A Conversation With Nick Beams
August 2003—Nick Beams talks about US militarism, global political economy, and the anti-war movement in an e-mail interview with Gloves Off editors Sara Burke and Claudio Puty. This conversation was inspired by Nick's talk, "The Political Economy of American Militarism."

Note on this series: our conversation with Nick Beams—co-editor of the World Socialist Web Site and National Secretary of the Socialist Equality Party in Australia—is the first of what we hope will be many conversations with a variety of parties, groups and tendencies on the Left. We believe that conversation and debate—whether they end in agreement of disagreement—have always been a vital feature of the Left and are particularly necessary now, as worldwide mobilizations against US militarism and the inequality and injustice wrought by global capitalism gain in strength and intensity.

We also hope that these conversations will not end here: we urge you take them up with us [email editor@glovesoff.org] and/or with Nick Beams [editor@wsws.org].

GLOVES OFF:
Nick, thanks for making the time to have a conversation with Gloves Off.

You begin your analysis of the political economy of American militarism by characterizing the time we're living in as the beginning of a new era. You argue that we are experiencing a phenomenon Trotsky described as a "truly volcanic eruption of American imperialism." You conclude the article with an appeal to the global justice movement: treat the globally-coordinated demonstration as a giant experiment to test the validity of protest politics.

Since the demonstrations were clearly unable to stop the war or to influence US actions in the war—even though the UN, as a body, refused (or failed) to back the US—you challenge that movement follow the experiment to its logical conclusion: assimilate the history of the 20th century—and, by extension, grapple with your own history and ancestry—and critique your political perspective.

A first step in this project would be to recognize that the rise of American militarism—and the concurrent restructuring of international relations—was precipitated by the collapse of the Soviet Union. On its own, this is an obvious conclusion, regardless of one's political perspective. But you go on to advance a classical Marxist argument that this historical process—the collapse of the USSR and rise of US militarism—is driven by the laws of political economy that govern capitalist accumulation.

We think this is an extremely important project. Can you address the theoretical and organizational—and even political!—challenges to communicating this perspective to a movement that is as broad as the global justice movement?

BEAMS:
I would like to begin my reply by citing some passages from Marx’s famous letter of September 1843 to Arnold Ruge in which he outlines his approach to political struggle.

The key issue for Marx—a point he emphasised again in The Communist Manifesto—is that “we do not anticipate the world dogmatically but we first try to discover the new world from a critique of the old one.” Hence the method which must be employed is one of ruthless criticism of all that exists. This criticism, however, is not carried out on the basis of some dogma, or new principle. Rather, Marx continues: “We develop for the world new principle out of the principles of the world. We do not say to the world: Give up your struggles, they are stupid stuff; we will provide you with the true watchword of your struggle. We merely demonstrate to the world why it really struggles, and consciousness is something it must adopt, even if it does not want to do so. …Our slogan must therefore be: reform of consciousness, not through dogmas but through analysis of the mystic consciousness which is unclear to itself, regardless of whether it is religious or political.”

I attempted to follow this approach at the conclusion of my report. What lessons need to be drawn from the experiences of the mass movement which developed in opposition to the launching of the invasion of Iraq? There is no question that millions of people were motivated to come on the streets in the largest demonstrations in history by a deep opposition to the policies of the various capitalist governments. But the fact that the demonstrations failed to prevent the war requires that an analysis be made. In other words, given that the perspective of pressure politics had failed, the question of what perspective must now be adopted is immediately raised—not as the outcome of some dogma but from the experience of the mass movement itself.

It is on the question of perspective that political differences, which, in the final analysis, reflect different class tendencies, start to emerge.

Take, for example, the positions of George Monbiot which I raised in my report. According to Monbiot the task before the “global justice movement” is the development of a political struggle for some revamped version of the United Nations.

Anyone who is seriously committed to the struggle against imperialism and war will surely reject this perspective, not only on the basis of the UN’s role in sanctioning the actions of the US and Britain in this war, but through an examination of its history. That history has shown that it has functioned, as Lenin characterised its predecessor, the League of Nations, as a “thieves kitchen”.

It is clear that the struggle against war cannot be seriously addressed without tackling the question of global economic power. That is, the struggle against imperialist war is inseparably bound up with the struggle against the capitalist system from which it arises. And that means a serious analysis of the history of the Marxist movement and the perspective for international socialism which it has advanced.

Here we find that Monbiot’s proposal for a new UN represents an attempt to block the development of such an analysis. This is made clear in his book The Age of Consent in which he advances his perspective for a “global democratic revolution” to bring about a “world parliament”. According to Monbiot there are two tendencies that compete for what is generally recognised as democracy—Marxism and anarchism. Marxism, he insists, must be rejected.

“[N]othing is more persuasive of the hazards of Marx’s political program than The Communist Manifesto. It seems to me that this treatise contains, in theoretical form, all the oppressions which were later visited on the people of communist nations. The problem with its political prescriptions is not that they have been corrupted but that they have been rigidly applied.” [Monbiot, The Age of Consent p. 26] Not content with equating Marxism with the crimes of Stalinism—the stock in trade of every right wing political tendency—he goes on to conclude that Marx sanctioned the wiping out of indigenous peoples and provided the perfect excuse for “ruthless extermination” and provided the justification for “numberless atrocities.”

Thus an examination of the positions of Monbiot and others like him immediately raises all the issues of the history of the 20th century. Are the crimes of Stalinism the result of Marxism or of its betrayal? Do the “numberless atrocities” of this century flow from the doctrines of Marxism or such concrete historical developments as the First World War which saw the institution of mass slaughter? To answer these, and many other questions of perspective, it is necessary to come to grips with the greatest event of the century just past—the Russian Revolution. The analysis of its origins, development and betrayal provides the refutation of all those who attempt to blame Marxism for the crimes of those who betrayed it.

This issue is at the heart of the development of the WSWS. We have insisted that the development of an international socialist movement and the revival of a genuine socialist culture requires an analysis of the historical experiences of the 20th, including not only an analysis of the most crucial strategic political experiences, but also a grasp of the political economy which underlay them.

Such an understanding will be imparted to broader layers of the working class, youth, students and intellectuals as they seek to grapple with the issues of perspective that are thrown up by the struggle against imperialism and war.

That can be seen even from the limited experiences of the recent period. Take the issue of the globalisation itself and its relationship to the nation-state. Right from the outset—the anti-WTO demonstrations in Seattle in November 1999—the WSWS took issue with those who maintained that the problem was “globalisation” and that it was necessary to base oneself on the national state. We undertook a discussion of this issue with Professor Michel Chossudovsky in February 2000 in which we insisted that the globalisation of production actually provided the material basis for the development of an international socialist movement.

Over the past three years a certain understanding has developed, not least I believe because of the work of the WSWS, that the struggle against global capitalism cannot be fought by basing oneself on the nation-state. The extent of this shift can be gauged from the fact that Monbiot, for example, feels the need to adapt to it. After promoting defence of the national state, he now feels obliged to admit that he made a “mistake” on that score.

To sum up: On the theoretical front the challenge is to develop an analysis of the political economy of the 20th century as part of the elaboration of a socialist perspective. The communication of this analysis will take place through a critique of opposed tendencies and positions. Such critiques will by no means be a sterile debate but will find a widening audience as more and more people seek answers to the issues that confront them the struggles that lie ahead.

GLOVES OFF:
A critique of tendencies and proposals is clearly an important next step—but not merely a critique, I think you would agree. It's important to ACTIVELY debate specific proposals coming out of the global justice movement, like George Monbiot's. It is equally important to confront the ongoing, historical schism between anarchists and Marxists, and—in a sense—to insist that the movement learn its history.

Monbiot re-invigorates this schism with the remarks you mention on the Communist Manifesto. And he's hardly alone. David Graeber (activist and academic) has made similar arguments in "The New Anarchists," New Left Review, January-February 2002. And—among Americans—Noam Chomsky is probably the most persistent and influential Bolshevik-basher and cheerleader for anarchism (eg. notes on anarchism and anarchism and Marxism in Z Magazine).

Critiquing the perspective of those who currently call themselves anarchist means giving their beliefs closer scrutiny. Barbara Epstein (who, BTW, has an interesting article on the anti-war movement in the July-Aug 2003 Monthly Review) wrote an insightful article in the Sept 2001 Monthly Review called "Anarchism and the Anti-Globalization Movement." She argues that the history of antagonism between anarchists and Marxists has created a stereotype of anarchism in the minds of many Marxists that prevents them from fully grasping the perspective of today's young anarchists. This perspective, she says, has little to do with the theoretical debates between anarchists and Marxists that took place in the late 19th and early 20th centuries and more to do with egalitarian and anti-authoritarian strains of democratic socialism. Clearly, it is extremely important for Marxists to grasp the nuances of today's anarchism and to reflect a full understanding of it in their critiques—rather than stereotyping or merely dismissing it—since it has such a powerful attraction for today's radical youth (eg. the 200,000 who gathered at Larzac last weekend).

Can you comment on the merger of anarchism, the global justice (or anti-globalization) movement and the anti-war movement? Are there any meaningful historical precedents to what we are seeing now? What specific arguments do you think Marxists need to advance in an ENGAGED critique of anarchist tendencies and the proposals coming out of the global justice movement?

BEAMS:
In the first place I would take issue with your contention that there has been some kind of merger between anarchism and the anti-war movement or that the tendencies to which you refer occupy a leading or dominant position.

If we take the demonstrations which emerged around the globe on February 15-16 they were characterised by the fact that they owed no allegiance to any particular tendency. The general sentiment was that somehow mass pressure could be brought to bear on the various governments to try to stop the war that was about to be unleashed.

Perhaps I have failed to make myself sufficiently clear on Monbiot. The point I was making was that his proposal for a revamped United Nations cannot in any way meet the problems of global governance confronting humanity precisely because he bases himself on capitalist private property and the nation state—the two key social relations which lie at the root of the present historical crisis. Monbiot may describe himself as an anarchist but on concrete political issues he comes down as a supporter of the capitalist nation-state.

This is not the place to take up a debate on the positions of Noam Chomsky. I would merely point out that like anarchists in the past—for example in the Spanish civil war—he comes down on the side of the capitalist state. Chomsky was supporter of the US intervention in Haiti carried out by the Clinton administration in 1994 to install a government headed by Aristide. According to Chomsky there was no other alternative.

The political significance of his position can be seen from recent history with imperialist interventions increasingly being carried out under the banner of “humanitarianism” or “democracy”. One need only recall the military actions in Bosnia and the war against Serbia over Kosovo, as well as the Australian military intervention in East Timor. [eg. see the report, "From Anti-War Protester to Advocate of US Aggression" on Chomsky's support for the Clinton intervention in East Timor.]

The specific arguments Marxists will advance against the so-called anarchist tendencies will be along the lines they have advanced in the past. That is, they will demonstrate that anarchism is a political tendency which aims at the subordination of the independent movement of the working class to the bourgeoisie and ultimately, despite all its protestations to the contrary, to the capitalist state itself.

Of course all these tendencies base themselves on the claim—advanced in the first place, it should be noted, by the most right wing ideologues of the capitalist class—that Bolshevism came to power through a coup, that Stalinism was the necessary and logical continuation of Leninism and indeed Marxism itself. Of course what none of them can answer is why it was that the attacks of the Stalinist bureaucracy were directed above all at genuine Marxism. Once again these issues will be settled through an examination of the history of this century—a history which demonstrates that Stalinism was not the continuity of Marxism, but its counter-revolutionary negation.

GLOVES OFF:
Let's return to a consideration of the root causes of the "volcanic eruption of American imperialism" the world is now living through. In your report on "The Political Economy of American Militarism"—and in general in your writings—you approach issues from a broad, historical perspective. Your analysis of the present phase of US imperialism starts—not with the war on Iraq, or with the present Bush administration—but 30 years ago, with a downswing in the long-term "curve of capitalist development" that—despite all efforts of the capitalist class to reverse it—continues to steepen because it is driven by the process of capital accumulation at the very core of the capitalist economy.

As this downswing manifests more and more directly in the US economy and drives the US ruling class further in its policy of "regime change," or the forced economic restructuring of "rogue states," what consequences are we likely to see in the world? How do you think the present crisis in both US and global capitalism likely to manifest in relations and developments in Europe, Asia, Africa, Latin America—and in the relations between the regions in the coming months and years? If we are entering a fundamentally new era, what are its central characteristics?

BEAMS:
The underlying cause of the downswing in the curve of capitalist development since 1973 has been the decline in the rate of profit, which, despite all the efforts over the past three decades, capital has been unable to restore to the levels achieved during the post-war boom.

This continuous downward pressure on profit rates has had two major consequences. It has led to a reorganisation of capitalist production—globalisation and the use of computer technology—and the intensification of conflicts between the major capitalist powers.

These processes are at the root of the eruption of American imperialism. In considering this issue, it is important to recall Trotsky’s remark that “Imperialism represents the predatory capitalist expression of a progressive tendency in economic development—to construct a human economy on a world scale, freed from the cramping fetters of the nation and the state.”

Imperialism cannot resolve the contradiction between the global character of production and the nation-state on a progressive basis. Rather, its efforts prepare the world for a catastrophe.

The US is now seeking to re-organise the world to meet its needs and interests, ultimately to ensure that US firms and corporations, financial institutions and banks, are able to advance their interests against their rivals.

However, the other capitalist powers are driven by the same agenda. In this struggle lies the basis for a new inter-imperialist war. In his explanation of why the socialist revolution was an objective historical necessity—in answer to Kautsky and others—Lenin explained that the First World War marked a new epoch. Any peace that emerged, no matter how long it might last, would only be an interlude until a new imperialist war developed.

This analysis seemed, at least to some, to be a long way from the mark during the post-war period. But with the collapse of the economic and political framework which sustained that period of “peace” the conflicts between the major capitalist powers are rapidly coming to the surface.

What was the dispute between France, Germany and the US over Iraq all about? Ultimately over the issue of which of the great powers is to be dominant in the Middle East and benefit from the appropriation of its wealth. And with the failure of the European powers to put a spike in the wheel of the US juggernaut, one of the key issues of discussion in European political circles is how American military power can be countered, or at least how Europe must acquire sufficient military force to start asserting its interests.

Likewise in Japan we find that there are continual moves to scrap the post-war restrictions on the use of the military overseas.

In the region of the world where I live we find the Australian government seeking to re-organise the South Pacific—described by Prime Minister Howard as “our patch”—to ensure that Australia, rather than some other power will exercise hegemony over this region.

There is a remarkable passage in the US National Security Strategy issued last September. “Today,” the document asserts, “the international community has the best chance since the rise of the nation-state in the seventeenth century to build a world where great powers compete in peace instead of continually preparing for war.” This is because the great powers find themselves on the same side. But as the document, itself recognises in the same paragraph, that could rapidly change. “We will strongly resist aggression from other great powers—even as we welcome their peaceful pursuit of prosperity, trade and cultural development.”

The point, however, is that the so-called “peaceful” pursuit of markets, of trade, of profit by the capitalist great powers—under conditions where profit rates are under continuous downward pressure—leads them into conflict with each other—conflicts which must, at a certain point, take a military form.

All the capitalist powers are forced, both for strategic and economic reasons, to pursue an imperialist foreign policy. The European opponents of the US are not anti-imperialist; they simply are opposed to American policies which cut across the interests of French or German imperialism.

The changed international framework conditions the internal situation. Imperialism is always accompanied by anti-democratic measures and so we see in all the major capitalist countries the introduction of laws and regulations—very often in the name of combating terrorism—which infringe on fundamental democratic rights.

If we were to sum up the overall situation we could say that humanity faces the same issues which it confronted at the beginning of the 20th century. The world must be reorganised. But the question is by whom? The re-organisation under imperialism inevitably means—is already producing—the development of barbarism.

It is within this context that the significance of the Russian Revolution emerges. It should be recalled that the perspective of Lenin and Trotsky was not that the taking of political power in Russia was an end in itself. Rather, it was conceived of as the opening shot of the world socialist revolution. It was the first attempt to resolve the problems of mankind’s historical development that had been revealed too graphically by the war.

We know that this first attempt failed—the socialist revolution did not extend and a monstrous bureaucracy arose in the Soviet Union. But the historical problem which the revolution set out to resolve—that is the contradiction between the world economy and the division of the world into rival capitalist nation-states—has deepened. This means that the experience of the Russian Revolution—the key defining event of the 20th century—must be studied and analysed as we confront the problems of today.

And anyone in the "global justice movement" who is seriously seeking answers to these complex issues should reject the attempts of Monbiot, Chomsky and other so-called “anarchists” who maintain that the reasons for the degeneration of the Russian Revolution lay in the doctrines of Lenin, or even Marx.

GLOVES OFF:
In your report on The Political Economy of US Militarism, you include a shocking statistic on the US balance-of-payments deficit. That deficit, you say, is over $500 billion and likely to increase, which means that "in order to finance its payments gap, the US has to suck in $1 million every minute from the rest of the world, all day, every day."

This picture of the state of the US economy in the current downswing makes it clear how desparate the capitalist class (and government) in the US must be to find profit and advantage--competitive or military--wherever they can.

But there would seem to be contradictions between the needs of transnational corporations and the needs of the US government, or any national government. Can you talk about the economics of the transnational corporation in this context? In what cases are their interests in line with those of the US government, and where are they opposed?

BEAMS:
First of all it is important to understand that the transnational corporation arises out of the globalisation of productive capital. Many writers (Hirst and Thompson the most notable) in arguing for a national-based political program have claimed that the present phase of globalisation is not really all that significant as previous periods – in particular the 30 years before World War 1 – saw the development of an international economy.

They either miss or attempt to cover over what is new about the present period. Capital exists in three forms: money capital, commodity capital and productive capital. The first phase of globalisation at the end of the 19th century saw the globalisation of capital in the money and commodity forms – the development of international trade in mass produced farm products and raw materials and factory-produced goods along with an international banking and financial system. However productive capital, that is capital engaged in the extraction of surplus value from the working class, remained confined within the framework of a given nation-state. To be sure there were multinational companies but they were that multi-national rather than transnational or global. General Motors, for example, set up overseas operations to produce the Opel in Germany, the Vauxhall in the UK or the Holden in Australia. But it was not yet a transnational corporation in as much as these companies carried on as if they were national-based firms, extraction surplus value from the working class within a given nation.

That is no longer the case. The extraction of surplus value from the working class now takes place on a global scale. This gives rise to all manner of contradictions with the nation-state form of organisation. For example, much of the clamour in the US about the need for a revaluation of the Chinese currency comes from American companies which do not have operations in China. They are not complaining about “Chinese” imports to the US. Rather their objections are to US-owned transnational corporations which have set up operations in China and which are undercutting wholly US-based firms.

Much of the trade deficit of the US is caused by “imports” from US firms and corporations. But the existence of a $500 billion a year balance of payments gap does pose a real problem for US financial authorities. Greenspan and others live with the “nightmare scenario” that on the one hand they may be forced to raise interest rates to ensure the flow of capital into the US, while on the other they want to lower interest rates to prevent the US economy from plunging into recession. So we could have a major financial crisis arising, at least in part, as the result of the global activities of US-owned transnational corporations.

It would not be the first time this has happened. If we go back 30 years, the origins of the present forms of the international capital and currency markets lie in the conflicts between the global movement of capital and the national state. The Bretton Woods system of fixed currency exchange rates, that had formed the basis of the international financial system since the end of World War 2, came to an end on August 15, 1971 when President Nixon removed the gold backing from the US dollar.

This decision was a recognition that it was no longer possible for national governments to regulate currency exchanges. Those efforts had been steadily undermined by the rise of the so-called Euro-dollar market over the preceding 15 years. The Euro dollar market arose from the activities of British and then US banks to escape from the regulations imposed by national governments in order to meet the needs of their corporate clients. In 1958, as sterling was about to be made freely exchangeable with the dollar, the British government imposed certain restrictions in order to smooth the transition. British banks, anxious not to lose their customers, began using their dollar holdings as the basis for lending, thereby escaping the clutches of the Bank of England. Likewise in the 1960s when the US government faced with a growing deficit as a result of the Vietnam War tried to impose restrictions and taxes to halt international capital outflows, American banks became involved in the Euro dollar market.

The historical significance of the transnational corporation lies in the fact that it is the form taken under capitalism of the drive of the productive forces to overcome the limitations and constrictions of the nation-state. Moreover, these organisations lay the material foundations of globalised production organised and regulated by the “associated producers.”

The development of the transnational corporation surely puts to rest all the arguments advanced by supporters of capitalism that a planned world socialist economy would be impossible to organise. Global planning of production, down to the very last detail one might add, is already taking place within vast transnational corporations, many of which are larger economic entities than whole countries. If it is possible to plan production globally in order to extract profit, then it is certainly possible to plan global production to meet human need.

While the transnational corporation seeks on the one hand to escape the clutches of the nation-state, on the other hand it needs the political power of the national state as it conducts the struggle for markets and profits. To be sure there are conflicts between the capitalist state and the interests of transnational corporations. There have always been conflicts between different sections of capital and the capitalist state. But these conflicts are relative, not absolute.

Sometimes the argument is put – echoing the claims of Kautsky on the eve of World War 1 – that inter-imperialist war is out of the question because of the close economic integration effected by the transnational corporation. Norman Angell advanced a similar argument in 1910. There is no doubt that the global economic integration has proceeded to a level never reached in the past. But this global integration is itself the outcome of continuous downward pressure on the rate of profit over the past three decades which has made the struggle for markets and resources more intense than ever. In other words, the world is at the same time become more integrated and more divided. It is united by the development of new production methods and organisation – which lay the basis for a higher economic development – and divided by private profit system and the nation-state system in which it is rooted.

Transnational capital may at time come into conflict with its “own” national-state. Such conflicts are relative because, in the final analysis, it needs the power of that state to undertake action against other sections of capital -- to open up markets, remove restrictions on its operations and ultimately undertake military operations on its behalf.

GLOVES OFF:
To finish up, we'd like to explore a little of the history of the "long-term curve of capitalist development" idea that has wound its way through our discussion.

In the early years after the Russian Revolution, Soviet economist Nikolai Kondratieff gathered data on commodity prices and wages (such as could be compiled) from the 19th century to investigate the possibility of long-term economic cycles, which he called "long-waves."

His work was criticized by Leon Trotsky in reports to the Third International in the early 1920s. Trotsky was concerned that Kondratieff based his theory exclusively on statistical observations and lacked an analysis of the concurrent social and political developments that were present in a complex analysis of "the long-term curve of capitalist development."

In another vein, Schumpeter in the 1930s expanded on Kondratieff's work but transmuted long-waves into a theory supportive of capitalism in general. Ernest Mandel, then, in the early 1970s, re-asserted Trotsky's concerns for grounding an understanding of capitalism's development in its concrete facts while at the same time surpassing the limitations of economic data. Mandel's long-wave theory (in his book "Late Capitalism") attempted to bring a full application of Marx's laws of motion to the concrete history of capitalism up to the point of its publication in 1972.

Mandel's book ends where our discussion of the current downturn begins, in the early 1970s. At that time he saw the current long-wave's period of expansion flattening out into a period of stagnation, which has clearly now moved on into a period of contraction and downturn.

In previous remarks you have made it clear that the history of your tendency shows sharp political disagreements with the International Secretariat of which Mandel was a leader. If it is possible to leave aside, at least to some extent, the political differences--and the political conclusions and strategies Mandel drew from his own analysis--what we are most interested in discussing is where your ECONOMIC analysis of long-waves and the long-term curve of capitalist development differs from Mandel's analysis and on what points you might agree.

BEAMS:
The essential difference between Trotsky and Kondratiev over the question of “long waves” was not over the use of statistics or whether such “large segments” in the curve of capitalist development existed. Trotsky disagreed with Kondratiev over their historical significance and in particular the designation of them as “major cycles.”

The implication of such a designation was that they had the same law-governed character as the “minor” or business cycle. “The periodic recurrence of minor cycles,” Trotsky wrote, “is conditioned by the international dynamics of capitalist forces, and manifests itself always and everywhere once the market comes into existence.” [The Curve of Capitalist Development in Problems of Everyday Life p. 276]

The succession of boom, crisis, recession, recovery takes places as long as capitalism continues. Against those who maintained that the sharp downturn of 1920 was the final crisis of capitalism, Trotsky explained that it would be followed by an upturn in the business cycle, driven by the internal dynamic of the capitalist economy. This, however, did not change the character of the epoch but merely that like a dying man, capitalism continued to “breathe” right up to the moment of death.

According to Kondratiev, however, not only was the business cycle driven by the internal dynamics of capitalist production, but the “major cycle” as well. That is, an upswing would be followed by a downswing and, in particular, the downswing, into which the capitalist system had entered around 1913 would inevitably be followed by a new upswing, just as in the business cycle, recession inevitably gave way to an upturn.

What followed from this perspective was that capitalism would go on indefinitely and consequently there was really no objective basis for the socialist revolution. This meant the positions of Trotsky and Kondratiev were fundamentally opposed.

However in his discussion of “long waves” Mandel attempted to bridge that chasm. Here I am basing myself on the very fine article on this question by the Canadian writer Richard Day which appeared in the New Left Review of September-October 1976. Allow me to quote some of his conclusions.

Day began by pointing out that in Late Capitalism, which had only just been published, Mandel had “made a systematic effort to reconcile Kondratiev’s conclusions with the Marxist tradition in general, and with the view of Leon Trotsky in particular.”

There was, however, a fundamental difference between Trotsky and Kondratiev. As Day put it: “Trotsky rejected the concept of long cycles on the grounds that Kondratiev had obscured the difference between periodical cycles and separate historical periods. Marx had succeeded in discerning the regularity in the pattern of short cycles because these were the consequences of the internal contradictions of capitalism. Before one could speak of regular long cycles, however, one had first to posit the existence of an internal regulator. But as Trotsky sought to demonstrate in his diagram (in the article The Curve of Capitalist Development), the turning-points of capitalist development were regulated by external conditions and by the relative autonomy of superstructural phenomena. The turning points were, therefore, unpredictable in character and no automatic periodicity was possible.”

Let us recall that in his speech to the Third Congress in which he first explained the significance of the long term curve Trotsky made clear that a new period of capitalist equilibrium was possible. But, it would not arise as a result of the automatic development of capitalist economy. Only if the working class failed to take power and, as a consequence capitalism, plunged mankind into a new round of death and destruction only then, on the bones of millions of people, might a new upswing take place. As we know Trotsky’s “prediction” was tragically vindicated, but the possibility of a new upswing was not the result of some organic tendency or internal regulator within the capitalist system, but was a product of the crisis of leadership of the working class – above all the domination of Stalinism.

Day further elaborated as follows: “Mandel’s misunderstanding of Trotsky’s position can be further illustrated by his reference to George Garvy, who quite properly concluded that Trotsky denied the cyclical character of long-term fluctuations. In Late Capitalism, Mandel suggests that Garvy’s conclusion was ‘not quite accurate;’ that is to say, Garvy discovered a mere semantic difficulty which, if pursued, would reduce the question ‘to a pointless dispute as to the semantic differences between cycles, “long waves,” “long periods,” and large segments of the capitalist curve of development.’ What Mandel takes only to be a semantic difference in reality constituted the very core of the Trotsky-Kondratiev debate.”

How is one to explain this? Here again Day puts his finger on the essential question.

“Mandel’s awkwardness in dealing with these questions must be accounted for by the fact that one of the purposes of Late Capitalism is to reinforce Kondratiev’s conclusions with more orthodox Marxist explanations.”

Exactly. And one of Kondratiev’s central conclusions is that there is no law-governed process within capitalism which makes the socialist revolution an historical necessity. Capitalism is able to continue indefinitely … that is the view which Mandel is attempting to reinforce with, I would not say Marxist orthodoxy, but Marxist phraseology.

If we go back through Mandel’s writings we find that the analysis of “long waves” in Late Capitalism is part of a general tendency. Mandel does not deny that capitalism is riven by contradictions – he is not a Bernstein. But for Mandel these contradictions never assume so sharp a form as to actually threaten the very existence of the capitalist system and open the way for its revolutionary overthrow by the working class. Even when he identifies the dangers confronting the capitalist system Mandel insists that the bourgeoisie, recognising the situation, will be able to intervene and ensure the continuation of the profit system.

In his first major foray into the sphere of political economy, with the publication of his two volume Marxist Economic Theory in 1962, Mandel referred to what he called the “new phase” of capitalism which had developed in the post war period.

“The origins of the phenomenon are connected with all the features of the phase of capitalist decline …The capitalist economy of this phase tends to ensure greater stability both of consumption and of investment than in the era of free competition, or than during the phase of monopoly capitalism; it tends towards a reduction in cyclical fluctuations, resulting above all from the increasing intervention of the state in economic life.” [Mandel, Marxist Economic Theory p. 529]

In other words, all the contradictions of capitalism remain but they are now able to be regulated by the state. Mandel had not yet used the term “neo-capitalism” to characterise this new period. He was to introduce it in a pamphlet published in 1964 entitled An Introduction to Marxist Theory. Mandel’s explanation of the post-war boom was no different from a whole array of bourgeois economists who maintained that it was due to Keynesian economics.

“To the extent that the bourgeoisie itself,” he wrote, “is no longer confident that the automatic mechanism of capitalist economy will sustain its rule, another force must intervene for the long-term salvation of the system, and that force is the state. Neo-capitalism is a capitalism whose pre-eminent characteristic is the growth of intervention by the state into economic life.”

State intervention into economic life was “above all anticyclical, or, if you prefer, anticrisis in character.” [An Introduction of Marxist Economic Theory pp. 56-57]

The point of this examination is not to deny that the post-war boom did not present new challenges and the need for a deeper analysis, taking into account the role of state intervention. But Mandel never questioned whether there were any objective limits to the ability of the state to prevent the development of a crisis.

Towards the end of the 1960s, the gathering storms of the capitalist economy saw Mandel adopt a somewhat more “radical” outlook.

Accordingly in a paper delivered to the 1968 Socialist Scholars Conference at Rutgers University, he explained neo-capitalism as follows:

“Some European politicians and sociologists speak about ‘neo-capitalism’ in the sense that society has shed some of the basic characteristics of capitalism. I deny this most categorically, and therefore attach to the term ‘neo-capitalism’ the opposite connotation: a society which has all the basic elements of classical capitalism.

“Nevertheless I am quite convinced that starting either with the great depression of 1929-32 or with the second world war, capitalism entered a third stage in its development, which is as different from monopoly capitalism described by Lenin, Hilferding and others as monopoly capitalism was different from classical 19th century laissez-faire capitalism.” [The Worker under Neo-capitalism pp. 4-5]

In order to grasp the implications of Mandel’s position it is necessary to recall the questions of perspective which flowed from Lenin’s analysis of monopoly capitalism. The central issue he emphasised was the monopoly capitalism represented the transition of capitalism to a higher socio-economic order, that is, that it laid the objective foundations for the development of a socialist economy and that the socialist revolution was an objective necessity. The implication of Mandel’s position was that the theoreticians of the Second International who denounced Lenin as an “anarchist” who grabbed power in a coup had been right: the objective conditions for the overthrow of capitalism had not been established, it had a new and higher stage of development, neo-capitalism.

The point at issue here was not whether there had been any changes in capitalism since Lenin’s day; of course there had been. But what was the significance of those changes. The post-war boom saw a restabilisation of capitalism based on the introduction of more productive methods which enabled a greater extraction of surplus value and lifted the rate of profit. But the establishment of this new equilibrium did not flow organically from the laws of capitalist economy as Kondratiev would have maintained. The leaders of American capitalism could only undertake the re-organisation of Europe after World War 2 and give capitalism a new lease of life because of the vital role of the leaderships of the working class – above all the Stalinists of the Communist Parties – in ensuring that the capitalist order was never challenged in the immediate post-war period.

By the time he came to write Late Capitalism Mandel had come under attack for his use of the term “neo-capitalism.” Hence the need for new terminology. In the Introduction to Late Capitalism he explained that “the term ‘late capitalism’ in no way suggests that capitalism has changed its essence, rendering the analytic findings of Marx’s Capital and Lenin’s Imperialism out of date. … The era of late capitalism is not a new epoch of capitalist development. It is merely a further development of the imperialist, monopoly-capitalist epoch.” [Late Capitalism p. 9]

So while “neo-capitalism” was as different from monopoly capitalism as monopoly capitalism was different from competition, “late capitalism” was merely a further development of monopoly capitalism.

Behind all this terminological juggling the essential perspective remained the same. In the first chapter of Late Capitalism, Mandel contrasted “the classical epoch of imperialism before and between the two World Wars and the late capitalism of today” and pointed to the “new stage in the history of capitalism which clearly began after the Second World War.” [Late Capitalism p. 23]

I take note that you asked me to keep to the economics but it is here that the economics impinges on the politics and vice versa.

What is at issue here is not a terminological war. Marxism has defined this epoch as the epoch of imperialism – the epoch of the socialist revolution. It points to the fact that the objective conditions for socialism have not matured and that the fundamental task is the resolution of the crisis of leadership and perspective in the working class.

Mandel’s continuous search for new definitions – and his insistence that capitalism had entered a new epoch after World War – was bound up with another orientation: the rationalisation and defence of the opportunist leaderships which dominated the working class and made possible the continuation of capitalism. Sometime in the late 1940s or early 1950s, in response to the unanticipated outcome of the war, Mandel came to the conclusion that the perspective of the Fourth International – the resolution of the crisis of leadership of the working class – was no longer viable. This led to his revisions in the sphere of political economy, and these in turn provided the rationalisation for opportunism.

There are many other issues which could be taken up here, including Mandel’s treatment of the tendency of the rate of profit to fall, his analysis of the impact of computerisation and the process of surplus value extraction, and the foundations of the socialist revolution. Let me conclude my remarks at this point by examining Mandel’s treatment of what we now term “globalisation.”

Central to the perspective of Lenin and Trotsky was the understanding that the development of the productive forces on a global scale had come into violent conflict with the nation-state. This made socialism an objective necessity if human civilisation were to further advance.

Mandel directly attacked this conception. In one of the key chapters of his book Late Capitalism entitled “The International Concentration and Centralisation of Capital” he wrote:

“The international centralization of capital may also be accompanied by a gradual dismantling of the power of various bourgeois national states and the rise of a new, federal, supranational bourgeois state power. This variant, which seems at least possible, if not even probable, for the West European EEC area, corresponds to the second major form of the international centralization of capital: the international fusion of capital without the predominance of any particular group of national capitalists. Just as no kind of hegemony is tolerated in these really multinational companies, the state form corresponding to this form of capital cannot in the long-run involve the supremacy of a single bourgeois nation state over others, nor a loose confederation of sovereign nation states. It must rather take the form of a supranational federal state characterized by the transfer of crucial sovereign rights.” [Late Capitalism p. 326]

This process is explained all very logically. The function of the state in late capitalism is to undertake economic planning and programming to prevent the development of a crisis which would threaten the stability of the system. Economic planning and programming in one state is incompatible with a situation where capital is increasingly becoming fused across national borders. In order to carry out economic planning to regulate currencies, and above all to carry out an anti-cyclical policy, which is the essence of state intervention, it is necessary to have common budgets, common currencies, common monetary policies etc. But these are impossible without a federal government with sovereignty in these matters. That is, a common state is needed.

There is no doubt that the very development of the productive forces makes the nation-state an historical anachronism. But it is something else to say that the bourgeoisie, recognising this fact, can overcome it. It is in fact the contradiction between the needs of economy and the political forms developed under capitalism which produces the most explosive political conflicts. If the bourgeoisie can, as Mandel implied, resolve the contradiction between the continental and global development of the productive forces and the nation-state system then there is no objective basis for the socialist revolution. Socialism, as Rosa Luxemburg pointed out in her polemic against Bernstein, then becomes an ethical ideal, a dream, or anything you like, but it ceases to be historically necessary.

The necessity for the working class to take power and overthrow the bourgeoisie does not arise from the fact that the international working class is an exploited class but that it is the bearer of new social relations, which advance the development of the productive forces.  It is the only class which can overturn the outmoded nation-state system and liberate the productive forces from the fetters of capitalism and ensure that civilisation advances. And for that task to be achieved an intransigent struggle must be taken up to construct an international revolutionary party in opposition to all the forces which have played the central role in sustaining the capitalist system. The differences between Mandel and the International Committee boiled down to this.

GLOVES OFF:
Thanks very much for the conversation, Nick.

We welcome letters to the editor at editor@glovesoff.org. Nick Beams can be contacted at editor@wsws.org.

Bio

Nick Beams is a member of the editorial board of the World Socialist Web Site (WSWS) and is National Secretary of the Socialist Equality Party (SEP) in Australia. He regularly writes on matters of political economy for the WSWS. A transcription of his talk is also available on the WSWS [click here]

Recent articles by Nick Beams include:

"General Motors: From Auto Manufacturer To Financial Institution"
August 25, 2003

"Freddie Mac Report: A Further Exposure of Profit Manipulations"
August 1, 2003

"US Recession Declared Over But Economic Problems Deepen"
July 23, 2003

"Australian Prime Minister An Enthusiastic Promoter of the WMD Fraud"
June 5, 2003

"G8 Summit: A Widening Gap Between Reality and Rhetoric"
June 3, 2003

"Currency Upheaval Could Have Major Consequences"
May 29, 2003

"US Fed Acknowledges Deflation Threat"
May 12, 2003

"The US War Against Iraq: The Historical Issues"
March 24, 2003