G' day Thaxists,

A contentious piece but well worth a quiet half-hour in the pub with a
thoughtful pint.  Shan't chance my own half-arsed response yet, but think it
well worth having a solid chat about.  Please have a peek, comrades!  Plenty
here for us to chew on, I reckon.

Best to all,

   "A Left Politics for the 21st Century? or, Theory and Praxis Once Again"*
                                    by Immanuel Wallerstein

                               Fernand Braudel Center 1999

There is said to be a Yugoslav aphorism that goes like this: "The only
absolutely certain thing is the future, since the past is constantly
changing."1 The world left is living today with two pasts that have
almost totally disappeared, and rather suddenly at that. This is very
unsettling. The first past that has disappeared is the trajectory of the
French Revolution. The second past that has disappeared is the
trajectory of the Russian Revolution. They both disappeared more
or less simultaneously and jointly, in the 1980s. Let me carefully
explain what I mean by this.

The French Revolution is of course a symbol. It symbolizes a theory of
history that has been very widely shared for two centuries, and shared
far beyond the confines of the world left. Most of the world's liberal
center also shared this theory of history, and today even part of the
world's right. It could be said to have been the dominant view within
the world-system throughout most of the nineteenth and twentieth centuries.
Its premise was the belief in progress and the essential rationality of
The theory was that history could be seen as a linear upward process.
The world was en route to the good society, and the French Revolution
constituted and symbolized a major leap forward in this process.

There were many variants on this theory. Some persons, especially in the
United States, wished to substitute the American for the French
Revolution in this story. Others, especially in Great Britain, were in
favor of substituting the English Revolution. Some
persons wished to eliminate all political revolutions from the story,
and make this theory of history the story of the steady
commercialization of the world's economic processes, or the steady
expansion of its electoral processes, or the fulfillment of a
purported historic mission of the State (with a capital S). But whatever
the details, all these variants shared the sense of the inevitability
and the irreversibility of the historical process.

This was a hopeful theory of history since it offered a happy ending. No
matter how terrible the present (as for example when the fortunes of
Nazi Germany seemed to be riding high, or when racist colonialism seemed
at its most oppressive), believers (and most of us were believers) took
in the knowledge we claimed to have, that "history was on our side." It was
an encouraging theory even for those who were privileged in the present,
since it offered the expectation that eventually everyone else would share
privileges (without the present beneficiaries losing any) and that therefore
oppressed would cease annoying the oppressors with their complaints.

The only problem with this theory of history is that it did not seem to
survive the test of empirical experience very well. This is where the
Russian Revolution came in. It was a sort of codicil to the French
Revolution. Its message was that the theory of history symbolized by the
French Revolution was incomplete because it held true only insofar as
the proletariat (or the popular masses) were energized under the aegis of a
dedicated group of cadres organized as a party or party/state. This codicil
we came to call Leninism.

Leninism was a theory of history espoused only by the world left, and in
fact by only a part of it at most. Still, it would be fatuous to deny
that Leninism came to have a hold on a significant portion of the
world's populations, especially in the years 1945-1970. The Leninist
version of history was, if anything, more resolutely optimistic than the
standard French Revolution model. This was because Leninism insisted
that there was a simple piece of material evidence one could locate if one
wanted to verify that history was evolving as planned. Leninists insisted
that wherever a Leninist party was in undisputed power in a state,
that state was self-evidently on the road to historical progress, and
furthermore could never turn back. The problem is that Leninist parties
tended to be in power only in economically less well-off zones of the
world, and conditions were not always brilliant in such countries.
Still, the belief in Leninism was a powerful antidote to any anxieties
caused by the fact that immediate conditions or events within a country
governed by a Leninist party were dismaying.

I do not need to rehearse for you the degree to which all theories of
progress have become suspect in the last two decades, and the Leninist
variant in particular. I do not say that there are no believers left,
since that would be untrue, but they no longer represent a substantial
percentage of the world's populations. This constitutes a geocultural
shift of no small proportion and, as I have said, has been particularly
unsettling for the world left, which had placed most of its chips (if not
all of them) on the correctness of at least the French Revolution version
of this theory of history.

Why did this shift occur? There are many explanations that we are
hearing today. From the world's center and right, the explanation comes
that the world left misread this theory of history, and that it is still
somehow true, but only if we define the good society as the predominance
of an unfettered free flow of the factors of production, all in
non-governmental hands, and most especially the free flow of capital. This
utopia is called "neo-liberalism," and is quite popular today with
and so-called public intellectuals. It is however a mirage as well as a
deliberate delusion, one whose acme of influence is already
past, and one that is worth a lot less discussion than it has been
getting. By 2010, I warrant, we will scarcely remember this momentary
mad fantasy.

A second explanation, coming from parts of the world left, is that the
original theory remains correct, but that the world left has suffered
some temporary setbacks, which will soon be reversed. All we have to do
is to reiterate forcefully the theory (and the praxis). Given the degree to
which such a massive "temporary setback" was nowhere predicted in the
theory, and failing a more detailed explanation, this explanation seems to
me to be a case of wishful thinking by some ostriches. I cannot see how
Leninism, as an ideological stance and an organizational reality, can be
resurrected, even should one want to do so. And the French Revolution
arouses passion today only among a restricted group of scholars.

A third explanation for the collapse of this theory of history is that
the collapse is in fact both a cause and a consequence of the crisis of
the capitalist world-system. This is an explanation I have myself been
expounding in various recent works.2 I argue that
the very theory of history widely espoused by the world left - that is,
by what I call the antisystemic movements in their three
historic variants: Communism, Social-Democracy, and the national
liberation movements - was itself a product of the capitalist
world-system. As a result, although these movements did of course
mobilize large masses of people to struggle against the
system, they also paradoxically served historically as cultural
undergirding for the system's relative political stability. The very
belief in the inevitability of progress was substantively
depoliticizing, and particularly depoliticizing once an antisystemic
movement came to state power. I believe further that the discrepancy
between what was promised by these movements and
what was realizable within the framework of the existing world-system
once they were in state power inevitably became too
great. As a consequence, the popular base eventually became
disillusioned with the movements, which led to their ejection from
power in a large number of states.

The decisive moment was the world revolution of 1968, during which the
so-called Old Left (that is, the historic antisystemic movements) became
an object of challenge by the participants in the various local
expressions of this world revolution. One of
the principal lasting results of 1968 was the rejection of the theory of
inevitable and irreversible progress that had been preached by the
movements. Thereupon, the world's populations began to turn away from
the historic antisystemic movements
themselves, and then began to delegitimize the state structures which
the movements had been sustaining as essential
mechanisms of progressive change. But this popular shift to
anti-statism, hailed though it was by the celebrants of the capitalist
system, did not really serve the interests of the latter. For in
actuality the anti-statism has been delegitimizing all state structures,

not merely particular regimes. It has thus undermined (rather than
reinforced) the political stability of the world-system, and
thereby has been making more acute its systemic crisis, which has had of
course many other contributing causes as well.

In my view, the situation of the world left at present is the following:
(1) After 500 years of existence, the world capitalist system
is, for the first time, in true systemic crisis, and we find ourselves
in an age of transition. (2) The outcome is intrinsically
uncertain, but nonetheless, and also for the first time in these 500
years, there is a real perspective of fundamental change, which
might be progressive but will not necessarily be so. (3) The principal
problem for the world left at this juncture is that the
strategy for the transformation of the world which it had evolved in the
nineteenth century is in tatters, and it is consequently
acting thus far with uncertainty, weakness, and in a generalized mild
state of depression. Allow me to elaborate on each of these
three points.

1. Systemic crisis

One of the unhappy results of the disarray of the world left is the
suspicion that today surrounds any argument concerning a
crisis of capitalism. Once burned, twice shy - and we have been burned
so many, many times. The basic problem, if I may say
so, is that most of the major figures of the world left of the past two
centuries had not read Braudel on the multiplicity of social
times, and were constantly confounding cyclical ups and downs with
structural crises. This is easy to do, and especially within a
geoculture like that of the modern world-system, one that gives pride of
place to "newness" because of its total faith in the
upward linearity of history. The left was particularly reluctant to
embrace any argument that invoked cyclical processes because
it incorrectly identified all such arguments with the subset that
asserted what I would call the "eternal cyclicity of history." The
latter theory had indeed been pervasively utilized by conservative
thinkers as an argument against any and all transformational
movements. But the concept of cycles within structures (to which I am
referring) is not only different from the concept of eternal
cyclicity; it is virtually its opposite, since structures are not at all
eternal, only long-lasting, and the cycles within the structures are
what guarantees that a structure can never be eternal. There are thus no
eternal cycles, for there really is an arrow of time, even
if it is not linear.

What seems to me therefore methodologically essential in the analysis of
any historical social system (and the capitalist
world-economy is a historical social system) is to distinguish carefully
between, on the one hand, the cyclical rhythms that define
its systemic character and which enable it to maintain certain
equilibria, at least for the duration of the system and, on the other
hand, the secular trends that grow out of these cyclical rhythms
defining its historical character and which mean that, sooner or
later, a given system will no longer be able to contain its internal
contradictions and that thus this system will enter into systemic
crisis. In such a methodology, any historical system can be said to have
three moments in time: its genesis (which needs to be
explained, but which normally occurs as the result of the collapse of
some other historical system), the relatively long period of
what might be called the "quasi-normal" functioning of a historical
system (the rules and constraints of which need to be
described and analyzed), and its period of terminal crisis (which needs
to be seen as a moment of historic choice whose
outcome is always undetermined).

I believe that a number of trends have today at last reached points
where they threaten the basic functioning of the system. I
shall summarize briefly here what I have expounded at length elsewhere.3
Capitalism as a historical system is defined by the fact
that it makes structurally central and primary the endless accumulation
of capital. This means that the institutions which constitute
its framework reward those who pursue the endless accumulation of
capital and penalize those who don't.

But how does one accumulate capital? The crucial prerequisite is
obtaining profit from economic operations, the more the
better. And profit is a function of the differential between real costs
and possible prices. I say possible prices because of course
no seller can infinitely increase the price demanded for a commodity and
expect to sell it. There are always limits. Economists
call this the elasticity of demand. Within the limits of the rate of
elasticity, the actual profit depends upon three costs: the cost of
labor, the cost of inputs and infrastructure, the cost of taxation.

Now suppose we were to measure these costs globally as percentages of
total sales prices and arrive hypothetically at average
levels. Of course, this is an operation no one has ever done, and is
perhaps not doable. But it is possible to conceive of it, and
to approximate the results. I would suggest to you that, over 500 years
and across the capitalist world-economy as a whole, the
three costs have all been steadily rising as a percentage of total value
produced. And the net result is that we are in, and ever
more coming into, a global profit squeeze that is threatening the
ability of capitalists to accumulate capital.

This is actually something capitalists discuss all the time. They use
however other terminology. They discuss "efficiency of
production," by which they mean essentially lowering costs as a
percentage of total value. In effect, they are talking about using
fewer people to produce the same amount of goods, or of obtaining
cheaper inputs (which often includes fewer people to
produce the input). It is of course the case that in inter-capitalist
competition, the producer who is more efficient is likely to gain
more profit than his competitor. But my question is different: is
production, considered globally and in all sectors taken together,
more "efficient" today than 100, 200, 300 years ago?

Not only am I skeptical that global production is more "efficient" from
the point of view of the producer, but I am contending
that the curve has been steadily downward. All the so-called triumphs of
efficient production are simply attempts to slow down
the pace of the downward curve. One can regard the entire neoliberal
offensive of the last two decades as one gigantic attempt
to slow down the increasing costs of production - primarily by lowering
the cost of wages and taxation and secondarily by
lowering the costs of inputs via technological advance. I believe
further that the overall degree of success has been quite limited,
however painful it has been for those who have borne the brunt of the
attack, and that even the limited gains are about to be

What else is the issue in all the constant screaming about the threat of
inflation, so often invoked by Alan Greenspan and his
cronies in Germany and Great Britain? If you read what they say, the
potential cause of this terrible monster called inflation is
that workers might actually get higher wages or that governments might
spend even more (and therefore tax even more). They at
least seem to have no illusion about the source of the threat to capital
accumulation. Mild inflation after all is the normal condition
of the capitalist world-economy when it is functioning smoothly, and has
been going on for a long, long time. But normal inflation
is indeed the consequence of rising wage and taxation levels, and
therefore is precisely the phenomenon to which I am pointing.

Why are these three prices steadily if slowly rising over time, despite
the best efforts of capitalists to attempt to slow them
down? Let me briefly outline the reasons for each of the rising costs.
Wages rise because workers organize. This is an ancient
truism, but it is nonetheless accurate. The modes of organizing are
multiple. Whenever workers' syndical action becomes too
expensive for capitalists, and particularly in Kondratieff B-phases when
global competition is more acute, capitalists have sought
to "run away" - from the city to the countryside, from loci where
workers have been well organized to other loci where they
have been less well organized.

If one regards the process over 500 years, one sees that this process
has taken the form of transferring productive processes
regularly (but not at all continuously) to zones newly-incorporated into
the capitalist world-economy. The reason has been
simple. In such zones one can locate a work force in rural areas that
are less well commercialized who can be persuaded to
engage in wage work at wage levels below the world standard. They can be
so persuaded because, for them at that moment,
such wages represent a real increase in total income. The hitch is that,
once these now displaced workers have been in the new
work zone (usually an urban one) for some time (say 25-50 years), they
shift their standards of comparison, learn the ways of
the new work world, and begin in turn to organize and demand higher wage

The poor capitalist is reduced to running away once again. The problem
today is that, after 500 years, there are few places left
to which to run. The process of rising wages has become extremely
difficult to slow down. Today, even in the miserable barrios
of the large urban centers of the countries of the South, the real
alternatives for income of a potential wage-worker is far higher
than that of his rural grandparent and therefore, if one wants his/her
services in the so-called formal economy, one has to pay for
it at higher levels.

The same process of exhaustion of low-cost zones has been occurring in
the cost of inputs. The main mechanism that capitalists
have used to keep down the cost of inputs has been not to pay for some
of them, but instead to obtain them at the expense of
the collectivity. This is called externalization of costs. A producer
externalizes costs primarily in three ways: he disposes of
unprocessed waste outside of his property without paying anyone to
process it; he purchases inputs at the cost of their being
made available to him but without paying for the cost of their being
replenished; he utilizes infrastructure built at collective
expense. These three usages are no small part of reducing the cost of
production and thereby increasing the rate of profit.

The first two of these three ways have depended on finding new areas to
dump waste and new sources of raw materials whose
previous sources are being exhausted. With the steady expansion of the
areas included within the capitalist world-economy and
the steady increase of the rate of their utilization, the globe is
running out of replacement locales. This is the problem addressed
by the ecology movement, who have pointed as well to the fact that
inexpensive modes of disposal (by producers and by the
collectivity) have wreaked major damage to the ecosystem, which is in
urgent need of expensive repair. The third form of
externalizing costs requires a steady increase in taxation, to which
issue we are coming. The only real long-term solution to these
problems is the internalization of costs which, given the limits of the
elasticity of demand, means a long-term profit squeeze.

Finally, taxes have been going up, as we are constantly reminded by all
and sundry. It matters not that taxes are unevenly
distributed. They have been going up for just about everyone, and this
includes all producers. They have been going up for one
simple reason, which political scientists refer to as the
democratization of the world whose consequence has been the expansion
of the welfare state. People have been demanding higher state outputs on
education, health, and guarantees of lifetime income.
Furthermore, the threshold of demands has been steadily rising and
spreading geographically to include more and more parts of
the world. This has been the price of relative political stability, and
there is no indication that the pressure from the bottom is
letting up in any way.

One final point. It is not as though all these rising pressures on the
rate of profit were only the result of the demands of persons
other than the producers. Capitalists have been themselves partially
responsible for this rise in costs. They (or at least some of
them) have favored some rise in wage levels as a means of creating
effective demand. They (or at least some of them) have
favored internalization of some costs, as a mode of guaranteeing future
production possibilities. They (or at least some of them)
have wanted the welfare state as a way of appeasing the working classes.
And they have favored other kinds of state
expenditures (and therefore of taxation) as a way of repressing the
working classes. And finally they (or at least some of them)
have favored all of these measures as a way of creating financial
pressures on their weaker competitors.

The net result of all of this however has been a massive rise in costs
which is leading to a worldwide squeeze on profits. The
very madness of our current speculative mania, most acute in the
stronghold of the system, the United States, is not disproof of
this hypothesis but further evidence for it. I cannot however argue this
thesis further here if I am to discuss the prospects for
fundamental change and the strategy of the world left.

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