a thin-centred ideology that considers

society to be ultimately separated into two homogenous and antagonistic groups, ‘the pure

people’ and the ‘corrupt elite’ and which argues that politics should be an expression of the

volonte generale (general will) of the people” (2007: 23). Muddle’s definition fits equally

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with either left or right populist politics and it is in such a characterisation that ultimate

weaknesses in the logic of populism appear. It almost inevitably offers immediate national

responses to what are effectively global problems. In focusing on an often amorphous elite,

broader understandings of class and internationalism become blurred. The issue of leadership

again reasserts itself. Organised manifestations of discontent all too quickly dissipate. ‘Left’

and ‘right’ expressions of disaffection frequently appear to merge. The ‘enemy’ can be

foreign workers, economic competition from other nations, or an ill-defined globalisation.

Herein lies a dilemma for those seeking to combat globalisation while not firmly integrating

globalisation and capitalism. Capitalism, by default, remains unchallenged and effectively

embraced by left and right populists alike.

6.6 Capital remains unchallenged

The shift in Marxist theory, from its focus on the centrality of the working class, to broader,

non-class approaches, has seriously limited the potential to oppose capitalist rule. This is

shown in a diffused Marxist organisational response to capitalist crisis and, particularly since

the 1960s, in social movement theories that do not present an effective challenge to capitalist

rule. The attitude of Marxism to social movement politics has often been ambivalent,

although Marxists traditionally sought to provide an understanding of the role of capitalism

and class. This has been less evident in recent decades. Flacks observes that “one of Marx’s

central analytic strategies . . . is missing from contemporary theories [of social movements] –

namely, his effort to embed power relations in an analysis of the political economy as a

whole” (2004: 138). This shift is due to a lack of theoretical clarity that emerged from the

crisis in Marxism and from capitalism’s ideological ability to obscure and cloud what would

otherwise have the potential to invigorate a class-conscious appraisal of issues.

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The ability to persuade people that legitimacy rests within a class-based society is

enormously enduring. The concept of ‘false consciousness’ or ‘social hegemony’ have

previously been discussed, but Piven & Cloward’s analysis of social movements further

attests to the validity of this theory. They argue that power is:

rooted in the control of coercive force and in control of the means of production.

However, in capitalist societies this reality is not legitimated by rendering the

powerful divine, but by obscuring their existence . . . [through] electoral-

representative institutions [that] proclaim the franchise, not force and wealth, as the

basis for the accumulation of power (1977: 2).

Any attempt to seriously challenge capitalism and to fundamentally alter the economic

structures of society must confront this reality. Hetland & Goodwin (2013: 86) acknowledge

that recent studies of social movement politics effectively ignore the power of capitalism in

this regard. This artificial legitimisation creates the optimum conditions to render movements

that seek to oppose capitalism and globalisation, powerless. This is despite the often large

numbers of people that are drawn into political action.

There is an inability to successfully channel discontent. Bonefeld (2006) questions the

capacity of anti-capitalist, anti-globalisation movements if they do not espouse a socialist

alternative as a means to emancipation. Responses are frequently conflicting. Harvey states

that:

there is no resolute and sufficiently unified anti-capitalist movement that can

adequately challenge the reproduction of the capitalist class and the perpetuation of its

power on the world stage … but just because there is no political force capable of

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 articulating let alone mounting such a program, this is no reason to hold back on

outlining alternatives” (2010b: 250).

Harvey (2010) argues for a ‘co-revolutionary’ theory to build opposition to capitalism.

However, he concludes his appeal by effectively disregarding Marxist organisational ‘party’

structures. Instead he remarks that whereas “traditional institutionalized communism is as

good as dead and buried, there are … millions of de facto communists active among us,

willing to act upon their understandings, ready to creatively pursue anti-capitalist

imperatives” (2010b: 260). These ‘understandings’ may vary dramatically. What is clearly

lacking, but what is required, is a leadership that can develop and unite disparate forces and

ideas into a movement that can effectively challenge globalised capitalism.

Without such a leadership, the actions of the many who are drawn into activity are,

ultimately, in vain. Capitalism and its structures remain intact. Capitalism and the state can

accommodate such actions and even portray them as indications of the ‘health’ of society.

Trotsky (1965: 17) used the analogy of energy being dissipated like steam not enclosed in a

piston box. However, while there might be an objective necessity to confront capitalism in

the cause of emancipation, capitalist ideology and a weakness in Marxist theory combine to

obscure that perception. This is by no means a new phenomenon. Marx, over 160 years ago,

wrote in his Address of the Central Committee to the Communist League that “the democratic

petty bourgeois, far from wanting to transform the whole society in the interests of the

revolutionary proletarians, only aspire to a change in social conditions which will make the

existing society as tolerable and comfortable for themselves as possible” (cited in D’Amato

2006: 104).

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Herein lies a problem for Marxism in the 21 st century. The role of the working class, once

regarded as pivotal to anti-capitalist ideological and organisational movements has, over

time, been relegated and diminished. Anti-capitalist and anti-globalist movements have

increasingly assumed a non-class and supra-class emphasis. The ‘middle class’ nature of

many of these movements, while briefly mobilising large numbers, has not developed into a

movement that would confront and challenge capitalist rule.

The 1960s saw the rise of a more overtly radicalised middle class. This fuelled the ideological

shift by many within the Marxist movement away from the working class. The focus and

motivations underlying expressions of middle class radicalism were highlighted by Parkin

(1968) when he drew a distinction between working class and middle class radicalism. The

middle class variant, in his estimation, was geared less to questions of economic reforms, and

more to social reforms which he described as being ‘moral’ in nature. Such a characterisation

of middle class radicalism from Parkin’s perspective in the late 1960s, closely mirrors those

of Marx from the 1840s. Parkin was essentially paraphrasing Marx and Engels’ comments

regarding ‘German or true socialism’ that they represented “not true requirements, but the

requirements of Truth; not the interests of the proletariat, but the interests of Human Nature,

of Man in general, who belongs to no class, has no reality, who exists in the misty realm of

philosophical fantasy” (Marx & Engels 1977: 65-66). This raises important questions.

Marxism makes the claim that the working class is a potentially revolutionary force. How can

this claim be justified in the face of a weakening of working class strength and

consciousness?

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Marxism has long argued that the working class is a revolutionary class, or at least a class

with revolutionary potential. Such attribution separates it from other classes and groups in

society. The claim is based primarily on the premise that the source of all wealth, all profit in

capitalist relations, is derived from labour, from the surplus value produced by labour.

Lebowitz proposes the argument that the working class becomes a ‘revolutionary subject’

precisely from the struggles that it is forced to undergo:

and, those struggles bring us up against capital. Why? Because capital is the barrier

that stands between us and our own development. And it is so because capital has

captured the fruits of all civilization, is the owner of all the products of the social

brain and the social hand, and it turns our products and the products of workers before

us against us—for one sole purpose, which is its own gain, profit. If we are to satisfy

our needs, if we are to be able to develop our potential, we must struggle against

capital and, in doing so, we working people create ourselves as revolutionary subjects

(2012a: 35).

While this is undeniably the case, the growth of middle class radicalism since the 1960s

remains a fact, and a fact that must be taken into consideration. Wright is among a number of

theorists who recognise that to arbitrarily separate the middle class from the working class is

an error. “Workers cannot be defined simply as wage-labourers, but as wage-labourers who

also do not control the labour of others within production and do not control the use of their

own labour within the labour-process” (Wright 1979: 73-74). As the crisis in capitalism

intensifies, so too does the middle class become threatened. Collado (2010: 1), in describing

the ‘shrinking’ of the middle class, argues that it is a result of financial rather than social or

political circumstances that is leading to this threat.

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How relevant is Marxism in the age of capitalist crisis? Therborn (2012) speaks of the 20 th

century as the century of the working class while the 21 st century represents a shift to the

middle class. It is a construction that is broadly accepted by many theorists and many from

within Marxism. Therborn accepts that capitalist exploitation and oppression continue and

asks who will put their stamp upon the new century and the struggles against capitalism – the

‘new’ middle class or those he describes as the ‘plebeian’ masses. Having declared the

century of the working class to be over, Therborn ultimately offers a defeatist and

demoralised perspective. Marxism, cannot simply ignore this or that section of the

population, but nor can it be permitted to equivocate. The class nature of society has not

changed. The potential and capacity of a globalised working class remains strong. The middle

class has increasingly been brought into direct confrontation with capitalism. D’Amato

(2006: 100) generalises the different perspectives by stating that the world view of the

working class is broadly collectivist while that of the middle class is individualist. These

perspectives differ, but they do not preclude a radicalised middle class from playing a

significant role, alongside a class-conscious working class. This is possibly an optimistic

assessment given the lack of class consciousness that exists within the working class today

and the obvious lack of leadership that entrenches capitalist rule while it remains riven by

crisis. Marxism remains the only viable structure to achieve that optimistic outcome.

6.7 Conclusion

The chapter analysed responses to capitalist globalisation. In doing so it identified some of

the differences in perspective that exist in what is broadly defined as the ‘anti-capitalist’

movement. These differences are all apparent in contemporary Marxism. Questions of the

interconnectedness of capitalism and globalisation, of the utility of class as a focal point in

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determining social, economic and political issues, and of the role of the working class in anti-

capitalist, emancipatory politics were posed and different perspectives analysed.

Anti-globalisation movements have frequently sought to decouple globalisation from

capitalism. This has tended to obscure the essential component of capitalist development –

the need for capitalism to expand. To struggle against globalisation can all too easily result in

a step back to a nationalist perspective.

The chapter also discussed the implications of removing class relations from the centre of

theoretical or practical organisation. The significance of the rise of non-class social

movement and identity politics and the strengths and weaknesses of such approaches to

emancipatory politics cannot be underestimated. Future attempts by Marxism to provide a

cogent leadership that will confront and challenge capitalism must take these movements into

consideration. This, however, needs to be balanced with an understanding that the role of the

working class as the source of capitalist profit remains pivotal due to its labour and extracted

surplus value.

Capitalism remains unchallenged. Marxism remains divided. Marxism, however, is the most

appropriate vehicle to offer the required leadership to challenge capitalism. Marxism’s

relevance is not the issue, but it first must overcome the theoretical and practical problems

that have plagued it for decades. The final chapter provides solutions to these problems.

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Chapter 7 The promise of Marxism

This chapter returns to the issue of Marxism’s role in an era of capitalist crisis. The chapter

offers an optimistic perspective for the future of Marxism in the 21 st century. Economic

issues drive political responses and the class nature of capitalist economic structures remain

pivotal. Crisis remains elemental to capitalist development. Interpreting the development of

capitalism and its changes is central to the thesis as a whole.

Section 7.1, therefore, focuses on whether Marxism can address the problems that are posed

by 21st century capitalism. Marxist responses to capitalism need to reflect the qualitative

changes that are apparent, but the additional problem of multiple ‘Marxisms’ needs to be

resolved. This problem is reflected in the decades-long debates of ‘reform or revolution’, as

well as the role of the working class. These issues are further developed in Section 7.2 where

the rich empirical analysis of Picketty reinforce the core values inherent in Marxism. Despite

the depth of his analysis on the correlation between capitalist development and the growth of

social inequality, Picketty is unable to move beyond a position of making capitalism ‘fairer’,

more ‘democratic’ and regulated.

Section 7.3, addresses the ‘crisis’ in Marxism, and whether a resolution is either possible or

desirable. Polemic and debate allow for theory and ideas to grow, but it has come at the cost

of the ‘practice’ of Marxism. Marxism’s relevance is inescapably connected to the success or

failure of the development of a political movement of the working class. The most significant

and fundamental question is what form of political expression this will be.

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Section 7.4, therefore, attends to the issue of the working class as a ‘revolutionary subject’.

There is a broad consensus among the variants of Marxism that a new society is required and

that the world needs to change. There is, at the same time, a reticence in offering a view of

how change might be effected. This is understandably connected to a sense of fear of failure

that exists in the ‘shadow’ of Stalinism. Questions of spontaneity and leadership are

discussed, as is the potential to harness the spontaneous events of protest into more overt

class-conscious activity.

Section 7.5 re-examines the conflicting positions of class and identity as springboards for

action. The chapter argues that class analysis and the role of the working class must remain

the essential priority of Marxist theory. At the same time, identity and social movement

politics have mobilised large numbers of people into an often amorphous ‘anti-capitalist’

sentiment. A form of principled unity might be developed that acknowledges the potential for

identity politics to become more directly connected to deeper issues of class as a means of

confronting capitalism. Capitalism, the chapter insists, survives and reproduces itself via the

class nature of the system – by the use of labour, and by convincing the working class that it

needs capitalism to survive.

The final section of this chapter addresses the question of Marxism’s purpose and future. In

responding to this question the section encapsulates the central arguments that run through

the thesis – of Marxism’s relevance in an age of capitalist crisis and of Marxism’s central

purpose. Marxism has proven to be a valuable analytical tool and has the capacity to trace the

trajectory of capitalism. This, however, is not enough. Marxism’s ultimate purpose is to

combat and challenge capitalism, with a view to fundamentally changing the world.

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7.1 Marxism and 21st century capitalism

Marxism has historically sought to respond to changes in capitalism. This has led to

disputation and dislocation within Marxist theory and practice. Marxist theorists have shown

an enduring capacity to analyse developments within capitalism, but this has often been at the

expense of what remains the core function of Marxism; an organisational and leadership role

that can effectively challenge capitalism. This is not to belittle the rich analytical and

intellectual history of Marxism. From the Stalinisation of the Russian Revolution and the

limitations this imposed on the development of Marxist thought, to the subsequent crisis in

Marxism, there has been an on-going movement to develop a Marxist ideology that would

remain relevant. The various schools of Marxist thought have responded to capitalist

development. They have acknowledged the ideological questions that 21st century capitalism

poses and have sought to analyse and answer those questions. What has remained uncertain is

Marxism’s current capacity to respond and to finally resolve these questions, and in so doing,

challenge the continuation of capitalist rule.

There have been dramatic changes in capitalism. These are particularly evident in the

financialisation of capitalism, changes in the productive use of capital, and in increased

capitalist integration. This demands a conscious and constant re-appraisal of Marxist theory

and practice. These changes in capitalism are said to indicate that “we are living in a Marxist

moment” (Laffey & Dean 2002: 90). Such a statement leads to a question of enormous

significance. Which Marxism? Wallerstein (1986) famously refers to a ‘thousand Marxisms’.

Laffey and Dean (2002: 92) describe the difficulty, in the face of a multiplicity of Marxisms,

of making choices between them. Can the claim that Marxism can address the questions that

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21st century capitalism raises be credible if it is first necessary to ‘choose’ between

Marxisms?

This dilemma of choice needs to be addressed. A suitable starting position is to regard the

problem from the perspective of Marx and the Marxist method of analysis. Marx (1974)

proposed that what was of singular importance was to make observations that move from the

simple to the complex – from labour, value, exchange and ultimately leading to globalised

capitalist relations and the world market. It was the inter-relationship of all component parts

that was paramount. What can be observed in much contemporary Marxist theory is an

unwillingness to acknowledge those simple truths. Issues of class, exploitation, and

economics as the engine of political movement, are often downplayed. In particular, the

significance and role of the working class is given little relevance. Capitalism and its

development is predicated on the appropriation of surplus value. Capitalist society is based on

the notion of an economic base, upon which rests a political and social superstructure. The

state, as facilitator of the dominant economic ideology, is rooted in class and class divisions.

These are issues that define Marxism. Ultimately there is one capitalism that essentially

conforms to that pattern. It adapts to changes in prevailing conditions as a means of seeking

escape from its inherent contradictions, but remains the obstacle to emancipation of the

working class and its allies. There is one Marxism, albeit a dislocated Marxism, that seeks to

challenge capitalist rule. This often fractured Marxism still seeks to answer the questions of

capitalism. What it has often failed to do, precisely because of its perceived fracture, is to

promote a practice that will challenge and replace capitalism.

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Capitalism, in the 21 st century, is mired in crisis. Tabb (2010: 320) argues that capitalism has

always disregarded any interests apart from those that serve its development and that this

disregard of communities and of the working people is heightened in periods of crisis. Tabb

cites Brenner’s comments that “the basic source of today’s crisis is the declining vitality of

the advanced economies since 1973 and especially since 2000” (2010: 317). This assessment

indicates that crisis, rather than abating, will deepen. Experience validates such a view.

Brenner’s assessment, however, does little to resolve the problem. Perspectives that

consciously seek to articulate the need to challenge capitalist hegemony remain muted.

Lebowitz describes the situation whereby the predominant response to capitalist ‘abuses’ is to

seek ways to regulate and ameliorate its worst and most evident excesses. “We see the same

pattern when it comes to the current financial crisis of capitalism. New regulations, new

limits, new forms of oversight are seen as a solution to abuse and excess … Bad capitalists,

rather than capitalism itself are identified as the evil” (2012b: 59). Capitalist crisis, of itself,

has not led to effective challenge. Marxism, in the 21 st century, can and does answer the

questions of capitalism but has done little to effectively resolve the problem. For many,

capitalism remains an almost immutable force. Once more there is the echo of the

Luxemburg/Bernstein polemic: reform or revolution (see Chapter 6)? Marxism may lay all

manner of claims to an intellectual, moral, analytical high-ground but the words of

Luxemburg are still bitingly fresh:

As long as theoretic knowledge remains the privilege of a handful of ‘academicians’

in the party, the latter will face the danger of going astray. Only when the great mass

of workers take the keen and dependable weapons of scientific socialism in their own

hands will all the petty bourgeois inclinations, all the opportunist currents, come to

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 naught. The movement will then find itself on sure and firm ground. ‘Quantity will do

it’ (1988: 10).

Luxemburg’s call for ‘quantity’ appears even more remote than when she uttered those words

in 1900. Influential Marxist theorists of the late 20 th and early 21st century have, in their quest

to remain ‘relevant’ and to respond to capitalism’s attempts to adapt, unconsciously

weakened the movement that might ‘change the world’. There have been numerous

departures from the essence of Marxist theory, but the most telling, from the perspective of

presenting a serious challenge to the dominance of capitalism, has been the relegation of class

as a pivotal issue.

Class, and an acknowledgement of the potential of a globalised working class, is essential to

making Marxism relevant in the age of capitalist crisis. The continuing growth of the working

class is such that by 2030 it is estimated that globally there will be 3.5 billion members of the

working class (Dobbs et al 2012). It is necessary for Marxism, both as a theoretical construct,

and as an organising force, to recognise that the core components of Marxist theory remain

valid.

Capitalism poses questions for the working class and for those who seek emancipation.

Burgmann (2016: 240) sums up one enduring response to these questions when using the

example of austerity programs in Greece. The unions react by re-forming themselves and

taking up new forms of struggle. The problems with such a perspective are immediately clear.

To assume that trade union struggles alone can challenge capitalism is to invite defeat.

Nothing much has changed in this regard since Lenin (1977c: 109) described how the unions

were engaged in economic struggle but fundamental change requires an ideological and

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theoretical position that trade union politics could not offer. What also remains relatively

unchanged is the battle of ideas within the anti-capitalist movement. It is a battle between

those who seek an accommodation with capitalism in the hopes of making capitalism more

responsive to the needs of the people – to democratise capitalism – and those who seek to

fundamentally reorganise society and the economy to serve the interests of the working class

and its allies.

Contemporary Marxist theory has tended to promote the merits of identity politics, and social

movement politics ahead of the working class. The essence of the arguments that this study

has pursued is that the working class remains the central force for effecting fundamental

change. To relegate the working class to a position of relative insignificance is a position that

is deeply flawed. At the same time, it is an objective reality that social movement politics

have the capacity to engage large numbers. Marxist approaches to the issues of 21 st century

capitalism and its crisis need to recognise the value of incorporating both trends. The

organisation and leadership of anti-capitalist movements will necessitate a confluence of

these two forces. This can only be achieved by resolving the issue of leadership. Harman

depicts the 20th century as a century of wars, civil wars and revolutions. He argues that this

also characterises the 21st century. The decisive question, in his consideration, is “what forces

exist that are capable of taking on the system and transforming the world?” (Harman 2009:

329). It is a question that has been debated for decades. A successful resolution to that

question also offers the definitive answer to the question of whether Marxism can address the

questions that 21st century capitalism poses. Central to achieving such resolution is the

requirement to re-focus attention to just what constitutes the essence of Marxism.

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7.2 An effective theory for the 21st century

It should not be a difficult task to establish and isolate the core values of Marxism. A range of

analyses of capitalist development can be used as a means of finding ‘common ground’ and

agreement on what constitutes the essence of Marxist theory. The central contradictions that

are observable in capitalism have already been described. These include:

1. the private nature of ownership and the public nature of the production process,

2. the necessity to globalise economic relations while maintaining a reliance on the

nation-state as a political foundation and,

3. the drive to maximise profits and surplus value while facing a tendency to see profit

rates fall.

While the theory of the falling rate of profit remains contested and divisive, points 1 and 2

tend to resonate among all schools of Marxist thought. An even more elemental perspective is

the proposition that economic issues drive political outcomes – the base/superstructure thesis.

However, this idea, so central to Marxist theory, is perhaps the most divisive. Even so there

are a great many values that are shared.

Burawoy and Wright describe what they term the ‘centrepiece’ of Marxist theory in the

depiction of capitalism as “a particular kind of class society” (2006: 461). Such a proposition

is regarded as a potentially unifying factor within Marxism. Burawoy and Wright (2006: 461)

explain that the central arguments of Marxist theory fall within three theoretical ‘clusters’.

These are; a theory of the trajectory of capitalist development, a theory of the reproduction of

capitalism, and the emancipatory theory of socialism and communism. Such a premise

certainly allows for a sense of optimism, and particularly from the point of view of view of

developing and articulating a Marxist theory for the 21 st century. Theory develops, according

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to the objective conditions at hand. Capitalism continues to exist in conditions of crisis. It has

been shown that this crisis not only continues but has become increasingly acute. Marxist

theorists are largely in accord with such an observation. It is in the integration of a growing

theory with a neglected practice that Marxism’s on-going significance rests. Burawoy and

Wright’s work is important in that they identify those areas of commonality. The next steps,

of linking a developing theory to practice, assume an even greater significance. While these

‘clusters’ remain at the very centre of Marxist theory, the question of the emancipatory

program, of fundamentally changing the world, remains the most problematic for Marxism in

the 21st century. Once more we return to that most divisive question of reform or revolution.

Finding common ground within what appears to be a range of ‘Marxisms’ is difficult. This is

particularly the case when considered alongside the idea of advancing an emancipatory

program for the working class and its allies. The ‘crisis’ of Marxism that Korsch (1931)

identified has not been resolved. On the contrary it has deepened. At the same time, Marxist

theory has continued to develop. Its capacity for analysis and observation has remained its

strength. Drawing together those elements of Marxist theory that serve both to promote a

class-based analysis and to seek ways to organise a class-based resistance to capitalism

becomes a central task. The role and importance of the working class remains central to the

idea of Marxist relevance, to resolving the ‘crisis’ in Marxism, and in challenging capitalism.

This role is reinforced as a working class is formed in developing economies. Silver

comments that:

The insight that labor and labor movements are continually made and remade

provides an important antidote against the common tendency to be overly rigid in

specifying who the working class is … our eyes are open to the early signs of new

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 working class formations as well as ‘backlash’ resistance from those working classes

that are being ‘unmade.’ A key task becomes the identification of emerging responses

from below to both the creative and destructive sides of capitalist development (2006:

20-21).

Silver’s analysis of the ‘making’ and the ‘unmaking’ of the working class in different parts of

the world, reinforces earlier Marxist perspectives on one of the defining characteristics of the

general crisis in capitalism. This is the growth of the working class. While trade union

density in industrialised nations has shrunk and manufacturing jobs have declined, the global

working class has expanded (Dobbs et al 2012). Capitalism, in Marx’s estimation, promotes

the growth of the working class, and importantly, as capitalism develops, the growth of a

global working class. This theme, that imperialism in constructing capitalism on a global

scale necessarily develops a global working class, was further developed by Warren (1980).

It is regarded as an inevitable feature of an expanding capitalism that is both destructive as

well as progressive (Marx 1969b: 107, 1975b: 200-201). The working class and the

importance of class, regardless of disputation within Marxism, remains at its core. Marxism is

a means to an end. That end is to challenge capitalism and to change the world.

To state that Marxism’s purpose is to change the world need not be antagonistic to Marxism’s

other theoretical ‘clusters’ as identified by Burawoy and Wright. This study has broadly

discussed the trajectory of Marxism and has been critical of its development. At the same

time the analytical capacity of contemporary Marxism has contributed to an understanding of

how capitalism operates and has developed. Attempts by the Regulation School (see Chapter

2) to re-build aspects of Marxist theory serve as just such an example.

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Marxist theory argued that capitalism was prone to ‘breakdown’ under the weight of internal

contradictions. The ‘golden age’ of capitalism after World War II threw the breakdown

theory into confusion and disarray. Regulation Theory “set its eyes on the analysis of the

crisis-ridden process of capitalist development. It argued that crises, far from leading to the

demise of capitalism, generate structural transformations that facilitate its survival and

longevity” (Mavroudeas 2012: 3). Jessop describes Regulation Theory as a way to:

integrate the analysis of political economy with that of civil society and the state to

show how they interact to ‘normalize’ the capital relation. It examines the social

processes and struggles that define and stabilize modes of economic calculation and

norms of economic conduct (2001b: 216).

Aglietta correctly asserts that “theory is never final and complete, it is always in the process

of development” (2000: 15). However, (in the sense that Regulation Theory is aligned with

Marxism) theory ought to generate activity that will lead to change. The fundamental position

of the regulation theorists is that capitalism remains a self-regulating system. If this is true

then theory becomes a circle not unlike the cyclical nature of capitalism, resulting in

equilibrium rather than change. Yet again the echoes of a century-old debate between

Bernstein and Luxemburg, and whether reform or revolution is the desired path to

emancipation, can be heard. The ultimate point of departure between classical Marxism and

Regulation theory rests on the regulationists’ acceptance and insistence that capitalism is both

resilient and enduring, whereas the classical Marxist perspective is that capitalism is crisis-

prone and liable to breakdown.

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Running along a not altogether dissimilar pathway is Marx’s concept of the reproduction of

capitalism. This, for Burawoy and Wright, is one of the theoretical ‘clusters’. Lebowitz has

argued that the working class play a central role in this cycle of reproduction and that they

have come to see the existence and reproduction of capitalism as essential to their own

existence. He describes a ‘vicious circle’ beginning with:

(a) people who are separated from the means of production and with needs that they

must fulfil, we see that these people (b) must go into the labour market to sell their

labour power – competing with other people in the same situation. They (c) enter into

capitalist production, that process which yields as its result impoverished workers

with the need and the means to consume. Having (d) consumed the products they are

able to purchase, however, these workers are once again without the means to

maintain themselves and must present themselves again to capital (2012b: 63-64).

This cycle of dependence serves not merely to reproduce capital but to reproduce the class

relationships within capitalism itself.

Burawoy and Wright’s first two theoretical ‘clusters’ – theories of the trajectory of capitalist

development and of the reproduction of capitalism, become the focus of Picketty’s Capital in

the Twenty-First Century. His book evoked intense discussion, with the Economist describing

him as ‘a modern Marx’ (Economist 2014). This is despite Picketty’s own assertion that he is

not a Marxist. Picketty (2014: 1-13) seeks to chart a course between what he describes as

Marx’s ‘apocalyptic’ theory of capitalist breakdown and collapse and Kuznets ‘fairy-tale’ of

a link between the growth of capitalism and a diminution of inequality. Kuznets’ theory

(1955) assumed that as an economy developed there would be an initial intensification of

inequality but, as that individual economy and market grows and matures, then so too does

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inequality diminish. Kuznets’ view appeared to be validated by post-World War II capitalist

stabilisation and relative economic growth. The period from the 1970s and heightened

capitalist crisis has led to a re-assessment of this theory and a reappraisal of the Marxist

breakdown theory.

Picketty’s exhaustive and thorough empirical study, indicates that inequality and capitalism

are inseparable. It is one thing to ‘prove’, through diligent use of statistics that this is the case.

The question remains of what to do with the data and how to redress the visible and growing

inequality. Picketty (2014: 569) argues that capital must be brought under ‘democratic’

control and that the problems of economic and social inequality that he so painstakingly

exposes, can be resolved by “a progressive annual tax on capital. This will make it possible to

avoid an endless inegalitarian (sic) spiral while preserving competition and incentives for

new instances of primitive accumulation” (Picketty 2014: 572). While he in no way seeks to

present a challenge to capitalism, his work and research was still attacked and the fact that

growth in inequality is both quantifiable and verifiable was questioned (Giles 2014).

Picketty’s work, and the reactions to it, show that inequality has risen in direct proportion to

the growing crisis in capitalism which in turn serves to reaffirm the relevance of Marxism.

The threat of crisis hangs in the air. However, stating this is one thing. There are many

contending schools of Marxist thought and the trajectory of Marxism has done little to

eliminate, let alone limit contention within the anti-capitalist movement. It is in the process of

re-building a theory, of returning to the core issues that can unite Marxists, that optimism can

be found. The most central of values, the deepest core of Marxism, lies in its oft-stated call to

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‘change the world’. That can only come from people engaged in concerted struggle to effect

fundamental change.

7.3 Resolving the crisis in Marxism

Realising Marxism’s stated objective of challenging capitalism has been made more difficult

by division and crisis. However, a resolution of the crisis in Marxism is both possible and

necessary. Marxism, it has been shown:

1. is the antithesis of capitalism,

2. offers a thorough analysis of capitalism’s trajectory,

3. exists to challenge capitalism and to change the world and;

4. promotes the view that the working class is the force that has the potential to

overthrow capitalism

Marxism has, since its formation, been engaged in intense polemic and contention. To expect

that the divergent trends within Marxist theory could be expected to find common cause or

principled unity is, in the immediate future, unlikely. This observation is not made from a

position of pessimism. Marxism offers a rational path to emancipation. The promotion of an

emancipatory path is what most significantly divides Marxism and, paradoxically, offers a

means of by-passing, if not resolving the crisis that has long afflicted Marxist thought.

Describing ‘problems’ in Marxism, from a Marxist perspective, has a long history and one

that this study has broadly discussed. Plekhanov (1976) Korsch (1931), the theorists of the

Frankfurt School, Western Marxism, the ‘New Left’, the neo-Marxists, post-Marxists, have

all focused on the problems. What has become almost commonplace is the claim that the

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“crisis is ultimately not one of Marxist philosophy but of Marxism as revolutionary social

theory” (McCarney 1990: 189). It is an idea that gained currency as postmodernist and post-

Marxist theories developed.

As a consequence, reactions to the Marxist concept of the ‘revolutionary potential of the

working class’ assume importance as either a means of seeking a path towards renewal of

Marxism, or of resolving the crisis within Marxism. The working class, regardless of poor

leadership, or periods of indifference, remains a potentially revolutionary force. Three

interconnected elements validate this proposition. Firstly, the working class is the class that,

by their labour, produce and reproduce capitalist production and class relations (Marx 1986:

529-530). Secondly, the needs of opposing classes remain intensely contradictory (Marx &

Engels 1977: 35-36). Finally, the working class has become an increasingly globalised class

as capitalism itself has become a globalised economic structure (Silver 2016). Recognition of

these three facts becomes pivotal when considering the prospects for Marxist renewal.

Class formation, in Marx’s view, had little to do with aspirations or desires. “Men make their

own history, but they do not make it just as they please; they do not make it under

circumstances chosen by themselves, but under circumstances directly encountered, given

and transmitted from the past” (Marx 1986f: 97). It is a view that needs to be considered in

the light of much contemporary Marxist scholarship. ‘Identification’ with a group, rather than

a place in a set of economic arrangements has become a dominant perspective. The role and

potential power of the working class has been diminished within the broad scope of this

scholarship.

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The issue of class and the role of the working class continues to be among the most vexatious

in terms of finding that elusive ‘common ground’ among Marxists. Despite evidence to the

contrary (Silver 2006, World Bank 1995, Dobbs et al 2012) some Marxist analysts maintain

that a global ‘proletarianisation’ has not occurred and it is unlikely that it will do so (Sitton

2010: 15). Sitton does not deny that struggles against capital are a fact of life. He argues that:

Multiple forces of opposition are gathering in the world today. Some are trying to

protect their jobs, their culture, the environment, or their families. Others are simply

asserting human dignity in the face of crushing circumstance. Overthrow by a self-

conscious proletariat has never been the only possibility … whatever their motives,

they will be determined that economies exist to serve people, not people to serve

economies (2010: 26).

There remains a reluctance to acknowledge the potential power of the working class. At the

same time the need for ‘change’ is broadly accepted. Fuentes-Ramirez (2014: 142), for

instance, argues that change can be brought about by influencing the state to empower

institutions that might, in turn, cause ‘ruptures’ within capitalist institutions. To separate state

institutions from capitalist institutions and to use one set against another would seem an

unlikely scenario. Harvey (2012: xiii) shifts the focus again when he speaks of a

revolutionary working class being constituted from urban rather than ‘exclusively’ factory

workers. Harvey argues that ‘glimmers’ of hope are visible. He bases these hopes on the left-

populist movements in Spain and Greece and on what he describes as ‘revolutionary

impulses’ in Latin America (2012: 157). It is an argument that is strongly influenced by the

Occupy Wall Street Movement. He proposes that the anti-capitalist movement should connect

with the alienated and discontented and that this ‘movement’ “be democratically assembled

into a coherent opposition … an alternative political system, and, ultimately, an alternative

way of organizing production, distribution, and consumption for the benefit of the people”

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(Harvey 2012: 162-163). While recognising the need to effect change and ‘revolutionary’

change, two factors remain obscure and understated. How is this change to be brought about

and which forces will bring about change? They are questions that go to the heart of any real

chance for Marxist realignment or resolution to the theoretical differences within Marxist

theory.

The potential for realigning Marxist theory, or of resolving the differences within Marxist

theory, must be seriously considered if Marxism is to fulfil its historical role and ‘change the

world’. None of capitalism’s historical contradictions have been resolved but, rather, have

become more acute. Chapter 5.5 describes a ‘dialectic of globalisation’, where capitalism’s

most acute contradiction, between the requirement to globalise, while maintaining a nation-

state administrative framework inevitably leads to social inequality and division.

Areas of accord have been identified, but contemporary Marxist theory remains divided in the

area of forging a unity of purpose between theory and practice. The thesis has argued that

among those elements that constitute a Marxist core, the working class and its identification

as revolutionary subject, remains pivotal. The shift in Marxist theory, from the centrality of

the working class to non-class issues, has limited Marxism’s capacity to oppose capital (See

Chapter 6.6). Theory is enhanced by considering and reconsidering the historical context that

contributes to the present and future movement of social forces.

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Which forces, then, are most likely to bring about this change? Marxist theory was built upon

the premise that an organised working class is central to challenging capitalism. The

development of class consciousness and organisation of the working class is not something

that develops spontaneously. A degree of coyness exists when describing this channelling of

discontent. The organisational structure that would seem to be inevitable under conditions of

class rule is an overtly political organisation – a political party framed by Marxist theory. The

reluctance of many Marxists to speak in terms of political organisation is understandable. The

history of Marxist political parties throughout the 20 th century has been mired in Stalinism.

Non-Stalinist Marxist political expressions have been dogged by problems associated with

perceived irrelevance that afflict small and often powerless organisations. To speak,

therefore, of a Marxist party that might organisationally arm the working class, is often

derided.

The idea of a political expression of Marxism through the vehicle of a political party is very

nearly as old as Marxism. The strength of such parties has appreciably weakened. “In the

capitalist world, self-described Marxist parties have become noticeably weaker or have

ceased to be potent political forces at all” (Allen 2004 xii). There is an irony in such analysis.

On the one hand a resurgence of interest in Marxism and an appreciation of capitalist crisis is

acknowledged and yet, on the other hand, political expressions of Marxist theory have

become weaker. The relevance of Marxism in the face of capitalist crisis must be gauged by

its capacity to challenge the rule of capitalism. The means of organisation has traditionally

been through a party-political organisation.

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Marxism has long espoused the need for a political movement of the working class. It is

regarded as the most appropriate means of leading a movement that seeks to change the

world. To this end Marx and Engels produced the Manifesto of the Communist Party as a

guide to the embryonic Communist League. Sitton laments that Marx never “clarified what

would be the form of the proletariat organized as the ruling class” (2010: 12). It is a curious

lament. All too often classical Marxists are berated for regarding Marx’s words as something

akin to ‘holy writ’ and yet their critics seem to demand that an almost prescriptive formula

for change be presented. Marxists in a capitalist world can, justifiably seek to create the

conditions by which such a transformation might be enacted, but not to determine what and

how that future society would operate. The role and purpose of such a party in the 21 st

century is central to clarifying what Marxism is ‘for’ in this century, its claim to relevance

and what forces are best suited to promote the emancipatory project of the working class.

What that form of political organisation takes is necessarily dependent upon the objective

conditions that exist. What is clear is that the essential formation of any such political

organisation could not be limited by national boundaries and nor could it hope to exist under

the ‘patronage’ of the state that it ultimately would seek to challenge. Rees argues that:

A revolutionary organization remains the indispensable tool … Without the struggle

to build such an organization, the danger remains that the dialectic of capitalist

development will remain … but if the struggle to build such an organization is

successful, we have a chance – not more, not less – to make the leap from the realm of

necessity to the realm of freedom” (1998: 301-302).

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It is around this ‘call to arms’ that Marxism, in the age of capitalist crisis, can assert its

relevance and, if not re-group and realign itself, then discover ways to resolve the crisis that

has been a feature of its development for the better part of a century.

7.4 New organisational structures and overcoming the crisis of leadership

An essential step in resolving the perceived crisis in Marxism is to overcome what has been

described as a ‘crisis of leadership’. Such a proposition is predicated on a number of

assumptions. The first is that the working class is the class most capable of bringing about

fundamental change. For this to occur there needs to be a high degree of class consciousness.

This class consciousness needs to be guided to action that will result in both challenge to

capitalism and to its replacement as a ruling idea. The most capable form of such leadership

is one based in Marxist theory and practice. This premise is the basis of core Marxist theory

and yet many contemporary Marxists appear reluctant to broach the issue of how change can

be effected. This becomes an even greater problem when so many Marxist theorists reject the

idea of the working class as a ‘revolutionary’ subject. Mann (1973: 71) argues that the

working class in developed capitalist states is unlikely to develop ‘revolutionary’ class

consciousness and therefore is unlikely to become an agent for radical change. Subsequent

decades have seen this assumption grow in strength.

While there is a reluctance to consider how change can be implemented there is no shortage

of calls for a different future. Badiou typifies these often amorphous calls to the future:

The communist hypothesis is that a different collective organization is practicable,

one that will eliminate the inequality of wealth and even the division of labour. The

private appropriation of massive fortunes and their transmission by inheritance will

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 disappear. The existence of a coercive state, separate from civil society, will no longer

appear a necessity: a long process of reorganization based on a free association of

producers will see it withering away (2008: 42).

Badiou, while ‘wishing’ for a better future, essentially maintains a position of antipathy

towards the working class. What is evident is a desire to break from capitalism and a wish for

‘something better’. What is not evident is how to go about it. The difficulties are exacerbated

when the working class is relegated to a position of insignificance. What needs to be

considered, but is ignored by Badiou and post-Marxism in general, is a fundamental premise

of Marxism. This is, that capitalism is a system framed by alienation of labour, upon which

its continued future and profitability rests (Harman 2010: 349). While this is the case, there

is an understandable fear of the past and of the distortions in Marxism that stemmed from the

experience of Stalinism. Swyngedouw succinctly describes the situation whereby the “fear of

failing has become so overwhelming that fear of real change is all that is left; resistance is as

far as our horizons reach – transformation, it seems, can no longer be thought, let alone

practiced” (2010: 317). However, even while acknowledging the problem, that very ‘fear’

remains, and he fails to move beyond the call, in principle at least, for change. This

‘revolutionary’ change requires two conditions to occur. Productive forces need to be highly

developed and the working class and its allies must assume political power (Elster 1991:

528). What Elster describes is the coming together of the objective and subjective conditions

for fundamental change.

If change is merited and capitalism is to be confronted, then there needs to be a mechanism

by which to approach that change. Political organisation has already been briefly discussed,

as has the importance of the working class as an agent for change. Historical moments have

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arisen when change might successfully have been achieved and yet capitalism remains the

obviously dominant paradigm. The failures of the working class movement can be attributed,

as Trotsky (1974) forcefully did, to a failure of leadership of the working class. Such a

proposition has been criticised with Beilharz (1987: 72) seeking to dismiss the idea as being

‘Jacobin’ in its style with its focus being almost exclusively on leadership and leadership

alone. What is important to remember in such debates is that Marxist theories of radical

change have traditionally been formulated on the need for a focused and consistent theory

that is not subject to the dissipations of effort that so often mark spontaneous activity.

The issue of spontaneity and Marxist responses appear quite unequivocal. Lenin bluntly

focused on this issue stating that the task was to “combat spontaneity, to divert the working-

class movement from this spontaneous, trade unionist striving to come under the wing of the

bourgeoisie, and to bring it under the wing of revolutionary Social-Democracy” (emphasis in

the original 1977c: 122). At the same time situations arise that can be regarded as

spontaneous moments of radical upsurge and these cannot be discounted. The point is how to

channel these moments as a means of challenging capitalism. In recent years, there have been

numerous examples of mobilisations that have withered for want of leadership and program.

The Seattle protests, anti-WTO actions, the ‘Occupy’ movement and the wide-spread protests

in the US in the aftermath of the 2016 presidential elections are just some examples.

Discontent is apparent but these manifestations of unrest remain disconnected and isolated

and inevitably without conscious leadership.

Inevitably, it would seem, the question returns to how to unify the broad anti-capitalist

sentiments that exist? Marxism’s relevance in the 21 st century will be judged by its capacity

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to answer that question, theoretically and practically. It is a task of some magnitude and many

obstacles stand in its way. The working class as revolutionary subject needs to be re-affirmed.

The flawed concept of identity politics needs to be addressed. The issues and discontents

exhibited in such protest movements need to be brought into a class perspective that allows

for an integration of separate grievances into the broader anti-capitalist movement. The

debilitating problem of nationalism needs to be overcome in the face of a relentless

globalisation of capitalism. The global, international nature of the burgeoning working class

needs to be recognised and harnessed in order to issue any successful challenge to the rule of

capital. Political organisation is required and a consistent leadership is necessary.

Overcoming the problems appears a daunting task.

The requirement of a global response to the global problem of capitalism has long vexed

socialist and Marxist theorists. It has framed the articulation of an ideology of global trade

union responses, to movements for a global human rights and socialist globalisation and as

Sklair states:

the many radical movements … feed into an emerging anti-globalization movement.

As this movement inspires ever larger numbers of people to become active in the

pursuit of human rights and the social responsibilities that are an integral part of them,

we can begin to work out alternatives to capitalist globalization. Socialist

globalization is one of many alternative paths (2002: 319).

Sklair recognises class as an issue but remains a captive of identity politics, arguing that

conflicts effectively revolve around issues of personal identity and that “there is no adequate

theory of how class relates to race, religion, and nationalism in the economic, political and

culture-ideology spheres, nationally or transnationally” (2002: 324). A starting point in

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isolating such a ‘theory’ would appear to be a return to Marx. The Communist Manifesto,

might allay some of Sklair’s fears. “Does it require deep intuition to comprehend that man’s

ideas, views and conceptions, in one word, man’s consciousness, changes with every change

in the conditions of his material existence, in his social relations and in his social life? (Marx

& Engels 1977: 57).

Marx and Engels (1977: 49) declared that the essence of a communist organisation is that it

operates in the interests of the working class, regardless of nationality and in the direct

interests of the movement as a whole. For them, emancipation and the challenge to capitalism

was, necessarily, to be organised through the auspices of a political organisation and that this

organisation could only be a political party organised at the global level. This is all the more

relevant today as capitalism has assumed an intensely global character. The difficulties are

enormous but the capacities to link and unite working class struggles, with the issues that

have been promoted through divisive identity politics and non-class social movements offers

a chance to change the world. The significance of Marxism in the era of capitalist crisis lies

in its insistence upon its organisational capacity, its internationalism, its analytical abilities

and a capacity to merge theory and practice. The divergent schools of Marxism that have

developed in the past century can unite around such a perspective. It is a possibility that is

fraught with difficulties, but regardless, the era of capitalist crisis requires an ideological

opposition that can mount a concerted and committed challenge.

Lebowitz (2004) seeks to explain how and why capitalism keeps going. In his concluding

remarks, he argues that for change to be effected more is required than simply explaining the

nature of capitalism or its history. It is necessary for people to believe that something better is

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possible. He concludes by asserting that, “to the extent that those of us on the left are not

actively attempting to communicate the nature of capitalism and working explicitly for the

creation of a socialist alternative, we are part of the explanation as to what keeps capitalism

going” (2004: 25). Such a proposition requires a consistent and lucid theory and practice as a

way to either resolve the crisis in Marxism, or to re-invigorate Marxism.

7.5 Reinterpreting class and social identity

Harman’s (2009: 329) earlier question about which forces might transform the world brings

us back to issues of class and social identity. The two concepts are inextricably linked and

yet, in contemporary literature, often stand apart and in an often antagonistic relationship.

Class and social class for Marx was the foundation-stone of economic and political structures.

The “history of all hitherto existing society is the history of class struggles” (Marx and

Engels 1977: 35). Historically there has been a strong identification with class, although this

often becomes somewhat subjective. Emmison (1991: 262) remarks that just 48.6 per cent of

Australians thought of themselves as belonging to any social class. Class identification

remains difficult to discern. Sheppard and Biddle (2015) indicate that over 50 per cent of

Australians regard themselves as ‘middle-class’ while 40 per cent still identify as ‘working

class’. Figures from the United States (Newport 2015) show that identification with the

working class has risen rapidly in direct proportion to the rise of inequality.

While class identification may be a subjective affair, Marxist understanding of class is more

solidly defined. It is a division determined by position in relation to the process of production

(Lukacs 1976: 46). Class can be simply described on the basis of the ownership of the means

of production, distribution and exchange. “It is always the direct relationship of the owners

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of the conditions of production to the direct producers” (Marx 1986b: 791). Marx briefly

elaborated on this, differentiating between “the owners merely of labour-power, owners of

capital, and landowners, whose respective sources of income are wages, profit and ground-

rent, in other words, wage-labourers, capitalists, and landlords, constitute then three big

classes of modern society based upon the capitalist mode of production” (Marx 1986b: 885).

Such divisions are necessarily antagonistic and constitute the basis of the concept of class-

consciousness as well as social inequality.

A class-based society and economy inevitably engenders a sense of inequality. Marx

employed the analogy of a house to describe this feeling:

A house may be large or small; as long as the surrounding houses are equally small it

satisfies all social demands for a dwelling. But let a palace arise beside the little

house, and it shrinks from a little house to a hut … the occupant of the relatively small

house will feel more and more uncomfortable, dissatisfied and cramped within its four

walls (1986e: 83).

It is a situation that has become the norm and, as such, is little remarked upon. What has

happened, over time, has been a concerted and successful ideological offensive waged by

capitalism and the state. It has, through engendering a sense of national unity and

commonality, been able to successfully foster a belief among many that there are shared

interests based not on class, but on national identity. Marx’s (1986b: 83) argument, that the

working class remains dependent upon capital rather than there being any ‘community’ of

interests between worker and capitalist, remains as valid today as it did in 1849.

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The crisis in Marxism that has been evident for a century serves to highlight this dilemma of

class and class identification. Faced with such a tightly constructed and maintained

ideological shield, many activists and theorists alike have sought to construct a framework

that advantages identity over class. This has already been discussed but it remains an

objective reality that supra-class approaches to capitalism enjoy a position of dominance and,

as such, need to be seriously considered in seeking a way forward for Marxism in the 21 st

century. This is said, not in any sense of acquiescence or accommodation to those who reject

the leadership role of the working class, but rather to find, if possible, a degree of accord

between the non-class activist approach and the classical Marxist class-based path to

challenge capitalism.

Identity politics (Castells 2004: 11-12) has become the only ‘valid’ response to inequality. It

is a claim that directly challenges the essence of Marxist class-based politics. It is an

argument that is based, in Castells’ view, on the premise that the “ideological emptiness

created by the failure of Marxism-Leninism to actually indoctrinate the masses was replaced,

in the 1980s, when people were able to express themselves, by the only source of identity …

in the collective memory: national identity (2004: 43 italics in the original). Setting to one

side his emotive language, it remains that for large numbers of people, identity has continued

to be central. Herein lies a problem for identity as a political expression. Castells (2004: 6-7)

outlines the potential array of identities that any one person may have including that of

worker, parent, sportsperson etc. The needs of one identity group are not necessarily in

concert with the needs of another. Castells argues that identity politics has become the most

appropriate vehicle by which to respond to inequality but it inevitably runs along a line of

potentially diverging interests.

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Moran (2015: 165) also argues that identity politics can challenge issues of inequality and the

distribution of resources within capitalist societies. However, he queries whether such a

political framework can challenge the ‘logic’ of the capitalist system. This brings us to a

dilemma that identity politics ultimately faces. It is said that the politics of identity is capable

of providing a ‘challenge’ to aspects of capitalism but not the ‘logic’ of the system itself. This

has led some theorists to seek to merge what are separate issues. They seek to discover a

commonality between class and identity political movements. This is despite the fact that

identity politics invariably takes a non-class approach as its initial premise. Fraser (1998)

argues that the struggle for social justice has increasingly become polarised. Choices are

variously made between class and identity. Fraser maintains that this is a false division and

that ‘justice’ demands a redistribution across class lines and with a recognition of identity in

close embrace. Such a position seeks to challenge the view of those whose perspective is

either rooted in class as the determining factor or those who regard identity as the only valid

vehicle that can combat capitalism.

Such a view is advanced by Kelley (1997) who argues that the rise of identity politics

advances and strengthens class politics. His perspective is that any call to subsume issues of

race, ethnicity or gender into broader ‘class’ issues weakens the movement for emancipation.

Kelley, while advocating a broad class struggle infused with the recognition of identity

politics, also supports the concept of ‘radical humanism’ which opposes a Marxist

worldview. Kelley and Fraser seek a mechanism by which to fuse class and identity politics.

It can be done but there needs to be a greater degree of clarity. There can be, from the point

of view of a reformist political program, a unity of working class and identity-based politics

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that would advance a call to make capitalism more tolerable. Walker (2015), president of the

Ford Foundation, argues that capitalism is obliged to improve and strengthen the economic

and political system. He recently oversaw a financial contribution of $100 million to the

‘Black Lives Matter’ (BLM) movement. Many of the activists in BLM would describe

themselves as anti-capitalist. The Ford Foundation do not share such an anti-capitalist

perspective and assiduously work to limit any rise in class antagonisms.

The capitalist state has sought to diminish expressions of working class identity. This has

driven the movement to assume a broad, non-class identity. What needs to be remembered is

that those who maintain an anti-capitalist perspective frequently share class as well as

identity. To deny class is to ignore the magnitude of the global working class and, in large

measure to ignore Marxism. To ignore identity as a motivating factor is to ignore its capacity

for mobilisation. Identity-based movements ought, with conscious leadership, to be able to be

incorporated into class politics. However, a coming together of these elements needs first to

recognise that it is not sufficient to make capitalism a more palatable system. The Ford

Foundation president asks what ‘kind’ of capitalism do we want. It is a question of the utmost

relevance and especially when considered alongside an enduring perception that there is no

real alternative to capitalism.

Lebowitz (2004) argues that capitalism’s ability to ‘keep going’, or to reproduce itself, is due

in large part to the acquiescence of the working class. He speaks of a dependency that

workers feel for capitalism. They come to believe that capitalism meets their needs and that

the worker needs capitalism.

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 As long as workers have not broken with the idea that capital is necessary, a state

under their control will act to facilitate the conditions for the reproduction of capital

… Capitalism produces the working class it needs. It produces workers who look

upon it as necessary … A system where the reproduction of capital is necessary for

the reproduction of wage laborers. What keeps capitalism going? Wage laborers

(2004: 24).

Lebowitz also separates what is ‘necessary’ for capitalism to survive from what is ‘useful’ for

its survival. Capitalism requires an exploited working class to survive. It is a necessity. A

working class and middle class that is divided across often arbitrary lines of race, gender,

ethnicity, and sexuality becomes useful for capitalism. Resolving any of these non-class

issues would not, of itself, undermine the rule of capitalism. It has often been eloquently

shown to be the case. The Ford Foundation’s largesse to the anti-racist movement is a case in

point. This assumes a particular significance when re-assessing the core values of Marxism

and its relevance in an age of capitalist crisis. Such a re-assessment focuses, in the final

assessment, on the fundamental question of Marxism’s purpose.

7.6 Marxism’s purpose and future

An article appeared in Time Magazine in 2013 entitled ‘Marx’s Revenge: How Class Struggle Is

Shaping the World’. The article acknowledges that the global economy is in crisis and that workers

around the world are experiencing a stagnation and decline in income, growing unemployment and

debt. The author reminds his readers that “Marx theorized that the capitalist system would

inevitably impoverish the masses as the world’s wealth became concentrated in the hands of a

greedy few, causing economic crises and heightened conflict between the rich and working

classes” (Schuman 2013). The article also cites French philosopher Ranciere’s argument that

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working class organisations today are calling, at best, to reform an unequal system, and that

“virtually all progressive or leftist parties contributed at some point to the rise and reach of

financial markets, and rolling back of welfare systems in order to prove they were capable of

reform,” (Ranciere in Schuman 2013). The article is particularly relevant. It at once accepts

the potential for class struggle to assume increasing significance in conditions of acute crisis

for capitalism and that the organisations of the working class have acted against these very

interests.

Marxism’s ultimate purpose is to combat capitalism and to effect fundamental change.

Questions of the relevance of Marxism ultimately depend on perceptions of capitalism’s

efficacy and whether it can be sustained, or, indeed whether it can confront and overcome its

elemental contradictions. Gilpin enthusiastically speaks of a new age of global capitalism.

“Americans, other citizens of the industrialized world, and many people in other parts of the

international economy have entered what the financial expert and economic commentator

Hale has called ‘The Second Great Age of Global Capitalism’” (2000: 15). Such extravagant

claims have a tendency to rapidly become outdated. The Global Financial Crisis, as an

expression of the deepening crisis in capitalism, the retreat into economic nationalism, the

seemingly irresolvable contradictions between globalised capitalism and the nation-state,

make such exaltation questionable. Gilpin (2000: 51) further argues that economic efficiency

and the ambitions of dominant nation-states will determine the future power and prosperity of

global capitalism. If he is correct, then Marxism has no future and therefore no purpose. On

the other hand, Marxism has not been disproven. On the contrary, the very problems within

capitalism attest to the validity of Marxism. Marxist analysis, however acute and accurate it

might be, has not led to change. Is Marxism to simply be a useful tool to analyse that which is

observable, or a vehicle by which to bring about change?

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Tant (1999: 123) observes that for Marx, the very point of understanding the world was to

change it. Marxism famously set itself this task. For this to be accomplished, a close interplay

between theory and practice was considered a necessity. Gouldner (1980: 1-7) describes the

coming to power of the Bolsheviks in 1917 and closely attends to the importance of a

theoretical underpinning to the revolutionary practice that ‘changed the world’. Pannekoek,

writing during WWI and on the eve of the 1917 Revolution, stated what was, for Marxists, an

unarguable reality. “Man is only the agent of economic needs; but these needs can only be

changed thanks to his activity. Both parts are equally correct and important, and together they

form a complete theory” (Pannekoek 1915). Marxism remains a philosophy that is integrally

and dialectically connected to the economy. It is a philosophy that is fundamentally

connected to the world, while simultaneously seeking to change and construct a new world.

Marx (1964: 31-32) built his method of analysis on the premise that the first historically

significant moment for human development was the production of the economic means to

satisfy material requirements and needs. Eagleton extrapolates from this, stating that

“Marxism, however, wants to claim more than this. It wants to argue that material production

is fundamental not only in the sense that there could be no civilisation without it, but that it is

what ultimately determines the nature of that civilisation” (2011: 108). Marxist theory rests

on the notion that economic factors largely determine social and political actions and

reactions. Gray rejects Marxism as a failed attempt at social engineering. Even so he

concedes that “in market societies . . . not only is economic activity distinct from the rest of

social life, but it conditions, and sometimes dominates, the whole of society’’ (2002: 12).

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The future of Marxism and the question of what Marxism is for, is intimately connected with

Marx’s own emphasis on economics. For many critics of Marx, both non-Marxist and from

within the Marxist milieu, the issue of Marx’s ‘economism’ becomes the nub of Marxism’s

problems and therefore an obstacle to a ‘future’ for Marxism. Gamble argues that:

Marxism in the end has to stand by the claim that the economic power which accrues

to the class which controls productive assets is a crucial determinant of the manner in

which political, cultural and ideological power are exercised. Many kinds of

sophisticated concepts can be deployed to understand the intricacies of the

relationship, but in the end if the primacy of the economic is lost, then Marxism loses

its distinctiveness and its value in social theory (1999b: 143).

Much of the on-going crisis within Marxism stems from a perceived need to distance

Marxism from its ‘economism’ and its ‘determinism’. Western Marxism and its variations

have, for decades, sought to reconstruct Marxist theory. This has been at the expense of core

Marxist considerations of the centrality of economics. In its place, has grown a misplaced

acceptance that societal and political issues inform economic questions. Despite this, the

crisis of capitalism has continued to indicate that economic issues do, indeed, play a central

role in determining social and political outcomes. Marxism offers a theoretical and analytical

framework from which to build resistance to capitalism. This resistance must, necessarily

address the primacy of economic questions. Ultimately a fundamental difference within

schools of Marxist thought remains unresolved. This is the issue of base and superstructure.

The economic structures of society and capitalism constitute the base. Social and political

activities and the institutions of the state (the superstructure) rest on this economic base.

Elemental change can only be effected by changing the base. If the purpose of Marxism is to

change the world then the economic structures of that world must be addressed, understood

and fundamentally changed.

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Change, according to Marxist theory, takes place within the context of class conflict. The

working class and its allies assume an historical role. Cockshott & Zachriah (2012: 17)

promote the idea of an historical ‘project’ of the working class. They assert that success can

only be achieved if the working class espouses its own political vision for the future. The

development of such a political vision can only be advanced alongside a leadership that is

independent from the structures of the state and has the support of the class that is expected to

‘espouse’ a political vision. In this context, Marxism’s intent, as envisaged more than a

century ago becomes central to the issues of the 21st century. Lebowitz in an interview on the

relevance of Marx in the 21 st century remarked:

I think that there is absolutely no question that Marxism enables us to understand the

nature of the capitalist crisis today. For non-Marxists, everything is an accident or the

result of bad decisions. They are not able to distinguish between causes and effects

and often see symptoms as the source of problems. In contrast, Marxism permits us

to consider capitalism as a whole and to understand the underlying factors which

characterize not only its crises but also its periods of uninterrupted expansion.

However, I think it is an error to think that Marxism can solve the crisis. Marxism is

a theory – it is a way to understand. Ultimately, the only way to end capitalist crises

is to end capitalism. And that requires more than a theory; it requires a commitment

and determination to put an end to this perverse economic system (2013).

If Marxism is no more than a theory and a guide to understanding how the world turns, then it

remains and must remain incapable of effecting change. Marxism has historically sought to

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present a theoretical response to capitalism while simultaneously promoting a practice that

would enable an ideologically armed working class to bring about its own emancipation.

Such has been the ‘theory’ of Marxism. The ‘practice’ has often been quite a different matter.

Deutscher (1973: 18) described a rift between theory and practice that divided classical

Marxism from Western Marxism and the New Left. It was a reminder of two of Marxism’s

more famous aphorisms – that without revolutionary theory there can be no revolutionary

movement and that practice without theory is blind and that theory without practice is sterile.

In much the same sense that Cox (1981: 128) argues that theory is always for someone and

for some purpose, then so too is Marxism for a particular purpose. That purpose is to promote

a theory and practice that will equip the working class to confront and combat capitalism.

Central to this purpose is Marxism’s capacity to respond to, address and provide answers to

the questions that capitalism, in the 21 st century, raises. Marxism, then, has relevance, it has

purpose and it has a future. It exists to counter capitalism in an age of capitalist crisis.

7.7 Conclusion

The thesis set itself the task of identifying how Marxism can be made relevant in an age of

capitalist crisis. This, in turn, prompted subsequent questions of how an ideologically

fragmented Marxism can combat capitalism in the 21st century and whether broad peoples’

movements have the capacity to respond to the intensification of capitalist crisis. The chapter

focused on whether Marxism has a future.

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It argued that if Marxism has a future, then the overriding question of the utility of Marxism

must be apparent. The chapter contended that for Marxism to reaffirm its claim to relevance,

it must address the fundamental issue of aligning theory with practice. This can be achieved

by refocusing on core elements that constitute Marxism and, importantly, in addressing the

issue of the working class as revolutionary subject.

Such a focus becomes central to Marxism’s role as both advocate for change and as an

organisational vehicle to effect that change. Attention was given to the need to overcome a

‘crisis of leadership’ that has permitted the rule of capitalism to continue. It is possible and

essential that the crisis in Marxism be resolved, but equally important that such resolution be

achieved within a framework that acknowledges the importance of the working class. The

significance of social movement and identity politics is not to be underestimated but needs to

be incorporated into independent class-based political structures of the working class. The

chapter further argued that these structures are most effectively promoted through the form of

a party political organisation that is not encumbered by allegiance to national states but is, as

Marx envisaged, international in program and scope. It is in this context that Marxism will be

able to combat global capitalism. The chapter acknowledged the difficulties that a divided

Marxism present but that resolving the crisis in Marxism will ultimately resolve the

contradictions of capitalist rule.

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Chapter 8 Conclusion

This thesis has answered the fundamental question of Marxism’s relevance in an age of

capitalist crisis. In reaffirming its claim to relevance, and situating this alongside Marxism’s

historical exhortation to confront and challenge capitalism, I consciously engaged in an

exercise in theory-building. The theoretical propositions outlined by Marx and subsequent

Marxists have, over time, become mired in dislocation and disputation. ‘Theory building’, as

it relates to this thesis has been an exercise in refocussing attention to the central, pivotal

values espoused by Marxism. It has also involved exploring what grounds there might be for

a realignment of Marxist thought in the face of on-going and intensifying capitalist crisis.

In the introduction to this study I stated my intention of explaining the connection between

contemporary Marxism’s endemic problems and capitalism’s continued survival. It was also

stated that the thesis would raise questions of the relevance of Marxism in the 21 st century. It

closely engaged with an interconnected question of how broad, non-class and supra class

social movements, as well as the politics of identity, could be expected to respond to the

intensification of capitalist crisis.

The thesis first focused on the trajectory of capitalism. This, in turn, was linked to a

discussion of the development of Marxist theory as it responded to the unfolding processes of

capitalism and of its globalising nature. Capitalism is an economic system riven by

contradiction and crisis. Marxism, for the past hundred years, has been embroiled in

disputation. Running along parallel lines to the primary questions raised by the study is the

contention that the crisis in Marxism has, to a significant extent, aided and abetted

capitalism’s continued existence.

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I have argued that capitalism’s capacity to survive crisis and avoid fundamental breakdown

has little to do with any inherent strength of capitalism and more to do with an inability on

the part of Marxism to seriously threaten capitalism. This is due, in large part, to on-going

schisms that weakened Marxism from the early 20th century. The split in Marxism, as a

reaction to resurgent nationalism on the eve of World War I, the rise of Stalinism, the

subsequent development of Western Marxism, the New Left, post-Marxism and the growing

emphasis on the politics of identity rather than class, all served to weaken the capacity of the

working class to struggle for emancipation. Marxism’s ability to play a central leadership role

in such emancipatory projects was seriously limited. For many Marxists, the working class,

as a revolutionary subject, was deemed to no longer have any particular significance.

The thesis, in advancing the claim of Marxism’s continued relevance, drew attention to the

‘purpose’ of Marxism, and refocused attention to the issue of just what Marxism is for. In so

doing the thesis was also able to assert its own relevance. Section 8.1 therefore reflects on the

relationship between previous research and the contributions that the thesis makes to on-

going research. This relates to the review of contemporary literature that has been undertaken

and to what that literature either ignores, or to which is ascribed little significance. The thesis

advances cogent arguments and engages in debates that seek to advance Marxist theory in the

21st century.

Section 8.2 focuses on the implications that this project has for future debates and research. It

acknowledges the limitations that inevitably arise from such research, and of the criticisms

that it would inevitably invite, but also that the project makes a serious contribution to on-

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going debates and polemics. It seeks to return attention to Marxism’s core values and to the

role of the working class within Marxist theory.

Marxist theory exists within a broadly constituted battle of ideas. This battle is never over.

Section 8.3 therefore offers recommendations for future research. The thesis is but one step in

a process that will continue. The argument for the relevance of Marxism in the 21 st century

has been clearly established. However, there is no prescriptive path that Marxism must

adhere to. Debates as to how capitalism is to be confronted are necessarily pertinent to

‘today’ and consequently assume a sense of immediacy. What a ‘post-capitalist’ society

might look like is a question for the future. This project is simply a part of that on-going

process.

8.1 Reflections on the research

The thesis argued that Marxism still enjoys a sense of purpose and relevance for the 21 st

century. It further argued that in an era of capitalist crisis, Marxism, as a theoretical construct

and a guide to action, assumes an even greater degree of significance. The first of these

claims – of the continued relevance of Marxism – should not be especially contentious. The

extensive literature that is available points to the on-going importance of Marxist analysis and

of its capacity to interpret and understand the world. The literature that was reviewed as part

of Chapter 1 shows this to be the case. Issues such as the state and its relationship with

capitalism, the inherent crisis of capitalism, and responses to capitalist globalisation became

central to this review. Marxism provides a sound and rational means to analyse and observe

these historical processes as well as providing a mechanism by which to consider future

prospects for the development of capitalism. There is a growing literature that admirably

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traces the trajectory of capitalism and it clearly shows that Marxism, as a vehicle for analysis,

had and retains its claim to relevance in the 21 st century. While this is undoubtedly the case,

the study has argued that Marxism must be more than merely an analytical tool.

The second claim – of Marxism’s increased and heightened significance, not only as a source

of understanding capitalism, but importantly as a guide to action that would challenge

capitalism – reveals serious limitations in the literature. It is in this area that the thesis, and its

stated role of theory building, assumes special significance. The study has argued that a

prolonged ‘crisis’ in Marxist theory and practice has unconsciously assisted capitalism’s

capacity to remain unchallenged. The literature is replete with analysis of the developing

problems within Marxism but largely fails to address this interconnected issue.

These problems were apparent from Marxism’s earliest days. Marxism suffered a blow with

the split that centred on support for national bourgeoisies at the time of World War I. The

Russian Revolution offered hope and renewal, but the logic of the Marxist theory of

‘permanent revolution’ was replaced by Stalinism and the deeply flawed concept of

‘socialism in one country’. The Stalinisation of Marxism and the geographical shift in its

centre of gravity from Western Europe to the East led to fissures in Marxist theoretical

development. Western Marxism and the various schools of Marxist thought that followed

struggled with ways of overcoming problems, but a process of turning away from core,

elemental Marxist values became increasingly apparent. The role of the working class as

revolutionary subject was downplayed. The fundamental premise of Marxism, that political

and social institutions rested upon an economic base was, at first questioned, and

subsequently ignored. Social movement and identity politics became the perceived vehicles

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by which to advance anti-capitalist campaigns. All of this is revealed in the literature but

there are few calls to reassert Marxism’s historic call to ‘change the world’ and even fewer

proposals as to how that change might be effected.

It is not enough to simply state that Marxism enjoys on-going significance. Such a claim

needs to be validated and, as a means to that end, an uncompromisingly Marxist

methodological approach was employed. While acknowledging the depth of Marxist

scholarship upon which this study has drawn, criticisms cannot be overlooked or disregarded.

There is a tendency that can be observed, towards a one-sided and, at times impressionistic

perspective, rather than a dialectical analysis of issues and events. Each of the component

parts that have been isolated in the literature describing particular ‘problems’ that assailed

Marxism are analysed by many contemporary Marxist theorists and in great depth. However,

the literature frequently discusses historical moments and changes in perspective and

trajectory as isolated phenomena, which is a departure from the Marxist analytical approach.

The adoption of a consistent Marxist method of analysis allowed the study to synthesise the

component parts that constitute a ‘crisis’ in Marxism. In so doing the thesis was able to

describe the problems in Marxism, isolate the strengths and weaknesses that exist in the

theory and promote a perspective that would allow for a reinvigorated Marxism that can

challenge capitalism. Marx’s method, and its application for today, was described in some

detail in the thesis. In that discussion, I noted that Marx argued that what was essential was to

make observations that move from the simple to the complex and that show the inter-

relationship of all component parts and how:

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 simple conceptions such as labour, division of labour, demand, exchange value, and

conclude with state, international exchange and world market … The concrete is

concrete because it is a combination of many determinations, i.e. a unity of diverse

elements. In our thought it therefore appears as a process of synthesis, as a result, and

not as a starting point, although it is the real starting point and, therefore, also the

starting point of observation and conception (1974: 100-101).

A fundamental contradiction exists between capitalist globalisation and the continued role

and significance of the nation-state. While this is broadly recognised, it also exposes

limitations in contemporary Marxist thought and practice. The reluctance to move beyond

national responses to global issues needs to be overcome if the working class is to

successfully struggle for emancipation.

The overarching issue that framed this thesis was Marxism’s pivotal role in an age of

capitalist crisis. In responding to this I dealt, in some detail, with the ideologically charged

question of whether Marxism, apparently fragmented and riven by dislocations, can present

an effective challenge to capitalism and offer leadership in the quest for emancipation from

capitalism. In seeking to resolve these problems, and satisfactorily answering the questions

raised, the study reaffirmed Marxism as an ideological, theoretical and practical force capable

of effecting fundamental change.

The thesis, therefore, focused on divergent trends within contemporary Marxist theory and

explored mechanisms by which rapprochement might be possible. For this to happen there

needs to be a re-focusing by Marxists on the core, unifying elements of Marxism. This

includes the acceptance of the potential of the working class as a revolutionary subject, and

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on the primacy of economics as the central force that drives social, political and societal

developments. From such a position, it is possible to incorporate identity politics and social

movement politics into class-based movements that are, and must remain, independent from

the state.

Capitalism has survived potential breakdown, growing endemic crisis, and immense and

destructive internal contradictions. The study exposed the limitations that exist in the

literature and also pointed to areas that deserve attention in the future. Naturally the

parameters of such a thesis are limited. This is, after all, one contribution to on-going debates

and polemics. Such contributions will develop a theoretical and practical platform upon

which new research can build. They will allow Marxism to reconnect with its core, classical

premise, while still being able to adapt in order to meet the challenges that capitalism

presents. My thesis, in consciously seeking to contribute to Marxist theory in the 21 st century,

has implications for future research. It invites criticism. Marxist theory, however, has been

built on critical appraisals and disputation.

8.2 Implications and limitations of the project

The research was conducted within a very specific framework and with a particular purpose

in mind. It is a contribution to a ‘battle of ideas’ within Marxism that is as old as Marxism

itself. In the previous chapter mention was made of Cox’s famous observation that theory is

always for someone and for some purpose (1981: 128). I remarked that Marxism, too, is for a

particular purpose, arguing that this purpose is to promote a theory and practice that will

equip the working class to confront and combat capitalism. Central to this purpose is

Marxism’s capacity to respond to, address, and provide answers to the questions that

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capitalism, in the 21st century, raises. As a consequence, the arguments and research that

comprise the essence of this study need to be accountable and with it an acknowledgement

that these arguments have implications.

The trajectory of Marxism during the 20th century was, to a large degree, inconsistent with

the professed purpose and aims of Marxism as it was first constructed. The call, to not simply

interpret the world but to change it, became muted. Few theorists within the milieu of

contemporary Marxism care to be reminded of that injunction. This, perhaps, is not altogether

surprising. Such a reluctance can be explained from historically identifiable problems that

have besieged Marxism for a century. I have contended that many who have acted in the

name of Marxism have effectively, if unconsciously, done Marxism a disservice. Central to

the purpose and intent of the thesis was to respond to the question of just what Marxism is

for, and in so doing to emphasise the two interlocking elements of Marxism – the dialectical

unity of theory and practice. Two of Marxism’s most oft-repeated aphorisms; that without

revolutionary theory there can be no revolutionary practice, and, that practice without theory

is blind while theory without practice is sterile, are worth repeating and reconsidering.

Deutscher’s view that a rift between theory and practice had divided classical Marxism from

Western Marxism and the New Left is also repeated here. The historical shifts in Marxism,

were responses to capitalist crisis and development. The thesis, in arguing that Marxism

needs to re-engage in a fundamental way with its classical roots, moves beyond merely

engaging with the literature, or in highlighting what has been left unstated, but consciously

contributes to that literature and to Marxist theory.

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The study has focused on the need to re-invigorate Marxism. This has been argued from the

point of view of the historical purpose of Marxism and its stated aim of fundamentally

challenging capitalism and, in so doing, changing the world. Similarly, the thesis argued that

a re-engagement with the working class as revolutionary agent is essential, as is the

acceptance of classical concepts of Marxism. These concepts include the base/superstructure

formation of society, the class nature of capitalist society and the point that capitalist

reproduction is only possible within the framework of a class-based system that co-opts and

incorporates the working class. The trajectory of contemporary Marxist theory, however, has

been to promote non-class and supra-class social movements and the politics of identity.

These, almost polar opposites, would indicate that any serious potential for a re-forged and

united Marxism is unlikely. I have argued that this is, in all likelihood, the case but that in

reality such a scenario is not necessarily a negative result. At the same time, it is not

inconceivable that the ‘broad’ non-class movements can be integrated and incorporated under

an encompassing class-centered umbrella that accepts the primacy of the working class and

of its revolutionary potential. I have also argued that there is little to be gained by offering

prescriptive approaches. The necessity of an alignment of all Marxist schools is not of

primary importance. What is required is the return to the core values upon which Marxism

was built.

I claimed that this study has implications for future research and in the development of

theory. In a broader context, there are long-term implications for such a theoretical

perspective. Marxism’s relevance relies on its ability to initiate a challenge and to effect

change. This, it has been argued, can only be achieved if theory and practice complement

each other. A political expression of Marxist theory is required. One significant factor in the

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seeming inability for the working class and its allies to combat capitalism, is that the

traditional organisations of the working class have been increasingly incorporated into the

institutions of the state. An equally significant factor has been the historical crisis of

leadership that is similarly connected to this reliance upon those same institutions of the

capitalist state. As a consequence, new forms of political organisation, and the necessity of

constructing such organisations were briefly discussed.

The thesis advocates future discussions around expressions of Marxist theory and practice.

This sits comfortably within classical conceptions of Marxism and of its purpose. At the same

time, such a proposition invites criticism. The study has engaged with a range of divergent

Marxist schools of thought. To promote an activist view of Marxism with an overt perception

of its historic role of organiser, is necessarily to come into conflict with much of

contemporary Marxist thought. However, the intent of the thesis was to respond to the over-

riding question of Marxism’s relevance in an age of capitalist crisis. I have argued that the

relevance of Marxism must be gauged by its capacity to challenge capitalism and that

capitalism’s longevity can be traced, in part, to Marxism’s inability to present such challenge.

Any research that seeks to play a part in the development of a theoretical proposition is,

inevitably limited by a range of factors. These include time and the scope of the project, the

polemical nature of the arguments that are presented, and a separation between theoretical

premises and empirical evidence to validate those same premises.

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The scope of the study was deliberately broad and encompassed a sweep of time and space.

This approach was undertaken in order to provide an historical and theoretical overview and

employed a Marxist Historical Materialist approach. A range of separate but interconnected

issues were analysed. The thesis was critical of a widely-held tendency to isolate and separate

individual elements of a whole. It may be argued that these elements deserved a depth of

analysis that the structure of this project was unable to provide. Equally it can be argued that

the thesis opens up avenues for further research and analysis.