MIA > Archive > Fraina/Corey Archive > Decline of Am. Cap.
IN its immediate aspects the American crisis is an outcome of the depression and of the inability to restore prosperity on any considerable scale. It mocks the pre-depression claims of prosperity everlasting. In its larger aspects the crisis is an outcome of the decline of capitalism.
Prosperity under capitalism depends upon the making of profits and their conversion into capital. The higher the profits and the lower the wages, the greater is the accumulation of capital. This lag of wages behind profits, and the resulting lag of mass consumption behind production, is a condition of accumulation. But it eventually upsets the balance between production and consumption, and creates recurrent crises and depressions. This has always been so and must always be so under the social relations of capitalist production.
While prosperity always broke down, every depression was succeeded by a new upsurge of prosperity because of the long-time factors of economic expansion. These factors – mechanization of old industries, development of new industries, industrialization of new regions – permitted an increasing production and absorption of capital goods, the basis of capitalist prosperity and accumulation. As, however, all the long-time factors of expansion approach exhaustion, capitalism begins to decline because it is no longer able to produce and absorb an increasing output of capital goods. The decline of capitalism is an expression of old age, of a crisis in its historical development: one social system grows into another. A new social order is in the making. But Niraism, and the state capitalism of which it is a form, does not represent the new order; its objective is to save the tottering old order of capitalist exploitation.
As prosperity depends upon the making of profits and their conversion into capital, labor may or may not share in its gains. When labor did share, it was meagerly; and there were whole periods in which prosperity was accompanied by stationary or falling real wages and mass consumption. But the tendency, at least, was upward. Now, in the epoch of the decline of capitalism, wages and mass consumption must tend downward; in other words, they experience an absolute fall, where in the past the fall was only relative to the rise in production and profits.
The decline of American capitalism is conditioned by the exhaustion of the inner long-time factors of expansion. This exhaustion, which is relative and wholly capitalist, was brought to a head by the prosperity of the “Golden Age” of American capitalism. It assumed the form of overdevelopment of productive forces, saturation of capital plant, monopoly, the export of capital, and imperialism. The legacy was a restriction of the opportunities for an increasing output and absorption of capital goods, for the accumulation of capital. Thus, to understand the decline of capitalism, an analysis is necessary of the prosperity of 1923-29, which involves an analysis of the fundamentals of capitalist production. And the starting point of the analysis is the movement of profits and wages, which conditions both the upswing and the decline of capitalism.
Last updated on 28.9.2007