This summer marks the twentieth anniversary of the UK publication of ‘The Unbroken Thread‘ – a selection of the writings of Ted Grant covering a fifty year time-span from the 1930s to the 1980s. This book, published in the summer of 1989 by the Militant tendency (forerunners of Socialist Appeal), remains a virtual manual of Marxism and an invaluable source for all class conscious workers and youth.
One of the most important key articles contained within is ‘Will there be a slump?’ written in 1960, nearly fifty years ago. This work, produced during the period of the post-war boom when many – both from the Right and Left – believed that capitalism had solved its crises forever, is of particular relevance today in the face of the “perfect storm” which has hit world capitalism over the last year.
At the time of writing it was argued that the welfare state, with its policy of intervention had resolved all the problems which had characterised capitalism in the past. As John Pickard explained in his introduction to the section on economic analysis in ‘The Unbroken Thread’:
“The right wing and the Fabians, arguing from the basis of the economic theories of John Maynard (later Lord) Keynes, alleged that the capitalist state – by limited nationalisations, economic intervention and state expenditure such as on social welfare – could smooth out the natural economic cycle and thus overcome crises. They were also echoed on the left, by alleged ‘Marxists’ who effectively adopted similar Keynesian theories. Influenced by what seemed to be an endless expansion, the same economic gurus who had originally denied the possibility of recovery now went to the opposite extreme. After having belatedly acknowledged the upswing, they also came forward with wonderful new theories describing how capitalism had been fundamentally changed so as to be able to avoid crises and slumps.'”(The Unbroken Thread, page 374)
Ted Grant’s perspective that the seemingly endless boom of the post 2nd World War period would actually end and “be followed by a catastrophic downswing, which cannot but have a profound effect on the political thinking of the enormously strengthened ranks of the labour movement” must have seen like madness to some at the time. However, as we have seen, the Marxist analysis has been proven to be more than correct in predicting the continuing crisis of capitalism over the last few decades. More recently, we have seen the likes of Blair and Brown announcing the abolition of Boom and Bust. Well it seems that they were 50% right in that, with the arrival of the credit crunch, Boom has been abolished leaving us just with Bust.
The text of ‘Will there be a slump?‘ remains even today an excellent riposte to all those who thought that capitalism could by magic avoid crisis and enter a period of non-stop plenty. It’s explanation of the true nature of capitalist crisis could have been written yesterday.
As Ted Grant explains in the article:
“The basic Marxist postulates… are that the exploitation of the working class by the capitalists means that the surplus value, created by the workers, is accumulated by the capitalists and then reinvested in industry. The explanation of the development of the economy under these conditions is the division of the economy into ‘department 1’ (production of the means of production) and ‘department 2’ (production of the means of consumption). The surplus produced by the working class, over and above its own subsistence is, apart from a small part consumed by the capitalists, ploughed back into production. The whole historic role of capitalism has been the development of the productive powers of society by the use of the surplus in capital construction. Hence the growth of production.
‘Competition between different capitals produced the need for ever greater productive equipment. This, in its turn, meant the gradual accumulation and concentration of capital in fewer and fewer hands. The continuous expansion of expenditure on constant capital (C) or means of production, in relation to the amount spent on variable capital or wages (V), in its turn produced the tendency of the rate of profit to fall. This is confirmed in different language by all serious economists including Keynes. Even the university professors, on studying the data, are compelled to admit the truth of this proposition for the modern epoch, even more than in the past.
‘The fundamental cause of crisis in capitalist society, a phenomenon peculiar to capitalist society alone, lies in the inevitable over-production of both consumer and capital goods for the purposes of capitalist production. There can be all sorts of secondary causes of crisis, particularly in a period of capitalist development – partial over-production in only some industries; financial juggling on the stock exchange; inflationary swindles; disproportions in production; and a whole host of others – but the fundamental cause of crisis lies in over-production. This in turn, is caused by the market economy, and the division of society into mutually conflicting classes.’‘
It is increasingly clear that world capitalism will attempt to get out of the mess they got themselves into at our expense, as usual. The coming period will see a brutal attack on public spending by all the capitalist governments linked to a ongoing programme by the bosses of wage freezes and cuts alongside job losses on a massive scale. As this article – and many others written by Ted Grant – explains, there is no ‘final’ crisis of capitalism as they will always seek to get out of it at the expense of the masses. Our task is to stop them through the struggle for socialism.