From "Prometeo" n.8/2003

The term decadence, inherent to and in the form of the relations of production and the bourgeois society being referred to, presents itself with both valid and ambiguous aspects. The ambiguity lies in the fact that the idea of decadence, or the progressive decline of the capitalist form of production, proceeds from a kind of ineluctable process of self-destruction whose causes are traceable to the essential aspect of its own being, and this auto-destructive decline is exemplified by the role that a neutron plays in the meeting of atoms, in a kind of obligatory course where two forces, which are mutually contradictory, progressively approach one another to the point where they produce their reciprocal destruction. The atomic encounter matches the teleological one, where, for this way of posing the question, the disappearance and destruction of the capitalist economic form is an historically given event, economically ineluctable and socially predetermined.

This, as well as being an infantilely idealistic approach, ends up by having negative repercussions on the political terrain, creating the hypothesis that, to see the death of capitalism, it is sufficient to sit on the banks of the river, or, at most, in crisis situations, and only then, to create the subjective instruments of the class struggle as the last impulse to a process which is otherwise irreversible. Nothing is more false. The contradictory aspect of capitalist production, the crises which are derived from this, the repetition of the process of accumulation which is momentarily interrupted but which receives new blood through the destruction of excess capital and means of production, do not automatically lead to its destruction. Either the subjective factor which has in the class struggle its material fulcrum and in the crises its economically determinant premise intervenes, or the economic system reproduces itself, posing, once more and at a higher level, all of its contradictions, without creating in this way the conditions for its own self-destruction. Nor is the evolutionary theory valid, according to which capitalism is historically characterised by a progressive phase and a decadent one, if no coherent economic explanation for it is given.

To this end, it is absolutely insufficient to refer to the fact that, in the decadent phase, economic crises and wars, like the attacks on the world of labour-power, occur with a constant and devastating rhythm. Even in the progressive phase, if by this is meant that long historical period in which the capitalist productive form overcame all the forms of economic organisation preceding it and created the conditions for an enormous development of the productive forces, crises and wars arrived punctually, just as the factors of attacks on the conditions of labour-power expressed themselves. An explicit example of this is given by the wars between the great colonial powers at the end of the 18th century and over the whole of the 19th century, up to the outbreak of the First World War. The example could be extended by listing the social attacks and the frequent military attacks on the class revolts and insurrections, which played themselves out in the same period. And when, according to this mode of posing the question, did the transition from the progressive to the decadent phase occur? At the end of the 19th century? After the First World War? After the Second?

As if the problem could be the chronological identification of the cusp without examining the economic factors which have produced decadence itself, at least if effects are not confounded with causes. Nor is it valid to appeal to Marx when the definition of capitalism as a transitory economic form, like all the other forms which have preceded it, is taken up. It is true that, from this point of view, capitalism does not differ from other economic systems which have been expressed historically, but it is also true that it is necessary to make the outlines precise and to distinguish the causes, otherwise one will continue to remain within the ambit of ideological definitions, valid for all times, without concrete analytical content.

The use in support of this thesis of Marx’s other phrase, according to which, at a certain point the productive forces come into conflict with the relations of production, thus generating decadence, is of the same tenor. Apart from the fact that the expression in question pertains to the phenomenon of crises in general and to the rupture of the relationship between the economic structure and the ideological superstructure which could generate class events in a revolutionary sense, and not to the question being considered here, it is still necessary to enter into the merit of the question by individuating the reasons for this passage. Marx limited himself to giving a definition of capitalism as progressive only in the historical phase in which it eliminated the economic world of feudalism, proposing itself as a powerful means of development of the productive forces inhibited by the preceding economic form, but he never went beyond this in the definition of decadence except for making it precise in the famous introduction to A Contribution to the Critique of Political Economy that “No social order ever perishes before all the productive forces for which there is room in it have developed”. Then research has to be brought about in the sense of verifying whether capitalism has exhausted its pressure for the development of the productive forces and if so, when, to what extent and above all why. In other words, paraphrasing Marx, reciting that capitalism has lived through a progressive phase and is today decadent, that it is a transitory economic form like all those that have preceded it, and that it enters the decadent phase when it is no longer able to develop the material productive forces which come into conflict with the existing relations of production, is absolutely not sufficient, neither from a political nor an analytical point of view.

On the contrary, the value of the term decadence lies in the identification of those factors which, in the process of the accumulation of capital and in the determining of cyclic crises, as in every other form of expression of the economic and social contradictions of capitalist society, render all these phenomena more acute, less adminstrable to the point of putting the very mechanisms which rule over the process of valorisation and accumulation of capital. That capitalism is a contradictory economic form and that it expresses itself through accumulation cycles, crises and new accumulation is a given fact deduced from the materiality of events. In their turn, economic crises bring with themselves a series of devastating consequences from the growing poverty of the many to the concentration of wealth in the hands of the few. Crises produce wars which regularly present themselves as opportunities for plunder on the various international markets, whether commercial, financial or for raw materials, but also as moments for the destruction of capital and means of production as a condition for a new process of accumulation. It is absolutely not possible to see the presumed process of decadence within these categories of social economy, and even less to attribute to them a necessary course leading to the self-destruction of the system. The investigation of decadence either individuates these mechanisms which regulate the deceleration of the valorisation process of capital, with all the consequences that that brings with it, or it remains within a false perspective, which prophecises in vain, or, worse still, is teleological, lacking any objective confirmation. In simple terms, the concept of decadence solely concerns the progressive difficulties which the valorisation process of capital encounters stemming from the principal contradiction expressed in the relation between capital and labour-power, between dead and living capital, or, in the last instance, between constant and variable capital. The ever growing difficulties in the valorisation process of capital have as their presupposition the tendential fall in the average rate of profit.

The phenomenon of the fall of the average rate of profit is a kind of economic cancer whose metastases spread into all the sectors of the productive form making the process of accumulation, which is at the basis of capitalism’s life and mode of expression, more and more difficult. It goes without saying that the fall of the average rate of profit, springing from the modification of the relation between capital and labour-power, or, in other words, from the fact that the ever greater investments in constant capital in relation to those in variable capital, reduce the base of the exploitation of labour-power despite intensifying it, is a constant expression of capitalist relations and has operated in a temporal progression from the birth of these relations. Despite ever greater investments, and even in the presence of growing masses of profit, the average rate of profit diminishes because of the changing organic relation of capital, and the more the acculumation process advances, the more the law of this fall finds room to express itself. Moreover, it is becoming clear that, although they have always operated, it is only in the past few decades that the profit crisis has made itself felt so heavily, unleashing a vicious cycle which world capitalism has shown itself unable to escape. Even at the end of the ’60’s, according to statistics released by international economic organisations like the IMF, the World Bank and even the Massachussets Institute of Technology, and present in the research of economists of the Marxist area like Ochoa and Mosley, profit rates in the USA were 35% lower than they were in the ’50’s and the same phenomenon, although with different rapidity and intensity, struck all the capitalistically developed countries.

Taking into consideration the tendential fall in the average rate of profit from the moment when its consequences for all the factors which regulate the normal mechanisms of capital accumulation are extending and deepening, and evaluating when the policies for counter-tendencies become less efficacious, means pointing out how much more difficult the valorisation process of capital, which is the point of departure and aim of capitalism, of its existence as a productive form, of its still progressive or decadent existence, has become. This cannot mean that capitalism, as soon as it has entered this phase, will no longer succeed in being a growing productive force, it only means that the rhythms of economic expansion are greatly slowed, economic crises become more frequent and deeper, wars assume the characteristics of permanancy in the regulation of relations between the sections of international capital, and the clashes on all the vital markets for survival of the relations of production are without quarter. Attacks on the social and economic conditions of labour-power become more intense, and we witness the totally capitalistic contradiction in which, in the presense of a greater possibility for the creation of social wealth, bourgeois society creates more poverty.

But listing these economic and social phenomena, once they have been identified and described, cannot, by themselves, be considered as a demonstration of the decadent phase of capitalism, they are only the symptoms, and the primary cause which brings them into existence is to be identified in the law of the profit crisis. In this sense, and with this perspective, the factors which render capitalism decadent should be read, not because it no longer produces, but because it is constrained to slow its rhythms of growth, not because it continues to make wars, but because wars have become a permanent mode of its existence, not because it produces crises, but because economic disequilibrium has become a constant, a kind of permanent crisis, and, finally, not because it exploits the working class more or less intensively, but because the assault without precedent on direct and indirect wages, its constant work to progressively dismantle the social state, the use of labour-power on the basis of flexibility, that is, its temporary usage in conformity with the companies’ productive needs of the moment and no more, have become priorities which capitalism cannot renounce, on pain of the risk of collapse.

Low rates of profit favoured and accelerated, between the ’70’s and ’80’s, the intervention of the state in the economy. The objective was to sustain the national productive sectors which were most affected by these rates, and the means to attain this was public debt, the issuing that is of government bonds at a fixed rate of return, until this manouevre became unsustainable. Credits provided at easy rates, the failing management by the state itself of entire sectors of the economy had as their result the abnormal expansion of the public debt to the point where there was a risk that state finances would collapse. At the end of the ’80’s, there was no industrialised country, from the USA to the biggest European countries and Japan, which had a financial deficit less that 60% of GNP, and, in some cases, this reached 110-120% of GNP. Only at this point did international capital find it necessary to enter the neo-liberal road, under the false hypothesis that the state was the cause of economic crisis and that the return of the free market was the right recipe to regain the lost profits and to set the valorisation and accumulation processes back in motion. Fifteen years of neo-liberalism and of globalisation of the economy again produced, for the nth time, the crisis and once more made evident all those problems which it was intended to resolve by abandoning a state which was no longer able to fully unfold its politics for the salvation of capitalist relations of production because it was on the threshold of bankrupcy.This goes to show two things: the first is that capitalism cannot overcome its own contradictions by changing its forms of management and ownership of the means of production, and the second is that the tendential fall in the average rate of profit continues to operate as regards the inevitable changes between constant and variable capital, and that the operation of counter-tendencies is more and more difficult to realise. Despite this, the state continues to be envoked at particularly acute moments of recession, and to subsidise sectors with lower rates of profit, like agriculture, to sustain and protect internal markets from the dangers of international competition, all in the face of the laws of the free market to which one adheres and makes reference. In a parallel course, but with twice the acceleration, the state has started to dismantle social assistence, social insurance and health services, and even education and research. The pairing of indebtedness and low profits, and so less taxes stemming from the productive sectors and less chance of self-financing, has made the weight of welfare insupportable, and it had to be progressively reduced, a process which threatens the heaviest of consequences but which has no end in sight. The paradox that present capitalist society is living through is that, unknown in previous decades, and, in the face of a technological potential which has no precedent in human history, more is always produced but at lower rates of increase, and an ever smaller paart of this wealth finds its way into the social state.

A further consequence of low profit rates are their contribution to the slowing of the production of wealth in the form of goods and services. The GNP of the highly industrialised countries grew, on average, by 5-7% in the years immediately following the second world conflict, falling to about 3-4% in the ’70’s and ’80’s and then falling back to 2.5% in the last decade. The system is still able to produce wealth, but more slowly and with difficulty. Productive investments grew less than speculative ones, factories produce, on average, 75-80% of their potential, while capital destined to research falls by percentage points. The reason resides as always in the diminished profitability of the capitalist system which, despite the increase in productivity, pushes capital to prefer the road of speculative investment to the costs of productive investment, constraining it to the spasmodic recourse to easy profits in the short term rather than in the long term. At a given stage of the development of the relationship between constant and variable capital there is created a relative shortage of capital which negatively influences the process of accumulation. While the minimum necessary quantity of capital forwhich is at the basis for investments for the phase of enlarged reproduction grows, the rate of profit falls and the conditions for a slowing in the increment of the mass of profit are created, more and more expotentiating the world of production on credit, and thus, of debt. This imposes on the system a trajectory towards the control of financial markets, towards the introduction of new stock market structures aimed at enrolling savings and speculative capital, towards the creation of more sophisticated forms of the concentration of capitals with the end of covering the needs for investment. Parasitism, repeated stock market bubbles and the consequent financial crises are on the most evident effects of this.

The paradox of the attacks on direct wages and the proletariat’s living conditions is analogous. The more the factory’s productivity increases, the more technology pushes down the costs of production, the more unemployment, precariousness and poverty is created in the world of labour. The fall of the rate of profit that the introduction of technology imposes, once brief moments of recovery in the process of capital valorisation have been made, determines the necessity to further cut into the contents of wages as the principal component of costs of production. While social wealth increases, albeit more slowly and with greater difficulty, the rate of profit diminishes and capital is constrained to attack the world of work, augmenting exploitation and rendering it fit for the necessities of production when they express themselves and no more. All the range of the new fixed-term contracts: on demand, temporary, disposable, to use a term which scarcely captures the idea, and the attempt to shrink wages to the lowest possible level, are the instruments that capital is using to withstand a difficult valorisation situation without precedent. The aggression against direct wages, preceded by the progressive erosion of indirect wages, which is happening at a rapid and increasing tempo never previously seen and which is being proposed in all the capitalistically advanced countries with only brief and very brief interruptions, cannot be imputed to a presumed sudden ferocity of international capital but to an objective factor which has imposed a common necessity for a similar economic policy.

Regular and devastating wars like those that economic crises generate, have become a permanent state for capitalism. Low profit rates have created a situation of permanent crisis where the distinction between recession and economic recovery is unstable and ephemeral, and where the solution of war seems to be the most important way of resolving the problems of capital valorisation. The use of both preventative and other violence, systematic aggression over all the markets of strategic interest, the assumption of force as the institutional model for the expression of international competition between the various segments of imperialism, have become normal expressions of the relations of capitalist production and of the power structures of reference. In just twelve years, from the disappearance of Soviet imperialism to today, there have been at least five wars without lasting solutions, from the Balkans to the Middle and Far East. The selfsame bourgeois analysts, who theorised that, after the collapse of the USSR, there would be for humanity a scenario of peace and economic prosperity, have not drawn up an account of their own incapacity for analysis and the tendential fall in the average rate of profit. They mistook the victory over the Soviet Union to be the defeat of communism, not imagining that it was a question of the collapse of a very particular capitalism, and they did not even touch upon the idea that the problems of Western capitalism had survived and greatly grown, exasperated by its ever bigger and uncontrollable contradiction.