MIA > Archive > Fraina/Corey Archive > Decline of Am. Cap.
OUT of capitalist competition arises the concentration of industry. For the competitive struggle, waged primarily by cheapening costs, develops the imperative to produce more and sell more. This involves the necessity of enlarging the scale of production, emphasized by the pressure of technological change, with its constantly greater demands for fixed capital and raw materials, and the efforts to overcome a fall in the rate of profit by increasing its mass. Thus capitalist expansion and accumulation are accompanied by the gradual but inexorable rise to power of large-scale industry. Small individual producers are replaced by giant corporate enterprises, utilizing the most efficient methods of production and distribution, including inner planning and the control of raw materials and markets throughout the world.
Concentration is interwoven, both as cause and effect, with a complex system of interdependent institutional arrangements: economic activity becomes more and more collective, more social in its forms. A fundamental change occurs in the objective relations of capitalist production. Ownership and management are separated by the multiplication of stockholders. Ownership is vested in stockholders who own but do not manage and merely receive dividends. Management is vested in employees who manage but (as a functional group) do not own. The stockholder, beyond the pieces of paper which represent ownership, is unable to say “this” or “that” is “mine.” He knows nothing of the enterprise in whose ownership he has a stake, except its dividend yield and stock market quotations. Corporate industry is institutional or impersonal, an immense objective socialization of production; but the older relations of private or personal ownership and appropriation persist within the newer economic forms.
Industrial concentration represents an essentially new mode of production developing within the older social relations of capitalist production, the objective basis of a new social order, of socialism. But industrial concentration also develops forces which are a negation of its progressive aspects, the forces of monopoly and finance capital. Socialization of production makes monopoly possible, and monopoly tends to sacrifice efficiency and output in favor of higher prices and surplus profits, of speculation and financiering. Separation of ownership and management permits seizure of control by the financial oligarchy, which imposes its dictatorship over industry. The industrial capitalist combined predatory and constructive functions; the financial capitalist is wholly predatory. Where industrial capitalism was identified with economic progress and upswing, monopoly capitalism is identified with retrogression and decline.
Monopoly capitalism is accompanied by measurable exhaustion of the inner long-time factors of expansion. This means an absolute or relative fall in the output and absorption of capital goods, the basis of capitalist accumulation and prosperity. Restriction of employment in the capital goods industries restricts the creation of mass purchasing power. Consumption moves downward. But the industrial concentration underlying monopoly capitalism represents an enormous increase in the productive forces of society. Hence both excess capacity and surplus capital mount. These conditions limit the realization of surplus value as profit and its conversion into capital. The rate of profit tends to fall, and sets in motion efforts to overcome the fall. Competition flares up in new forms. It is intensified in the non-monopoly fields; and, since monopoly is seldom complete, monopolist combinations alternate between cooperation and competition, with competition tending to become more destructive. The situation is aggravated as monopoly enlarges its field of control, for monopoly thrives only when it is comparatively limited, only where there is a mass of “free” industries to exploit. As contradictions and antagonisms are aggravated, monopoly capitalism seeks a way out in the export of capital and imperialism.
Monopoly, by its very nature, strives to become international, to control foreign markets, sources of raw materials, and investment opportunities. This is not merely a policy of monopoly and finance capital, but the expression of a new stage of capitalism. In the epoch of upswing, of industrial capitalism, when the output and absorption of capital goods moved upward, the emphasis was on the export of goods; in the epoch of decline, of monopoly capitalism, when the output and absorption of capital goods moves downward, the emphasis is on the export of capital to offset limitation of inner investment opportunities and capital accumulation. But, as in the case of monopoly, there are definite limits to the export of capital and imperialism. They thrive only when restricted to a small circle of highly industrial nations; as the circle widens and expansion contracts, the imperialist nations must plunder one another. Hence war inevitably results from the struggle for the economic and territorial division and domination of the world. Imperialism is the violent expression of the efforts of monopoly capitalism to overcome the limitations upon accumulation, and the resulting tendency toward economic decline, by exploiting the outer, the international long-time factors of expansion.
These efforts are only partly and temporarily successful, and they eventually strengthen the elements of decline. The export of capital becomes more and more an export of interest on existing foreign investments. Imperialist finance capital increasingly operates in the world markets with reinvested profits, independently of the needs of the home economy, which is no longer stimulated by an export of capital identified with the export of goods. Dominated by an alien monopoly and imperialism, the development of economically backward countries is distorted and hampered by the mere fact of domination and by the pressure of the decline of capitalism. The outer long-time factors of expansion are quickly exhausted (on a capitalist basis). This reacts and aggravates inner decline, sharpens imperialist antagonisms, and multiplies the burdens of armaments and the dangers of war.
Underlying the decline of capitalism, and the desperate imperialist efforts to overcome it, is the objective clash between older and newer relations of production. From a social-economic viewpoint, monopoly capitalism and imperialism are the transition to a new social order; from a class-economic viewpoint, they are an effort, by the dominant capitalist interests, to prevent the birth of that order. This sharpens both economic contradictions and class antagonisms. The clash between the old and the new, under the conditions of capitalist decline, is no longer “softened” by the upswing of capitalism and prosperity.
Class lines become more rigid and class differences more acute. The mass of the farmers, exploited by monopoly capitalism and imperialism, are thrust downward to the level of an American peasantry. Large elements of the middle class, particularly small businessmen and professionals, are objectively proletarianized, deprived of their occupations and property. The working class, whose driving force is the industrial proletariat, the specific creation of capitalist production, is tormented by disemployment and lower standards of living. Class struggles become more violent, develop new forms and objectives. As capitalist decline makes it impossible to adjust class antagonisms peacefully, by balancing one interest against another, a struggle for power arises, for the power to decide what shall be done with the economic order. The interests of the capitalist class are identified with repression of the new relations of production, moving backward to reaction and stagnation. The interests of the working class are identified with liberation of the new relations of production, moving onward to progress and socialism. Incapable of an independent historical policy, the farmers and the exploited groups of the middle class must accept either the reactionary policy of the capitalist class or the revolutionary policy of the working class.
Last updated on 4.9.2007