Economy

Without grasping the meaning and significance of the objective and subjective conditions of the revolution, together with their dialectical interaction, it is impossible to develop a revolutionary strategy that will lead the working class to victory. The distortions that have emerged, and will continue to emerge, from this question can be lumped into two opposite categories. On one end lies the one dimensional interpretation of the objective condition of revolution, and hence an overestimation of the capacity of the working class for a spontaneous revolt.

When we examine the necessary conditions for a successful proletarian revolution as a whole, we must speak of three principal premises. The first one is related to the general conditions of production across the world. Productive forces must reach a certain level of development that would allow socialism to replace capitalism. Secondly, a class that possesses both the intention and capability to carry out such historical transformation must come into existence. That is to say, the position occupied by the working class in the economy must allow it to launch such a radical change. And thirdly, the working class must be prepared to carry out the revolution. While the first two conditions involve the objective basis for the overthrow of capitalism and the building of socialism, the last one corresponds to the subjective factor of the revolution. In order not to drift towards voluntarism or spontaneity on the question of revolution, one must properly grasp the objective and subjective factors of proletarian revolution.

The main distinguishing feature between reformist and revolutionary tendencies in the workers’ movement lies in the question of whether or not there is will, tenacity and preparedness to heighten the organised class struggle against the bourgeoisie. The idea that capitalist crisis will somehow be followed by a new period of economic recovery, where measures to improve workers’ rights will be back on the agenda, is an utterly pacifist, conciliationist and reformist notion.

The relationship between the economic crises of capitalism and the struggle of the working class should not be interpreted in a mechanical manner. Rather, it must be analysed on the basis of the dialectical relationship between various objective and subjective factors that determine the actual course of events. Economic crisis does not automatically lead to an upsurge of the revolutionary struggle of the working class. The mutual interaction between economy and politics has a much more complex nature. The way workers respond to crisis is determined by various factors such as the political and organisational level of the workers’ movement, its general mood, its determination to combat, or exhaustion. Under unfavourable circumstances, the working class may suffer setbacks in the face of economic crisis, allowing bourgeoisie to heave a sigh of relief.

Capitalist economy inherently contains seeds of crisis. However, it would be utterly erroneous to argue that crises will spontaneously lead capitalism to its destruction. Unless it is overthrown through a revolution of the working class, it can continue to exist, going through new periods of booms and crises. Some assert that the ongoing crisis will mark the end of capitalism. This idea was also put forward during previous crises. While it seems very difficult for capitalism to overcome the deep crisis it is currently engulfed in, and moreover that capitalism becomes weaker with time in terms of overcoming its crises, it would be erroneous to link the collapse of capitalism with the prophecy of a final crisis.

Under conditions of confusion and demoralisation created by the collapse of the Soviet Union, workers’ movement suffered a major setback in terms of the level of class consciousness and organisation. This allowed the world bourgeoisie, which was on the verge of a crisis, to breathe a deep sigh of relief. The capitalist class seized the historic opportunity with both hands, stepping up its neoliberal economic policies that had already been in progress. This represented an all-out attack against the gains made by the working class and plundering of social funds. It was owing to this all-out attack that capitalism secured a temporary recovery throughout 1990s.

In addition to its ordinary working mechanism named industrial cycles, capitalist economy is also characterised by non-cyclical, more prolonged upward and downward fluctuations that involve far more complex factors. This type of fluctuations is nothing more than a combination of different economic and political events capitalism has been through. Such periods of capitalist development, each having its distinctive characteristics, still contain industrial cycles that consist of boom and crisis phases. Therefore, the existence of such long-term fluctuations does not invalidate the Marxist analysis of industrial cycles.

Aside from the reality of periodic crises that break out on the basis of industrial cycles, the changes in the pace of capitalist development over long periods have continuously preoccupied Marxists as well. There have been many debates concerning the fluctuations in the curve of capitalist development that have been identified to occur over the course of decades. In these debates there have been certain conceptions developed in an effort to deepen the understanding of the workings of capitalism, without drifting away from basic tenets of Marxism. But there have also been other interpretations that are at variance with foundations of Marxism, leading to various misconceptions. The analysis of “long waves” that will be discussed below belongs to the latter category. Let us underline an important point to prevent any misunderstanding regarding the target of criticism. To be able to comprehend concrete fluctuations in the curve of capitalist development, it is of importance to analyse long periods with different characteristics. There is nothing to criticise about it. What deserves criticism, however, is the type of “long waves” theory which, in effect, is used in place of periodic long cycles, as seen in the case of Kondratiev.

With the development and spread of the banking system, the work of allocating capital, which had previously been managed by private money lenders and individual capitalists, was taken over by banks that grew on substantial scales. Thus, banking system and credit mechanism became the strongest lever to push the capitalist production beyond its limits. With the utmost intensification and centralisation of capital in the age of imperialism, massive growth of banks and the domination of finance capital, the credit system gained central importance in the workings of capitalism. The need for loans grew incredibly as a result of the fact that capitalist production and trade made colossal progress not only within national borders but also on an international level.

In an effort to escape the fact that economic crises are inherent in capitalism, bourgeois economics has long claimed that crises are completely accidental, resulting from factors such as fluctuations in wages and prices. Yet, such fluctuations are not the cause but the result of the boom-crisis cycle as both wages and prices are generally dependent on the course of economic development. Capitalism contains within itself the possibility of crisis, which manifests itself in the form of overproduction. It is not some incidental factors that play the decisive role in turning possibility into reality, but some fundamental laws inherent in capitalism. The law of the tendency of the rate of profit to fall occupies a central position with respect to the outbreak of capitalist crises.

As is known, capitalism is based on generalised commodity production. The fundamental feature of capitalist mode of production lies in the fact that the outcome of the production process is not only the value but also the surplus value. Nevertheless, for a well-functioning economy, producing more surplus value is not enough. It must be realised in the market as well.

In accordance with the dialectics of the process of development, the periods of economic stability feed the self-confidence of capitalists and their ideologists on the one hand, while at the same time they serve as fermentation processes of the problems which would produce the disappointment of the forthcoming period. A concrete example can be given from the present crisis. During the boom period which preceded the last great economic crisis, bourgeois economists constantly proclaimed that capitalism entered a new epoch which would witness an uninterrupted growth.

Capitalism is in a state of deep crisis. This crisis is far from being one of the ordinary crises of capitalist economy. By all evidence it is a deep system crisis of historical importance. Capitalism is at an historical impasse, argues Elif Çağlı in her article. After her booklet titled "Crises of Capitalism and Revolutionary Situation" she explains the nature of capitalism with a special emphasis on the role played by credit mechanism, referring to Marx who made a special emphasis on the role of credits in the workings of capitalist economy. While the credit mechanism helps the system overcome certain problems, it reproduces them on a greater scale. Çağlı makes the point that the credit mechanism as well as other tools used by capitalism is now quite worn out. They have almost completely lost their efficiency in overcoming great crises. Capitalism has also lost its capacity for a great scale transformation and reforms that might save it a new era of freshness and provide the broad working masses a genuine welfare.