From International Socialism (1st series), No.6, Autumn 1961, pp.15-19.
Thanks to Ted Crawford & the late Will Fancy.
Transcribed & marked up by Einde O’Callaghan for ETOL.
Henry Collins is a staff tutor with the University of Oxford extra-mural department. He is involved in the educational schemes of the Amalgamated Union of Foundry Workers, the Fire Brigades’ Union and the Transport and General Workers’ Union. His publications include: Trade Unions Today (1950); with Basil Davidson and others, The New West Africa (1953); with H.J. Fyrth, The Foundry Workers: a trade union history (1960). He has published essays on the London Corresponding Society and the English Branches of the First International; and dealt in his D. Phil. thesis with England and the First International. Member of the Communist Party from 1936 to 1957 he now considers himself ‘on the extreme right of the extreme left’. He might be wrong.
The serf, in the period of serfdom, raised himself to membership in the commune, just as the petty bourgeois, under the yoke of feudal absolutism, managed to develop into a bourgeois. The modern labourer, on the contrary, instead of rising with the progress of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth. And here it becomes evident that the bourgeoisie is unfit any longer to be the ruling class in society, and to impose its conditions of existence upon society as an over-riding law. It is unfit to rule because it is incompetent to assure an existence to its slave within his slavery, because it cannot help letting him sink into such a state, that it has to feed him, instead of being fed by him. Society can no longer live under this bourgeoisie, in other words, its existence is no longer compatible with society.
Marx and Engels, Manifesto of the Communist Party, February, 1848.
Neither Marx nor Engels ever preached an iron law of wages. Both advised the workers to unite in trade unions and fight for improved wages and shorter hours. In these struggles, victories would be won. The workers could wring concessions out of the capitalists. ‘Now and then’, the authors noted in the Manifesto, ‘the workers are victorious, but only for a time. The real fruit of their battles lies, not in the immediate result, but in the ever-expanding union of the workers.’
Better living standards could be won by trade union pressure, as by political agitation, to secure such improvements as the Ten Hours Act. But such gains would be meagre, precarious and temporary. Marx showed in the first volume of Capital how every increase in real wages, by cutting into surplus value, reduced the funds available for new investment, retarded the accumulation of capital and so lowered the demand for labour. The supply of labour, however, constantly augmented by the ruin of the peasantry and the urban petty bourgeoisie, continually increased until the downward pressure on wages became irresistible. As Marx put it in his answer to Citizen Weston, though real wages could be increased here and there by trade union activity, ‘The general tendency of capitalist production is not to raise, but to sink the average standard of wages.’
In the second volume of Capital Marx went on to show how the stability of a capitalist economy depended upon proportionate rates of growth being maintained in the sectors producing capital and consumer goods. Contrary to the teachings of the classical and vulgar economists there was no built-in tendency for such proportionate growth to occur, and crises of over-investment and under-consumption were, for all practical purposes, inevitable. And in volume three he proved that capital accumulation, accompanied by the tendency for investment to become more capital-intensive, would produce a long-term tendency for the rate of profit to decline. Chronic crises, a growing disparity between the productive power of society and the standard of living of its people, and, finally, a tendency for capital accumulation to outrun the possibilities of profitable investment, so giving rise to a secular stagnation in investment and production – these are the developments which, though they were never systematized into a coherent model, the student of Marx would deduce from his analyses. Nearly a century has elapsed since Marx published the first volume of Capital and we are justified in saying that he was not too wide of the mark.
It is my own view that Marx correctly identified and diagnosed the central contradictions of capitalist economy. With all the modifications introduced since his death, it remains – and largely for the reasons he described – vicious, wasteful and unstable. The system is rooted in the exploitation of the producer by the property owner, as was every previous system since the birth of civilization. Unlike previous systems of class exploitation, however, capitalism had developed the productive forces to a point which renders the existence of classes unnecessary. Private property alone stands between mankind and the fairly rapid advance to an age of abundance.
All this can be true without our being any the wiser as to the way in which capitalism will be overthrown. Previous social systems have been unjust and inefficient and they have all generated class conflicts. They have been overthrown, as described in the Manifesto, in a variety of ways. Some fell apart through internal decay, like Rome, before being overwhelmed from outside. Others fostered the rise of more enterprising and progressive classes which succeeded, by revolutionary means, in changing a decrepit system of exploitation into one permitting more rapid growth. The dynamic of revolution differs from one society to another. In the case of capitalism, Marx was quite confident that he had discovered the dynamic. The system created the conditions in which the workers grew simultaneously more united, more organized and more desperate. Mass poverty would spark off the revolution, mass organization would carry it through. Both were equally inherent in the system, in its social relations and economic organization.
The crucial role which Marx ascribed to impoverishment is clear in a number of passages. ‘Along with the constantly diminishing number of the magnates of capital’, he wrote, in Chapter XXXII of the first volume of Capital, ‘who usurp and monopolize all advantages of this process of transformation, grows the mass of misery, oppression, slavery, degradation, exploitation; but with this too grows the revolt of the working-class, a class always increasing in numbers, and disciplined, united, organized by the very mechanism of the process of capitalist production itself.’ Though Marx was never dogmatic about the course of real wages under capitalism – they might rise here or fall there – there is a good deal of evidence from his writings that he expected a growing tendency towards impoverishment in its most brutal, physical sense.
I have not found in Marx any very explicit long-term theory of wages. The fluctuations in real and money wages, which he describes with considerable insight in Capital and in Wages, Price and Profit, are fluctuations within the trade cycle. Whether the trend of real wages, through a number of such cycles, would be upwards, downwards or neither is by no means clear. He was inclined to agree with Adam Smith that the accumulation of capital would tend, other things being equal, to raise wages. But he was careful to add that the constantly rising organic composition of capital (increasing capital intensity of investment, in contemporary terms) would lower the demand for labour generated by a particular volume of investment. And in Wages, Price and Profit he made it perfectly plain that he expected the second tendency to be stronger than the first. ‘In the progress of industry’, he concluded, the demand for labour keeps, therefore, no pace with the accumulation of capital. It will still increase, but increase in a constantly diminishing ratio as compared with the increase of capital.
These few hints will suffice to show that the very development of modern industry must progresively turn the scale in favour of the capitalist against the working man, and that consequently the general tendency of capitalistic production is not to raise, but to sink the average standard of wages, or to push the value of labour more or less to its minimum limit. The minimum limit was that necessary for sheer physical survival.
So far as the data available to Marx – or to anyone else writing in the 1860s – were concerned, these conclusions were reasonable enough. The onset of capitalism in England, in the late sixteenth century, had been accompanied by a disastrous drop in the standard of living. According to Phelps Brown, real wages in the building trade were higher in the fifteenth century than at any subsequent period until about 1880.  During the 1860s the urban death rate was, generally, rising and the average level of material well-being almost certainly fell. Marx could see the colossal advance in productive technique brought by a century of capitalist industrialization. He could see no corresponding benefits for the workers – if anything, their squalor and misery were tending to grow worse. He felt justified in concluding, therefore, that mass poverty and capitalism were inseparable and that, so soon as they had attained the necessary degree of organization and class consciousness, the workers would be compelled by sheer physical necessity to make an end of the system.
Available evidence seems to show that, from the 1870s onwards, this expectation ceased to be true. Progress in the means of production and transport brought about a marked cheapening in the workers’ means of subsistence. Together with this, the application of mass production techniques to clothing and furniture had brought, by the end of the century, a greatly increased range of commodities within
the purchasing power of the working class. Though the rise in prices which started in the late 1890s began to eat into these gains, they were never completely destroyed. The long-term trend of real wages from the first decade of the present century has been unquestonably upwards. The level of real wages doubles in each generation – more or less. I am not trying to present an idealized picture of capitalism, to ignore the miseries of pre-war unemployment or the large patches of degrading and preventible poverty that persist through affluence. I am not seeking to deny the instability, irrationality or waste in capitalism at the best of times. But I am trying to discuss the dynamics of revolution. And no social system has ever, in history, been overthrown because it was unstable, irrational or wasteful. To judge from the past, crises are required of such profundity that the masses are hurled into political activity while the ruling class falters and is split before social revolution becomes possible.
It is true enough that poverty, in itself, has never been a cause of revolution. (Otherwise revolutions would happen every day in some part of the world.) But Marx was right in believing that impoverishment, the incompetence of the ruling class ‘to assure an existence to its slave within his slavery’, a forcing down of the level of life through economic crisis, seemed, in the mid-nineteenth century, an essential pre-requisite for proletarian revolution. It also seemed, from the data then available to Marx and Engels, inevitable. It no longer seems so. And the question then arises for Marxists – what is now the dynamic of revolution.
It would be foolish to ignore the possibility of economic, political, colonial or international crises in one capitalist country or another which might precipitate a revolutionary situation. But this seems to me merely one possibility among a number, and by no means the most likely. Marx wrote his brilliant analysis of capitalist crisis on one assumption which has since ceased to be valid. He assumed that both the size and distribution of the national income would be determined by market forces, unchecked by conscious political controls. If crises are caused by (a) an inadequate market for consumer goods and (b) inadequately profitable investment outlets for that part of surplus value not spent on capitalist consumption, they can be countered by funnelling money from the private to the public sector and by expanding credit up to the point of full or near-full employment. Bernstein believed that the growth of monopolies would be accompanied by growing control over the market which would enable crises to be eliminated. But monopolies neither eliminate competition nor ensure that total demand grows fast enough to make possible the full utilization of resources. On the contrary, monopolies frequently operate by restricting the use of resources, so intensifying unemployment. Moreover, private monopolies succeed in raising their own rate of profit at the expense of other, less monopolized sectors of capital investment at home or abroad. The net effect of monopoly has been to intensify rather than mitigate crises. What has been happening over the last fifteen years, however, has been different in scale and in quality from anything experienced under capitalism before.
When the state assumes responsibility for a sizeable sector of investment, in nationalized industries, armaments, social services or whatever, the volume of investment is no longer geared, to the same extent, to profit expectations. When the state makes conscious use of budgetary and credit policy to control the level of demand, the oscillations in the trade cycle can be considerably modified. The degree will vary from country to country, depending partly on the size of the public sector and partly on the extent to which physical as well as monetary controls are operated. It seems unlikely that full employment can be indefinitely maintained. It seems more than likely, however, that mass unemployment on a scale sufficient to shake the social system – on a scale comparable with that of the nineteen thirties – can and will be prevented from occurring again.
That capitalism will waste and misuse resources is not seriously in dispute. But the waste and misuse of resources, though it arouses opposition and generates pressure for social change, does not in itself create revolutionary situations. Marxists are prone to believe, however, that capitalism somehow or other does generate such situations.
One school of thought argues, rightly, that imperialism, in the past, tended to stabilize the economies of advanced capitalist countries by providing markets, monopoly profits and, most important, profitable outlets for investment, in the colonial and semi-colonial world. But this was merely to stabilize capitalism at the centre while de-stabilizing it at the periphery. Events of the last sixty years have done much to confirm this analysis. But they have also shown something else. They have shown that under present conditions the break-through to independence in Asia and a large part of Africa, the weakening and, in part, collapse of imperialism at astonishing speed, have not been followed by economic or social crises in the former colony-owning countries. On the contrary, they have been accompanied by an unprecedented, if partial, achievement of economic stability. What is more, it is precisely those countries which have divested themselves, or been divested, of their colonies which have made the most rapid progress.
This, too, is explicable in view of the change in political and economic conditions. Economies prone to mass unemployment benefit by colonial investment outlets. Economies prone to inflation, which means, on the whole, to capital shortage, develop more slowly to the extent that investment is diverted from home to overseas. The substantial amount of capital exported from Britain and the USA during the nineteen fifties has actually handicapped them in competition with West-Europe and Japan. Particular financial and settler groups which maintain an interest in the preservation of the old colonial relationship have certainly been a major liability to capitalist Britain. The effects of this particular contradiction may be seen in current divisions within the Conservative Party; a comparable process is observable in France.
It seems only too likely, therefore, that capitalism can accommodate itself to a world without colonies. Moreover, if it can surmount the obstacles to an expansion in international trade caused by a largely archaic monetary system, the industrialization of under-developed continents can provide a further stimulus to growth. Reforms in the International Monetary Fund of the kind recommended by Triffin, and in the pattern of international trade and lending, along the lines proposed by Shonfield, will be needed if trade is not to be choked by an inadequate supply of gold and credit. The rationalization of international trade will require measures of control and planning which will certainly be resisted by the more orthodox pundits. Power will shift increasingly from its present centres in Washington, Moscow, London and Paris to such places as Peking, Delhi, Cairo and Rio. Such changes in the world’s power structure are unlikely to be smooth. They can give rise to crises and convulsions of various kinds of which social revolution is certainly one. To say this, however, is not to say that social revolution is inevitable, or even particularly likely. It remains, as always, a possibility, and no more.
Faced with developments which Marx did not foresee and could not have foreseen, some Marxists have produced a theory of the ‘permanent war economy’ to explain the unprecedented stability and unexpected growth of capitalism since 1945. And it is certainly true that military spending has supplied capitalism, especially in America, with a stabilizer of considerable power. But too much has been built on this single fact. Since 1953 the proportion of the national income taken up by military expenditure has tended to fall in the main capitalist countries. If capitalism were still functioning along pre-war lines we should have experienced a sizeable growth in unemployment over the last eight years. While this has, to some extent, happened in the United States and Canada, the opposite has occurred in Western Europe. Countries with an unbalanced industrial structure, such as Canada and Northern Ireland, or with a very small publicly-owned sector and a weakly developed apparatus of controls, such as the United States, are still abnormally vulnerable to unemployment, though on nothing like the pre-war scale. This type of problem can be acute but, once more, there seems to be no reason why it can not be mitigated, if not solved, within the framework of capitalist property relations.
The changes which have occurred within the structure of capitalism seem, on the whole, beneficial. Socialists should welcome, not deplore them. The welcome does not preclude criticism of their inadequacies and exposure of the abuses which continue to flow from private ownership. But full or near-full employment has given the worker an enhanced status as well as a higher standard of living. Welfare services are incomparably better than they have ever been. The industrial power of labour, especially in Britain and the United States, supplemented by a degree of political influence, is a force making for social progress. The extent to which economies in under-developed countries and, to a limited extent, in France and Britain, have come to depend on a degree of public ownership and social control, is all to the good. A final factor determining the development of world politics, and perhaps the most important, is the emergence of a socialist sector in the world, equal to the capitalist in military strength and overhauling it rapidly in economic development.
I believe that the classification of regimes established by Communist parties in a number of countries as ‘state capitalist’ is not only wrong but dangerously misleading. Like the ‘permanent war economy’ explanation of certain new features in capitalist economies, the ‘state capitalist’ classification is based on a correct insight which is then grossly distorted. A socialist party which takes power in a country of under-developed capitalism can abolish capitalist property. It seems unlikely that it can quickly establish anything like a classless society. Moreover it must, if it is to develop its productive forces, practise what Preobrazhensky called ‘primitive socialist accumulation’.
The desperate shortage of technical and administrative skill, combined with the necessity for rapid growth, demands incentives which will result in a highly inegalitarian income structure. High incomes, perks and privileges at the top, combined with hardship for the mass of the people who provide the means for socialist accumulation, gives rise to some exceedingly ugly distortions. Military preparations in face of world wide hostility, pitiless repression of opposition, and the hypocritical pretence that such policies are based on popular support, produce a regime which is in many ways a hideous caricature of the free, democratic, classless society of which generations of socialists dreamed and which they sought to create. None of these indubitable truths should blind us to the fact that socialism is a hardy plant. Once it has taken root, in however unfavourable a soil, it tends to survive. If it sprouts thorns where we had expected flowers, it survives, nonetheless, and remains capable of further change.
There is no evidence that the high income and privileged groups in communist societies have congealed into a class. Without the solidifying interest of private property ownership which served to unite feudal and capitalist ruling classes it is, indeed, difficult to see how this can happen.
With all their undoubted shortcomings, based on the primitive techniques which they inherited and the adverse conditions in which they grew, communist societies have liberated the productive forces from the fetters of private ownership. Their economies develop at twice the rate prevailing in the capitalist world. And as they develop, these societies tend, though naturally not in a smooth or uniform fashion, to shed their more barbaric and bureaucratic features. The level of life improves for their peoples, culturally as well as materially. They constitute the main challenge to the preservation of capitalism in the rest of the world. As a result of their existence and their challenge, nations emerging from colonial subjection enjoy a freedom of action and a room for manoeuvre which have not existed in the past. And the organized working class, fighting to improve its standards and, as part of the process, to extend the area of social control and democratic participation, meet resistance from a ruling class which has lost its grip on the world and which faces the challenges of the communist sector, of the emerging Afro-Asian, Middle Eastern and Latin American nations, with diminished unity and self confidence.
Under these conditions, it seems to me that development towards socialism in the capitalist countries will be a piecemeal, ragged, interrupted but nonetheless persistent process. Victories by the working class will result in encroaching control by a state acting under constant democratic pressure. This is not a perspective of gradual, harmonious, fabian-type progress. The class struggle will as always, constitute the main engine of social change. Concessions will not be won, and most certainly will not be retained, without constant labour and democratic, pressure. At various times and on various issues other groups, classes and nations will fight alongside the working class, but the workers will remain, as aways under capitalism, the only consistent progressive and revolutionary force. But the revolution will be protracted and capitalist power will be squeezed out rather than struck down.
It will be argued, against this perspective, that no account has been taken of the nature of the state, of its role as the coercive apparatus of the propertied classes and of the impossibility of advancing to socialism without destroying the bourgeois state. Capitalism, as many Marxists will admit, is capable – has always been capable – of responding to working class pressures by concessions. But, if there is any validity in the classical Marxist analysis of capitalism and in the Leninist view of the state, it will be urged that there must be a limit to this process of concessions, that a point will inevitably be reached when there are no more concessions to be wrung by pressure, and that then the final, revolutionary conquest of power must be attempted. It is precisely this apocalyptic Marxism which seems to me dogmatic and unrealistic in the conditions of the mid-twentieth century.
I am not, again, denying the possibility of some such developments in one or more countries, in varying combinations of unpredictable future conditions. But I am certainly denying their inevitability and questioning the wisdom of Marxists in putting all their eggs into this particular basket.
Ultimately, the power of capitalists to grant concessions depends upon the expansive power of their economies and of the world market. A contracting world market, a repetition of the economic experiences of the 1930s, would very soon see capitalism showing its uglier side once more. But I see no hard evidence that capitalism has exhausted its possibilities of expansion, or that the world market is going to contract. Certainly, some drastic changes are needed in the international machinery of credit and in the pattern of international trade. These will, equally certainly, cut across the requirements of financial orthodoxy and require, at some stage, an increased amount of state control over foreign trade and lending. Such changes will be resisted, but they are no more incapable of being adopted than were the other, Keynesian changes in internal economic direction which, contrary to the expectation and prediction of Marxists, have eliminated mass unemployment as a permanent feature of capitalism.
Concessions and reforms along the lines I have indicated can not occur without changing the balance of class forces still further. The encroaching power of the state over the economy and of working class pressure on the state might even reach the point of no return when the capitalists, though not eliminated, cease to dominate the economic, political and social scene. How the capitalist class would react in such contingencies remains to be seen. There are severe internal contradictions within this class, nationally and internationally, and there are no precise precedents for present or probable future conditions. I am preaching, here, the case for agnosticism, in the absence of hard evidence. The working class, most certainly, should keep its powder dry and its pressure up. But the timing and even the form of the ultimate transition is still, as far as I, at least, am concerned, wrapped in the mists.
Historical parallels are dangerous but, with certain qualifications, one parallel irresistibly suggests itself. When capitalism emerged from feudal conditions, it won its first decisive victories by revolutionary armed conflict in Holland, Britain, North America and France. By the mid-nineteenth century capitalism had emerged as the dominant world system. Elsewhere the feudal nobility had not been overthrown. But feudal and semi-feudal monarchies were under constant and, ultimately, irresistible pressures, both internal and external, to yield their privileges and to permit, with many and sometimes frantic rearguard actions, the transformation of their social structure into shapes more appropriate to the prevailing conditions. The balance of evidence suggests to me that some such process may be at work today.
The forms of struggle are more complex than before and the dangers immeasurably greater. But there seem good and reasonable prospects of eventual success. Under the circumstances, the most suitable slogan for socialists who. want to make their socialism effective would seem to be – ‘reformist tactics within a revolutionary strategy’.
1. In the published version the note seems to have been accidentally omitted. – ETOL
Last updated on 21 February 2010