Review by Jose Esteban Castro

Global Capitalism in Crisis
Karl Marx & The Decay of the Profit System

By Murray E.G. Smith  

In Chapter 5 of Global Capitalism in Crisis, Smith provides an overview of the conditions that help to explain the emergence of what he variously calls an “amorphous”, “gradualist” or “non-vanguardist” anti-capitalist left in the aftermath of the collapse of the former Soviet Union in the late 1980s. He also presents a deeply critical assessment of the positions adopted by these groups in relation to the feasibility of a socialist revolution, and puts forward some potential explanations for what he calls the “political irresponsibility of the radical left” in the face of the current global crisis of capitalism that erupted in 2008. Finally, Smith vigorously invites the reader to engage in an in-depth revision of the postulates of revolutionary Marxism, specifically as developed by Lenin and more particularly Trotsky, as the only way forward to develop a political programme and strategy to revive revolutionary socialism.

Smith’s diagnosis is clear and stems from his main argument in the book: the current global crisis of capitalism is terminal. He argues that the crisis, from a Marxist perspective, should be understood as being both conjunctural and systemic, “as an extreme conjunctural expression of the decay of the profit system” (p. x). He dedicates the first four chapters of the book to elucidate this argument, which he does convincingly in many respects while also providing empirical evidence that leaves no doubt about the enduring explanatory value of Marx’s analysis of capitalism.

The fifth chapter builds on this diagnosis and reviews some of the main trends characterizing global politics since the demise of the former Soviet Union, particularly: the “disastrous restoration of capitalism” in the territories of the former Soviet bloc, the worldwide expansion of a “virulent neoliberalism”, the strengthening of and clashes between different forms of fundamentalism, and the development of “adventurist and bellicose” neocolonial initiatives. More importantly, Smith highlights the emergence of a “militant anti-corporate-globalization movement”, an “amorphous global social-justice movement” concerned with issues of ecological sustainability, fair trade, global poverty, racism, gender inequality, economic democracy, and other issues. He dedicates much of this chapter to criticize this multifarious “movement”, and particularly those sectors within it that identify themselves as Marxists or socialists of some description.

The author argues that despite long-standing attempts to discredit Marxism as a body of theory and knowledge, the developments in recent decades and most notably the ongoing global crisis have given Marxists an opportunity to show “profound intellectual and moral responsibility” and stand up in defense of certain “truths”: the historically specific character of capitalism, the fact that since the early twentieth century capitalism would have lost its capacity “to promote continued human progress” for all, and that the only systematic attempt to develop an alternative to capitalism, the experience of the former Soviet Union, ended up in complete failure as a result of been taken over by the Stalinist project, which was “hostile to the Marxist principle of the democratic self-emancipation of the working class”.

From this point onwards the author attempts to define clear lines of demarcation between a broadly defined “left” and what he calls towards the end of the chapter “a genuine socialist project”, that is, revolutionary socialism:

1) Smith correctly points out that many left wing intellectuals have come to accept arguments previously defended by right wing and liberal actors who dismiss the value of Marx’s work as a predictive theory. He claims that Marx’s critics, including many coming from the Marxist left, have ignored the accuracy of his analysis of the long-term dynamics of capitalism governed by the law of the tendency of the profit rate to fall, which offers a powerful explanatory framework for the understanding of the current global crisis. Rather, they have mainly concentrated on criticizing Marx’s “failed” prediction that the end of capitalism would be brought about by the organized working class.

2) On the latter point, Smith rightly emphasizes that in fact the revolutionary potential of the working class has been recurrently enacted since Marx’s time. The fact that working class revolutions have not delivered the predicted demise of capitalism should remind us that Marx himself had warned that the revolutionary transcendence of capitalism by socialism was not merely dependent on the revolutionary potential of the working class but more importantly on the level of development achieved by the forces of production. The author also emphasizes that the achievement of a full transcendence of capitalism by socialism must be, as Marx warned, of a worldwide scale. Socialism cannot be achieved at the level of individual countries or regions, as history has now demonstrated with the demise of the Stalinist project, but must be truly global in scope and reach, which in turn validates Trotsky’s positions on this matter.

3) The relevance of the current global crisis, Smith argues, would be that “the objective, historical conditions for a socialist transformation are not only ripe; they have become altogether rotten” (p. 134). Here he develops what I think is the hardest line of his argument in this chapter and probably also the weakest. Summing up his argument, Smith suggests that the main reason why a revolutionary socialist transition does not seem likely despite the fact that the historical conditions are now ripe, even rotten, would be the “political irresponsibility” of the radical left (p. 131). By this, he in fact means that the radical left would have abandoned its revolutionary vocation, leaving the working class without a vanguard to lead the revolution.

It is not difficult to agree with many of the factors that Smith marshals to back up his attack on the “gradualist”, “reformist”, “non-vanguardist” socialism that has emerged in the aftermath of the collapse of the former Soviet Union, which would be the main culprit for the lost opportunity to take advantage right now of the historical conditions to carry out the revolution. In particular, I cannot disagree with his argument that “the collapse of Stalinism and the sharp rightward turn of social democracy” have generated the conditions for the rise and consolidation of a highly heterogeneous “left”, which includes many Marxist intellectuals that now embrace liberal reformist initiatives and see socialism as very distant goal that presupposes a very long march through ever evolving capitalist landscapes for the foreseeable future.

Although there is considerable merit in these arguments, Smith has entered here a much muddier terrain. Firstly, his analysis here leaves little room for distinction between widely different processes and actors, which have been cramped together as the “adversary” for the sake of the argument. Although this certainly makes the task of identifying who is responsible for the slow pace or even regression of the socialist revolutionary project somewhat simpler, it does so at the expense of a huge loss in the discriminatory power of his analytical tools and arguments. For instance, by mechanically labeling some policy instruments and initiatives like alternative budgets, taxes on financial flows, or bank nationalization as “liberal reformist” (p. 126), to give just an example, rather than examining, the actual processes and historical conditions in which these instruments are deployed or the interlinkages between those responsible for such policies and wider constellations of social actors at different scales, Smith is in fact forgetting if not abandoning altogether the Marxist approach that he has so vehemently defended in much of the book. Even in the context of a single country like Brazil, there is a need to make a fine discrimination in the analysis of the design and implementation of a policy instrument like participatory budgeting, as it has been carried out by widely ranging political actors, with different political objectives, in highly diverse socio-geographical and political settings, and with different results, including unplanned and uncontrollable political developments. I would not disagree with Smith if he were to argue that despite all that complexity the end result of these policies (for instance in Brazil) has been no more than a reformist, gradualist process that in a broad perspective consolidates a regime based on capitalist exploitation and subordination of the working class. However, the analysis of the intricacies of this process (or any other of the processes under discussion) as it happens in the field would allow Smith to get a very different picture and probably to review some of his presuppositions and perhaps also his conclusions.

In this connection, it may be reasonable and fair to say that Smith’s argument in Chapter 5 is largely exaggerating both the terminal state of the capitalist system and the capacity that a vanguardist left could eventually have in the present circumstances in conducting the dethroning of the system at world scale and its replacement by a socialist order. There is no question of the desirability and necessity of replacing a criminal system like capitalism if we are to preserve our planet, its biosphere, and our species within it, but I am not convinced that Smith’s analysis is helping us here to chart the field correctly. I already pointed out above the low discriminatory power of Smith’s analysis of what he calls “liberal reformist” policy instruments, as presented in Chapter 5 of his book. I also think that his argument would benefit from a more discriminating examination of the “global crisis” itself, which is the central topic of his book. He tends to blur in his account the fact that the crisis has helped to drive substantive changes in the capitalist world system, notoriously in relation to the emergence of new capitalist actors that seriously challenge the status quo at the inter-capitalist level, to the point that the traditional capitalist core finds difficult for the first time to transfer the cost of the crisis to the now highly dynamic and increasingly assertive former peripheries. Most of or all these emerging capitalist powers and the nation states to which they are primarily attached (i.e. Brazil, China, India, and a few others), have escaped the worst impacts of the financial crisis and are experiencing a process of rapid capitalist development, for sure with little serious opposition from their national working classes and much less from their left-wing national intelligentsias.

Smith may be right in concluding that despite the rapid capitalist development taking place in these areas of the world, “stagnation and austerity have remained pervasive on a global scale”. However, the fact that billions of humans are being incorporated into the dynamics of these emerging capitalist markets, and the systemic consequences these processes already have and will continue to have in the coming years are not minor developments and cannot be left out of the analysis if a proper understanding of the process is to be achieved. For a large part of these billions of humans currently being thrown into the world of capitalist markets and consumption the idea that capitalism has long lost his capacity to deliver improvements in living conditions would seem far-fetched, and in fact for a large part of these masses capitalism seems to be delivering significant improvements which find expression in longer life expectancy, access to education, and even some forms of sumptuary consumption. These may be short lived gains, the prelude of Apocalypse, as it has been many times before. But my point here is that from a sociological perspective the attempt to understand WHY if the transcendence of capitalism by socialism “cannot be delayed for long without putting at risk the very survival of the human species” (p. 127) we do not seem to be any nearer of reaching that goal, requires refocusing our theoretical lens to capture a rapidly changing and multi-textured socio-political scene.

It certainly merits a more in depth analysis that goes beyond blaming the “amorphous left”, the “preeminence of academics in the radical left”, or the “political irresponsibility of the radical left” for this state of affairs. The capacity of the capitalist system not just to survive economic-financial crises but more importantly to reproduce and reinvent itself in different dimensions, notably the political and cultural dimensions, cannot be left out of consideration. More importantly perhaps, the capacity of the capitalist system to annihilate the development of systemic alternatives, as it has happened so often since Marx’s times, for instance through genocidal dictatorships in the Global South that swiped a whole generation of radical thinkers and activists in the late twentieth century leaving an enduring mark in the way in which whole countries experience the “political”, must be part of the explanation that helps to understand the weakness or even absence of a political leadership with revolutionary vocation. Finally, Smith remains focused on the “working class”, presumably understood in classical terms, and uses a somewhat dismissive language when referring to “grassroots movements” and other expressions of the amorphous anti-capitalist movements that he discusses in Chapter 5. However, in parts of the world that are currently undergoing significant experiences in the search to develop systemic anti-capitalist alternatives, like several countries of Latin America (i.e. Bolivia, Ecuador, but certainly also Argentina, Peru, Mexico and Venezuela, at different scales and in different ways), the traditional working class is part of a wider spectrum of social forces that includes notably the emergence as political actors of long-forgotten but often sizeable and increasingly active indigenous communities with capacity for transnational organization, which in some cases have been able to deliver significant blows to the system. Smith remains oddly silent about these and similar processes.

I think that the final pages of Chapter 5 are an excellent contribution to this debate. Smith poses a number of critical questions that provide a precise guidance to answer “what is to be done” today, which I strongly encourage readers to engage with. Many of these questions are already pointing in the direction of some of the criticisms I have made in the previous paragraphs. I believe that Smith has put the finger in the wound and his book deserves careful reading, which I also wish will be widespread.

–Jose Esteban Castro is a professor of Sociology at Newcastle University. Review completed while working as visiting scholar at the Federal University of Minas Gerais, Belo Horizonte, Brazil, December 2010

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