Late capitalism

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Late capitalism is a term sometimes used to refer to capitalism of the second half of the 20th century, generally with the implication that it is historically limited, and will eventually end.

This idea has its origin in Karl Marx's judgement that the capitalist mode of production, like any other mode of production, is in the broad sweep of history a limited and transient phenomenon, rather than being the natural, ever-lasting condition for human life. Thus, it can be periodized in terms of its historical emergence, its heyday, and its subsequent phase of decline and disappearance.

However, the notion of late capitalism is partly an ideological perspective, insofar as we simply do not know now when exactly capitalism will end, or if it will end. In addition, the global pattern of capitalist development has been extremely uneven; some regions have barely reached the stage of "early capitalism".

In general, Karl Marx seems to have believed—as a generalisation—that no mode of production disappears until it has developed all the productive forces which it can contain within its social relations of production. Technologies would ultimately become incompatible with the existing social framework, causing that social framework to break down, and a new social framework to emerge. According to Rosa Luxemburg, that could mean an advance to socialism or a relapse into barbarism.

Capitalism has proved to be a flexible and adaptive system, able to survive terrible catastrophes including two world wars and an enormous number of smaller wars - suggesting, for many thinkers, that the end is not yet near. Lenin opined that there were no absolutely hopeless situations for capitalism; its fate depended on the outcome of class struggle. This, however, does not deter critics of the system, who point to various alleged signs of the system's social decay on a world scale.

But there are also others who argue that capitalism has already been superseded; in a modern information society the old industrial system is a thing of the past, and the reference to capitalism is an anachronism.

1 Origin of the term
2 Characteristics
3 Cultural critique
4 See also
5 External links

[edit] Origin of the term

The term "late capitalism" came into use in Europe towards the end of the 1930s when many economists believed capitalism was doomed (see, for example, Natalia Moszkowska's Zur Dynamik des Spätkapitalismus. Zurich: Verlag Der Aufbruch, 1943) and it was used in the 1960s particularly in Germany and Austria, among others by Marxists writing in the tradition of the Frankfurt School and Austro-Marxism. At the end of the second world war, many economists including Paul K. Samuelson and Joseph Schumpeter believed the end of capitalism could well be nigh, in that the economic problems might be insurmountable.

According to the Marxist economist Ernest Mandel, who popularised the term with his 1972 Phd dissertation, late-stage capitalism will be dominated by the machinations - or perhaps better, fluidities - of financial capital.

In the tradition of the classical Marxists, Mandel tried to characterize the nature of the modern epoch as a whole, with reference to the main laws of motion of capitalism specified by Marx, in order to show how the same forces which boosted profitability after the world war must ultimately turn into their dialectical opposites, and cause its decline. Mandel's aim was to explain the unexpected revival of capitalism after the Second World War, and a long economic boom which showed the fastest economic growth ever seen in human history.

For Mandel, profitability could be influenced by numerous different factors, and was only the general indicator of the condition of the system as a whole; his critics (such as Paul Mattick) however argued that Mandel is too eclectic, and failed to give an orthodox Marxist explanation of the famous "tendency of the rate of profit to fall".

Whereas Mandel organised his explanation of the long boom mainly in terms of factors counteracting the falling rate of profit, he did not distinguish clearly between the rate and volume of profit and considered effective demand an important variable. This invited the accusation that Mandel subscribed to a theory of underconsumptionism, i.e. attributing crisis phenomena to a lack of buying power by workers. Such an approach, it was argued, is conducive to a reformist redistribution of wealth, rather than total revolution.

Other critics, such as the Marxist-Leninists, preferred the concept of state monopoly capitalism, or reject any periodisation of capitalism in terms of "early" and "late" stages as unscientific.

[edit] Characteristics

Among the characteristics of late capitalism (or the 'third age' of capitalism after freely-competitive capitalism and monopoly capitalism) are said to be:

the hypertrophy of the state, and systematic attempts by the state to moderate economic fluctuations as well as exerting more and more social controls;

intensified monopolistic and oligopolistic competition for superprofit in world markets;

the co-optation and integration of trade union and oppositional political movements into the state apparatuses;

the globalisation of financial capital, commercial capital and production capital;

a third technological revolution (electronics, synthetics, computerisation, biotechnology) and accelerated technological innovation;

accelerated turnover of capital and the pressure to engage in comprehensive economic planning of investments;

An increase in the rate of surplus value attributable mainly to increased productivity of labour;

a permanent arms economy in which the military industry becomes a significant factor in economic growth;

permanent currency inflation and growing debt levels;

the hyper-concentration and centralisation of capital ownership and management on a world scale, in giant industrial and banking corporations;

neo-colonialism involving unequal exchange and humanitarian imperialism where armed intervention in foreign countries is morally justified by reference to humane concerns;

the corrosion and breakdown of all traditional social institutions by market forces, leading globally to a succession of continual wars, armed conflicts and unarmed social conflicts;

(according to Leo Kofler) an optimistic belief in the power of technology to solve all problems, or, alternatively, a cultural pessimism. Some writers like Andre Glucksmann extrapolate this pessimism as a nihilist ideology; others like Elmar Altvater and Tariq Ali have interpreted it as a retreat to fundamentalism; and yet others like Frank Furedi see the pessimism as a cult of human vulnerabilities diminishing human potential and sowing unwarranted anxieties;

an ever-increasing gap between the rich and the poor, within and between countries, as strong market actors defeat the weaker ones;

the growth of "excess capital" (overcapitalisation) and "excess capacity", meaning that much additional capital is no longer invested in expanding production, but diverted to trade and capital accumulation based on already existing physical and financial assets - with obvious effects on employment opportunities.

[edit] Cultural critique

Late capitalism is also an important component of Fredric Jameson's influential cultural analysis of postmodernism. A section of Jameson's analysis has been reproduced on the Marxists Internet Archive.

The theme of the end of history, recalling an idea from Hegel, was rekindled by A. Kojève in his Introduction to the Reading of Hegel (1980). It is discussed by Francis Fukuyama in a book of the same name, and criticised by Frank Furedi [1]

A related term is late bourgeois society as contrasted with early bourgeois society in the 17th and 18th century, and classical bourgeois society in the 19th and early 20th century.