Is there a material limit on the lifespan of capitalism?

by Jehu

I have been reading this article by Alan Nasser: “The Alternative To Long-Term Austerity: Less Work, Higher Wages, No Mere Utopian Dream”. Nasser appears to be an advocate of labor hours reduction; which he calls “the only practical alternative to […] secular stagnation”. To make his argument, Nasser enlists the writings of both Marx and Keynes to arrive at his own synthesis — a sort of Keynesian-Marxism.

Now, a lot of people have their own pet reading of Marx’s Capital and there are controversies about how it should be properly interpreted. For instance, some writers. like Cleaver, approach Capital spam-bad-2politically, rather than as an economic work. Others approach Capital as if it is an economics textbook: “This is how capital works.” Still others approach Capital as a critique of political-economy, a radical criticism of the premises of bourgeois economic science.

There is some truth in all of these approaches in my opinion, but hardly enough to sustain any long-term genuine interest in the book. In my opinion, to really understand Capital, you have to realize that capital, the social relation, is a transitional mode of production.

In my opinion, nothing about Capital, the book, makes sense unless you understand capital, the social relation, is a transitional, historically limited, mode of production.

The Keynesian delusion: Capitalism without limits

As I first read Nasser’s article, I wondered why he relied so much on Keynes, since much of the contribution made by that writer in favor of a limit on hours of labor already had been discovered independently by Marx decades before Keynes was born and with far greater precision and depth. It turns out there was only one reason: In Nasser’s opinion there is no limit on the lifespan of capitalism; the idea that capitalism is nothing more than a transition form that ends in communism is “historical determinism”:

“The historical determinists who thought capitalism was programmed for extinction are now rightly dismissed. There is no reason to think that capitalism’s days are limited.”

In Capital, however, Marx explicitly makes the point that, in his opinion, capitalism’s days are most definitely limited:

“Development of the productive forces of social labour is the historical task and justification of capital. This is just the way in which it unconsciously creates the material requirements of a higher mode of production. What worries Ricardo is the fact that the rate of profit, the stimulating principle of capitalist production, the fundamental premise and driving force of accumulation, should be endangered by the development of production itself. And here the quantitative proportion means everything. There is, indeed, something deeper behind it, of which he is only vaguely aware. It comes to the surface here in a purely economic way — i.e., from the bourgeois point of view, within the limitations of capitalist understanding, from the standpoint of capitalist production itself — that it has its barrier, that it is relative, that it is not an absolute, but only a historical mode of production corresponding to a definite limited epoch in the development of the material requirements of production.”

The role of the state in extending capitalism’s lifespan

For the vast majority of post-war Marxists today, like Nasser, Marx’s idea capitalism is a historically limited mode of production has been rejected. And on what basis has this ‘historical determinism’ been dismissed? It has been dismissed based on the writings of economists like John Keynes, of course. And how was this dismissal accomplished? Well, it turns out, once capitalism ran into its limits, the mode of production fell into a serious secular stagnation, which Keynes shows requires state intervention. As Nasser puts it:

“The economic surplus must be directed to public-investment- and (household) consumption-seeking if working people are to have the well-being that is objectively within reach. The need for large-scale government spending to create jobs for infrastructure projects, education, health care, green technologies and more, is acknowledged by just about everyone. These are not just better ideas. They appear to be the sole means of averting persistent stagnation and creating the kind of society we want to live in.”

Why is it determinism to argue that capitalism ends in communism, but it is not determinism to say capitalism ends in stagnation? The reason Marxists make this sort of silly argument, I think, is that, for them, communism is a political system. In order to have communism, we have elections and everybody has to decide whether they will vote for communism or barbarism. Every four years, the voter emerges from her hole in the ground and if she is scared by her shadow we get four more years of stagnation. This is basically the post-war Marxist conception of the communist movement of society: material relations that are decided in a polling booth. Communism is so identified with politics in the post-war Marxist conception, it is impossible for them to think of it in any other fashion.

Where do Marxists go wrong?

They go wrong by assuming secular stagnation is the ultimate result of capitalist development in the absence of a political event. In fact, no matter what other changes in society results from political causes, communism must result directly from the development of the productive forces bound up with capitalism. Which is to say, it does not matter whether society ever decides to end wage labor, wage labor will end and it will end no matter the consequences for society.

To say communism is inevitable means society does not actually get a vote on the demise of capitalism any more than it gets a vote on gravity or evolution.

That capitalism is a transitional, historically limited, mode of production naturally raises the question: A transition from what, to what? What are the material conditions of production predominating at capitalism’s historical point of origin and at its historical destination? Capitalism is clearly moving society from one stage in the development of the productive forces to another, but what stages exactly?

Marx answered this question: We begin with simple commodity production and exchange, the precursor to capitalist relations themselves, and end with communism. Of course, some writers, like Chris Arthur, deny there was ever a stage of simple commodity production and exchange in labor theory. Did Marx believe simple commodity production and exchange was actually a definite stage of society preceding capitalism? Engels definitely thought Marx made this argument and says so by quoting Marx directly in a passage from chapter 10 of volume 3:

“The exchange of commodities at their values, or approximately at their values, thus requires a much lower stage than their exchange at their prices of production, which requires a definite level of capitalist development”.

Secular stagnation or communism

On the other hand, many post-war Marxist writers — likely the overwhelming majority — deny capitalism, of itself, ends in communism. If, for Marx, capitalism is a transitional, historically limited, mode of production, for most Marxists capitalism at best leads to some sort of economic stagnation. This argument tells us a lot about post-war Marxism as an economic theory. It basically means Marxists actually have no idea what happens ultimately to capitalism and are simply extrapolating from the present into the future. Since we are currently deeply mired in a ‘secular stagnation’, Marxists simply extrapolate this economic malaise into an indefinite future.

Many quite widely-read Marxists assume capitalism will be more or less like it is today, but with periodic ups and downs or changes in the form of crises. And I don’t just refer to writers like Harvey, Heinrich or Nasser; this view is equally prevalent among folks like Kliman and Roberts and even infects exceptional writers like Postone and Kurz.

In my opinion, this problem can be traced to a fundamental misreading of chapter 1 of Capital, volume one. In that chapter Marx does something that no other economist from either the various post-war Marxist schools or bourgeois simpletons do: He sets a strict and definite limit on the aggregate value that can be produced by labor under any circumstances. And he then explains that this strict and definite limit will change as the productive forces are developed. This is a hard material limit on the production of value and, therefore, on all modes based on production of value. The aggregate value produced in a capitalist society can never be greater than the aggregate expenditure of socially necessary labor time required for production of commodities.

Socially necessary labor time and the limits of capitalism

For the capitalist mode of commodity production, this material limit on the production of value has an unexpected effect. Since capitalism is not simply the production of value, but the production of surplus value, the material limit on the production of value acts to set a strict and definite limit on the lifespan of capitalism. This is because capitalism develops the productive forces with an eye toward the production of surplus value.

In the first place, the production of value is limited to the aggregate socially necessary labor time required for production of commodities.

In the second place, the aggregate socially necessary labor time required for production of commodities diminishes with the development of the productive forces.

In the third place, capitalism, in its drive to produce surplus value, develops the very productive forces that reduce the socially necessary labor time required for production of commodities.

This is Marx’s argument in a nutshell. And he spends the rest of Capital showing why it doesn’t happen overnight, but happens nonetheless. Because capitalism continuously runs into the barrier imposed by socially necessary labor time in its hunger for surplus value, it progressively erodes its own material conditions of existence. Capitalism’s lifespan is therefore limited by its own material logic.