Published: in International Council Correspondence Vol. 1, no.8, May 1935, pp 1-6.
Source: Antonie Pannekoek Archives
Transcribed: by Graham Dyer

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To Marxism, the determining contradiction in present-day society lies in the contradictory development of the social forces of production within the existing relations of production, or, otherwise expressed, between the increasingly socialized character of the productive process itself and the persisting property relations. In all forms of society, the general advance of humanity has been expressed in the development of the productive forces, i.e. of the means and methods of production, enabling ever greater amounts of use articles to be produced with an ever diminishing amount of direct human labor. This process is divisible into historical periods. In it, each stage simply mirrors the attained level of the continuously increasing forces of production and develops for them corresponding social relations. And as soon as a given set of social conditions no longer sufficed, without giving rise to great maladjustments in the social, economic and political spheres, to satisfy the demands of the new and growing forces of production, those conditions were overcome through revolutionary action.

All social development is based in the last instance on the process of interaction between social man and nature. The contradiction arising through human labor between being and consciousness, nature and man, leads to further and further development, and change in nature, society, man and consciousness. Within this great contradiction evolve, in the process of development, narrower social contradictions, which in their turn propel the progressive social movement along the path of revolution.

Since the development of the productive forces has throughout the past been bound up with the rise and decline of classes, past history must necessarily be regarded as a history of class struggle. Thus the development of manufacture under feudalism had to lead, at a certain level, to the overcoming of feudalism and to the birth of capitalist society; a transition which took a revolutionary expression in all the social domains.

The statement of contradiction, the materialist dialectic, the philosophic theory of Marxism and at the same time the law of all real movement, seeks in all contradictions their unity - without, however, for that reason, confusing those contradictions - and sees in the spontaneous movement of contradictions their abolition, i.e. their resolution in a third form, which again produces and must overcome its contradiction. Since the Marxist analysis takes capital as its starting point, capital becomes the thesis, of which the proletariat is the antithesis. The dialectical law of the negation of the negation leads to the synthesis. This can only be the communist society, which knows neither capital nor proletariat, since it has taken up or resolved them both in their concrete forms. This is merely the falling off of a social husk, and, being a product of historical property relations, it is only in capitalism that this husk can possess concrete reality. History, like all reality, is dialectical, hence limitless. Each problem possesses no more than historical character. Marxism does not present itself as something absolute, but as the theory of the class struggle within capitalist society.

Not only, from the standpoint of Marxism, is the contradiction between capital and labor the beginning as well as the end of present-day society, but the progressive development of that society is to be seen only in the growth and sharpening of that contradiction. Capital being the result of the exploitation of labor power, so with the growth of capital, that is, in the course of the human progress under way in this historical period, the exploitation of the workers must of necessity be more and more intensified. If the possibilities of the exploitation of labor power in the present system were unlimited, there would be no reason to expect an end of capitalist society. But with the growth of the proletariat, the class struggle also increases, since at a certain point of development the productive forces of the workers can no longer be applied capitalistically. At that point, the proletariat, of its own accord, develops into a revolutionary force, which strives for and brings about an overthrow of the existing social relations.

Marxism, which perceives in the existence of the proletariat the realization of the dialectical movement of society, bases its theoretical justification mainly on the laws of economic development in general, and of capitalism in particular. Capitalist relations of production are not solely determined by nature (land as a basis for labor) and human activity, but these natural conditions are also subordinate to the capitalistic social relations. The concerns of human beings are not regulated from the point of view of their needs as human beings, but from the point of view of capitalist needs for profits. The decisive factor in capitalist society is not the production of use values but of capital; the latter is the motive power of the productive machinery. This dependence of human welfare upon the private interests of the capitalists is made possible through the separation of the workers from the means of production. The workers cannot live except through the sale of their labor power. The buyers of labor power, who are at the same time the owners of the means of production, buy this power only in order to further their private interests as capitalists, without regard to social consequences.

We have seen that in all forms of society, progressive development is illustrated in the continual growth and improvement of the means and methods of production, enabling the output of an ever greater quantity of products with ever less labor. In capitalism, this same process expresses itself in a more rapid growth of the capital invested in means of production as compared with the capital invested in labor power. That part of the capital which is invested in means of production we call constant capital, since as such it enables no changes of magnitude; and that portion which goes in the form of wages to the workers we call the variable capital, since it adds, through labor itself, new values to those already present. In this way it is shown that the development of the social forces of production under capitalism is expressed in a more rapid growth of the constant capital relatively to the variable.

Capital, and hence its material form, the means of production and labor power, can, however, as already stated, function capitalistically only so long as this may appear profitable to the owners of the means of production. Coming into action only as capital, they must reproduce themselves as capital, a thing which is possible, on the capitalistic basis, only by way of accumulation. The surplus value, from which are derived the funds for accumulation, the additional means of production and labor power as well as the capitalists’ profit, is, however, nothing but unpaid labor. It is that part of the workers’ products which is not consumed by them but was taken from them. Now since the surplus value is derived exclusively from the variable part of capital, and if this variable part must continually diminish relatively to the advance of accumulation, then the surplus value must, with mathematical certainty, continually diminish relatively to accumulation even though it increases absolutely. This contradictory movement, by which with advancing accumulation the capitalistic rate of profit falls (the rate of profit is computed on the total capital, constant and variable) - a process denoted as the growth of the organic composition of capital - is, however, up to a certain point of capitalist development, not at all dangerous, since at a rather low stage of development the system is capable of accumulating faster than the rate of profit falls, or, in other words, to compensate for the fall of the profit rate by the growth of the actual profit mass. This possibility is, however, no less historical than all other matters.

Accumulation there must be, and the lower the rate of profit falls as a result of this accumulation, the greater must the accumulation be. When accumulation goes out, the crisis comes in; the solving of the crisis is possible only through further accumulation, and necessarily at a continually accelerated rate. At a rather high level of capitalist development, when the tempo inherent in accumulation requires the further advance of accumulation in such measure that the absolutely swollen mass of profit is too small in relation to those demands for further accumulation, then accumulation must of necessity come to a stop, and the boom turns to crisis. In other words, capitalist accumulation devours for its own purposes, by which all society is conditioned, an increasingly large part of the surplus value produced by the workers; and in spite of the growth of this surplus value, it must nevertheless, at a high point of development, prove insufficient to meet the demands of accumulation. This law of capitalist accumulation, the primary cause of which is to be seen in the contradiction between exchange value and use value, between capital and labor, is confirmed as an actual law by all empirical factors involved. If accumulation comes to a standstill, by reason of the fact that there is not enough surplus value at hand for its continuance, then that part of capital which is destined for but is at the same time insufficient to meet the needs of accumulation, lies idle and seeks in vain for profitable possibilities of investment. We are faced with the paradoxical truth that a shortage of capital gives rise to a superfluity of capital lacking room for investment. There is no lack of purchasing power, yet, in the capitalist sense, no use can be made of this purchasing power, since from this point of view it is meaningless, because unprofitable.

If accumulation is not continued, the situation must of necessity give rise to a general tie-up of human activity. The commodities destined for further accumulation can find no buyers. They lie unused, and from the over-accumulation results the general over-production of commodities; a circumstance which expresses itself in the closing and paralyzing of enterprises in all spheres of social life and hence in an enormous increase of unemployment.

The crisis also brings with it certain tendencies working to overcome it. The organic composition of capital is lowered by capital being destroyed through bankruptcies and devaluation. Through the export of capital and intensified imperialistic ventures, new sources of additional surplus value are created. Through general rationalization of working methods, further technical innovations in the productive process, cheaper sources of raw materials, as well as through the pauperization of the workers and the expropriation of the middle classes, etc., the quantity of surplus value is adapted to meet the demands of further accumulation. All efforts during the crisis serve to revive profitable capitalist operation on a lower price and value level. If this occurs, nothing stands in the way of a new upswing, which, however, after a certain time, as a result of renewed over-accumulation, necessarily turns off into a new crisis. These factors we call the counter-tendencies directed against the collapse of capitalism.

Like everything else, however, these counter-tendencies are of an historical nature. At a certain point of capitalist development, their effectiveness as factors in overcoming crises ceases. They become too weak in relation to the further demands of accumulation, or are already completely exhausted as a result of previous accumulation (for example, capitalist expansion meets its objective limits long before it completes its march over the globe). Furthermore, capitalist rationalization leads, as has been shown, to mis-rationalization, and the revolutionizing of technique, too, has its capitalistic limits. Neither can wages in the long run be kept below the workers’ cost of reproducing themselves, nor can the middle-class elements be completely expropriated. Monopolization further lowers the possibility for capital expansion, and imperialistic ventures grow more and more dubious. But regardless of how or when the counter-tendencies are neutralized, it is clear to the Marxist that capitalism must of necessity reach a point where the past cycle of crises gives way to the permanent crisis which capitalism is powerless to overcome.

This permanent crisis, or the death crisis, of capitalism is a crisis no longer restricted by any counter-tendencies - a crisis in which the tendency toward collapse runs its course. But even here we are not presented with a single act, but with a process, a whole historical period. In such an economic condition, the relative pauperization of the proletariat, which goes with the whole of capitalist development, is bound to become absolute, general and permanent. During the upgrade period of capitalism, wages rose, since the cost of reproducing the workers continually increased also, though in relation to what they produced, their portion was less and less. In the permanent crisis, their real living conditions are bound to grow worse, absolutely and uninterruptedly.

The condition of permanent crisis forms the objective basis of the revolutionary labor movement. The class struggle grows sharper and assumes more naked forms. On the other hand, the means of suppression employed by the ruling class are adapted to this new condition. While in the upgrade period of capitalism, “formal democracy” sufficed to permit the smooth operation of the social mechanism, in the permanent crisis capitalism has to take up with open dictatorship. In the place of “democracy” there arises, at a rather high stage of development, a political condition which today is called fascism. The fact that the ideological basis of fascism is formed by the impoverished middle class does not alter the fact that the fascist movement operates only in the interest of the now monopolized capital. Capitalist concentration, which goes on even in the permanent crisis, necessarily impoverishes also the middle strata of capitalists. The energies thus aroused within the middle class are engaged by monopoly capital for its own purposes. Parts of the petty bourgeoisie are granted concessions at the expense of the workers, though these concessions are only of temporary character.

By destroying the organizations and doing away with the limited “democratic” political liberties of the workers with the aid of the corrupted middle-class gunmen and the part of the workers under their ideological influence, capitalism thinks to secure its continued existence even during the permanent crisis. But even though, through terrorism, the workers can be politically atomized, their congregation in large masses is still necessary for industrial production. With the destruction of the old form of the labor movement, new forms necessarily arise; and since these forms are deprived of other means of expression, they must express themselves on the job itself, whereby their strength is increased a thousand-fold. The workers-council movement, the organizational form of the revolution, thus arises naturally out of the very conditions which capitalism has created. The permanent terror is at the same time the political schooling of the workers. So that in the proletariat capitalism not only produces its own grave-diggers; it has also to demonstrate to the proletariat how they can fight successfully.

Even though the workers in great masses may never attain a revolutionary consciousness, in order to live they are forced to take up the fight against capital. And when they fight for their existence under the conditions of the permanent crisis, this fight, regardless of its ideological quality, is a fight which can only turn in the direction of overcoming the capitalist system. Until the successful revolutionary overthrow, the proletariat lives in barbarous, constantly worsening conditions, and the only possibility of getting away from that is communism; that is, the overcoming of capitalist relations of production, the abolition of private property in the means of production, which is identical with the abolition of wage labor.

Marxism is not only a theory which sprung from the existence of the proletariat and its position in society; Marxism is the actual class struggle between capital and labor, that is, a social condition in which the workers, whether they will or not, whether they are conscious of it or not, whether they know Marx or not, are unable to act otherwise than in accordance with Marxism, if they wish to maintain themselves and thereby at the same time to serve the general progress of mankind. While Marx himself actualized the Hegelian dialectic, that is recognized the real, concrete movement as dialectical, Marxism can be actualized only by means of the fighting proletariat. A Marxist is not one who has mastered the Marxian theories; a Marxist is one who strives to actualize those theories. In a word: Marxism is not only a view of the world; Marxism is the living, fighting proletariat.

The article above will be available in printed pamphlet form after May 1, 1935. It is being printed by the Council Communist Press of Chicago. Order from the United Workers’ Party.